Economic Espionage Prevention Act

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1486 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 1486

To impose sanctions with respect to economic or industrial espionage by
         foreign adversarial companies, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           February 21, 2025

Mr. McCormick (for himself and Mr. Moolenaar) introduced the following
 bill; which was referred to the Committee on Foreign Affairs, and in
    addition to the Committee on the Judiciary, 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 with respect to economic or industrial espionage by
         foreign adversarial companies, and for other purposes.

    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 ``Economic Espionage Prevention Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) On March 14, 2024, the Department of State notified
        Congress of the following:
                    (A) People's Republic of China exports of
                semiconductors to Russia have increased substantially
                since Russia's full-scale invasion of Ukraine.
                    (B) In the second half of 2023, China exported
                between $25,000,000 and $50,000,000 in additional
                semiconductors to Russia every month relative to pre-
                invasion levels.
                    (C) During the same period, China also exported
                between $50,000,000 and $100,000,000 in additional
                exports to Russia every month to known transshipment
                hubs.
                    (D) These exports include both Chinese and United
                States-branded semiconductors (integrated circuits),
                according to analysis of commercially available trade
                data by the Bureau of Industry and Security of the
                Department of Commerce, and are almost certainly
                supporting Russia's military capabilities based on
                Ukrainian analysis of recovered Russian weapons.
                    (E) Because of the prevalence of United States
                manufacturing equipment in global semiconductor supply
                chains, nearly all chips produced worldwide, including
                in the People's Republic of China, are subject to
                United States export controls if destined for Russia or
                Belarus.
                    (F) All advanced semiconductors described on the
                Commerce Control List have been subject to a license
                requirement if destined to an entity in Russia since
                its further invasion of Ukraine.
            (2) On April 3, 2024, Deputy Secretary of State, Kurt
        Campbell, said ``I think we have assessed, over the course of
        the last couple of months that Russia has almost completely
        reconstituted militarily. And after the initial setbacks on the
        battlefield delivered to them by a brave and hearty group in
        Ukraine, with the support of China in particular, dual use
        capabilities and a variety of other efforts, industrial and
        commercial, Russia has retooled and now poses a threat to
        Ukraine . . . But not just to Ukraine, its new found
        capabilities pose a longer term challenge to stability in
        Europe and threatens NATO allies.''.

SEC. 3. REPORT.

    (a) In General.--Not later than 90 days after the date of the
enactment of this Act, the Secretary of State, in coordination with the
heads of relevant Federal departments and agencies, as appropriate,
shall submit to the appropriate congressional committees, a written
report that contains the following:
            (1) An analysis and description of the extent to which any
        foreign person who is a citizen of the People's Republic of
        China or an entity organized under the laws of the People's
        Republic of China, or any foreign person or entity controlled
        by or operating at the direction of the Government of the
        People's Republic of China--
                    (A) is knowingly a material source of critical
                components necessary for the manufacture of weapons,
                vehicles, and other military equipment by the defense
                industrial base of the Russian Federation;
                    (B) has knowingly delivered critical components to
                or entered into any agreement relating to the sale or
                delivery of critical components with any entity
                operating in the defense or intelligence sectors of the
                Government of the Russian Federation;
                    (C) has knowingly delivered critical components to
                or entered into any agreement relating to the sale or
                delivery of critical components with any country or
                entity with which the defense or intelligence sectors
                of the Government of Russian Federation are cooperating
                in support of Russia's war against Ukraine; or
                    (D) has knowingly delivered critical components to
                or entered into any agreement relating to the sale or
                delivery of critical components with a foreign person
                that knowingly and directly provides these components
                to the defense or intelligence sectors of the
                Government of the Russian Federation.
            (2) The extent to which--
                    (A) any foreign person that is a citizen of the
                People's Republic of China or an entity organized under
                the laws of the People's Republic of China has
                knowingly engaged, on or after the date of the
                enactment of this Act, in transactions with a person
                that is part of, or operates on behalf of, the defense
                or intelligence sectors of the Government of the
                Russian Federation;
                    (B) any foreign person identified pursuant to
                subparagraph (A) has engaged in transactions which
                would constitute a significant transaction with persons
                that have been sanctioned for being part of, or
                operating on behalf of, the defense or intelligence
                sectors of the Government of the Russian Federation; or
                    (C) any foreign person identified pursuant to
                subparagraph (A) has been subjected to sanctions
                imposed pursuant to sections 231 and 235 of the
                Countering America's Adversaries Through Sanctions Act
                (22 U.S.C. 9525 and 9529).
    (b) Form and Availability.--
            (1) Form.--The report required by subsection (a) shall be
        submitted in unclassified form, but may include a classified
        annex.
            (2) Availability.--The unclassified portion of the report
        required by subsection (a) may also be made available to the
        public.

SEC. 4. IMPOSITION OF SANCTIONS WITH RESPECT TO ECONOMIC OR INDUSTRIAL
              ESPIONAGE BY FOREIGN ADVERSARY ENTITIES.

    (a) In General.--On and after the date that is 30 days after the
date of the enactment of this Act, the President (a) may impose the
sanctions described in subsection (c) against any of the foreign
persons described in subsection (b).
    (b) Foreign Persons Described.--A foreign person is described in
this subsection if the President determines on or after the date of the
enactment of this Act that the person is a foreign adversary entity
that knowingly engages in--
            (1) economic or industrial espionage with respect to trade
        secrets or proprietary information owned by United States
        persons;
            (2) the provision of material support or services to a
        foreign adversaries' military, intelligence, or other national
        security entities; or
            (3) the violation of United States export control laws.
    (c) Sanctions Described.--The sanctions that may be imposed with
respect to a foreign person under subsection (b) are the following:
            (1) Property blocking.--The exercise of all powers granted
        to the President by the International Emergency Economic Powers
        Act (50 U.S.C. 1701 et seq.) to the extent necessary to block
        and prohibit all transactions in property and interests in
        property of the foreign person 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.
            (2) Ineligibility for visas, admission, or parole.--
                    (A) Visas, admission, or parole.--An alien
                described in subsection (b) is--
                            (i) inadmissible to the United States;
                            (ii) ineligible to receive a visa or other
                        documentation to enter the United States; and
                            (iii) otherwise ineligible to be admitted
                        or paroled into the United States or to receive
                        any other benefit under the Immigration and
                        Nationality Act (8 U.S.C. 1101 et seq.).
                    (B) Current visas revoked.--
                            (i) In general.--An alien described in
                        subsection (b) is subject to revocation of any
                        visa or other entry documentation regardless of
                        when the visa or other entry documentation is
                        or was issued.
                            (ii) Immediate effect.--A revocation under
                        clause (i) shall take effect immediately and
                        automatically cancel any other valid visa or
                        entry documentation that is in the alien's
                        possession.
    (d) Exceptions.--
            (1) Exception for intelligence activities.--Sanctions under
        this section shall not apply to any activity subject to the
        reporting requirements under title V of the National Security
        Act of 1947 (50 U.S.C. 3091 et seq.) or any authorized
        intelligence activities of the United States.
            (2) Exception to comply with international obligations.--
        Sanctions under subsection (c)(2) shall not apply with respect
        to the admission of an alien if admitting or paroling the alien
        into the United States is necessary to permit the United States
        to comply with--
                    (A) the Agreement regarding the Headquarters of the
                United Nations, signed at Lake Success June 26, 1947,
                and entered into force November 21, 1947, between the
                United Nations and the United States; or
                    (B) other applicable international obligations.
            (3) Exception to carry out or assist law enforcement
        activities.--Sanctions under subsection (c)(2) shall not apply
        with respect to an alien if admitting or paroling the alien
        into the United States is necessary to carry out or assist law
        enforcement activity in the United States.
    (e) Waiver.--The President may waive the application of sanctions
under this section with respect to a foreign person for renewable
periods of not more than 180 days each if the President determines and
submits to the appropriate congressional committees a report that
contains a determination of the President that such a waiver is in the
national security interests of the United States.
    (f) Implementation; Penalties.--
            (1) Implementation.--The President may exercise the
        authorities provided to the President under sections 203 and
        205 of the International Emergency Economic Powers Act (50
        U.S.C. 1702 and 1704) to the extent necessary to carry out this
        section.
            (2) Penalties.--A person that violates, attempts to
        violate, conspires to violate, or causes a violation of
        subsection (a) or any regulation, license, or order issued to
        carry out that subsection 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 that section.
            (3) Procedures and guidelines for sanctions.--The President
        shall establish procedures and guidelines for the
        implementation and enforcement of sanctions imposed under this
        section.
            (4) Annual report.--
                    (A) Unless the exception in subparagraph (B)
                applies, not later than one year after the date of the
                enactment of this Act, and for each of the 5 years
                thereafter, the President shall submit to the
                appropriate congressional committees a report on any
                notable developments regarding economic or industrial
                espionage activities by foreign persons.
                    (B) The President shall not be required to submit
                the annual report described by subparagraph (A) if the
                President has imposed sanctions as authorized under
                this section within the previous calendar year.
    (g) Rule of Construction.--For purposes of this section, a
transaction shall not be construed to include participation in an
international standards-setting body or the activities of such a body.

SEC. 5. CLARIFYING AMENDMENTS.

    Section 203 of the International Emergency Economic Powers Act (50
U.S.C. 1702) is amended--
            (1) in subsection (b)--
                    (A) in the matter preceding paragraph (1), by
                striking ``, directly or indirectly'';
                    (B) in paragraph (3)--
                            (i) by striking ``including but not limited
                        to'' and all that follows through ``news wire
                        feeds.'' and inserting ``except to the extent
                        that the President determines that such imports
                        and exports would seriously impair his ability
                        to deal with any national emergency declared
                        under section 202.''; and
                            (ii) by striking ``under section 5 of the
                        Export Administration Act of 1979, or under
                        section 6 of such Act'' and inserting ``under
                        other statutory or regulatory export control
                        authorities''; and
                    (C) in paragraph (4), by inserting ``, except to
                the extent that the President determines that such
                imports and exports would seriously impair the ability
                to deal with any national emergency declared under
                section 202'' before the period at the end; and
            (2) by adding at the end the following:
    ``(d) Rules of Construction Relating to Sensitive and Personal
Data.--The communication, the importation to a country, or the
exportation from a country, directly or indirectly, whether commercial
or otherwise, of bulk sensitive personal data or of source code used in
a connected software application may not be construed to constitute--
            ``(1) a `postal, telegraphic, telephonic, or other personal
        communication', for purposes of subsection (b)(1); or
            ``(2) an importation from a country, or an exportation to a
        country, of `information or informational materials', for
        purposes of subsection (b)(3).''.

SEC. 6. DEFINITIONS.

    In this Act:
            (1) Appropriate congressional committees.--The term
        ``appropriate congressional committees'' means--
                    (A) the Committee on Foreign Affairs of the House
                of Representatives; and
                    (B) the Committee on Foreign Relations of the
                Senate.
            (2) Economic or industrial espionage.--The term ``economic
        or industrial espionage'' has the meaning given that term in
        section 1637(d) of the Carl Levin and Howard P. ``Buck'' McKeon
        National Defense Authorization Act for Fiscal Year 2015.
            (3) Foreign person.--The term ``foreign person'' means any
        person that is not a United States person.
            (4) Knowingly.--The term ``knowingly'', with respect to
        conduct, a circumstance, or a result, means that a person has
        actual knowledge, or should have known, of the conduct, the
        circumstance, or the result.
            (5) Own, proprietary information, and trade secret.--The
        terms ``own'', ``proprietary information'', and ``trade
        secret'' have the meanings given those terms in section 1637(d)
        of the Carl Levin and Howard P. ``Buck'' McKeon National
        Defense Authorization Act for Fiscal Year 2015 (50 U.S.C.
        1708(d)).
            (6) Person.--The term ``person'' means an individual or
        entity.
            (7) 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.
            (8) Foreign adversary.--The term ``foreign adversary''
        means the countries listed in section 7.4 of title 15, Code of
        Federal Regulations.
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