Sec. 16. Actions by the Committee to address national security risks
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Section 721(l) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(l) ) is amended— in the subsection heading, by striking and inserting Mitigation, Tracking, and Postconsummation Monitoring and Enforcement ; Actions by the Committee To address national security risks by redesignating paragraphs (1), (2), and
(3)as paragraphs (3), (5), and (6), respectively; by inserting before paragraph (3), as redesignated by paragraph (2), the following: The Committee, acting through the chairperson, may suspend a proposed or pending covered transaction that may pose a risk to the national security of the United States for such time as the covered transaction is under review or investigation under subsection (b). The Committee may, at any time during the review or investigation of a covered transaction under subsection (b), complete the action of the Committee with respect to the transaction and refer the transaction to the President for action pursuant to subsection (d). ; in paragraph (3), as redesignated by paragraph (2)— in subparagraph (A)— in the subparagraph heading, by striking and inserting In general ; Agreements and conditions by striking The Committee and inserting the following: The Committee ; by striking threat and inserting risk ; and by adding at the end the following: If a party to a covered transaction has voluntarily chosen to abandon the transaction, the Committee or lead agency, as the case may be, may negotiate, enter into or impose, and enforce any agreement or condition with any party to the covered transaction for purposes of effectuating such abandonment and mitigating any risk to the national security of the United States that arises as a result of the covered transaction. The Committee or lead agency, as the case may be, may negotiate, enter into or impose, and enforce any agreement or condition with any party to a completed covered transaction in order to mitigate any interim risk to the national security of the United States that may arise as a result of the covered transaction until such time that the Committee has completed action pursuant to subsection
(b)or the President has taken action pursuant to subsection
(d)with respect to the transaction. ; and by striking subparagraph
(B)and inserting the following: An agreement may not be entered into or condition imposed under subparagraph
(A)with respect to a covered transaction unless the Committee determines that the agreement or condition resolves the national security concerns posed by the transaction, taking into consideration whether the agreement or condition is reasonably calculated to— be effective; allow for compliance with the terms of the agreement or condition in an appropriately verifiable way; and enable effective monitoring of compliance with and enforcement of the terms of the agreement or condition. The provisions of section 706(b) shall apply to any mitigation agreement entered into or condition imposed under subparagraph (A). ; by inserting after paragraph (3), as redesignated by paragraph (2), the following: Any determination of the Committee to suspend a covered transaction under paragraph (1), to refer a covered transaction to the President under paragraph (2), or to negotiate, enter into or impose, or enforce any agreement or condition under paragraph (3)(A) with respect to a covered transaction, shall be based on a risk-based analysis, conducted by the Committee, of the effects on the national security of the United States of the covered transaction, which shall include— an assessment of— the national security threat posed by the transaction, taking into account the analysis conducted by the Director of National Intelligence under subsection (b)(4); any national security vulnerabilities related to the transaction; and the potential national security consequences of the transaction; and an identification of any of the factors described in subsection
(f)that the transaction may substantially implicate. Any member of the Committee who concludes that a covered transaction poses an unresolved national security concern shall recommend to the Committee that the Committee suspend the transaction under paragraph (1), refer the transaction to the President under paragraph (2), or negotiate, enter into or impose, or enforce any agreement or condition under paragraph (3)(A) with respect to the transaction. In making that recommendation, the member shall propose the risk-based analysis required by subparagraph (A). If the Committee fails to reach consensus with respect to a recommendation under clause
(i)regarding a covered transaction, the members of the Committee who support an alternative recommendation shall produce— a written statement justifying the alternative recommendation; and as appropriate, a risk-based analysis that supports the alternative recommendation. ; in paragraph (5), as redesignated by paragraph (2), by striking (as defined in the National Security Act of 1947) ; and in paragraph (6), as redesignated by paragraph (2)— in subparagraph (A)— by striking paragraph
(1)and inserting paragraph
(3); and by striking the second sentence and inserting the following: The lead agency may, at its discretion, seek and receive the assistance of other departments or agencies in carrying out the purposes of this paragraph. ; in subparagraph (B)— by striking and all that follows through designated agency The lead agency in connection and inserting ; designated agency .—The lead agency in connection by striking clause (ii); and by redesignating subclauses
(I)and
(II)as clauses
(i)and (ii), respectively, and by moving such clauses, as so redesignated, 2 ems to the left; and by adding at the end the following: In the case of a covered transaction with respect to which an agreement is entered into under paragraph (3)(A), the Committee or lead agency, as the case may be, shall formulate, adhere to, and keep updated a plan for monitoring compliance with the agreement. Each plan required by clause
(i)with respect to an agreement entered into under paragraph (3)(A) shall include an explanation of— which member of the Committee will have primary responsibility for monitoring compliance with the agreement; how compliance with the agreement will be monitored; how frequently compliance reviews will be conducted; whether an independent entity will be utilized under subparagraph
(E)to conduct compliance reviews; and what actions will be taken if the parties fail to cooperate regarding monitoring compliance with the agreement. If, at any time after a mitigation agreement or condition is entered into or imposed under paragraph (3)(A), the Committee or lead agency, as the case may be, determines that a party or parties to the agreement or condition are not in compliance with the terms of the agreement or condition, the Committee or lead agency may, in addition to the authority of the Committee to impose penalties pursuant to subsection (h)(3) and to unilaterally initiate a review of any covered transaction under subsection (b)(1)(D)(iii)(I)— negotiate a plan of action for the party or parties to remediate the lack of compliance, with failure to abide by the plan or otherwise remediate the lack of compliance serving as the basis for the Committee to find a material breach of the agreement or condition; require that the party or parties submit any covered transaction initiated after the date of the determination of noncompliance and before the date that is 5 years after the date of the determination to the Committee for review under subsection (b); or seek injunctive relief. If the parties to an agreement entered into under paragraph (3)(A) enter into a contract with an independent entity from outside the United States Government for the purpose of monitoring compliance with the agreement, the Committee shall take such action as is necessary to prevent a conflict of interest from arising by ensuring that the independent entity owes no fiduciary duty to the parties. Subject to subparagraphs
(A)through (E), the Committee shall develop and agree upon methods for evaluating compliance with any agreement entered into or condition imposed with respect to a covered transaction that will allow the Committee to adequately ensure compliance without unnecessarily diverting Committee resources from assessing any new covered transaction for which a written notice under clause
(i)of subsection (b)(1)(C) or declaration under clause
(v)of that subsection has been filed, and if necessary, reaching a mitigation agreement with or imposing a condition on a party to such covered transaction or any covered transaction for which a review has been reopened for any reason. .
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Sec. 16
Actions by the Committee to address national security risks
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