Chinese Communist Economic Espionage Sanctions Act - Expresses the sense of Congress that the Chinese Communist Party and the government of China should be condemned for conducting cyber and economic espionage against the United States.
Directs the President to prohibit transactions in property and property interests of a covered Chinese state-owned enterprise or a person who is a member of the board of directors, an executive officer, or a senior official of a covered Chinese state-owned enterprise if such property and property interests are in the United States, come within the United States, or are within the possession or control of a U.S. person.
Directs the Secretary of the Treasury to require each financial institution that is a U.S. person and has within its possession or control such assets that are in the United States to certify to the Secretary that the financial institution has frozen these assets.
Makes an alien who is a member of the board of directors, an executive officer, or a senior official of a covered Chinese state-owned enterprise ineligible for U.S. admission.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5103 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 5103
To impose sanctions on Chinese state-owned enterprises and any person
who is a member of the board of directors, an executive officer, or a
senior official of a Chinese state-owned enterprise for benefitting
from cyber and economic espionage against the United States.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 14, 2014
Mr. Rohrabacher (for himself and Mr. Ryan of Ohio) introduced the
following bill; which was referred to the Committee on Foreign Affairs,
and in addition to the Committees on the Judiciary and Financial
Services, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To impose sanctions on Chinese state-owned enterprises and any person
who is a member of the board of directors, an executive officer, or a
senior official of a Chinese state-owned enterprise for benefitting
from cyber and economic espionage against the United States.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Chinese Communist Economic Espionage
Sanctions Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The Chinese Communist Party (CCP) has made it its
policy to engage in economic warfare against the United States.
(2) The CCP uses the resources of the People's Liberation
Army (PLA) and the Chinese State to drain the United States of
economic might, including by means of economic espionage and
cyber espionage, unfair trade practices, unfair labor
practices, and currency manipulation.
(3) Chinese state-owned enterprises (SOE) and the PLA are
the main beneficiary of the CCP's campaign of theft against the
United States.
(4) Although many SOEs are listed on stock exchanges or
officially privatized, the Chinese government retains at least
one-half of equity in those companies.
(5) SOEs come under the control of the ministerial-level
State-owned Assets Supervision and Administration Commission.
(6) Members of the boards of directors and senior
management of SOEs are appointed by the State-owned Assets
Supervision and Administration Commission in consultation with
the Communist Party's Department of Organization.
(7) More than two-thirds of board members and three-
quarters of senior executives of SOEs are either Communist
Party members or officials.
(8) Corruption within the CCP is widespread and endemic.
(9) CCP officials use their positions of control and
influence within and over SOE's to enrich themselves and their
families.
(10) The vast majority of the Chinese people do not benefit
from the corruption of the CCP.
(11) On May 19, 2014, the United States Department of
Justice announced charges against five members of the PLA,
accusing them of stealing trade secrets from United States
companies and marking the first time the United States has
charged foreign government employees with economic espionage.
(12) The indictment charged that members of the PLA worked
to ``steal information'' from United States companies ``that
would be useful to their competitors in China, including state-
owned enterprises''.
(13) Chinese SOEs are reported to have benefitted directly
from their actions, including the State Nuclear Power
Technology Corporation, the Baosteel Group, and the Aluminum
Corporation of China (Chinalco).
(14) The chairman of the board and the majority of the
boards for the State Nuclear Power Technology Corporation, the
Baosteel Group, and the Aluminum Corporation of China
(Chinalco) are members of the CCP.
(15) On May 21, 2014, Assistant Attorney General John
Carlin said that criminal charges can justify economic
sanctions.
(16) The indictment named members of Unit 61398 which is
publicly identified as a Shanghai-based cyber unit of the PLA
also known as APT1.
(17) Unit 61398 is part of the 2nd Bureau of the PLA, 3rd
Department of the General Staff.
(18) Unit 61398 was first publically identified in 2013 as
APT1 by Mandiant, a United States cyber security firm and
leader in cyber incident response industry.
(19) Mandiant exposed a timeline of Unit 61398's economic
espionage conducted since 2006 against 141 victims across
multiple industries.
(20) Mandiant's conclusions have been supported by
CrowdStrike, another cyber security company, which publicly
revealed the existence of Unit 61486, a related PLA unit
dedicated to cyber espionage.
(21) George Kurts, the co-founder of CrowdStrike, stated
that ``If you look at all the groups that we track in China,
the indictments are just the very tip of the iceberg.''.
(22) Units 61398 and 61486 are only two of at least 20
cyber threat groups in Communist China and are considered by
multiple experts to have stolen vast amounts of valuable
information from the United States.
(23) The 2011 annual report to Congress from the Office of
the Secretary of Defense, titled ``Military and Security
Developments Involving the People's Republic of China'',
states, ``The PRC also utilizes a large, well-organized network
of enterprises, defense factories, affiliated research
institutes, and computer network operations to facilitate the
collection of sensitive information and export-controlled
technology, as well as basic research and science that supports
U.S. defense system modernization.''.
(24) A 2011 report by the Office of the National
Counterintelligence Executive found that ``Chinese actors are
the world's most active and persistent perpetrators of economic
espionage.''.
(25) The 2012 annual report to Congress from the Office of
the Secretary of Defense, titled ``Military and Security
Developments Involving the People's Republic of China'', found
that ``Chinese attempts to collect U.S. technological and
economic information will continue at a high level and will
represent a growing and persistent threat to U.S. economic
security.''.
(26) James Clapper, the Director of National Intelligence,
stated, ``Among significant foreign threats . . . China
remain[s] the most capable and persistent intelligence threats
and are aggressive practitioners of economic espionage against
the United States.''.
(27) Retired General Michael Hayden, former Director of the
Central Intelligence Agency and Director of the National
Security Agency, stated, ``The intensity of Chinese espionage
is certainly greater than that what we saw between the U.S. and
the Soviets during the Cold War. The problem is China's view is
that industrial espionage by the state against relatively
vulnerable private enterprise is a commonly accepted state
practice,''.
(28) The annual report by the congressional United States-
China Economic and Security Review Commission stated in 2013,
``strong evidence emerged that the Chinese government is
directing and executing a large-scale cyber espionage campaign
against the United States''.
(29) Retired Lieutenant General Ronald Burgess, Jr., former
Director of the Defense Intelligence Agency, stated, ``China
has used its intelligence services to gather information via a
significant network of agents and contacts using a variety of
methods . . . In recent years, multiple cases of economic
espionage and theft of dual-use and military technology have
uncovered pervasive Chinese collection efforts,''.
(30) Congressman Mike Rogers, Chairman of the Permanent
Select Committee on Intelligence of the House of
Representatives, stated, ``China's economic espionage has
reached an intolerable level and I believe that the United
States and our allies in Europe and Asia have an obligation to
confront Beijing and demand that they put a stop to this
piracy. Beijing is waging a massive trade war on us all, and we
should band together to pressure them to stop. Combined, the
United States and our allies in Europe and Asia have
significant diplomatic and economic leverage over China, and we
should use this to our advantage to put an end to this
scourge,''.
(31) The threat of Chinese espionage is so large that
Senator Sheldon Whitehouse, D-Rhode Island, who chaired the
Cyber Task Force of the Select Committee on Intelligence,
proclaimed it to be part of ``the biggest transfer of wealth
through theft and piracy in the history of mankind''.
(32) Massive cyber and economic espionage organized,
directed, and carried out by the CCP and the PLA has
contributed to creating a $318,000,000,000 United States trade
deficit with Communist China in 2013, which equals 1.89 percent
of total United States gross domestic product (GDP).
SEC. 3. SENSE OF CONGRESS.
It is the sense of Congress that the Chinese Communist Party and
the Government of the People's Republic of China should be condemned
for sponsoring, planning, ordering, conducting, and benefitting from
cyber and economic espionage against the United States.
SEC. 4. FINANCIAL MEASURES.
(a) Freezing of Assets.--The President shall exercise all powers
granted by the International Emergency Economic Powers Act (50 U.S.C.
1701 et seq.) (except that the requirements of section 202 of such Act
(50 U.S.C. 1701) shall not apply) to the extent necessary to block and
prohibit all transactions in all property and interests in property of
a covered Chinese state-owned enterprise or a person who is a member of
the board of directors, an executive officer, or a senior official of a
covered Chinese state-owned enterprise if such property and interests
in property are in the United States, come within the United States, or
are or come within the possession or control of a United States person.
(b) Enforcement.--
(1) Penalties.--A covered Chinese state-owned enterprise or
a person who is a member of the board of directors, an
executive officer, or a senior official of a covered Chinese
state-owned enterprise shall be subject to the penalties set
forth in subsections (b) and (c) of section 206 of the
International Emergency Economic Powers Act (50 U.S.C. 1705) to
the same extent as a person that commits an unlawful act
described in subsection (a) of such section.
(2) Requirements for financial institutions.--Not later
than 120 days after the date of the enactment of this Act, the
Secretary of the Treasury shall prescribe or amend regulations
as needed to require each financial institution that is a
United States person and has within its possession or control
assets that are property or interests in property of a covered
Chinese state-owned enterprise or a person who is a member of
the board of directors, an executive officer, or a senior
official of a covered Chinese state-owned enterprise if such
property and interests in property are in the United States to
certify to the Secretary that, to the best of the knowledge of
the financial institution, the financial institution has frozen
all assets within the possession or control of the financial
institution that are required to be frozen pursuant to
subsection (a).
(c) Regulatory Authority.--The Secretary of the Treasury shall
issue such regulations, licenses, and orders as are necessary to carry
out this section.
(d) Definitions.--In this section:
(1) Covered chinese state-owned enterprise.--The term
``covered Chinese state-owned enterprise'' means an enterprise
that--
(A) is organized under the laws of the People's
Republic of China, including a foreign branch of such
enterprise; and
(B) is owned or controlled by the Government of the
People's Republic of China or the Chinese Communist
Party.
(2) United states person.--The term ``United States
person'' means--
(A) a United States citizen or an alien lawfully
admitted for permanent residence to the United States;
or
(B) an entity organized under the laws of the
United States or any jurisdiction within the United
States, including a foreign branch of such an entity.
SEC. 5. INADMISSIBILITY OF CERTAIN ALIENS.
(a) Ineligibility for Visas.--An alien is ineligible to receive a
visa to enter the United States and ineligible to be admitted to the
United States if the alien is a person who is a member of the board of
directors, an executive officer, or a senior official of a covered
Chinese state-owned enterprise.
(b) Current Visas Revoked.--The Secretary of State shall revoke, in
accordance with section 221(i) of the Immigration and Nationality Act
(8 U.S.C. 1201(i)), the visa or other documentation of any alien who
would be ineligible to receive such a visa or documentation under
subsection (a) of this section.
(c) Regulatory Authority.--The Secretary of State shall prescribe
such regulations as are necessary to carry out this section.
SEC. 6. REPORT TO CONGRESS.
(a) In General.--Not later than 180 days after the date of the
enactment of this Act, and annually thereafter, the Secretary of State
and the Secretary of the Treasury shall submit to the appropriate
congressional committees a report on--
(1) the actions taken to carry out this Act, including the
number of covered Chinese state-owned enterprises and persons
who are members of the board of directors, executive officers,
or senior officials of covered Chinese state-owned enterprises
sanctioned during the year preceding the report; and
(2) efforts by the executive branch to encourage the
governments of other countries to impose sanctions that are
similar to the sanctions imposed under this Act.
(b) Form.--The report required by subsection (a) shall be submitted
in unclassified form, but may contain a classified annex.
(c) Definition.--In this section, the term ``appropriate
congressional committees'' means--
(1) the Committee on Foreign Affairs, the Permanent Select
Committee on Intelligence, and the Committee on Ways and Means
of the House of Representatives; and
(2) the Committee on Foreign Relations, the Select
Committee on Intelligence, the Committee on Finance, and the
Committee on Banking, Housing, and Urban Affairs of the Senate.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Foreign Affairs, and in addition to the Committees on the Judiciary, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Foreign Affairs, and in addition to the Committees on the Judiciary, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Foreign Affairs, and in addition to the Committees on the Judiciary, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Immigration and Border Security.
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