H.R. 1486 — Economic Espionage Prevention Act

This section provides the short title of the Act as the “Economic Espionage Prevention Act.”

This section sets out congressional findings that the People’s Republic of China substantially increased semiconductor exports to Russia after Russia’s full-scale invasion of Ukraine, including an estimated $25 million to $50 million in additional semiconductors per month and $50 million to $100 million in additional exports per month to known transshipment hubs in the second half of 2023, and that these exports include both Chinese- and U.S.-branded semiconductors and are subject to U.S. export controls when destined for Russia or Belarus. It also finds that advanced semiconductors on the Commerce Control List have required a license for export to entities in Russia since Russia’s further invasion of Ukraine and cites a March 14, 2024, State Department notification and an April 3, 2024, statement by Deputy Secretary of State Kurt Campbell regarding Russia’s military reconstitution and the role of Chinese support.

This section directs the Secretary of State, in coordination with relevant Federal departments and agencies, to submit to the appropriate congressional committees within 90 days after enactment a report on the extent to which People’s Republic of China citizens, PRC-organized entities, or persons controlled by or acting at the direction of the Government of the People’s Republic of China are supplying critical components to the Russian defense industrial base or entering into transactions with entities in the Russian Federation’s defense or intelligence sectors. The report must also assess whether such persons have engaged, on or after enactment, in transactions with persons operating on behalf of those sectors, whether those transactions would constitute significant transactions under the Countering America’s Adversaries Through Sanctions Act (CAATSA), and whether any such persons have been sanctioned under sections 231 and 235 of CAATSA (22 U.S.C. 9525 and 9529). The report must be submitted in unclassified form, may include a classified annex, and the unclassified portion may be made public.

This section establishes sanctions authorities for foreign adversary entities that knowingly engage in economic or industrial espionage involving trade secrets or proprietary information owned by United States persons, provide material support or services to foreign adversary military, intelligence, or other national security entities, or violate United States export control laws. On and after 30 days after enactment, the President may impose property-blocking sanctions under the International Emergency Economic Powers Act (IEEPA) (50 U.S.C. 1701 et seq.) against covered foreign persons whose property is in the United States, comes within the United States, or is in the possession or control of a United States person. The section also makes covered aliens inadmissible to the United States, ineligible for visas, admission, parole, or other benefits under the Immigration and Nationality Act, and subject to revocation of any visa or entry documentation regardless of when issued; any revocation takes effect immediately and automatically cancels other valid documentation in the alien’s possession. This section provides exceptions for activities subject to the reporting requirements under title V of the National Security Act of 1947 or other authorized intelligence activities of the United States, for admissions or parole necessary to comply with the United Nations Headquarters Agreement or other applicable international obligations, and for admissions or parole necessary to carry out or assist law enforcement activities in the United States. It also authorizes the President to waive sanctions for renewable periods of not more than 180 days if the President determines and reports to the appropriate congressional committees that the waiver is in the national security interests of the United States. This section directs the President to use authorities under sections 203 and 205 of IEEPA (50 U.S.C. 1702 and 1704) to carry out the sanctions, applies IEEPA penalties under 50 U.S.C. 1705 for violations, requires the President to establish implementation and enforcement procedures and guidelines, and requires annual reporting to Congress for 1 year after enactment and each of the 5 years thereafter unless sanctions were imposed during the previous calendar year. It also provides that participation in an international standards-setting body is not a transaction for purposes of this section.

This section limits the sanctions authorities under the Act by excluding the importation of goods from any authority or requirement to impose sanctions. It defines “good” to mean any article, natural or manmade substance, material, supply, or manufactured product, including inspection and test equipment, but excluding technical data.

This section establishes definitions for purposes of the Act, including “appropriate congressional committees” as the House Committee on Foreign Affairs and the Senate Committee on Foreign Relations, “foreign person” as any person that is not a United States person, “person” as an individual or entity, and “United States person” as a U.S. citizen, lawful permanent resident, or an entity organized under U.S. law, including a foreign branch of such an entity. It also defines “knowingly” to mean actual knowledge or constructive knowledge, incorporates by reference the existing statutory definitions of “economic or industrial espionage,” “own,” “proprietary information,” and “trade secret” under 50 U.S.C. § 1708(d), and defines “foreign adversary” as the countries listed in section 7.4 of title 15, Code of Federal Regulations.