An Act
To impose sanctions with respect to foreign persons involved in the erosion of certain obligations of China with respect to Hong Kong, 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; TABLE OF CONTENTS.
(a) Short Title.—This Act may be cited as the “Hong Kong Autonomy Act”.
(b) Table Of Contents.—The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Findings.
Sec. 4. Sense of Congress regarding Hong Kong.
Sec. 5. Identification of foreign persons involved in the erosion of the obligations of China under the Joint Declaration or the Basic Law and foreign financial institutions that conduct significant transactions with those persons.
Sec. 6. Sanctions with respect to foreign persons that contravene the obligations of China under the Joint Declaration or the Basic Law.
Sec. 7. Sanctions with respect to foreign financial institutions that conduct significant transactions with foreign persons that contravene the obligations of China under the Joint Declaration or the Basic Law.
Sec. 8. Waiver, termination, exceptions, and congressional review process.
Sec. 9. Implementation; penalties.
Sec. 10. Rule of construction.
SEC. 2. DEFINITIONS.
In this Act:
(1) ALIEN; NATIONAL; NATIONAL OF THE UNITED STATES.—The terms “alien”, “national”, and “national of the United States” have the meanings given those terms in section 101 of the Immigration and Nationality Act (8 U.S.C. 1101).
(2) APPROPRIATE CONGRESSIONAL COMMITTEES AND LEADERSHIP.—The term “appropriate congressional committees and leadership” means—
(A) the Committee on Armed Services, the Committee on Banking, Housing, and Urban Affairs, the Committee on Foreign Relations, the Committee on Homeland Security and Governmental Affairs, the Committee on the Judiciary, the Select Committee on Intelligence, and the majority leader and the minority leader of the Senate; and
(B) the Committee on Armed Services, the Committee on Financial Services, the Committee on Foreign Affairs, the Committee on Homeland Security, the Committee on the Judiciary, the Permanent Select Committee on Intelligence, and the Speaker and the minority leader of the House of Representatives.
(3) BASIC LAW.—The term “Basic Law” means the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China.
(4) CHINA.—The term “China” means the People's Republic of China.
(5) ENTITY.—The term “entity” means a partnership, joint venture, association, corporation, organization, network, group, or subgroup, or any other form of business collaboration.
(6) FINANCIAL INSTITUTION.—The term “financial institution” means a financial institution specified in section 5312(a)(2) of title 31, United States Code.
(7) HONG KONG.—The term “Hong Kong” means the Hong Kong Special Administrative Region of the People's Republic of China.
(8) JOINT DECLARATION.—The term “Joint Declaration” means the Joint Declaration of the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People's Republic of China on the Question of Hong Kong, done at Beijing on December 19, 1984.
(9) KNOWINGLY.—The term “knowingly”, with respect to conduct, a circumstance, or a result, means that a person has actual knowledge of the conduct, the circumstance, or the result.
(10) PERSON.—The term “person” means an individual or entity.
(11) UNITED STATES PERSON.—The term “United States person” means—
(A) any citizen or national of the United States;
(B) any alien lawfully admitted for permanent residence in the United States;
(C) any entity organized under the laws of the United States or any jurisdiction within the United States (including a foreign branch of such an entity); or
(D) any person located in the United States.
...
SEC. 5. IDENTIFICATION OF FOREIGN PERSONS INVOLVED IN THE EROSION OF THE OBLIGATIONS OF CHINA UNDER THE JOINT DECLARATION OR THE BASIC LAW AND FOREIGN FINANCIAL INSTITUTIONS THAT CONDUCT SIGNIFICANT TRANSACTIONS WITH THOSE PERSONS.
(a) In General.—Not later than 90 days after the date of the enactment of this Act, if the Secretary of State, in consultation with the Secretary of the Treasury, determines that a foreign person is materially contributing to, has materially contributed to, or attempts to materially contribute to the failure of the Government of China to meet its obligations under the Joint Declaration or the Basic Law, the Secretary of State shall submit to the appropriate congressional committees and leadership a report that includes—
(1) an identification of the foreign person; and
(2) a clear explanation for why the foreign person was identified and a description of the activity that resulted in the identification.
(b) Identifying Foreign Financial Institutions.—Not earlier than 30 days and not later than 60 days after the Secretary of State submits to the appropriate congressional committees and leadership the report under subsection (a), the Secretary of the Treasury, in consultation with the Secretary of State, shall submit to the appropriate congressional committees and leadership a report that identifies any foreign financial institution that knowingly conducts a significant transaction with a foreign person identified in the report under subsection (a).
(c) Exclusion Of Certain Information.—
(1) INTELLIGENCE.—The Secretary of State shall not disclose the identity of a person in a report submitted under subsection (a) or (b), or an update under subsection (e), if the Director of National Intelligence determines that such disclosure could compromise an intelligence operation, activity, source, or method of the United States.
(2) LAW ENFORCEMENT.—The Secretary of State shall not disclose the identity of a person in a report submitted under subsection (a) or (b), or an update under subsection (e), if the Attorney General, in coordination, as appropriate, with the Director of the Federal Bureau of Investigation, the head of any other appropriate Federal law enforcement agency, and the Secretary of the Treasury, determines that such disclosure could reasonably be expected—
(A) to compromise the identity of a confidential source, including a State, local, or foreign agency or authority or any private institution that furnished information on a confidential basis;
(B) to jeopardize the integrity or success of an ongoing criminal investigation or prosecution;
(C) to endanger the life or physical safety of any person; or
(D) to cause substantial harm to physical property.
(3) NOTIFICATION REQUIRED.—If the Director of National Intelligence makes a determination under paragraph (1) or the Attorney General makes a determination under paragraph (2), the Director or the Attorney General, as the case may be, shall notify the appropriate congressional committees and leadership of the determination and the reasons for the determination.
(d) Exclusion Or Removal Of Foreign Persons And Foreign Financial Institutions.—
(1) FOREIGN PERSONS.—The President may exclude a foreign person from the report under subsection (a), or an update under subsection (e), or remove a foreign person from the report or update prior to the imposition of sanctions under section 6(a) if the material contribution (as described in subsection (g)) that merited inclusion in that report or update—
(A) does not have a significant and lasting negative effect that contravenes the obligations of China under the Joint Declaration and the Basic Law;
(B) is not likely to be repeated in the future; and
(C) has been reversed or otherwise mitigated through positive countermeasures taken by that foreign person.
(2) FOREIGN FINANCIAL INSTITUTIONS.—The President may exclude a foreign financial institution from the report under subsection (b), or an update under subsection (e), or remove a foreign financial institution from the report or update prior to the imposition of sanctions under section 7(a) if the significant transaction or significant transactions of the foreign financial institution that merited inclusion in that report or update—
(A) does not have a significant and lasting negative effect that contravenes the obligations of China under the Joint Declaration and the Basic Law;
(B) is not likely to be repeated in the future; and
(C) has been reversed or otherwise mitigated through positive countermeasures taken by that foreign financial institution.
(3) NOTIFICATION REQUIRED.—If the President makes a determination under paragraph (1) or (2) to exclude or remove a foreign person or foreign financial institution from a report under subsection (a) or (b), as the case may be, the President shall notify the appropriate congressional committees and leadership of the determination and the reasons for the determination.
(e) Update Of Reports.—
(1) IN GENERAL.—Each report submitted under subsections (a) and (b) shall be updated in an ongoing manner and, to the extent practicable, updated reports shall be resubmitted with the annual report under section 301 of the United States-Hong Kong Policy Act of 1992 (22 U.S.C. 5731).
(2) RULE OF CONSTRUCTION.—Nothing in this subsection shall be construed to terminate the requirement to update the reports under subsections (a) and (b) upon the termination of the requirement to submit the annual report under section 301 of the United States-Hong Kong Policy Act of 1992 (22 U.S.C. 5731).
(f) Form Of Reports.—
(1) IN GENERAL.—Each report under subsection (a) or (b) (including updates under subsection (e)) shall be submitted in unclassified form and made available to the public.
(2) CLASSIFIED ANNEX.—The explanations and descriptions included in the report under subsection (a)(2) (including updates under subsection (e)) may be expanded on in a classified annex.
(g) Material Contributions Related To Obligations Of China Described.—For purposes of this section, a foreign person materially contributes to the failure of the Government of China to meet its obligations under the Joint Declaration or the Basic Law if the person—
(1) took action that resulted in the inability of the people of Hong Kong—
(A) to enjoy freedom of assembly, speech, press, or independent rule of law; or
(B) to participate in democratic outcomes; or
(2) otherwise took action that reduces the high degree of autonomy of Hong Kong.
SEC. 6. SANCTIONS WITH RESPECT TO FOREIGN PERSONS THAT CONTRAVENE THE OBLIGATIONS OF CHINA UNDER THE JOINT DECLARATION OR THE BASIC LAW.
(a) Imposition Of Sanctions.—
(1) IN GENERAL.—On and after the date on which a foreign person is included in the report under section 5(a) or an update to that report under section 5(e), the President may impose sanctions described in subsection (b) with respect to that foreign person.
(2) MANDATORY SANCTIONS.—Not later than one year after the date on which a foreign person is included in the report under section 5(a) or an update to that report under section 5(e), the President shall impose sanctions described in subsection (b) with respect to that foreign person.
(b) Sanctions Described.—The sanctions described in this subsection with respect to a foreign person are the following:
(1) PROPERTY TRANSACTIONS.—The President may, pursuant to such regulations as the President may prescribe, prohibit any person from—
(A) acquiring, holding, withholding, using, transferring, withdrawing, transporting, or exporting any property that is subject to the jurisdiction of the United States and with respect to which the foreign person has any interest;
(B) dealing in or exercising any right, power, or privilege with respect to such property; or
(C) conducting any transaction involving such property.
(2) EXCLUSION FROM THE UNITED STATES AND REVOCATION OF VISA OR OTHER DOCUMENTATION.—In the case of a foreign person who is an individual, the President may direct the Secretary of State to deny a visa to, and the Secretary of Homeland Security to exclude from the United States, the foreign person, subject to regulatory exceptions to permit the United States to comply with the Agreement regarding the Headquarters of the United Nations, signed at Lake Success June 26, 1947, and entered into force November 21, 1947, between the United Nations and the United States, or other applicable international obligations.
SEC. 7. SANCTIONS WITH RESPECT TO FOREIGN FINANCIAL INSTITUTIONS THAT CONDUCT SIGNIFICANT TRANSACTIONS WITH FOREIGN PERSONS THAT CONTRAVENE THE OBLIGATIONS OF CHINA UNDER THE JOINT DECLARATION OR THE BASIC LAW.
(a) Imposition Of Sanctions.—
(1) INITIAL SANCTIONS.—Not later than one year after the date on which a foreign financial institution is included in the report under section 5(b) or an update to that report under section 5(e), the President shall impose not fewer than 5 of the sanctions described in subsection (b) with respect to that foreign financial institution.
(2) EXPANDED SANCTIONS.—Not later than two years after the date on which a foreign financial institution is included in the report under section 5(b) or an update to that report under section 5(e), the President shall impose each of the sanctions described in subsection (b).
(b) Sanctions Described.—The sanctions described in this subsection with respect to a foreign financial institution are the following:
(1) LOANS FROM UNITED STATES FINANCIAL INSTITUTIONS.—The United States Government may prohibit any United States financial institution from making loans or providing credits to the foreign financial institution.
(2) PROHIBITION ON DESIGNATION AS PRIMARY DEALER.—Neither the Board of Governors of the Federal Reserve System nor the Federal Reserve Bank of New York may designate, or permit the continuation of any prior designation of, the foreign financial institution as a primary dealer in United States Government debt instruments.
(3) PROHIBITION ON SERVICE AS A REPOSITORY OF GOVERNMENT FUNDS.—The foreign financial institution may not serve as agent of the United States Government or serve as repository for United States Government funds.
(4) FOREIGN EXCHANGE.—The President may, pursuant to such regulations as the President may prescribe, prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and involve the foreign financial institution.
(5) BANKING TRANSACTIONS.—The President may, pursuant to such regulations as the President may prescribe, prohibit any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve the foreign financial institution.
(6) PROPERTY TRANSACTIONS.—The President may, pursuant to such regulations as the President may prescribe, prohibit any person from—
(A) acquiring, holding, withholding, using, transferring, withdrawing, transporting, importing, or exporting any property that is subject to the jurisdiction of the United States and with respect to which the foreign financial institution has any interest;
(B) dealing in or exercising any right, power, or privilege with respect to such property; or
(C) conducting any transaction involving such property.
(7) RESTRICTION ON EXPORTS, REEXPORTS, AND TRANSFERS.—The President, in consultation with the Secretary of Commerce, may restrict or prohibit exports, reexports, and transfers (in-country) of commodities, software, and technology subject to the jurisdiction of the United States directly or indirectly to the foreign financial institution.
(8) BAN ON INVESTMENT IN EQUITY OR DEBT.—The President may, pursuant to such regulations or guidelines as the President may prescribe, prohibit any United States person from investing in or purchasing significant amounts of equity or debt instruments of the foreign financial institution.
(9) EXCLUSION OF CORPORATE OFFICERS.—The President may direct the Secretary of State, in consultation with the Secretary of the Treasury and the Secretary of Homeland Security, to exclude from the United States any alien that is determined to be a corporate officer or principal of, or a shareholder with a controlling interest in, the foreign financial institution, subject to regulatory exceptions to permit the United States to comply with the Agreement regarding the Headquarters of the United Nations, signed at Lake Success June 26, 1947, and entered into force November 21, 1947, between the United Nations and the United States, or other applicable international obligations.
(10) SANCTIONS ON PRINCIPAL EXECUTIVE OFFICERS.—The President may impose on the principal executive officer or officers of the foreign financial institution, or on individuals performing similar functions and with similar authorities as such officer or officers, any of the sanctions described in paragraphs (1) through (8) that are applicable.
(c) Timing Of Sanctions.—The President may impose sanctions required under subsection (a) with respect to a financial institution included in the report under section 5(b) or an update to that report under section 5(e) beginning on the day on which the financial institution is included in that report or update.
...
1) See comments to Executive Order 13936 (The President’s Executive Order on Hong Kong Normalization) for consolidated commentary on the following Research System items:
* Executive Order 13936 - The President’s Executive Order on Hong Kong Normalization
* Hong Kong Human Rights and Democracy Act of 2019
* Hong Kong Autonomy Act (2020)