Bill Summary
The Holding China Accountable Act is a proposed amendment to the Sarbanes-Oxley Act of 2002, which requires the Public Company Accounting Oversight Board (PCAOB) to maintain a list of certain foreign issuers and prohibits certain individuals from the People's Republic of China from receiving nonimmigrant visas. The bill also requires disclosure of certain information by foreign issuers and their public accounting firms, as well as prohibiting the listing of certain firms on national securities exchanges. Additionally, the bill imposes restrictions on the issuance of nonimmigrant visas to nationals of China seeking to study or work in fields related to science, technology, engineering, mathematics, or attending business meetings or conferences related to these fields. The bill also amends the Higher Education Act of 1965 to require institutions to report any gifts or contracts received from certain foreign sources, and establishes a web portal for electronic filing of disclosure reports.
Possible Impacts
1. The "Holding China Accountable Act" could affect students from China who are studying in the US, as it restricts their ability to obtain nonimmigrant visas for certain fields of study. This could limit their opportunities for education and employment in the US.
2. The Act could also affect US companies that have business dealings with China, as it requires them to disclose information about their financial relationships with Chinese entities. This could impact their business strategies and partnerships.
3. The Act may also affect higher education institutions in the US, as they are required to disclose any gifts or contracts from the specified foreign sources. This could lead to increased scrutiny and potential consequences for not properly reporting this information.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7181 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 7181
To amend the Sarbanes-Oxley Act of 2002 to require the Public Company
Accounting Oversight Board to maintain a list of certain foreign
issuers, to prohibit certain nationals of the People's Republic of
China from receiving nonimmigrant visas, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 11, 2020
Mr. Nunes (for himself, Mr. Conaway, Mr. Crawford, Mr. Turner, Mr.
Stewart, Ms. Stefanik, Mr. Wenstrup, Mr. Calvert, Mr. Marshall, Mr.
Gibbs, Mr. Gaetz, Mr. Wilson of South Carolina, Mr. Holding, Mr.
Collins of Georgia, Mr. Diaz-Balart, Mr. Garcia of California, Mr.
Cook, Mr. Kustoff of Tennessee, Mr. McClintock, Mr. Bishop of North
Carolina, Mr. Spano, Mr. Brooks of Alabama, and Mr. Rouzer) introduced
the following bill; which was referred to the Committee on Financial
Services, and in addition to the Committees on the Judiciary, and
Education and Labor, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Sarbanes-Oxley Act of 2002 to require the Public Company
Accounting Oversight Board to maintain a list of certain foreign
issuers, to prohibit certain nationals of the People's Republic of
China from receiving nonimmigrant visas, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Holding China Accountable Act''.
SEC. 2. DISCLOSURES AND PROHIBITION AGAINST THE LISTING OF CERTAIN
FIRMS ON NATIONAL SECURITIES EXCHANGES.
(a) Disclosure.--
(1) List of certain foreign issuers and covered foreign
public accounting firms.--
(A) In general.--The Commission shall maintain a
publicly available list of--
(i) each foreign issuer, an audit report of
which--
(I) is prepared by a foreign public
accounting firm; and
(II) the Board is not able to
inspect or investigate because of a
position taken by an authority that is
outside of the United States;
(ii) each covered foreign public accounting
firm that has prepared an audit report
identified under clause (i); and
(iii) the jurisdiction in which each
covered foreign public accounting firm
identified under clause (ii) is organized or
operating.
(B) Role of the board.--Not less frequently than
annually, the Board shall provide to the Commission the
information that is required for the Commission to
carry out subparagraph (A).
(2) Annual report disclosure.--
(A) Disclosure.--Each applicable foreign issuer
shall disclose in each covered form filed by the
applicable foreign issuer--
(i) that, during the period covered by
covered form, a covered foreign public
accounting firm has prepared an audit report
for the issuer;
(ii) the percentage of the shares of the
issuer owned by governmental entities in the
foreign jurisdiction in which the issuer is
incorporated or otherwise organized;
(iii) whether governmental entities in a
covered jurisdiction with respect to any
covered foreign public accounting firm that has
prepared an audit report for the issuer during
the period covered by the form have a
controlling financial interest with respect to
the issuer; and
(iv) the name of any official of the
Chinese Communist Party who is a member of the
board of directors of the issuer or the
operating entity with respect to the issuer.
(B) Update of rules.--Not later than 270 days after
the date of enactment of this Act, and after providing
the opportunity for public notice and comment, the
Commission shall make any amendments to the rules of
the Commission that are required as a result of the
requirements of this subsection.
(C) Effective date.--This subsection shall take
effect on the date on which the Commission completes
the amendments required under subparagraph (B).
(3) Disclosure by brokers and dealers.--Section 15(n) of
the Securities Exchange Act of 1934 (15 U.S.C. 78o(n)) is
amended--
(A) in paragraph (1), by striking ``Commission may
issue'' and all that follows through the period at the
end and inserting the following: ``Commission--
``(A) shall issue rules that require a broker and a
dealer to disclose, with respect to any advice,
analysis, or report of the broker or dealer to a retail
investor regarding the securities of a foreign issuer,
whether a covered foreign public accounting firm has
prepared an audit report for the foreign issuer; and
``(B) in addition to the rules required under
subparagraph (A), may issue rules designating documents
or information that shall be provided by a broker or
dealer to a retail investor before the purchase of an
investment product or service by the retail
investor.''; and
(B) by adding at the end the following:
``(4) Definitions.--In this subsection, the terms `audit
report', `covered foreign public accounting firm', and `foreign
issuer' have the meanings given the terms in section 2 of the
EQUITABLE Act.''.
(b) Prohibition Against the Listing of Certain Firms on National
Securities Exchanges.--
(1) In general.--Section 6(b) of the Securities Exchange
Act of 1934 (15 U.S.C. 78f(b)) is amended by adding at the end
the following:
``(11)(A) The rules of the exchange prohibit the initial
listing, after the date of enactment of this paragraph, of any
security of an issuer for which a covered foreign public
accounting firm has prepared an audit report.
``(B) Nothing in subparagraph (A) may be construed to
prevent an exchange from listing a security on the exchange on
or after the date of enactment of this paragraph if that
security was listed on the exchange or a national securities
exchange before the date of enactment of this paragraph.
``(C) In this paragraph, the terms `audit report' and
`covered foreign public accounting firm' have the meanings
given the terms in section 2 of the EQUITABLE Act.
``(12)(A) The rules of the exchange prohibit the listing of
any security of a foreign issuer that, beginning in 2025, has
been identified under section 3(a)(1)(A) of the EQUITABLE Act
in 3 consecutive years.
``(B) Nothing in subparagraph (A) may be construed to
prevent an exchange from listing a security of a foreign issuer
described in that subparagraph beginning on the date on which
the issuer submits to the Commission an audit report for the
issuer that is prepared by a registered public accounting firm
that the Public Company Accounting Oversight Board has
inspected, or is able to inspect, under section 104 of the
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214).
``(C) In this paragraph--
``(i) the terms `audit report' and `registered
public accounting firm' have the meanings given the
terms in section 2(a) of the Sarbanes-Oxley Act of 2002
(15 U.S.C. 7201(a)); and
``(ii) the terms `covered foreign public accounting
firm' and `foreign issuer' have the meanings given the
terms in section 2 of the EQUITABLE Act.''.
(2) Rules.--
(A) Proposals.--Not later than 90 days after the
date of enactment of this Act, each national securities
exchange shall, in accordance with section 19(b) of the
Securities Exchange Act of 1934 (15 U.S.C. 78s(b)) and
any rules prescribed by the Commission under that
section, file with the Commission any proposed change
to the rules of the exchange that is required as a
result of the amendments made by this section.
(B) Adoption.--Not later than 1 year after the date
of enactment of this Act, each national securities
exchange shall have each proposed change described in
paragraph (1) approved by the Commission.
(c) Definitions.--In this section--
(1) the term ``applicable foreign issuer'' means a foreign
issuer--
(A) that is required to file a covered form; and
(B) for which, during the period covered by the
filing described in subparagraph (A), a covered foreign
public accounting firm has prepared an audit report for
the issuer;
(2) the term ``audit report'' has the meaning given the
term in section 2(a) of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7201(a));
(3) the term ``Board'' means the Public Company Accounting
Oversight Board;
(4) the term ``Commission'' means the Securities and
Exchange Commission;
(5) the term ``covered foreign public accounting firm''
means a foreign public accounting firm that the Board is unable
to inspect or investigate under the Sarbanes-Oxley Act of 2002
(15 U.S.C. 7201 et seq.) because of a position taken by an
authority outside of the United States;
(6) the term ``covered form''--
(A) means--
(i) the form described in section 249.310
of title 17, Code of Federal Regulations, or
any successor regulation; and
(ii) the form described in section 249.220f
of title 17, Code of Federal Regulations, or
any successor regulation; and
(B) includes a form that--
(i) is the equivalent of, or substantially
similar to, the form described in clause (i) or
(ii) of subparagraph (A); and
(ii) a foreign issuer files with the
Commission under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.) or rules issued
under that Act;
(7) the term ``covered jurisdiction'' means the foreign
jurisdiction in which the position described in paragraph (5)
is taken with respect to a covered foreign public accounting
firm that prepares an audit report for an applicable foreign
issuer;
(8) the term ``exchange'' has the meaning given the term in
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78a(a));
(9) the term ``foreign issuer'' has the meaning given the
term in section 240.3b-4 of title 17, Code of Federal
Regulations, or any successor regulation;
(10) the term ``foreign public accounting firm'' has the
meaning given the term in section 106(g) of the Sarbanes-Oxley
Act of 2002 (15 U.S.C. 7216(g));
(11) the term ``national securities exchange'' means an
exchange that is registered with the Commission under section 6
of the Securities Exchange Act of 1934 (15 U.S.C. 78f); and
(12) the term ``public accounting firm'' has the meaning
given the term in section 2(a) of the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7201(a)).
SEC. 3. RESTRICTION ON ISSUANCE OF NONIMMIGRANT VISAS TO NATIONALS OF
CHINA.
(a) Restriction.--The Secretary of State may not issue a visa to,
and the Secretary of Homeland Security shall deny entry to the United
States of, an alien under section 101(a)(15) of the Immigration and
Nationality Act (8 U.S.C. 1101(a)(15)) if the alien is a national of
the People's Republic of China seeking to enter the United States for
the purpose of--
(1) studying science, technology, engineering, mathematics,
or a related field;
(2) employment in science, technology, engineering,
mathematics, or a related field; or
(3) attending a business meeting, conference, or academic
or cultural exchange, that includes activities related to
science, technology, engineering, mathematics, or a related
field.
(b) Applicability.--The restriction under subsection (a) shall not
apply for any year in which the President certifies to Congress that--
(1) the People's Republic of China has not provided state
support of cyber espionage against a United States company
during the preceding year; and
(2) no individual or entity present in the United States
has engaged in espionage against a United States company on
behalf of the People's Republic of China during the preceding
year.
(c) Definitions.--In this section:
(1) Cyber espionage.--The term ``cyber espionage'' means
unauthorized access to a communications network, a
communications system, or a device connected to such a network
or system that--
(A) is carried out by a foreign government or any
individual or entity working on behalf of a foreign
government; and
(B) is for the purpose of--
(i) collecting information related to a
copyrighted or copyrightable work, patented or
patentable invention, trademarked good or
service, or trade secret (as such term is
defined in section 1839 of title 18, United
States Code); or
(ii) disruption, destruction, or
manipulation of, or other change to, such
network, system, or device or any information
stored on or transmitted by such network,
system, or device.
(2) Espionage.--The term ``espionage'' means unauthorized
access to or collection of information related to a copyrighted
or copyrightable work, patented or patentable invention,
trademarked good or service, or trade secret (as such term is
defined in section 1839 of title 18, United States Code) by a
foreign government or any individual or entity working on
behalf of a foreign government.
(3) United states company.--The term ``United States
company'' means an organization organized under the laws of the
United States or a State or political subdivision thereof.
SEC. 4. DISCLOSURES OF FOREIGN GIFTS.
(a) Short Title.--This section may be cited as the ``Foreign
Adversary Funding in Higher Education Act''.
(b) Special Rule.--Section 117(a) of the Higher Education Act of
1965 (20 U.S.C. 1011f(a)) is amended--
(1) by striking ``Whenever any'' and by inserting the
following:
``(1) In general.--Subject to paragraph (2), whenever
any''; and
(2) by adding at the end the following:
``(2) Special rule.--
``(A) In general.--Notwithstanding paragraph (1),
whenever any institution is owned or controlled by a
foreign source listed in subparagraph (B) or receives a
gift from or enters into a contract with that foreign
source, paragraph (1) shall be applied by substituting
`$25,000' for `$250,000'.
``(B) Foreign source.--A foreign source listed in
this subparagraph is:
``(i) The People's Republic of China.
``(ii) The Russian Federation.
``(iii) The Islamic Republic of Iran.
``(iv) The Democratic People's Republic of
Korea.''.
(c) Enforcement.--Section 117(f)(2) of the Higher Education Act of
1965 (20 U.S.C. 1011f(f)(2)) is amended by inserting ``an amount equal
to the amount that the institution failed to report under this section
and'' before ``the full costs''.
(d) Web Portal.--Section 117 of the Higher Education Act of 1965
(20 U.S.C. 1011f) is further amended--
(1) by redesignating subsections (g) and (h) as subsections
(h) and (i), respectively; and
(2) by inserting after subsection (f), the following:
``(g) Web Portal.--Not later than 180 days after the date of
enactment of the `Foreign Adversary Funding in Higher Education Act',
the Secretary shall establish a publicly available web portal that--
``(1) enables electronic filing of disclosure reports under
this section; and
``(2) includes any reports filed before such date of
enactment.''.
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