Modifications to requirement for public reporting of Chinese military companies operating in the United States

Section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283; 10 U.S.C. 113 note) is amended— (1) in subsection (a), by striking, based on the most recent information available,; (2) in subsection (b)— (A) in paragraph (3)(A), by striking based on the latest information available; and (B) by striking paragraph (4); (3) by amending subsection (e) to read as follows: (e) Regulations The Secretary of Defense shall prescribe regulations to implement this section.; and (4) in subsection (g)— (A) by redesignating paragraphs (2), (3), (4), and (5) as paragraphs (4), (11), (16), and (20), respectively; (B) by inserting after paragraph (1) the following new paragraphs: (2) Assistance The term assistance means the provision of any benefit, including monetary compensation in the form of grants, loans, subsidies, tax benefits, real property, tangible or intangible property, discounts, employees, sponsored research, or any other preferential treatment. (3) Association The term association means a group of two or more entities connected for a common interest.; (C) in paragraph (4), as redesignated by subparagraph (A), by amending subparagraph (C) to read as follows: (C) includes a wholly owned or wholly controlled subsidiary or wholly owned or wholly controlled affiliate of a parent entity or an entity described in subparagraph (B).; (D) by inserting after paragraph (4), as so redesignated, the following new paragraphs: (5) Contributor to Chinese defense industrial base The term contributor to the Chinese defense industrial base — (A) means an entity that manufactures, produces, exports, or provides materials, products, or services that— (i) can supply, service, or expand China's military-civil fusion strategy; or (ii) could be used for military or defense purposes by— (I) Chinese military and paramilitary elements, security forces, police, law enforcement, border control, the People’s Armed Police, or the Ministry of State Security; or (II) any other organization subordinate to the Central Military Commission of the Chinese Communist Party, the Chinese Ministry of Industry and Information Technology, the State-Owned Assets Supervision and Administration Commission of the State Council, or the State Administration of Science, Technology, and Industry for National Defense; and (B) may include manufacturing, producing, exporting, or providing materials, products, or services that have a substantial military application, even if— (i) the particular technology, product, or service is not directly supplied to or used by an entity described in subclause (I) or (II) of subparagraph (A)(ii); and (ii) the particular technology, product, or service also has commercial uses. (6) Directly controlled by The term directly controlled by, with respect to an entity, means that another entity exercises power over, influences, manages, or guides the business decisions or operations of the entity. (7) Formal association The term formal association includes established or recognized relationships between entities, such as joint ventures, standardization or working groups, task forces, consortiums, or partnerships and projects. (8) Indirectly controlled by The term indirectly controlled by, with respect to an entity, means that another entity exercises power, influence, management, or guidance over the business decisions or operations of the entity through an intermediate entity, subsidiary, or affiliate entity. (9) Indirectly owned by The term indirectly owned by, with respect to an entity, means ownership of the entity achieved through investment in, or the purchase of shares or economic or voting rights in, the entity through an intermediate entity, subsidiary, or affiliate entity, without regard to— (A) the percentage of ownership or number of shares owned; or (B) whether such ownership results in control of the entity. (10) Informal association The term informal association means a lesser recognized, short-term relationship between entities, such as participation in exhibitions, competitions, or joint demonstrations.; (E) in paragraph (11), as redesignated by subparagraph (A)— (i) by redesignating subparagraphs (B) through (H) as subparagraphs (C) through (I), respectively; and (ii) by striking subparagraph (A) and inserting the following new paragraphs: (A) Entities knowingly receiving assistance or that knowingly received assistance from the Government of China or the Chinese Communist Party through science, technology, research, and industrial efforts that may constitute efforts initiated, granted, or created by, provided under, or related to, the Chinese military industrial planning apparatus, or in furtherance of Chinese military industrial planning objectives. Single Champion or Little Giant designations associated with Chinese industrial planning, or any other successor selection or designation as an enterprise associated with Chinese industrial planning, may constitute knowing receipt of assistance through science, technology, research, and industrial efforts initiated, granted, or created by, provided under, or related to, the Chinese military industrial planning apparatus or in furtherance of Chinese military industrial planning objectives or military-civil fusion efforts. (B) Entities that knowingly contract with, or provide services or components to (including as lower tier suppliers and subcontractors)— (i) the People’s Liberation Army, Chinese military and paramilitary elements, security forces, police, law enforcement, border control, the People’s Armed Police, or the Ministry of State Security; or (ii) any other organization subordinate to the Central Military Commission of the Chinese Communist Party, the Chinese Ministry of Industry and Information Technology, the State-Owned Assets Supervision and Administration Commission of the State Council, or the State Administration of Science, Technology, and Industry for National Defense.; (F) by inserting after paragraph (11), as so redesignated, the following new paragraphs: (12) Military-civil fusion enterprise zone The term military-civil fusion enterprise zone means a section of territory established by the Government of China for the purpose of advancing China’s policy of military-civil fusion through economic activity. (13) Military equipment procurement platform The term military equipment procurement platform means a digital marketplace that advertises or sells equipment, supplies, or services to the military or military suppliers and that are ultimately used by the Chinese military or the Chinese defense industrial base, without regard to whether the platform is established, sponsored, or run by a private entity or the Government of China. (14) Military industrial planning apparatus The term military industrial planning apparatus means efforts or policies initiated by the Government of China to expand the Chinese defense industrial base, including military-civil fusion integration of dual-use products, technologies, or services. (15) Military industrial planning objective The term military industrial planning objective means a line of effort (such as a plan, mission, or goal) outlined by the Government of China to expand the Chinese defense industrial base, including by integrating dual-use products, technologies, or services into military equipment, programs, or systems.; and (G) by inserting after paragraph (16), as redesignated by subparagraph (A), the following new paragraphs: (17) Operational direction; policy guidance The terms operational direction and policy guidance mean instructions, decisions, proposals, plans, guidance, or requirements on how an entity should conduct operations. (18) Owned by The term owned by, with respect to an entity, mean ownership of the entity achieved through investment in, or the purchase of shares or economic or voting rights in, the entity, without regard to— (A) the percentage of ownership or number of shares owned; or (B) whether such ownership results in control of the entity. (19) Parent entity The term parent entity, with respect to an entity, means another entity that directly or indirectly holds at least 50 percent of the economic interest or at least 50 percent of the voting interest in the entity..