Bill Summary
The "Foreign Adversary Investment Prohibition Act" is a legislative proposal aimed at restricting Members of Congress from engaging in specific financial transactions that benefit foreign adversaries of the United States. This act prohibits any covered financial transactions—such as gifts, loans, investments, or any economic interests—from being conducted by Congress members with entities owned or operated by designated foreign adversaries during their term in office.
The act defines "foreign adversaries" to include countries like China, Cuba, Iran, North Korea, Russia, and Venezuela. If a member violates this prohibition, the Attorney General is authorized to bring a civil lawsuit against them, which may result in penalties ranging from $5,000 for a first violation to $15,000 for subsequent violations. The legislation aims to prevent conflicts of interest and protect national security by ensuring that U.S. lawmakers do not profit from dealings with hostile foreign entities.
Possible Impacts
The "Foreign Adversary Investment Prohibition Act" outlined in the legislation could affect people in several ways. Here are three examples:
1. **Increased Transparency in Congressional Finances**: The prohibition on Members of Congress conducting financial transactions with foreign adversaries may lead to greater transparency regarding the financial activities of elected officials. This could enhance public trust in government, as citizens may feel more secure knowing that their representatives are not financially benefiting from entities linked to countries deemed adversarial. As a result, voters and constituents may feel more empowered and informed about the integrity of their elected officials.
2. **Legal Accountability and Enforcement**: The provision allowing the Attorney General to bring civil actions against violators may lead to increased scrutiny of financial activities by Members of Congress. Individuals who believe they have been wronged by a Member's violation could seek legal recourse, resulting in potential civil penalties for those found in violation. This could act as a deterrent for unethical behavior and promote adherence to ethical standards among lawmakers, ultimately influencing the behavior of elected officials.
3. **Impact on Financial Activities and Relationships**: Members of Congress who may have previously engaged in investments or financial partnerships with foreign entities categorized as adversarial (e.g., those from China or Russia) would need to reevaluate their financial dealings. This could limit their investment opportunities and potentially impact their personal wealth. Additionally, it may also affect their relationships with foreign businesses or governments, as the need to comply with this legislation could strain or halt any ongoing financial collaborations, which may indirectly impact the economic landscape in their home states or districts.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3635 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 3635
To prohibit Members of Congress from conducting certain financial
transactions involving a foreign adversary of the United States, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 29, 2025
Mr. Kean (for himself and Ms. Scholten) introduced the following bill;
which was referred to the Committee on Financial Services, and in
addition to the Committee on Agriculture, 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 prohibit Members of Congress from conducting certain financial
transactions involving a foreign adversary of the United States, 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 ``Foreign Adversary Investment
Prohibition Act''.
SEC. 2. PROHIBITION WITH RESPECT TO CERTAIN TRANSACTIONS BY MEMBERS OF
CONGRESS WITH A FOREIGN ADVERSARY.
(a) In General.--A Member of Congress may not, during the term of
service of the Member of Congress, conduct any covered financial
transaction that benefits, directly or indirectly, a foreign adversary
or an entity owned or operated by a foreign adversary.
(b) Civil Enforcement.--
(1) In general.--The Attorney General may bring a civil
action in an appropriate district court of the United States
against any person who violates, or whom the Attorney General
has reason to believe is engaging in conduct that violates,
subsection (a).
(2) Civil penalty.--If the court finds by a preponderance
of the evidence that a person violated subsection (a), the
court shall impose a civil penalty of not more than--
(A) in the case of a first violation of subsection
(a), $5,000;
(B) in the case of a second violation of subsection
(a), $10,000; and
(C) in the case of each violation of subsection (a)
after a second violation under subparagraph (B),
$15,000.
(c) Definitions.--In this section:
(1) Covered financial transaction.--
(A) In general.--The term ``covered financial
transaction'' includes--
(i) any gift, subscription, loan, advance,
or deposit of money or anything of value;
(ii) any investment in--
(I) a security (as defined in
section 3(a) of Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)));
(II) a security future (as defined
in that section); or
(III) a commodity (as defined in
section 1a of the Commodity Exchange
Act (7 U.S.C. 1a)); and
(iii) any economic interest comparable to
an interest described in clause (i) that is
acquired through synthetic means, such as the
use of a derivative, including an option,
warrant, or other similar means.
(2) Foreign adversary.--The term ``foreign adversary''
means--
(A) the People's Republic of China, including the
Hong Kong Special Administrative Regions;
(B) the Republic of Cuba;
(C) the Islamic Republic of Iran;
(D) the Democratic People's Republic of Korea;
(E) the Russian Federation; and
(F) the Bolivarian Republic of Venezuela under the
regime of Nicolas Maduro Moros.
(3) Member of congress.--The term ``Member of Congress''
means a Senator or Representative in, or Delegate or Resident
Commissioner to, the Congress.
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