Sec. 1260E. CHINESE FOREIGN DIRECT INVESTMENT IN COUNTRIES OF THE ARCTIC REGION

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## SEC. 1260E CHINESE FOREIGN DIRECT INVESTMENT IN COUNTRIES OF THE ARCTIC REGION ###

(a)Independent Study ####

(1)In general Not later than 45 days after the date of enactment of this Act, the Secretary of Defense shall seek to enter into a contract with a federally-funded research and development center described in paragraph

(2)to complete an independent study of Chinese foreign direct investment in countries of the Arctic region, with a focus on the effects of such foreign direct investment on United States national security and near-peer competition in the Arctic region. ####

(2)Federally-funded research and development center described A federally-funded research and development center described in this paragraph is a federally-funded research and development center that— #####

(A)has access to relevant data and demonstrated data-sets regarding foreign direct investment in the Arctic region; and #####

(B)has access to policy experts throughout the United States and the Arctic region. ###

(b)Elements The study required by subsection

(a)shall include the following: ####

(1)Projects in the Arctic that are directly or indirectly funded by public and private Chinese entities, to— #####

(A)build public infrastructure; #####

(B)finance infrastructure; #####

(C)lease mineral and oil and gas leases; #####

(D)purchase real estate; #####

(E)extract or process, including smelting, minerals and oil and gas; #####

(F)engage in shipping or to own and operate or construct shipping infrastructure, including ship construction; #####

(G)lay undersea cables; and #####

(H)manufacture, own or operate telecommunications capabilities and infrastructure. ####

(2)An analysis of the legal environment in which Chinese foreign direct investment are occurring in the United States, Russia, Canada, Greenland, Norway, and Iceland. The analysis should include— #####

(A)an assessment of the efficacy of mechanisms for screening foreign direct investment in the United States, Russia, Canada, Greenland, Norway, and Iceland; #####

(B)an assessment of the degree to which there is transparency in Chinese foreign direct investment in countries of the Arctic region; #####

(C)an assessment of the criteria used to assess potential Chinese foreign direct investment in countries of the Arctic region; #####

(D)an assessment of the efficacy of methods for monitoring approved Chinese foreign direct investment in countries of the Arctic region; and #####

(E)an assessment of public reporting of the decision to approve such Chinese foreign direct investment. ####

(3)A comparison of Chinese foreign direct investment in countries of the Arctic region to other countries with major investments in such countries, including India, Japan, South Korea, the Netherlands, and France. ####

(4)An assessment of the environmental impact of past Chinese investments in oil and gas, mineral, and infrastructure projects in the Arctic region, including the degree to which Chinese investors are required to comply with local environmental laws and post bonds to assure remediation if a project becomes bankrupt. ####

(5)A review of the 2018 Chinese Arctic Policy and other relevant public and nonpublic Chinese policy documents to determine the following: #####

(A)China’s strategic objectives in the Arctic region from a military, economic, territorial, and political perspective. #####

(B)China’s goals in the Arctic region with respect to its relations with the United States and Russia, including the degree to which activities of China in the region are an extension of China’s strategic competition with the United States. #####

(C)Whether any active or planned infrastructure investments are likely to result in a regular presence of Chinese military vessels or the establishment of military bases in the Arctic region. #####

(D)The extent to which Chinese research activities in the Arctic region are a front for economic activities, including illegal economic espionage, intelligence gathering, and support for future Chinese military activities in the region. #####

(E)The degree to which Arctic littoral states are susceptible to the political and economic risks of unregulated foreign direct investment. #####

(F)The vulnerability of semi-autonomous regions, such as tribal lands, to Chinese foreign direct investment, including the influence of legal controls and political or economic manipulation with respect to such vulnerability. #####

(G)The implications of China’s Arctic development and participation model with respect to forecasting China’s military, economy, territorial, and political activities. ####

(6)Policy and legislative recommendations to enhance the position of the United States in affairs of the Arctic region, including— #####

(A)recommendations for how the United States would best interact with nongovernmental organizations such as the World Bank, Arctic Council, United Nations General Assembly, and International Maritime Organization; #####

(B)recommendations to pursue or not pursue the formation of an Arctic Development Bank and, if pursued, how to organize, fund, and operate the bank; #####

(C)measures the United States can take to promote regional governance and eliminate the soft-power influence from Chinese foreign direct investment, in particular, steps where the United States and Russia should cooperate; and #####

(D)the possibility of negotiating a regional arrangement to regulate foreign direct investment in countries of the Arctic region. ###

(c)Report to Department of Defense Not later than 720 days after the date of the enactment of this Act, the federally-funded research and development center with respect to which the Secretary of Defense has entered into a contract under subsection

(a)shall submit to the Secretary a report containing the study under subsections

(a)and (b). ###

(d)Report to Congress Not later than 750 days after the date of the enactment of this Act, the Secretary of Defense shall submit to the appropriate congressional committees the report under subsection (c), without change. ###

(e)Appropriate Congressional Committee Defined In this section, the term “appropriate congressional committees” means— ####

(1)the congressional defense committees; ####

(2)the Committee on Foreign Relations and the Committee on Commerce, Science, and Transportation of the Senate; and ####

(3)the Committee on Foreign Affairs and the Committee on Transportation and Infrastructure of the House of Representatives.