Sec. 104001. National critical capabilities reviews

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The Trade Act of 1974 ( 19 U.S.C. 2101 et seq. ) is amended by adding at the end the following: In this title: The term appropriate congressional committees means— the Committee on Finance, the Committee on Armed Services, the Committee on Banking, Housing, and Urban Affairs, the Committee on Commerce, Science, and Transportation, the Committee on Health, Education, Labor, and Pensions, the Committee on Foreign Relations, the Committee on Homeland Security and Governmental Affairs, and the Select Committee on Intelligence of the Senate; and the Committee on Ways and Means, the Committee on Armed Services, the Committee on Education and Labor, the Committee on Financial Services, the Committee on Homeland Security, the Committee on Foreign Affairs, the Committee on Transportation and Infrastructure, and the Permanent Select Committee on Intelligence of the House of Representatives.

The term Committee means the Committee on National Critical Capabilities established under section 1002. The term control means the power, direct or indirect, whether exercised or not exercised, to determine, direct, or decide important matters affecting an entity, subject to regulations prescribed by the Committee. The term country of concern — has the meaning given the term foreign adversary in section 8(c)(2) of the Secure and Trusted Communications Networks Act of 2019 ( 47 U.S.C. 1607(c)(2) ); and may include a nonmarket economy country (as defined in section 771(18) of the Tariff Act of 1930 ( 19 U.S.C. 1677(18) )) identified by the Committee for purposes of this paragraph by regulation.

Except as otherwise provided, the term covered transaction means any of the following transactions, proposed or pending on or after the date of the enactment of this title: Any transaction by a United States business that— shifts or relocates to a country of concern, or transfers to an entity of concern, the design, development, production, manufacture, fabrication, supply, servicing, testing, management, operation, investment, ownership, or any other essential elements involving one or more national critical capabilities identified under subparagraph (B)(ii); or could result in an unacceptable risk to a national critical capability.

Any other transaction, transfer, agreement, or arrangement, the structure of which is designed or intended to evade or circumvent the application of this title, subject to regulations prescribed by the Committee. The Committee shall prescribe regulations further defining the term covered transaction in accordance with subchapter II of chapter 5, and chapter 7, of title 5, United States Code (commonly known as the Administrative Procedure Act ). For purposes of subparagraph (A)(I), the regulations prescribed by the Committee under clause

(i)shall— identify the national critical capabilities subject to that subparagraph based on criteria intended to limit application of that subparagraph to the subset of national critical capabilities that is likely to pose an unacceptable risk to the national security and crisis preparedness of the United States; and enumerate, quantify, prioritize, and set forth sufficient allowances of, specific types and examples of such capabilities. The term crisis preparedness means preparedness for— a public health emergency declared under section 319 of the Public Health Service Act ( 42 U.S.C. 247d ); or a major disaster declared under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5170 ). The term critical infrastructure means systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems and assets would have a debilitating impact on national security, national economic security, national public health or safety, or any combination of those matters. The term entity of concern means an entity— the ultimate parent entity of which is domiciled in a country of concern; or that is directly or indirectly controlled by, owned by, or subject to the influence of a foreign person that has a substantial nexus with a country of concern. Except as provided by subparagraph (B), the term foreign entity means any branch, partnership, group or sub-group, association, estate, trust, corporation or division of a corporation, or organization organized under the laws of a foreign country if— its principal place of business is outside the United States; or its equity securities are primarily traded on one or more foreign exchanges. The term foreign entity does not include any entity described in subparagraph

(A)that can demonstrate that a majority of the equity interest in such entity is ultimately owned by nationals of the United States. The term foreign person means— any foreign national, foreign government, or foreign entity; any entity over which control is exercised or exercisable by a foreign national, foreign government, or foreign entity; or any entity over which control is exercised or exercisable by a person described in subparagraph

(A)or (B). The term national critical capabilities , subject to regulations prescribed by the Committee— means systems and assets, whether physical or virtual, so vital to the United States that the inability to develop such systems and assets or the incapacity or destruction of such systems or assets would have a debilitating impact on national security or crisis preparedness; and includes the following: The production, in sufficient quantities, of any of the following articles: Medical supplies, medicines, and personal protective equipment. Articles essential to the operation, manufacture, supply, service, or maintenance of critical infrastructure. Articles critical to infrastructure construction after a natural or manmade disaster. Articles that are components of systems critical to the operation of weapons systems, intelligence collection systems, or items critical to the conduct of military or intelligence operations. Any other articles identified in regulations prescribed under section 1007. Supply chains for the production of articles described in clause (i). Essential supply chains for the Department of Defense. Any other supply chains identified in regulations prescribed under section 1007. Services critical to the production of articles described in clause

(i)or a supply chain described in clause (ii), (iii), or (iv). Medical services. Services critical to the maintenance of critical infrastructure. Services critical to infrastructure construction after a natural or manmade disaster. Any other services identified in regulations prescribed under section 1007. The term national security includes— national security, as defined in section 721(a) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(a) ); national defense, as defined in section 702 of that Act ( 50 U.S.C. 4552 ); and agricultural security and natural resources security. The term party , with respect to a transaction, has the meaning given that term in regulations prescribed by the Committee. The term United States means the several States, the District of Columbia, and any territory or possession of the United States. The term United States business means a person engaged in interstate commerce in the United States. There is established a committee, to be known as the Committee on National Critical Capabilities , which shall carry out this title and such other assignments as the President may designate. The Committee shall be comprised of the head, or a designee of the head, of each of the following: The Office of the United States Trade Representative. The Department of Commerce. The Office of Science and Technology Policy. The Department of the Treasury. The Department of Homeland Security. The Department of Defense. The Department of State. The Department of Justice. The Department of Energy. The Department of Health and Human Services. The Department of Agriculture. The Department of Labor. Any other Federal agency the President determines appropriate, generally or on a case-by-case basis. In addition to the members of the Committee specified in paragraph (1), the following shall, except as provided in subparagraph (B), be nonvoting, ex officio members of the Committee: The Director of National Intelligence. The Administrator of the Federal Emergency Management Agency. The Director of the National Institute of Standards and Technology. The Director of the Centers for Disease Control and Prevention. The Director of the National Institute of Allergy and Infectious Diseases. The Chairperson of the Federal Communications Commission. The Chairperson of the Securities and Exchange Commission. The Chairperson of the Commodity Futures Trading Commission. The Administrator of the Federal Aviation Administration. The chairperson of the Committee may designate any of the officials specified in clauses

(ii)through

(ix)of subparagraph

(A)as voting members of the Committee. The United States Trade Representative shall serve as the chairperson of the Committee. In carrying out the duties of the chairperson of the Committee, the United States Trade Representative shall consult with the Secretary of Defense and the Secretary of Commerce. The head of each agency represented on the Committee shall designate an official, at or equivalent to the level of Assistant Secretary in the Department of the Treasury, who is appointed by the President, by and with the advice and consent of the Senate, to carry out such duties related to the Committee as the head of the agency may assign. A United States business that engages in a covered transaction shall submit a written notification of the transaction to the Committee. Not later than 60 days after receiving written notification under subsection

(a)of a covered transaction, the Committee may— review the transaction to determine if the transaction is likely to result in an unacceptable risk to one or more national critical capabilities, including by considering factors specified in section 1005; and if the Committee determines under subparagraph

(A)that the transaction poses a risk described in that subparagraph, make recommendations— to the President for appropriate action that may be taken under this title or under other existing authorities to address or mitigate that risk; and to Congress for the establishment or expansion of Federal programs to support the production or supply of articles and services described in section 1001(a)(11)(B) in the United States. The Committee may initiate a review under paragraph

(1)of a covered transaction for which written notification is not submitted under subsection (a). The Committee shall initiate a review under paragraph

(1)of a covered transaction if the chairperson and the ranking member of one of the appropriate congressional committees jointly request the Committee to review the transaction. A United States business shall submit each notification required by subsection

(a)to the Committee— in a form that includes business confidential information; and in a form that omits business confidential information and is appropriate for disclosure to the public. Subject to subsection (d), the President may take such action for such time as the President considers appropriate to address or mitigate any unacceptable risk posed by a covered transaction to one or more national critical capabilities, including suspending or prohibiting the covered transaction. The President shall announce the decision on whether or not to take action pursuant to subsection

(a)with respect to a covered transaction not later than 15 days after the date on which the review of the transaction under section 1003 is completed. The President may direct the Attorney General of the United States to seek appropriate relief, including divestment relief, in the district courts of the United States, in order to implement and enforce this section. The President may exercise the authority conferred by subsection

(a)to suspend or prohibit a covered transaction only if the President finds that— there is credible evidence that leads the President to believe that the transaction poses an unacceptable risk to one or more national critical capabilities; and provisions of law (other than this section) do not, in the judgment of the President, provide adequate and appropriate authority for the President to protect such capabilities. For purposes of determining whether to take action under subsection (a), the President shall consider, among other factors, each of the factors described in section 1005, as appropriate. The Committee, in reviewing and making a determination with respect to a covered transaction under section 1003, and the President, in determining whether to take action under section 1004 with respect to a covered transaction, shall consider any factors relating to national critical capabilities that the Committee or the President considers relevant, including— the long-term strategic economic, national security, and crisis preparedness interests of the United States; the history of distortive or predatory trade practices in each country in which a foreign person that is a party to the transaction is domiciled; control and beneficial ownership (as determined in accordance with section 847 of the National Defense Authorization Act for Fiscal Year 2020 ( Public Law 116–92 ; 10 U.S.C. 2509 note)) of each foreign person that is a party to the transaction; and impact on the domestic industry and resulting resiliency, including the domestic skills base, taking into consideration any pattern of foreign investment in the domestic industry. The Committee shall determine the sensitivities and risks for sourcing of articles described in section 1001(a)(11)(B)(i), in accordance with the following: The sourcing of least concern shall be articles the supply chains for which are housed in whole within countries that are allies of the United States. The sourcing of greater concern shall be articles the supply chains for which are housed in part within countries of concern or from an entity of concern but for which substitute production is available from elsewhere at required scale. The sourcing of greatest concern shall be articles the supply chains for which are housed wholly or in part in countries of concern or from an entity of concern and for which substitute production is unavailable elsewhere at required scale. The Committee should prescribe regulations to identify additional articles, supply chains, and services to recommend for inclusion in the definition of national critical capabilities under section 1001(a)(11). In identifying under subsection

(a)additional articles, supply chains, and services to recommend for inclusion in the definition of national critical capabilities under section 1001(a)(11), the Committee should conduct a review of industries identified by Federal Emergency Management Agency as carrying out emergency support functions, including the following industries: Energy. Medical. Communications, including electronic and communications components. Defense. Transportation. Aerospace, including space launch. Robotics. Artificial intelligence. Semiconductors. Shipbuilding. Water, including water purification. In conducting a review of industries under paragraph (1), the Committee should specify the quantity of articles, supply chains, and services, and specific types and examples of transactions, from each industry sufficient to maintain national critical capabilities. Not later than 90 days after the date of the enactment of the National Critical Capabilities Defense Act of 2021 , and annually thereafter, the Committee shall submit to the appropriate congressional committees a report— on the determination under section 1006 with respect to sensitivities and risks for sourcing of articles described in section 1001(a)(11)(B)(i); assessing whether identification of additional national critical capabilities under section 1007 is necessary; and describing, for the year preceding submission of the report— the notifications received under subsection

(a)of section 1003 and reviews conducted pursuant to such notifications; reviews initiated under paragraph

(2)or

(3)of subsection

(b)of that section; actions recommended by the Committee under subsection (b)(1)(B) of that section as a result of such reviews; and reviews during which the Committee determined no action was required; and assessing the overall impact of such reviews on national critical capabilities. The report required by paragraph

(1)shall be submitted in unclassified form but may include a classified annex. Not later than 180 days after the date of the enactment of the National Critical Capabilities Defense Act of 2021 , the Committee shall submit to Congress a report that includes recommendations relating to use the authorities under title III of the Defense Production Act of 1950 ( 50 U.S.C. 4531 et seq. ) to make investments to enhance national critical capabilities and reduce dependency on materials and services imported from foreign countries. The Committee shall prescribe regulations to carry out this title. Regulations prescribed to carry out this title shall— provide for the imposition of civil penalties for any violation of this title, including any mitigation agreement entered into, conditions imposed, or order issued pursuant to this title; and include specific examples of the types of— the transactions that will be considered to be covered transactions; and the articles, supply chains, and services that will be considered to be national critical capabilities. In prescribing regulations to carry out this title, the Committee shall coordinate with the United States Trade Representative, the Under Secretary of Commerce for Industry and Security, and the Committee on Foreign Investment in the United States to avoid duplication of effort. Not later than 90 days after the date of the enactment of the National Critical Capabilities Defense Act of 2021 , the Federal Acquisition Regulation shall be revised to require each person that is a prospective contractor for an executive agency to disclose the supply chains the person would use to carry out the contract and the extent to which the person would depend on articles and services imported from foreign countries, including the percentage of such materials and services imported from countries of concern. The head of an executive agency shall consider the failure of a person to make the disclosures required by subsection

(a)to be material determinants in awarding a contract to that person. The revisions to the Federal Acquisition Regulation required under subsection

(a)shall apply with respect to contracts for which solicitations are issued on or after the date that is 90 days after the date of the enactment of the National Critical Capabilities Defense Act of 2021 . In this section: The term executive agency has the meaning given that term in section 133 of title 41, United States Code. The term Federal Acquisition Regulation means the regulation issued pursuant to section 1303(a)(1) of title 41, United States Code. The United States Trade Representative— should, in coordination and consultation with relevant Federal agencies, conduct multilateral engagement with the governments of countries that are allies of the United States to secure coordination of protocols and procedures with respect to covered transactions with countries of concern; and upon adoption of protocols and procedures described in paragraph (1), shall work with those governments to establish information sharing regimes. There are authorized to be appropriated such sums as may be necessary to carry out this title, including to provide outreach to industry and persons affected by this title. Nothing in this title may be construed as prohibiting or limiting the free and fair flow of commerce outside of the United States that does not pose an unacceptable risk to a national critical capability. . The table of contents for the Trade Act of 1974 is amended by adding at the end the following: TITLE X—National critical capabilities reviews Sec. 1001. Definitions. Sec. 1002. Committee on National Critical Capabilities. Sec. 1003. Review of covered transactions. Sec. 1004. Action by the President. Sec. 1005. Factors to be considered. Sec. 1006. Supply chain sensitivities. Sec. 1007. Identification of additional national critical capabilities. Sec. 1008. Reporting requirements. Sec. 1009. Requirement for regulations. Sec. 1010. Requirements related to government procurement. Sec. 1011. Multilateral engagement and coordination. Sec. 1012. Authorization of appropriations. Sec. 1013. Rule of construction with respect to free and fair commerce. .

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