Reps. Reschenthaler, McCaul, and Riggleman Introduce Bill to Target and Deter U.S. Funding of Chinese Government Affiliates
WASHINGTON, D.C. – Today, Congressman Guy Reschenthaler (PA-14), House Foreign Affairs Committee Ranking Member Michael McCaul (TX-10), and Congressman Denver Riggleman (VA-5) introduced the Protecting National Security in Financial Investments Act (H.R. 8407). This legislation allows for the Securities and Exchange Commission (SEC) to require disclosure of investments made to foreign companies that threaten U.S. national security and foreign policy goals. This legislation will provide critical information to Congress and federal agencies regarding financial flows to entities with ties to the Chinese Communist Party (CCP).
“As a Member of the China Task Force, I am proud to introduce the Protecting National Security in Financial Investments Act, which will strengthen our nation’s ability to counter threats posed by Communist China,” said Reschenthaler. “This legislation will provide the federal government with tools to target CCP malign efforts, protect hardworking Americans’ savings and investments, and deter financial flows to foreign companies that undermine our national security. I thank Ranking Member McCaul and Congressman Riggleman for joining me in this critical effort and call on Congress to bring this bill up for a vote.”
“The Chinese Communist Party and its companies are exploiting U.S. capital markets to covertly access investment dollars to fuel their malign activity,” said McCaul. “By requiring the disclosure of investments in companies labeled as national security threats on the Department of Commerce Entity List, the Protecting National Security in Financial Investments Act fosters greater transparency for investors and protects the national security of the United States. In this generational contest with the CCP, the United States must avoid inadvertently channeling money and resources to companies that are threatening our security.”
“I am proud to co-sponsor the Protecting National Security in Financial Investments Act which increases financial transparency and makes our country more secure,” said Riggleman. “The bill takes steps to bring to light any investments made into entities of the People’s Republic of China that threaten the national security of the United States, making us both safer and more aware. It is an important part of my continued work with the China Task Force to hold the CCP accountable.”
Specifically, the Protecting National Security in Financial Investments Act requires the SEC to determine whether the disclosure of information related to investments in foreign companies identified as potential threats to U.S. national security is necessary. Following that assessment, the SEC may prescribe regulations requiring a financial institution to disclose information regarding investments made to parties identified as a national security threat on the Bureau of Industry and Security (BIS) in the Department of Commerce’s Entity List. Under current law, all companies and individuals designated on the Entity List are threats to U.S. national security and are subject to certain licensing requirements—typically under a presumption of denial—for technology items.
Further, the bill creates an additional entity list, compiled by the Department of State, of Chinese companies that have substantial relationships with the People’s Liberation Army, the Chinese People’s Armed Police Force, the Ministry of State Security, and the Chinese Coast Guard. This list will help identify and target additional CCP entities that threaten U.S. national security and foreign policy goals.
In May 2020, Congressman Reschenthaler was selected to serve on the China Task Force (CTF). The 15 member group is chaired by Foreign Affairs Committee Ranking Member Michael McCaul and is working to enhance information sharing and legislative strategy development to address challenges posed by the CCP. The task force has held dozens of meetings and briefings to educate task force members on a host of China-related issues, including control over crucial supply chains, efforts to take to take over international organizations, and economic aggression. The CTF will soon release a report detailing policy recommendations and critical findings of their investigation.
Bill text can be found here.