S. 4456

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4456 Introduced in Senate (IS)]

<DOC>

119th CONGRESS
2d Session
S. 4456

To require the Under Secretary of Commerce for Industry and Security to 
require a license for the export, reexport, or in-country transfer of 
certain integrated circuits, and for other purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

April 30, 2026

Mr. Banks (for himself, Ms. Warren, Mr. Cotton, Mrs. Shaheen, Mr. 
Ricketts, and Ms. Cortez Masto) introduced the following bill; which 
was read twice and referred to the Committee on Banking, Housing, and 
Urban Affairs

_______________________________________________________________________

A BILL

To require the Under Secretary of Commerce for Industry and Security to 
require a license for the export, reexport, or in-country transfer of 
certain integrated circuits, 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 ``Artificial Intelligence Oversight of 
Verified Exports and Restrictions on Weaponizable Advanced Technology 
to Covered High-Risk Actors Act'' or the ``AI OVERWATCH Act''.

SEC. 2. LICENSE REQUIREMENT FOR EXPORTS OF COVERED INTEGRATED CIRCUITS 
TO COUNTRIES OF CONCERN.

Part I of the Export Control Reform Act of 2018 (50 U.S.C. 4811 et 
seq.) is amended by inserting after section 1758 the following:

``SEC. 1758A. CONTROL OF EXPORTS OF COVERED INTEGRATED CIRCUITS.

``(a) Definitions.--In this section:
``(1) Allied country.--The term `allied country' means any 
country listed in Country Group A under Supplement No. 1 to 
part 740 of the Export Administration Regulations (as in effect 
on January 1, 2026).
``(2) Appropriate congressional committees.--The term 
`appropriate congressional committees' means the Committee on 
Foreign Affairs of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate.
``(3) Commerce control list.--The term `Commerce Control 
List' means the list set forth in Supplement No. 1 to part 774 
of the Export Administration Regulations.
``(4) Country of concern.--The 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;
``(C) the Islamic Republic of Iran;
``(D) the Democratic People's Republic of Korea;
``(E) the Russian Federation; and
``(F) any other foreign country listed in Country 
Group D:5 under Supplement No. 1 to part 740 of the 
Export Administration Regulations, as published on 
January 1, 2026, that is designated by the Secretary of 
State as a country of concern for purposes of this 
section and for which notice of such designation has 
been published in the Federal Register.
``(5) Covered agency heads.--The term `covered agency 
heads' means the Secretary of Defense, the Secretary of Energy, 
the Secretary of State, and the Director of the White House 
Office of Science and Technology Policy.
``(6) Covered integrated circuit.--
``(A) In general.--Subject to subparagraphs (B), 
(C), and (D), the term `covered integrated circuit' 
means--
``(i) an integrated circuit, computer, or 
other product--
``(I) classified under Export 
Control Classification Number 3A090 or 
4A090 or related Export Control 
Classification Numbers; or
``(II) that is functionally 
equivalent or substantially similar to 
a circuit, computer, or product 
described in subclause (I), including 
certain similar products listed under 
Export Control Classification Number 
5A002.z; or
``(ii) an integrated circuit that has 1 or 
more digital processing units with--
``(I) a total processing 
performance of 4,800 or more;
``(II) a total processing 
performance of 2,400 or more and a 
performance density of 1.6 or more;
``(III) a total processing 
performance of 1,600 or more and a 
performance density of 3.2 or more; or
``(IV) a total DRAM bandwidth of 
1,400 gigabytes per second or more, 
interconnect bandwidth of 1,100 
gigabytes per second or more, or a sum 
of DRAM bandwidth and interconnect 
bandwidth of 1,700 gigabytes per second 
or more.
``(B) Authority to update technical parameters.--
Beginning 24 months after the date of the submission to 
Congress of the American Artificial Intelligence 
Victory Strategy required in subsection (f), the Under 
Secretary of Commerce for Industry and Security may add 
or modify technical parameters for the definition of 
`covered integrated circuit' for purposes of this 
section though notice in the Federal Register, so long 
as--
``(i) the addition or modification poses no 
adverse impact on the national security of the 
United States;
``(ii) not fewer than 30 days before the 
addition or modification takes effect, the 
Secretary of Commerce--
``(I) consults with the appropriate 
congressional committees regarding such 
addition or modification; and
``(II) in conjunction with each 
agency that is part of the Operating 
Committee for Export Policy and in 
coordination with the Director of 
National Intelligence, updates the 
American Artificial Intelligence 
Victory Strategy required in subsection 
(f) and submits such update to the 
appropriate congressional committees; 
and
``(iii) the Operating Committee for Export 
Policy has approved the addition or 
modification by majority vote.
``(C) Products included.--Except as provided in 
subparagraph (D), the term `covered integrated circuit' 
includes a product containing such a covered integrated 
circuit.
``(D) Exclusion.--The term `covered integrated 
circuit' does not include--
``(i) covered integrated circuits or 
products containing a covered integrated 
circuit that are not designed or marketed for 
use in a data center; or
``(ii) microprocessor microcircuits, such 
as central processing units, that are not 
graphics processing units or similar products.
``(7) Operating committee for export policy.--The term 
`Operating Committee for Export Policy' means the Operating 
Committee for Export Policy referred to in section 1763(c) of 
the John S. McCain National Defense Authorization Act for 
Fiscal Year 2019 (50 U.S.C. 4822(c)).
``(8) Performance density; total processing performance.--
The terms `performance density' and `total processing 
performance' have the meanings given those terms in, and are 
calculated as provided for under, Export Control Classification 
Number 3A090 in the Commerce Control List (as in effect on 
January 1, 2026).
``(9) Restricted integrated circuit.--
``(A) In general.--Subject to subparagraphs (B), 
(C), and (D), the term `restricted integrated circuit' 
means a covered integrated circuit that is--
``(i) an integrated circuit that has 1 or 
more digital processing units--
``(I) with a total processing 
performance of 21,000 or more; or
``(II) with a total processing 
performance of 1,600 or more and a 
performance density of 21 or more; or
``(ii) an integrated circuit that was first 
marketed for sale after January 1, 2026, and 
that has 1 or more digital processing units 
with--
``(I) a total processing 
performance of 4,800 or more;
``(II) a total processing 
performance of 2,400 or more and a 
performance density of 1.6 or more; or
``(III) a total processing 
performance of 1,600 or more and a 
performance density of 3.2 or more.
``(B) Authority to update technical parameters.--
The Under Secretary of Commerce for Industry and 
Security may add or modify technical parameters for the 
definition of `restricted integrated circuit' in the 
same manner and subject to the same restrictions as the 
authority described in paragraph (6)(B).
``(C) Products included.--Except as provided by 
subparagraph (D), the term `restricted integrated 
circuit' includes a product containing such a 
restricted integrated circuit.
``(D) Exclusion.--The term `restricted integrated 
circuit' does not include--
``(i) restricted integrated circuits or 
products containing a restricted integrated 
circuit that are not designed or marketed for 
use in a data center; or
``(ii) microprocessor microcircuits, such 
as central processing units, that are not 
graphics processing units or similar products.
``(10) Trusted united states person.--The term `trusted 
United States person' means any United States person designated 
as a trusted United States person pursuant to subsection 
(h)(2).
``(b) License Requirement.--
``(1) In general.--Beginning on the date of the enactment 
of this section, the Under Secretary of Commerce for Industry 
and Security, in coordination with each agency that is part of 
the Operating Committee for Export Policy, shall require a 
license for the export, reexport, or in-country transfer of a 
covered integrated circuit or a restricted integrated circuit 
to an entity that is located or headquartered in, or the 
ultimate parent company of which is headquartered in, a country 
of concern.
``(2) General license prohibited.--The Under Secretary of 
Commerce for Industry and Security may not issue a general 
license for the purpose of fulfilling the license requirement 
in paragraph (1).
``(c) Certification to Congress.--
``(1) Certification requirement.--Not fewer than 30 days 
prior to approving any license for the export, reexport, or in-
country transfer of a covered integrated circuit to an entity 
that is located or headquartered in, or the ultimate parent 
company of which is headquartered in, a country of concern, the 
Under Secretary of Commerce for Industry and Security, in 
coordination with each agency that is part of the Operating 
Committee for Export Policy, shall submit to the appropriate 
congressional committees a copy of the license application and 
proposed license, including--
``(A) the quantity of covered integrated circuit, 
identified by an Export Control Classification Number, 
as applicable, and by technical parameters of the 
covered integrated circuit;
``(B) the ultimate consignee or end-user of the 
covered integrated circuit;
``(C) any and all license conditions;
``(D) a certification that the export, reexport, or 
in-country transfer of the covered integrated circuit 
has verifiable and enforceable mechanisms for ensuring 
the ultimate consignee or end-user has not, does not, 
and will not support or enable, directly or indirectly, 
the military, intelligence, surveillance, or cyber-
enabled capabilities of a country of concern, 
including--
``(i) that the United States Government has 
no information indicating that the ultimate 
consignee or end-user has, does, or will 
support or enable, directly or indirectly, the 
military, intelligence, surveillance, or cyber-
enabled capabilities of a country of concern;
``(ii) an explanation of how the license 
conditions support the certification; and
``(iii) in the case that the license 
concerns a country of concern that engages in a 
military-civil fusion policy or maintains a law 
that requires persons to provide support and 
assistance to national security bodies, public 
security bodies, or relevant military bodies of 
the country of concern, details on how the 
license conditions address the specific threats 
arising from such policy or law;
``(E) a certification that approving the license 
will not adversely impact the defense industrial base 
of the United States, including the availability of 
covered integrated circuits for United States persons, 
including all of the major subcomponents of the covered 
integrated circuits, such as high-bandwidth memory;
``(F) a certification that approving the license 
will not adversely impact the technology leadership and 
advantage of the United States in total nationally 
installed processing power capacity relative to the 
country of concern related to the ultimate consignee or 
end user of the covered integrated circuit;
``(G) a certification that approving the license 
will not adversely impact the national security of the 
United States;
``(H) the underlying analyses supporting the 
certifications required in subparagraphs (D), (E), (F), 
and (G); and
``(I) a technical assessment (including an 
alternative assessment by the Director of National 
Intelligence, if applicable) of how the export, 
reexport, or in-country transfer of the covered 
integrated circuit to an entity that is located or 
headquartered in, or the ultimate parent company of 
which is headquartered in, a country of concern affects 
the artificial intelligence leadership of the United 
States, including in terms of global market share, in 
artificial intelligence models, artificial intelligence 
cloud services, and covered integrated circuits, 
respectively.
``(2) Extension of review period for certain submissions.--
In the case that a submission to Congress under paragraph (1) 
is submitted on a date that is on or after July 10 and on or 
before September 7 in any year, paragraph (1) shall apply by 
substituting `60 days' for `30 days'.
``(3) Limitation.--The license described in subsection (b) 
may not be issued until the date that is not fewer than 30 days 
after the committees described in paragraph (1) received the 
certification required in such paragraph.
``(d) Termination of Licenses.--Any license issued or approved 
prior to the date of the enactment of this section for the export, 
reexport, or in-country transfer of a covered integrated circuit to an 
entity that is located or headquartered in, or the ultimate parent 
company of which is headquartered in, a country of concern is 
terminated.
``(e) Temporary Prohibition.--The Under Secretary of Commerce for 
Industry and Security, in coordination with each agency that is part of 
the Operating Committee for Export Policy, shall deny all licenses for 
the export, reexport, or in-country transfer of a covered integrated 
circuit to an entity that is located or headquartered in, or the 
ultimate parent company of which is headquartered in, a country of 
concern, within one business day of receiving any application for such 
a license, until the date that is 14 days after the submission to 
Congress of the American Artificial Intelligence Victory Strategy 
required in subsection (f).
``(f) American Artificial Intelligence Victory Strategy.--The 
Secretary of Commerce, in conjunction with the covered agency heads and 
in coordination with the Director of National Intelligence, shall 
submit to the appropriate congressional committees an American 
Artificial Intelligence Victory Strategy that details--
``(1) a whole-of-government framework to win the artificial 
intelligence race;
``(2) the national security and economic implications of 
the People's Republic of China winning the artificial 
intelligence race;
``(3) the effect that access by countries of concern to 
covered integrated circuits, semiconductor manufacturing 
equipment, and related subcomponents that are from the United 
States or allied countries would have on the artificial 
intelligence race, the capabilities of the People's Republic of 
China, and United States national security;
``(4) recommendations for policy changes the United States 
Government should make to best position the United States in 
the artificial intelligence race against the People's Republic 
of China;
``(5) an assessment of the implications of the export, 
reexport, or in-country transfer of covered integrated circuits 
to countries of concern for the military, intelligence, 
surveillance, or cyber-enabled capabilities of such countries; 
and
``(6) an assessment of the covered integrated circuit 
production numbers and capabilities of the People's Republic of 
China for fiscal years 2026 and 2027, including--
``(A) a determination of whether the People's 
Republic of China would cease or reduce its efforts to 
pursue indigenous production and use of Chinese-
designed and manufactured covered integrated circuits 
if entities located or headquartered in, or the 
ultimate parent company of which is headquartered in, 
the People's Republic of China are provided access to 
covered integrated circuits designed in the United 
States;
``(B) a comparison of the covered integrated 
circuit production numbers and capabilities of the 
People's Republic of China to the covered integrated 
circuit production numbers and capabilities of the 
United States and allies of the United States; and
``(C) a quantitative analysis, to the extent 
feasible, examining the artificial intelligence 
capabilities of countries of concern if such countries 
relied solely on indigenous production of covered 
integrated circuits using indigenously produced 
manufacturing equipment and related subcomponents.
``(g) License Prohibition for Restricted Integrated Circuits.--The 
Under Secretary of Commerce for Industry and Security, in coordination 
with each agency that is part of the Operating Committee for Export 
Policy, shall deny all licenses for the export, reexport, or in-country 
transfer of a restricted integrated circuit to an entity that is 
located or headquartered in, or the ultimate parent company of which is 
headquartered in, a country of concern.
``(h) Exemption From Certain License Requirements for Trusted 
United States Persons.--
``(1) In general.--The requirement for a license under 
sections 742.6 and 744.23 of the Export Administration 
Regulations shall not apply to the export, reexport, or in-
country transfer of a covered integrated circuit if the covered 
integrated circuit--
``(A) is not destined for Macau, Hong Kong, or a 
country listed in Country Group D:5 under Supplement 
No. 1 to part 740 of the Export Administration 
Regulations; and
``(B) will remain under the ownership and control 
of a trusted United States person or a subsidiary of a 
trusted United States person once the covered 
integrated circuit is in operation.
``(2) Implementation.--Not later than 90 days after the 
date of the enactment of this section, the Under Secretary of 
Commerce for Industry and Security, in coordination with each 
agency that is part of the Operating Committee for Export 
Policy, shall--
``(A) seek input from the public regarding the 
standards and requirements a United States person 
should be required to meet to obtain a designation as a 
trusted United States person;
``(B) based on such input, prescribe regulations 
establishing such standards and requirements, which 
shall include--
``(i) establishment by the United States 
person of reasonable security standards, 
including physical security, cybersecurity, 
remote access, secure covered integrated 
circuit repair and disposal procedures, and 
other measures designed to prevent the illicit 
transfer, diversion, or access to covered 
integrated circuits;
``(ii) a requirement that the United States 
person may not transfer or install a majority 
of its aggregate total processing performance 
of covered integrated circuits outside the 
United States;
``(iii) a requirement that not more than an 
aggregate 10 percent of the ultimate beneficial 
ownership of the United States person may be 
held, directly or indirectly, by any entity 
that primarily resides, is domiciled, or 
conducts the majority of its business in a 
country of concern;
``(iv) robust know-your-customer standards;
``(v) a preference for sourcing advanced 
integrated circuits and subcomponents from 
production facilities that support the revival 
of semiconductor manufacturing in the United 
States; and
``(vi) annual audit or attestation 
requirements to ensure compliance with clauses 
(i), (ii), (iii), and (iv); and
``(C) prescribe regulations establishing the 
process by which the Under Secretary of Commerce for 
Industry and Security, in coordination with each agency 
that is part of the Operating Committee for Export 
Policy, shall approve such a designation.
``(3) Expansion to allied countries.--The Under Secretary 
of Commerce for Industry and Security, in coordination with 
each agency that is part of the Operating Committee for Export 
Policy, shall consider options for securely expanding the 
license exemption program described in this subsection to 
certain allied countries.''.
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