H.R. 7757

[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7757 Introduced in House (IH)]

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118th CONGRESS
2d Session
H. R. 7757

To amend the Securities Exchange Act of 1934 to require disclosures 
with respect to certain financial risks relating to the People's 
Republic of China, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

March 20, 2024

Mr. Sherman (for himself and Mrs. Spartz) introduced the following 
bill; which was referred to the Committee on Financial Services

_______________________________________________________________________

A BILL

To amend the Securities Exchange Act of 1934 to require disclosures 
with respect to certain financial risks relating to the People's 
Republic of China, 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 ``China Risk Reporting Act''.

SEC. 2. DISCLOSURE WITH RESPECT TO CERTAIN FINANCIAL RISKS RELATING TO 
THE PEOPLE'S REPUBLIC OF CHINA.

(a) Sense of Congress.--It is the sense of Congress that investing 
in China poses unique risks that investors should carefully consider.
(b) Annual Disclosures.--Section 13 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78m) is amended by adding at the end the following:
``(t) Disclosure With Respect to Certain Financial Risks Relating 
to the People's Republic of China.--
``(1) In general.--Each issuer required to file an annual 
report under subsection (a) shall include in such report--
``(A) with respect to each covered foreign market, 
a description (including quantification, if possible) 
of--
``(i) the degree to which each supply chain 
of such issuer relies upon or is exposed to the 
covered foreign market; and
``(ii) the operations of such issuer in the 
covered foreign market;
``(B) a narrative description of the issuer's China 
risk; and
``(C) if the issuer identifies a material China 
risk, a narrative description with respect to each 
China risk identified by the issuer of--
``(i) the actions the issuer has taken or 
will take to minimize that China risk; and
``(ii) the additional actions the issuer 
may take to minimize that China risk if a 
covered event occurs.
``(2) Rule of construction.--Nothing in this subsection 
shall be construed to require an issuer to--
``(A) disclose the assessment of such issuer as to 
the likelihood that a covered event or any China risk 
will occur; or
``(B) provide any third-party assessment of such 
likelihood.
``(3) Definitions.--In this subsection:
``(A) China risk.--The term `China risk' means an 
issuer's exposure to material financial consequences 
caused by the Chinese Communist Party, the Government 
of the People's Republic of China, or firms or other 
entities operating in the People's Republic of China 
stemming from reasonably likely, imminent, or ongoing 
factors, including--
``(i) consequences for the operations of 
the issuer--
``(I) in a covered foreign market; 
and
``(II) caused by disruptions to 
supply chains, including supply chains 
for--
``(aa) goods or services 
originating in a covered 
foreign market; and
``(bb) goods transported 
through or over the East China 
Sea or South China Sea;
``(ii) devaluation, seizure, expropriation, 
denial of access, or nationalization of assets, 
including intellectual property, of the issuer 
in a covered foreign market;
``(iii) imperfect rule of law, unequal or 
imperfect enforcement of intellectual property 
rights, or biased judicial proceedings;
``(iv) with respect to any equity 
investments the issuer has within a covered 
foreign market, impediments to exercising full 
voting rights of American or non-Chinese 
shareholders or any firm in which the issuer 
has an equity investment taking actions against 
the interests of the firm's shareholders in 
favor of the interests of the Chinese Communist 
Party or the Government of the People's 
Republic of China; and
``(v) other material financial impact on 
the operations of the issuer caused by the 
Chinese Communist Party, the Government of the 
People's Republic of China, or firms or other 
entities operating in the People's Republic of 
China.
``(B) Covered event.--The term `covered event'--
``(i) means a significant disruption to the 
economic relations between the United States 
and the People's Republic of China, including--
``(I) a partial or full trade 
embargo of the People's Republic of 
China by the United States (or vice 
versa);
``(II) trade or financial sanctions 
imposed on the People's Republic of 
China by the United States (or vice 
versa); and
``(III) the United States revoking 
permanent normal trade relations with 
the People's Republic of China (or vice 
versa); and
``(ii) includes disruptions resulting from 
PRC military action against Taiwan.
``(C) Covered foreign market.--The term `covered 
foreign market' means mainland China, the Hong Kong 
special administrative region, the Macau special 
administrative region, Taiwan, Japan, Mongolia, the 
Democratic People's Republic of Korea, and the Republic 
of Korea.
``(D) Mainland china.--The term `mainland China' 
means the People's Republic of China, excluding the 
Hong Kong special administrative region and the Macau 
special administrative region.
``(E) Operations.--The term `operations' may 
include, with respect to an issuer required to file an 
annual report under subsection (a), the assets, 
personnel, sales and revenue, liabilities, technology, 
intellectual property, and other notable ties or 
activities of such issuer.
``(F) PRC military action against taiwan.--The term 
`PRC military action against Taiwan'--
``(i) means a campaign of armed aggression 
by the People's Republic of China against the 
Government of Taiwan (or the territories under 
its control); and
``(ii) includes--
``(I) a firepower strike campaign;
``(II) an island landing campaign; 
and
``(III) a full or partial blockade 
(by sea or air).''.
(c) Disclosure at Time of Registration.--Section 12(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78l(b)) is amended by adding 
at the end the following:
``(4) The information described under section 13(t)(1).''.
(d) Effective Date.--The amendments made by this section shall take 
effect on the date that is 180 days after the date of the enactment of 
this section.
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