Proposed House Amendments to China Bill Include New Export Controls, Sanctions

The House released the text of the America Competes Act of 2022 last week, which included new restrictions on exports of electronic waste-related goods, more designations targeting China for human rights abuses and a repeal of the sunset of the Magnitsky human rights sanctions regime (see 2201260035). Many of the trade-related provisions were similar to the bill’s counterpart in the Senate, the U.S. Innovation and Competition Act.

Some amendments offered by lawmakers could significantly expand the bill’s sanctions and export control measures, including one from McCaul, which includes a range of new "national security and foreign policy authorities,” according to a summary of the amendment. Among many provisions, the amendment would require the Biden administration to submit an interagency report to Congress at least every 90 days on Commerce’s efforts to control emerging and foundational technologies. McCaul, other Republicans and a bipartisan congressional commission have criticized Commerce for moving too slowly on the controls (see 2109080062, 2106020024 and 2010010020).

The amendment also would require Commerce to create a “searchable computer database” of export license applications and adjudications, both for regular and deemed exports. The database would be accessible by other federal agencies and the Republican and Democratic leaders of the Senate Foreign Relations and Banking committees and the House’s Foreign Affairs Committee.

Other provisions would require Commerce to add more companies to the Entity List, including all entities named on the Defense and Treasury Department’s Chinese military companies lists. The amendment includes several other sanctions and export control proposals.

A separate amendment, introduced by Rep. Joe Wilson, R-S.C., would create a new export license requirement under the Export Administration Regulations for “any goods or services exported or re-exported” to a country that the State Department determined “repeatedly” provided support for international terrorism.

Two amendments submitted by Rep. Steve Chabot, R-Ohio, would have Entity List implications. One would add Chinese telecommunications company ZTE to the Entity List, and another would require Chinese companies removed from the Entity List to “deposit $2.5 billion with the US Treasury to defray future intellectual property theft claims,” according to an amendment summary.

Other amendments would incorporate broader bills into the House legislation. A bipartisan group of lawmakers proposed an amendment that would include the full text of the Ocean Shipping Reform Act, which passed the House in December and would look to hold ocean carriers more accountable for unfair shipping practices (see 2112080075).

Rep. Andy Barr, R-Ky., submitted an amendment to include the Chinese Military and Surveillance Company Sanctions Act, which was introduced last year and would place sanctions and trade restrictions on certain Chinese military and surveillance companies.

Another amendment, introduced by Rep. Ed Case, D-Hawaii, would require entities sanctioned under one U.S. authority to be automatically sanctioned under all other authorities unless the entity receives a presidential waiver. The proposal would require the Treasury and State departments to create an “interagency system” to oversee the process.

An amendment from Rep. Greg Steube, R-Fla., would require the president to sanction people or entities operating in Afghanistan’s rare earth minerals sector.

An amendment introduced by Reps. Tim Burchett, R-Tenn., and Guy Reschenthaler, R-Pa., would require the president to oppose any Trade Related Intellectual Property Protection waiver at the World Trade Organization unless “explicitly approved” by Congress. A group of Democrats recently urged the U.S. to push Switzerland, the United Kingdom and the European Union to agree to a waiver so that COVID-19 vaccine production can accelerate in Asia, Latin America and Africa (see 2111240047).

Several other amendments could affect foreign investment reviews. One amendment, submitted by Rep. Dan Crenshaw, R-Texas, would require the Committee on Foreign Investment in the U.S. to provide “educational material” to every foreign ambassador, which would outline best practices for scrutinizing Chinese and state-owned foreign investments. Another amendment, submitted by Rep. Ronny Jackson, R-Texas, would require the departments of State and Agriculture to submit yearly reports on foreign investments in the American agriculture sector, which should focus particularly on foreign direct investment from China. Lawmakers have previously introduced legislation that would add the agriculture secretary to CFIUS (see 2110120012).

Rep. Brad Wenstrup, R-Ohio, submitted an amendment that would require the director of national intelligence to report on Chinese government investments in port infrastructure since 2012. The report would include “a review of existing and potential or planned future” Chinese investments and China’s “ability to leverage commercial ports for military purposes.”

Other noteworthy amendments include:

Entity List provision from Rep. Carlos Gimenez, R-Fla.: Prohibits Commerce from removing an entity from the Entity List until the agency certifies to Congress that the entity is no longer "reasonably believed to be involved in activities contrary to U.S. national security interests or foreign policy interests."

Export-Import Bank provision from Rep. Andy Barr, R-Ky.: Limits Ex-Im Bank support for deals with Chinese state-owned companies, and establishes an advisory committee for the bank's program on China and transformational exports (see 2104250003).

Export restriction from Rep. Mike Quigley, D-Ill.: Prohibits the import and export of certain live wild animals for human consumption.

ECRA provision from Rep. Tom Molinowski, D-N.J.: Amends the Export Control Reform Act to "right-size" Commerce's scope of authority to regulate U.S. exports to foreign military, security and intelligence agencies.

Forced labor sanctions from Rep. James Banks, R-Ind.: Requires a determination of whether Chinese companies implicated in using Uyghur forced labor meet sanctions criteria under the Uyghur Human Rights Policy Act of 2020 and the Uyghur Forced Labor Prevention Act.

China sanctions from Rep. Mike Gallagher, R-Wis.: Imposes economic and financial sanctions on China if it initiates a military invasion of Taiwan.

New sanctions list from Rep. Scott Perry, R-Pa.: Creates a State Department "Corporate Human Rights Abusers List," applies sanctions to companies on this list, and applies sanctions to Chinese companies on similar lists maintained by the Defense and Treasury departments.

Organ harvesting sanctions, from Rep. Scott Perry, R-Pa.: Directs the president to impose sanctions on any Chinese official or affiliate who the president determines is knowingly responsible for or complicit in forced organ harvesting.

China apparel company sanctions from Rep. Scott Perry, R-Pa.: Subjects Chinese sportswear companies Li-Ning and Anta to Magnitsky human rights sanctions.

CCP member sanctions from Rep. Kat Cammack, R-Fla.: Imposes sanctions on Chinese Communist Party members, including Wu Yingjie, Wang Yang, Han Zheng and Xia Baolong. Imposes sanctions on CCP members "who engage in a malign disinformation campaign or political warfare operation against the U.S.; who engage in the theft of intellectual property of a U.S. person; who engage in threats or actions undermining the sovereignty of Taiwan; or who engage in the forced closure or destruction of churches, mosques, Buddhist temples, or any other place of worship in China."

Chemical weapons sanctions from Rep. Randy Feenstra, R-Iowa: Amends the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 to impose sanctions against foreign governments that act with "gross negligence with respect to state-owned, operated, or directed chemical or biological programs."

Afghanistan trade zone from Rep. Jacob Auchincloss, D-Mass.: Directs the Treasury and State departments to conduct a study on "reforming specific sanctioned individuals in order to operate a foreign trade zone in Afghanistan."

Counterfeit product sanctions from Rep. Josh Gottheimer, D-N.J.: Provides a sense of Congress directing OFAC, with the Food and Drug Administration, to sanction "persons engaged in the intentional production or sale of counterfeit, adulterated, or misbranded medical products."

Chinese technology transfer from Rep. Josh Gottheimer, D-N.J.: Requires a report to Congress detailing links between Chinese technology and social media companies and the Chinese government, including potential technology transfer risks and Chinese investment in U.S. and allied nation technology companies.

Chinese military companies from Rep. Ronny Jackson, R-Texas: Adds additional reporting requirements for the secretary of the Treasury on Chinese military companies.