Full accountability for Chinese military companies

Section 1260H of the 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, is operating directly or indirectly in the United States or any of its territories and possessions,; (2) in subsection (b)— (A) in paragraph (1), by striking 2030 and inserting 2035; 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 amending paragraph (2)(C) to read as follows: (C) includes a majority-owned or majority-controlled subsidiary or majority-owned or majority-controlled affiliate of a parent entity or an entity described in subparagraph (B);; and (B) in paragraph (3)— (i) by amending subparagraph (A) to read as follows: (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, or 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, or 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.; (ii) by redesignating subparagraph (H) as subparagraph (J); (iii) by redesignating subparagraphs (B) through (G) as subparagraphs (C) through (H); (iv) by inserting after subparagraph (A) the following new subparagraph: (B) Entities that knowingly contract with, or provide services or components, which can include lower tier suppliers and subcontractors, to the People’s Liberation Army, Chinese military and paramilitary elements, security forces, police, law enforcement, border control, the People’s Armed Police, the Ministry of State Security, or 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 (v) by inserting after subparagraph (H), as redesignated by clause (ii), the following new subparagraph: (I) Majority-owned or majority-controlled subsidiaries or majority-owned or majority-controlled affiliates of entities described in subparagraphs (A) through (G).; and (C) by adding at the end the following new paragraphs: (6) Assistance The term assistance means benefits from the Government of China, 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. (7) Association The term association means a group of two or more entities connected for a common interest. (8) 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 can supply, service, or expand China’s military-civil fusion strategy or that could be used by Chinese military and paramilitary elements, security forces, police, law enforcement, border control, the People’s Armed Police, the Ministry of State Security, or 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 for military or defense purposes; and (B) includes manufacturing, producing, exporting, or providing materials, products, or services that have a substantial military application, even if the particular technology, product, or service is not directly supplied to or used by the Chinese military or defense and even if the particular technology, product, or service also has commercial uses. (9) Directly controlled by The term directly controlled by means exercising power over, influencing, managing, or guiding an entity’s business decisions or operations. (10) Formal association The term formal association includes established or recognized relationships, such as joint ventures, standardization or working groups, task forces, consortiums, or partnerships and projects with an entity identified in subsection (b)(1). (11) Indirectly controlled by The term indirectly controlled by means power, influence, management, or guidance of an entity’s business decisions or operations through an intermediate entity, subsidiary, or affiliate entity. (12) Indirectly owned by The term indirectly owned by means ownership achieved through investment in, or the purchase of, shares or economic or voting rights of an entity through an intermediate entity, subsidiary, or affiliate entity, regardless of the percentage of ownership or number of shares owned. Indirect ownership by any entity identified in subsection (b)(1) does not require that such entity hold control of another entity through its ownership. (13) Informal association The term informal association means a lesser-recognized, short-term relationship, such as participation in exhibitions, competitions, or joint demonstrations with any entity identified in subsection (b)(1). (14) 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. (15) Military equipment procurement platforms The term military equipment procurement platforms means a digital marketplace that advertises or sells equipment, supplies, or services to the military or military suppliers. A digital marketplace can be established by, sponsored by, or run by private entities or the government of China to advertise and sell equipment, supplies, or services that are ultimately used by the Chinese military or the Chinese defense industrial base. (16) Military industrial planning apparatus The term military industrial planning apparatus means efforts or policies initiated by the Chinese government to expand the Chinese defense industrial base, including military-civil fusion integration of dual-use products, technologies, or services. (17) Military industrial planning objectives The term military industrial planning objectives means lines of effort (such as plans, missions, or goals) outlined by the Chinese government to expand the Chinese defense industrial base, including by integrating dual-use products, technologies, or services into military equipment, programs, or systems. (18) Operational guidance; policy guidance The terms operational guidance and policy guidance mean instructions, decisions, proposals, plans, guidance, or requirements on how an entity should conduct operations. (19) Owned by The term owned by means ownership achieved through investment in, or the purchase of, shares or economic or voting rights in an entity, regardless of the percentage of ownership or number of shares owned. Ownership by any entity identified in subsection (b)(1) does not require that such entity hold control of another entity through its ownership. (20) Parent entity The term parent entity includes an entity that directly or indirectly holds at least 50 percent of the economic interest or at least 50 percent of the voting interest of an entity..