A measure to demand sanctions on and prohibit nearly all economic interactions with blacklisted Chinese entities so targeted – the Chinese Military and Surveillance Company Sanctions Act of 2023 (H.R. 760) – advanced from the House Financial Services Committee last week.
Authored by U.S. Rep. Andy Barr (R-KY), the legislation would require the President to sanction certain entities deemed crucial to China’s defense and surveillance sectors. It builds on an existing executive order from former President Donald Trump, which determined that private companies compelled to support Chinese military, intelligence and security apparatuses should be halted, restricting transactions of publicly traded securities of Community Chinese military companies.
Barr and his supporters found this did not go far enough, leaving open financing options through other forms of equity financing or debt financing, along with transactions with those in the U.S. who could generate earnings and aid company growth.
“In the face of the CCP’s unambiguous ambitions to reshape the global order, the ‘Chinese Military and Surveillance Company Sanctions Act’ stands as a crucial tool to cut off financing to PRC firms threatening U.S. national security”, Barr said. “This bill targets the very core of China’s military-industrial prowess, ensuring that firms integral to their defense and surveillance capabilities are isolated from the global financial system. In a world with intricate economic ties and challenges, this bill utilizes tested sanctions authorities that are targeted but effective while also providing ‘red light, green light’ clarity to global investors.”
The legislation would require an annual report on the situation from the Secretary of the Treasury. Additionally, the Secretary would be encouraged to focus efforts on those engaged in fields such as artificial intelligence, high-performance computing, robotics, biotechnology and more.
The bill was cosponsored by seven other bipartisan representatives.