50 USC 4586 - Rule of construction

Collapse to view only § 4586. Rule of construction

§ 4581. Prohibition on investments
§ 4582. Notification on investments
§ 4583. Report
§ 4584. Multilateral engagement and coordination
§ 4585. Public database of covered foreign persons
§ 4586. Rule of construction
§ 4587. Penalties
§ 4588. Exemption from disclosure
§ 4589. Definitions

§ 4581. Prohibition on investments

(a) In general

(b) Evasion

(1) National interest exemption

(2) Intelligence exemption

(d) Congressional notification

The Secretary shall—

(1) notify the appropriate congressional committees not later than five business days after issuing an exemption under subsection (c); and

(2) include in such notification an identification of the national interest justifying the use of the exemption, subject to appropriate confidentiality and classification requirements.

(e) Regulations

(1) In general

(2) Non-binding feedback

(A) In general

(B) Authority to limit frivolous feedback requests

(3) Notice; opportunity to cure

(A) In general

(B) Self-disclosure letters

(4) Low-burden regulations

In issuing regulations under paragraph (1), the Secretary should balance the priority of protecting the national security interest of the United States while, to the extent practicable—

(A) minimizing the cost and complexity of compliance for affected parties, including the duplication of reporting requirements under current regulations;

(B) adopting the least burdensome alternative that achieves regulatory objectives; and

(5) Burden of proof

(Sept. 8, 1950, ch. 932, title VIII, § 801, as added Pub. L. 119–60, div. H, title LXXXV, § 8521, Dec. 18, 2025, 139 Stat. 1924.)

§ 4582. Notification on investments

(a) Mandatory notification

(b) Regulations

(1) In general

(2) Low-burden regulations

In issuing regulations under paragraph (1), the Secretary should balance the priority of protecting the national security interest of the United States while, to the extent practicable—

(A) minimizing the cost and complexity of compliance for affected parties, including the duplication of reporting requirements under current regulation;

(B) adopting the least burdensome alternative that achieves regulatory objectives; and

(3) Burden of proof

(4) Completeness of notification

(A) In general

(B) Incomplete notifications

(5) Identification of non-notified activity

The Secretary shall establish a process to identify covered national security transactions in a prohibited technology or a notifiable technology for which—

(A) a notification is not submitted to the Secretary under subsection (a); and

(B) information is reasonably available.

(Sept. 8, 1950, ch. 932, title VIII, § 802, as added Pub. L. 119–60, div. H, title LXXXV, § 8521, Dec. 18, 2025, 139 Stat. 1925.)

§ 4583. Report

(a) In generalNot later than 18 months after December 18, 2025, and not less frequently than annually thereafter, the Secretary, in consultation with the Secretary of Commerce and, as appropriate, the heads of other relevant Federal departments and agencies, shall submit to the appropriate congressional committees a report, subject to appropriate confidentiality and classification requirements, that—

(1) lists all enforcement actions taken subject to the existing regulations and regulations issued under section 1

1 So in original. Probably should be “sections”.

4581(e) and 4582(b) of this title during the year preceding submission of the report, which includes, with respect to each such action, a description of—

(A) the prohibited technology or notifiable technology;

(B) the covered national security transaction;

(D) the relevant United States person;

(2) provides an assessment of the definition of the term “prohibited technology” under existing regulations or regulations issued under section 4581(e) or 4582(b) of this title by—

(A) identifying additional technologies that the Secretary, in consultation with the Secretary of Commerce and, as applicable, the Secretary of Defense, the Secretary of State, the Secretary of Energy, the Director of National Intelligence, and the heads of any other relevant Federal agencies, determined under existing regulations or regulations issued pursuant to 4581(e) 2

2 So in original. Probably should be preceded by “section”.

of this title may pose an acute threat to the national security of the United States if developed or acquired by a country of concern;

(B) explaining why each technology identified in subparagraph (A) may pose an acute threat to the national security of the United States if developed or acquired by a country of concern; and

(C) describing any removal of technologies from the category of prohibited technology under existing regulations or regulations issued under section 4581(e) of this title during the reporting period to the extent that the technologies no longer pose an acute threat to the national security of the United States if developed or acquired by a country of concern;

(3) lists all notifications submitted under existing regulations or regulations issued section 3

3 So in original. Probably should be preceded by “under”.

4582 of this title during the year preceding submission of the report and includes, with respect to each such notification—

(A) basic information on each party to the covered national security transaction with respect to which the notification was submitted; and

(B) the nature of the covered national security transaction that was the subject of the notification, including the elements of the covered national security transaction that necessitated a notification;

(4) includes a summary of those notifications, disaggregated by prohibited technology, by notifiable technology, by covered national security transaction, and by country of concern;

(5) provides additional context and information regarding trends in the prohibited technology, notifiable technology, the types of covered national security transaction, and the countries involved in those notifications; and

(6) assesses the overall impact of those notifications, including recommendations for—

(A) expanding existing Federal programs to support the production or supply of prohibited technologies or notifiable technologies in the United States, including the potential of existing authorities to address any related national security concerns;

(B) investments needed to enhance prohibited technologies or notifiable technologies and reduce United States dependence on countries of concern regarding those technologies; and

(b) Consideration of certain informationIn preparing the report pursuant to subsection (a), the Secretary—

(1) shall consider information provided jointly by the chairperson and ranking member of any of the appropriate congressional committees;

(2) may consider credible information obtained by other countries and nongovernmental organizations that monitor the military, surveillance, intelligence, or technology capabilities of a country of concern; and

(3) may consider any other information that the Secretary deems relevant.

(d) Testimony required

(e) Requests by appropriate congressional committees

(1) In generalAfter receiving a request that meets the requirements of paragraph (2) with respect to whether a technology should be included in the amendments as described in subsection (a)(2), the Secretary shall, in preparing the report pursuant to subsection (a)—

(A) determine if that technology may pose an acute threat to the national security of the United States if developed or acquired by a country of concern; and

(B) include in the report pursuant to subsection (a) an explanation with respect to that determination that includes—

(i) a statement of whether or not the technology, as determined by the Secretary, may pose an acute threat to the national security of the United States if developed or acquired by a country of concern; and

(ii) if the Secretary determines that—(I) the technology may pose an acute threat to the national security of the United States if developed or acquired by a country of concern, an explanation for such determination and a recommendation whether that technology should be named a prohibited technology or a notifiable technology; and(II) the technology would not pose an acute threat to the national security of the United States if developed or acquired by a country of concern, an explanation for such determination.

(2) Requirements

(Sept. 8, 1950, ch. 932, title VIII, § 803, as added Pub. L. 119–60, div. H, title LXXXV, § 8521, Dec. 18, 2025, 139 Stat. 1926.)

§ 4584. Multilateral engagement and coordination

(a) Authorities

The Secretary, in coordination with the Secretary of State, the Secretary of Commerce, and the heads of other relevant Federal agencies, should—

(1) conduct bilateral and multilateral engagement with the governments of countries that are allies and partners of the United States to promote and increase coordination of protocols and procedures to facilitate the effective implementation of and appropriate compliance with the prohibitions and notification requirement pursuant to this subchapter;

(2) upon adoption of protocols and procedures described in paragraph (1), work with those governments to establish mechanisms for sharing information, including trends, with respect to such activities; and

(3) work with and encourage the governments of countries that are allies and partners of the United States to develop similar mechanisms of their own, for the exclusive purpose of preventing the development of prohibited technologies by a country of concern.

(b) Strategy for multilateral engagement and coordination

Not later than 180 days after the date of the regulations implementing enactment of this subchapter, the Secretary, in coordination with the Secretary of State, the Secretary of Commerce, and the heads of other relevant Federal agencies, should—

(1) develop a strategy to work with the governments of countries that are allies and partners of the United States to develop mechanisms that are comparable to the prohibitions and notification requirements pursuant to this subchapter, for the exclusive purpose of preventing the development of prohibited technologies by a country of concern; and

(2) assess opportunities to provide technical assistance to those countries with respect to the development of those mechanisms.

Not later than one year after the date of the regulations implementing enactment of this subchapter, and annually thereafter for four years, the Secretary shall submit to the appropriate congressional committees a report, subject to the appropriate confidentiality and classification requirements, that includes—

(1) a discussion of any strategy developed pursuant to subsection (b)(1), including key tools and objectives for the development of comparable mechanisms by the governments of allies and partners of the United States;

(2) a list of partner and allied countries to target for cooperation in developing their own prohibitions;

(3) the status of the strategy’s implementation and outcomes; and

(4) a description of impediments to the establishment of comparable mechanisms by governments of allies and partners of the United States.

(d) Appropriate congressional committees defined

In this section, the term “appropriate congressional committees” means—

(1) the Committee on Foreign Relations and the Committee on Banking, Housing, and Urban Affairs of the Senate; and

(2) the Committee on Foreign Affairs and the Committee on Financial Services of the House of Representatives.

(Sept. 8, 1950, ch. 932, title VIII, § 804, as added Pub. L. 119–60, div. H, title LXXXV, § 8521, Dec. 18, 2025, 139 Stat. 1929.)

§ 4585. Public database of covered foreign persons

(a) In general

(b) Modification process

(d) Rule of construction

(Sept. 8, 1950, ch. 932, title VIII, § 805, as added Pub. L. 119–60, div. H, title LXXXV, § 8521, Dec. 18, 2025, 139 Stat. 1930.)

§ 4586. Rule of construction

(Sept. 8, 1950, ch. 932, title VIII, § 806, as added Pub. L. 119–60, div. H, title LXXXV, § 8521, Dec. 18, 2025, 139 Stat. 1930.)

§ 4587. Penalties

(a) In general

(b) Penalties described

(1) Unlawful acts

(2) Civil penalty

(3) Divestment

(4) Relief

(Sept. 8, 1950, ch. 932, title VIII, § 807, as added Pub. L. 119–60, div. H, title LXXXV, § 8521, Dec. 18, 2025, 139 Stat. 1930.)

§ 4588. Exemption from disclosure

(a) In general

(b) Exceptions

Subsection (a) shall not prohibit the disclosure of the following, subject to appropriate confidentiality and classification requirements:

(1) Information relevant to any administrative or judicial action or proceeding.

(2) Information to Congress or any duly authorized committee or subcommittee of Congress.

(3) Information important to the national security analysis or actions of the Secretary to any domestic governmental entity, or to any foreign governmental entity of a United States ally or partner, under the exclusive direction and authorization of the Secretary, only to the extent necessary for national security purposes, and subject to appropriate confidentiality and classification requirements.

(4) Identity of a covered foreign person in the public database described in section 4585 of this title.

(5) Information that the parties have consented to be disclosed to third parties.

(6) Information gathered by the Secretary or the Secretary’s designee where the disclosure is determined to be in the national security interest, which may include publication of anonymized data.

(Sept. 8, 1950, ch. 932, title VIII, § 808, as added Pub. L. 119–60, div. H, title LXXXV, § 8521, Dec. 18, 2025, 139 Stat. 1931.)

§ 4589. DefinitionsIn this subchapter:

(1) Appropriate congressional committeesExcept as provided in section 4584(d) of this title, the term “appropriate congressional committees” means—

(A) the Committee on Financial Services, the Committee on Foreign Affairs, and the Committee on Appropriations of the House of Representatives; and

(B) the Committee on Banking, Housing, and Urban Affairs and the Committee on Appropriations of the Senate.

(2) Country of concernThe term “country of concern” means—

(A) the People’s Republic of China, including the Hong Kong and Macau Special Administrative Regions;

(B) the Republic of Cuba;

(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) Covered foreign personSubject to regulations prescribed in accordance with this subchapter, the term “covered foreign person” means a foreign person that—

(A) is incorporated in, has a principal place of business in, or is organized under the laws of a country of concern;

(B) is a member of the Central Committee of the Chinese Communist Party or is a member of the political leadership of a country of concern;

(C) is subject to the direction or control of a country of concern, as defined by regulation, an entity described in subparagraph (A) or (B), or the state or the government of a country of concern (including any political subdivision, agency, or instrumentality thereof); or

(D) is owned in the aggregate, directly or indirectly, 50 percent or more by a country of concern, an entity described in subparagraph (A) or (B), or the state or the government of a country of concern (including any political subdivision, agency, or instrumentality thereof).

(4) Covered national security transaction

(A) In generalSubject to such regulations as may be issued in accordance with this subchapter, the term “covered national security transaction” means a United States person’s direct or indirect—

(i) acquisition of an equity interest or contingent equity interest in a covered foreign person that the United States person knows at the time of the acquisition is a covered foreign person;

(ii) provision of a loan or similar debt financing arrangement to a covered foreign person that the United States person knows at the time of the provision is a covered foreign person, where such debt financing affords or will afford the United States person an interest in profits of the covered foreign person, the right to appoint members of the board of directors (or equivalent) of the covered foreign person, or other comparable financial or governance rights characteristic of an equity investment but not typical of a loan;

(iii) entrance by such United States person into a joint venture, wherever located, that is formed with a person of a country of concern, and that the subject United States person knows at the time of entrance into the joint venture that the joint venture will engage, or plans to engage, in a prohibited technology or notifiable technology;

(iv) conversion of a contingent equity interest (or interest equivalent to a contingent equity interest) or conversion of debt to an equity interest in a covered foreign person;

(v) acquisition, leasing, or other development of operations, land, property, or other assets in a country of concern that the United States person knows at the time of such acquisition, leasing, or other development will result in, or that the United States person plans to result in—(I) the establishment of a covered foreign person; or(II) the engagement of a person of a country of concern in a prohibited technology or notifiable technology;

(vi) knowingly directing prohibited transactions or notifiable transactions by foreign persons that the United States person has knowledge at the time of the transaction would constitute an activity described in clause (i), (ii), (iii), (iv), or (v), if engaged in by a United States person;

(vii) acquisition of a limited partner or equivalent interest in a venture capital fund, private equity fund, fund of funds, or other pooled investment fund (in each case where the fund is not a United States person) that the United States person has knowledge at the time of the acquisition likely will invest in a person of a country of concern that is in one of the notifiable technology or prohibited technology sectors, and such fund undertakes a transaction that would be a covered national security transaction if undertaken by a United States person; or

(viii) any other transaction identified by the Secretary, in consultation with the appropriate congressional committees and subject to public notice and comment in accordance with subchapter II of chapter 5 and chapter 7 of title 5, and not subject to the requirements of section 4559 of this title, that is contributing to the military, intelligence, surveillance, or cyber-enabled capabilities of a country of concern.

(B) Exceptions and clarificationsSubject to regulations prescribed in accordance with this subchapter, the term “covered national security transaction” does not include—

(i) any transaction the value of which the Secretary determines is de minimis;

(ii) any category of transactions that the Secretary determines is in the national interest of the United States;

(iii) an investment—(I) in a security (as defined in section 78c(a) of title 15) that is traded on an exchange or the over-the-counter market in any jurisdiction;(II) in a security issued by an investment company (as defined in section 80a–3 of title 15) that is registered with the Securities and Exchange Commission, or, if the Secretary chooses to include it as an exception from a covered national security transaction, in a security issued by a non-United States investment company that is registered with a foreign regulator with comparable oversight standards and regulatory jurisdiction to the Securities and Exchange Commission as determined by the Secretary of Treasury;(III) made as a limited partner or equivalent in a venture capital fund, private equity fund, fund of funds, or other pooled investment fund (other than as described in subclause (II)) where—(aa) the limited partner or equivalent’s committed capital is not more than a de minimis amount, as determined by the Secretary, aggregated across any investment and co-investment vehicles of the fund; or(bb) the limited partner or equivalent has secured a binding contractual assurance that its capital in the fund will not be used to engage in a transaction that would be a covered national security transaction if engaged in by a United States person; or(IV) in a derivative of a security described under subclause (I), (II), or (III);

(iv) any ancillary transaction undertaken by a financial institution (as defined in section 5312 of title 31);

(v) the acquisition by a United States person of the equity or other interest owned or held by a covered foreign person in an entity or assets located outside of a country of concern in which the United States person is acquiring the totality of the interest in the entity held by the covered foreign person;

(vi) an intracompany transfer of funds, as defined in regulations prescribed in accordance with this subchapter, from a United States parent company to a subsidiary located in a country of concern or a transaction that, but for this clause, would be a covered national security transaction between a United States person and its controlled foreign person that supports operations that are not covered national security transactions or that maintains covered national security transactions that the controlled foreign person was engaged in prior to the effective date of the regulations implementing this subchapter;

(vii) a transaction secondary to a covered national security transaction, including—(I) contractual arrangements (not including contractual arrangements for technology transfer or technical knowledge transfer) or the procurement of material inputs for any covered national security transaction (such as raw materials);(II) bank lending;(III) the processing, clearing, or sending of payments by a bank;(IV) underwriting services including, but not limited to, the temporary acquisition of an equity interest for the sole purpose of facilitating underwriting services;(V) debt rating services;(VI) prime brokerage;(VII) global custody;(VIII) equity research or analysis; or(IX) other similar services;

(viii) any ordinary or administrative business transaction as may be defined in such regulations; or

(ix) any transaction completed before December 18, 2025.

(C) Ancillary transaction definedIn this paragraph, the term “ancillary transaction” means, subject to regulations prescribed by the Secretary—

(i) the processing, settling, clearing, or sending of payments and cash transactions;

(ii) underwriting services, including the temporary acquisition of an equity interest for the sole purpose of facilitating underwriting services;

(iii) credit rating services; and

(iv) other services ordinarily incident to and part of the provision of financial services, such as opening deposit accounts, direct custody services, foreign exchange services, remittances services, and safe deposit services.

(5) Foreign person

(6) Knowledge; knowThe terms “knowledge” or “know” mean—

(A) actual knowledge that a fact or circumstance exists or is substantially certain to occur;

(B) an awareness of a high probability of a fact or circumstance’s existence or future occurrence; or

(7) Notifiable technology

(A) In generalSubject to the regulations prescribed in accordance with this subchapter, the term “notifiable technology” means a technology within the following areas not already captured by the technical thresholds specified by any regulations issued in accordance with section 4581 of this title:

(i) Semiconductor technology and microelectronics.

(ii) Artificial intelligence systems.

(iii) Quantum information technologies.

(iv) High-performance computing and supercomputing.

(v) Hypersonic systems.

(B) UpdatesThe Secretary, in consultation with the appropriate congressional committees and subject to notice and comment in accordance with subchapter II of chapter 5 and chapter 7 of title 5, and not subject to the requirements of section 4559 of this title, may prescribe regulations in accordance with this subchapter to—

(i) define the technical parameters of technologies described in subparagraph (A), as reasonably needed for national security purposes; or

(ii) to add and define categories to the list in subparagraph (A) that enable the military, intelligence, surveillance, or cyber-enabled capabilities of a country of concern.

(8) Party

(9) Person

(10) Prohibited technology

(A) In generalSubject to the regulations prescribed in accordance with this subchapter, the term “prohibited technology” means a technology within the following areas, as specified by the regulations:

(i) Advanced semiconductor technology and microelectronics.

(ii) Artificial intelligence systems.

(iii) Quantum information technologies.

(iv) High-performance computing and supercomputing.

(v) Hypersonic systems.

(i) define the technical parameters of technologies described in subparagraph (A), as reasonably needed for national security purposes; or

(ii) to add and define categories to the list in subparagraph (A) that enable the military, intelligence, surveillance, or cyber-enabled capabilities of a country of concern.

(11) Secretary

(12) United States personThe term “United States person” means—

(A) any United States citizen or an alien lawfully admitted for permanent residence to the United States;

(B) an entity organized under the laws of the United States or of any jurisdiction within the United States (including any foreign branch of such an entity); or

(Sept. 8, 1950, ch. 932, title VIII, § 809, as added Pub. L. 119–60, div. H, title LXXXV, § 8521, Dec. 18, 2025, 139 Stat. 1931.)