Sec. 2. Findings

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Congress finds the following: In section 1 of the National Security Study Memorandum issued on June 3, 2021 (relating to establishing the fight against corruption as a core United States national security interest), President Joseph R. Biden, Jr., established countering corruption as a core United States national security interest. The practices of the Chinese Communist Party, the Government of the People’s Republic of China, and instrumentalities of the Government of the People’s Republic of China pose a unique challenge to the enforcement of section 30A of the Securities Exchange Act of 1934 ( 15 U.S.C. 78dd–1 ) and sections 104 and 104A of the Foreign Corrupt Practices Act of 1977 ( 15 U.S.C. 78dd–2 , 78dd–3) (referred to collectively in this section as the corporate anti-corruption laws ).

The Chinese Communist Party, the Government of the People’s Republic of China, and instrumentalities of the Government of the People’s Republic of China routinely frustrate the enforcement of the corporate anti-corruption laws by leveraging access to the markets of the People’s Republic of China to cause companies that are subject to the corporate anti-corruption laws to improperly provide valuable benefits to those entities in the form of principally nonmonetary actions (referred to collectively in this section as corporate actions currying favor with the Chinese Communist Party ), which include— the hiring, promotion, or retention of Chinese Communist Party officials and children of those officials, such as the unlawful practices admitted to by certain entities subject to the corporate anti-corruption laws in what are commonly known as the princelings settlements; political advocacy on behalf of the goals and policies of the Chinese Communist Party in the People’s Republic of China, the United States, and the rest of the world, including by— assisting in the denial, obfuscation, or excusal of— genocide and other atrocities committed by the Chinese Communist Party, the Government of the People’s Republic of China, and instrumentalities of the Government of the People’s Republic of China; the extrajudicial detainment, subjection to forced labor, torture, and political indoctrination of, and other severe human rights abuses with respect to, Uyghurs, Kazakhs, Kyrgyz, and members of other predominantly Muslim ethnic groups by the Government of the People’s Republic of China in the Xinjiang Uyghur Autonomous Region of China (or comparable treatment of members of other ethnic, religious, and political groups who reside elsewhere in the People’s Republic of China); censorship or other activities with respect to Hong Kong that— prohibit, limit, or penalize the exercise of freedom of expression or assembly by the citizens of Hong Kong; or limit access to free and independent print, online, or broadcast media; and the extrajudicial rendition, arbitrary detention, or torture of any individual in Hong Kong or other gross violations of internationally recognized human rights in Hong Kong; and supporting, legitimizing, or recognizing the unlawful territorial claims of the Government of the People’s Republic of China in Taiwan, Tibet, Korea, the South China Sea, the East China Sea, and other locations in which such claims are contested; and investments without reasonable business purposes in industries targeted for support by the Chinese Communist Party, the Government of the People’s Republic of China, or instrumentalities of the Government of the People’s Republic of China, including by entering into a joint venture with such an instrumentality or an entity affiliated with such an instrumentality.

Corporate actions currying favor with the Chinese Communist Party are valuable to officials of the Chinese Communist Party, the Government of the People’s Republic of China, and instrumentalities of the Government of the People’s Republic of China, and constitute payments of value for the purposes of subsection

(a)of each of the corporate anti-corruption laws, because those actions are— directly or indirectly financially valuable to those officials due to— the extent of corruption in the People’s Republic of China; the reliance of the economy of the People’s Republic of China on state-owned enterprises; and the integration of the party-state with business enterprises in the People’s Republic of China; and valuable to the interests of the Chinese Communist Party, and officials of that Party, in a manner that is distinct from any independent economic or public interest rationale for those actions. Corporate actions currying favor with the Chinese Communist Party are taken corruptly for the purposes of each of the corporate anti-corruption laws because those actions— have no reasonable business purpose unrelated to obtaining or retaining business within the People’s Republic of China and instead relate to— accessing markets within the jurisdiction of the People’s Republic of China; or avoiding injury threatened by the Chinese Communist Party, the Government of the People’s Republic of China, or instrumentalities of the Government of the People’s Republic of China; and are morally wrongful to the extent that those actions contribute to denying, obfuscating, or excusing— genocide and other atrocities; and the extrajudicial detainment, subjection to forced labor, torture, and political indoctrination of, and other severe human rights abuses with respect to, individuals by the Chinese Communist Party, the Government of the People’s Republic of China, or instrumentalities of the Government of the People’s Republic of China. Despite the public and prominent undertaking of corporate actions currying favor with the Chinese Communist Party by individuals and entities that are subject to the corporate anti-corruption laws, the Federal Government has undertaken little enforcement with respect to those corporate actions due to an apparent difficulty in demonstrating that the actions are corrupt, or of value to a foreign official, because of the principally nonmonetary nature of those actions. In addition to undermining the public interest in the enforcement of the corporate anti-corruption laws in the manner described in paragraphs

(2)through (6), corporate actions currying favor with the Chinese Communist Party undermine the public interest in the enforcement of the laws of the United States, including— sections 4 and 5 of the Act entitled An Act to ensure that goods made with forced labor in the Xinjiang Autonomous Region of the People’s Republic of China do not enter the United States market, and for other purposes , approved December 23, 2021 ( Public Law 117–78 ; 135 Stat. 1525) (referred to in this section as the Uyghur Forced Labor Prevention Act ) (including the amendment made by section 5 of that Act), by— reducing the awareness of entities subject to, or potentially subject to, that Act regarding the application of that Act to activities in the Xinjiang Autonomous Region of the People’s Republic of China or elsewhere in the People’s Republic of China; aiding and abetting violations of that Act; and reducing the information available to law enforcement officials in the United States regarding the activities described in clause (i); and United States sanctions laws with respect to persons and entities in the People’s Republic of China (collectively referred to in this section as the sanctions laws of the United States )— including— section 1237 of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 ( Public Law 105–261 ; 50 U.S.C. 1701 note); sections 4 and 5 of the Uyghur Forced Labor Prevention Act (including the amendment made by section 5 of that Act); the Global Magnitsky Human Rights Accountability Act (subtitle F of title XII of Public Law 114–328 ; 22 U.S.C. 2656 note); Executive Order 13818 ( 50 U.S.C. 1701 note; relating to blocking the property of persons involved in serious human rights abuse or corruption), as amended on or after the date of enactment of this Act; Executive Order 13959 ( 50 U.S.C. 1701 note; relating to addressing the threat from securities investments that finance Communist Chinese military companies), as amended before, on, or after the date of enactment of this Act and as superseded in part before, on, or after the date of enactment of this Act; and Executive Order 14032 ( 50 U.S.C. 1701 note; relating to addressing the threat from securities investments that finance certain companies of the People’s Republic of China), as amended before, on, or after the date of enactment of this Act; and by facilitating investment in, or transactions with, entities in which investment is, or with which transactions are, prohibited under the sanctions laws of the United States by— providing principally nonmonetary benefits of value to those entities, which, in turn, become financially valuable to those entities in a manner that is directly traceable to those benefits, such as with respect to raising capital from international capital markets; investing in, or transacting with, entities not subject to the sanctions laws of the United States under circumstances that suggest that those entities will, in turn, invest in or transact with other entities that are subject to the sanctions laws of the United States; and reducing the information available to law enforcement officials in the United States for the purpose of enforcing the sanctions laws of the United States. The requirements of this Act, and the amendments made by this Act, are justified by— the public interest in mitigating the threats to the enforcement of the corporate anti-corruption laws, and the sanctions laws of the United States, that are posed by the Chinese Communist Party, the Government of the People’s Republic of China, and instrumentalities of the Government of the People’s Republic of China; the foreign policy interests achieved by this Act and the amendments made by this Act; and the fact that those requirements— are confined to the specific conduct of entities and persons subject to the corporate anti-corruption laws based on observable patterns of behavior demonstrated by those entities and persons; and do not subject any entity or person described in clause

(i)to any criminal penalty.

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