CHAPTER 363-PROHIBITION AND PENALTIES

        

Editorial Notes

Prior Provisions

A prior chapter 363 "PROHIBITIONS AND PENALTIES", consisting of reserved section 4651, was repealed by Pub. L. 116–283, div. A, title XVIII, §1862(a), Jan. 1, 2021, 134 Stat. 4277 .

Another prior chapter 363, consisting of sections 3841 to 3855 relating to separation or transfer to the Retired Reserve, some of which had previously been repealed, was repealed in its entirety by Pub. L. 103–337, div. A, title XVI, §§1629(a)(3), 1691(b)(1), Oct. 5, 1994, 108 Stat. 2963 , 3026, effective Oct. 1, 1996.

Amendments

2024- Pub. L. 118–159, div. A, title VIII, §851(a), Dec. 23, 2024, 138 Stat. 1995 , added item 4663. Amendment was made pursuant to operation of section 102 of this title.

2023- Pub. L. 118–31, div. A, title VIII, §803, Dec. 22, 2023, 137 Stat. 312 , added item 4662. Amendment was made pursuant to operation of section 102 of this title.

2022- Pub. L. 117–263, div. A, title VIII, §855(c), Dec. 23, 2022, 136 Stat. 2723 , added item 4661.

Statutory Notes and Related Subsidiaries

Prohibition on Operation, Procurement, and Contracting Related to Foreign-Made Light Detection and Ranging Technology

Pub. L. 118–159, div. A, title I, §164, Dec. 23, 2024, 138 Stat. 1818 , provided that:

"(a) Prohibition on Agency Operation or Procurement.-The Secretary of Defense shall not operate or enter into or renew a contract for the procurement of-

"(1) a covered light detection and ranging technology (referred to in this section as 'LiDAR technology') that-

"(A) is manufactured in a covered foreign country or by an entity domiciled in a covered foreign country;

"(B) uses operating software developed in a covered foreign country or by an entity domiciled in a covered foreign country; or

"(C) uses network connectivity or data storage located in or administered by an entity domiciled in a covered foreign country; or

"(2) a system or systems that incorporates, interfaces with, or otherwise uses LiDAR technology as described in paragraph (1).

"(b) Exemption.-The prohibition under subsection (a) shall not apply if the operation, procurement, or contracting action is for the purposes of intelligence, electronic warfare, and information warfare operations, testing, analysis, and training.

"(c) Waiver.-The Secretary of Defense may waive the prohibition under subsection (a) on a case-by-case basis if the Secretary certifies, in writing, to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] that the operation, procurement, or contracting action is required in the national interest of the United States.

"(d) Effective Date.-The prohibition under section (a) shall take effect on June 30, 2026.

"(e) Definitions.-In this section:

"(1) The term 'covered foreign country' means any of the following:

"(A) The People's Republic of China.

"(B) The Islamic Republic of Iran.

"(C) The Democratic People's Republic of North Korea.

"(D) The Russian Federation.

"(2) The term 'covered LiDAR company' means any of the following:

"(A) Hesai Technology (or any subsidiary or affiliate of Hesai Technology).

"(B) Any entity that produces or provides LiDAR and that is included on-

"(i) the Consolidated Screening List maintained by the International Trade Administration of the Department of Commerce; or

"(ii) the civil-military fusion list maintained under section 1260h [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).

"(C) Any entity that produces or provides LiDAR and that-

"(i) is domiciled in a covered foreign country; or

"(ii) is subject to unmitigated foreign ownership, control or influence by a covered foreign country, as determined by the Secretary of Defense in accordance with the National Industrial Security Program or any successor to such program.

"(3) The term 'covered LiDAR technology' means LiDAR technology and any related services and equipment manufactured by a covered LiDAR company.

"(4) The terms 'light detection and ranging' and 'LiDAR' mean a sensor that emits light, often in the form of a pulsed or modulated laser, and scans or flashes the environment to detect and measure the range of its surroundings."

Prohibition on Procurement of Covered Semiconductor Products and Services From Companies Providing Covered Semiconductor Products and Services to Huawei

Pub. L. 118–159, div. A, title VIII, §853, Dec. 23, 2024, 138 Stat. 1996 , provided that:

"(a) Prohibition.-Beginning on the date that is 270 days after the enactment of this Act [Dec. 23, 2024], the Secretary of Defense shall not enter into or renew a contract for the procurement of any covered semiconductor products and services for the Department of Defense with any entity that knowingly provides covered semiconductor products and services to Huawei.

"(b) Certification Process.-The Secretary of Defense shall, not later than the date on which the prohibition in subsection (a) takes effect, develop and implement a process requiring each entity seeking to provide covered semiconductor products and services to the Department of Defense to certify to the Department that such entity is not an entity covered by such prohibition.

"(c) Waiver.-The Secretary of Defense may waive the prohibition under subsection (a) on a case-by-case basis as may be necessary in the interest of national security, if the Secretary determines that the covered semiconductor products and services to be acquired are-

"(1) only available from an entity otherwise covered by such prohibition; and

"(2) are required for national security systems or priority missions of the Department of Defense.

"(d) Definitions.-In this section:

"(1) The term 'covered semiconductor products and services' means-

"(A) semiconductors;

"(B) equipment for manufacturing semiconductors; and

"(C) tools for designing semiconductors.

"(2) The term 'Huawei' means-

"(A) Huawei Technologies Company;

"(B) any entity that is a subsidiary, owner, beneficial owner, affiliate, or successor of Huawei Technologies Company; and

"(C) any entity that is directly or indirectly controlled by Huawei Technologies Company."

Prohibition on Contracts for Online Tutoring Services

Pub. L. 118–159, div. A, title VIII, §854, Dec. 23, 2024, 138 Stat. 1997 , provided that: "The Secretary of Defense may not enter into a contract for online tutoring services which could result in personal data of citizens of the United States being transferred to the control of the People's Republic of China."

Study and Report on Department of Defense Use of Unmanned Ground Vehicle Systems Manufactured by Certain Foreign Entities

Pub. L. 118–159, div. A, title X, §1078, Dec. 23, 2024, 138 Stat. 2075 , provided that:

"(a) Study on Department of Defense Use of Certain Unmanned Ground Vehicle Systems.-

"(1) Study.-The Secretary of Defense shall conduct a study on the use by the Department of Defense of covered unmanned ground vehicle systems manufactured by covered foreign entities.

"(2) Report.-Not later than 180 days after the date of the enactment of this Act [Dec. 23, 2024], the Secretary shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on the study required under paragraph (1). Such report shall include each of the following:

"(A) An assessment of the extent to which covered unmanned ground vehicle systems manufactured by covered foreign entities are used by the Department, including a list of all such covered unmanned ground vehicle systems.

"(B) An assessment of the national security threats associated with using covered unmanned ground vehicle systems in applications of the Department, including with respect to-

"(i) cybersecurity;

"(ii) technological maturity of the systems; and

"(iii) technological vulnerabilities in the systems that may be exploited by foreign adversaries of the United States.

"(C) A description of any actions taken by the Department to identify covered foreign entities that-

"(i) develop or manufacture covered unmanned ground vehicle systems; and

"(ii) have a military-civil nexus on the list maintained by the Department under section 1260H(b) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283; 10 U.S.C. 113 note).

"(D) An assessment of the feasibility and advisability of directing the Defense Innovation Unit, or another entity in the Department of Defense, to develop a list of United States manufacturers of covered unmanned ground vehicle systems.

"(E) A recommendation on whether a prohibition on the procurement and operation of covered unmanned ground vehicle systems is in the best interest of the national security of the United States.

"(F) The findings and recommendations of the Secretary with respect to the matters covered by the study and report.

"(b) Prohibition on Procurement and Operation by Department of Defense.-

"(1) In general.-Subject to paragraph (3), and except as provided in paragraph (2), beginning on the date that is one year after the date of the submission of the report required under subsection (a)(2), the Secretary of Defense may not procure or operate any covered unmanned ground vehicle system that is manufactured by a covered foreign entity.

"(2) Exception for national security.-Paragraph (1) shall not apply with respect to the procurement or operation of a covered unmanned ground vehicle system that is manufactured by a covered foreign entity if the Secretary of Defense or the Secretary of a military department determines that the procurement or operation of such system is in the national interest of the United States.

"(3) Applicability.-Paragraph (1) shall not apply unless the Secretary of Defense includes in the report required under paragraph (2) of subsection (a) a recommendation pursuant to subparagraph (E) of that paragraph that a prohibition on the procurement and operation of covered unmanned ground vehicle systems is in the best interest of the national security of the United States.

"(c) Definitions.-In this section:

"(1) The term 'covered foreign country' means any of the following:

"(A) The People's Republic of China.

"(B) The Russian Federation.

"(C) The Islamic Republic of Iran.

"(D) The Democratic People's Republic of Korea.

"(2) The term 'covered foreign entity' means an entity that is domiciled in a covered foreign country or subject to influence or control by the government of a covered foreign country, as determined by the Secretary of Defense.

"(3) The term 'covered unmanned ground vehicle system'-

"(A) means a mechanical device that-

"(i) is capable of locomotion, navigation, or movement on the ground; and

"(ii) operates at a distance from one or more operators or supervisors based on commands or in response to sensor data, or through any combination thereof; and

"(B) includes-

"(i) remote surveillance vehicles, autonomous patrol technologies, mobile robotics, and humanoid robots; and

"(ii) the vehicle, its payload, and any external device used to control the vehicle."

Prohibition on Availability of Funds for Procurement of Certain Batteries

Pub. L. 118–31, div. A, title I, §154, Dec. 22, 2023, 137 Stat. 180 , provided that:

"(a) Limitation.-Beginning on October 1, 2027, none of the funds authorized to be appropriated or otherwise made available for the Department of Defense may be obligated or expended to procure a battery produced by an entity specified in subsection (b).

"(b) Entities Specified.-The entities specified in this subsection are the following:

"(1) Contemporary Amperex Technology Company, Limited (also known as 'CATL').

"(2) BYD Company, Limited.

"(3) Envision Energy, Limited.

"(4) EVE Energy Company, Limited.

"(5) Gotion High tech Company, Limited.

"(6) Hithium Energy Storage Technology company, Limited.

"(7) Any successor to an entity specified in paragraphs (1) through (6).

"(c) Treatment of Production.-For purposes of this section, a battery shall be treated as produced by an entity specified in subsection (b) if that entity-

"(1) assembles or manufactures the final product; or

"(2) creates or otherwise provides a majority of the components used in the battery.

"(d) Waiver.-The Secretary of Defense may waive the limitation under subsection (a)."

Limitation on Sourcing Chemical Materials for Munitions From Certain Countries

Pub. L. 118–31, div. A, title II, §244, Dec. 22, 2023, 137 Stat. 209 , provided that:

"(a) Limitation.-The Secretary of Defense may not procure a chemical material for munitions specified in subsection (b) from any country specified in subsection (c).

"(b) Chemical Materials Specified.-The chemical materials for munitions specified in this subsection are the chemicals listed under the heading 'Task 1: Domestic Production of Critical Chemicals' in section 3.0E of the document of the Department of Defense titled 'Statement of Objectives (SOO) for Critical Chemicals Production' (FOA: FA8650-19-S-5010, Appendix VI, Call: 012) and dated December 5, 2022.

"(c) Countries Specified.-The countries specified in this subsection are the following:

"(1) The People's Republic of China.

"(2) The Russian Federation.

"(3) The Islamic Republic of Iran.

"(4) The Democratic People's Republic of North Korea.

"(d) Effective Date.-The requirements of this section shall take effect on a date determined by the Secretary of Defense that is not later than September 30, 2028."

Prohibition on Required Disclosure by Department of Defense Contractors of Information Relating to Greenhouse Gas Emissions

Pub. L. 118–31, div. A, title III, §318, Dec. 22, 2023, 137 Stat. 218 , as amended by Pub. L. 118–159, div. A, title III, §316, Dec. 23, 2024, 138 Stat. 1852 , provided that:

"(a) Prohibition on Disclosure Requirements.-

"(1) Nontraditional defense contractors.-The Secretary of Defense may not require that any nontraditional defense contractor, as a condition of being awarded a contract with the Secretary, disclose a greenhouse gas inventory or any other report on greenhouse gas emissions, unless the Secretary determines that requiring such disclosure is necessary to verify a voluntary disclosure of such inventory or other report by the nontraditional defense contractor.

"(2) Other than nontraditional defense contractors.-During the three-year period beginning on the date of the enactment of this Act [Dec. 22, 2023], the Secretary of Defense may not require that any individual or entity other than a nontraditional defense contractor, as a condition of being awarded a contract with the Secretary, disclose a greenhouse gas inventory or any other report on greenhouse gas emissions, unless the Secretary determines that requiring such disclosure is necessary to verify a voluntary disclosure of such inventory or other report by the individual or entity.

"(b) Waiver.-The Secretary of Defense may issue a waiver on a contract-by-contract basis provided that the information provided is directly related to the performance of the contract. In issuing such a waiver, the Secretary of Defense shall ensure that any information that is required is clearly identifiable.

"(c) Definitions.-In this section:

"(1) The term 'greenhouse gas' means-

"(A) carbon dioxide;

"(B) methane;

"(C) nitrous oxide;

"(D) nitrogen trifluoride;

"(E) hydrofluorocarbons;

"(F) perfluorocarbons; or

"(G) sulfur hexafluoride.

"(2) The term 'greenhouse gas inventory' means, with respect to a person, a quantified list of the annual greenhouse gas emissions of the person.

"(3) The term 'nontraditional defense contractor' has the meaning given the term in section 3014 of title 10, United States Code."

Prohibition on Contracting With Persons That Have Fossil Fuel Operations With the Government of the Russian Federation or the Russian Energy Sector

Pub. L. 118–31, div. A, title VIII, §804, Dec. 22, 2023, 137 Stat. 313 , provided that:

"(a) Prohibition.-

"(1) In general.-Except as provided under subsections (b), (c), and (d), the Secretary of Defense may not enter into a contract for the procurement of goods or services with any person that is or that has fossil fuel business operations with a person that is not less than 50 percent owned, individually or collectively, by-

"(A) an authority of the Government of the Russian Federation; or

"(B) a fossil fuel company that operates in the Russian Federation, except if the fossil fuel company transports oil or gas-

"(i) through the Russian Federation for sale outside of the Russian Federation; and

"(ii) that was extracted from a country other than the Russian Federation with respect to the energy sector of which the President has not imposed sanctions as of the date on which the contract is awarded.

"(2) Oil and gas origin.-For the purposes of applying the exception under paragraph (1)(B), oil and gas transported by a fossil fuel company shall be deemed to have been extracted from the location of extraction specified in the certificate of origin or other documentation confirming the origin of such oil or gas unless the person with respect to which such exception would apply knew or had reason to know that such location in such documentation was false or incorrect.

"(b) Exceptions.-

"(1) In general.-The prohibition under subsection (a) does not apply to a contract that the Secretary of Defense and the Secretary of State jointly determine-

"(A) is necessary-

"(i) for purposes of providing humanitarian assistance to the people of Russia; or

"(ii) for purposes of providing disaster relief and other urgent life-saving measures;

"(B) is vital to the military readiness, basing, or operations of the United States or the North Atlantic Treaty Organization;

"(C) is vital to the national security interests of the United States; or

"(D) was a business operation with a fossil fuel company in a country other than the Russian Federation that was entered into prior to the date of the enactment of this section [Dec. 22, 2023].

"(2) Notification requirement.-The Secretary of Defense shall notify the appropriate congressional committees of any contract entered into on the basis of an exception provided for under paragraph (1).

"(3) Office of foreign assets control licenses.-The prohibition in subsection (a) shall not apply to a person that has a valid license to operate in Russia issued by the Office of Foreign Assets Control of the Department of the Treasury or is otherwise authorized to operate in Russia by the Federal Government notwithstanding the imposition of sanctions.

"(4) American diplomatic mission in russia.-The prohibition in subsection (a) shall not apply to contracts related to the operation and maintenance of the United States Government's consular offices and diplomatic posts in Russia.

"(c) Applicability.-This section shall take effect on the date of the enactment of this Act [Dec. 22, 2023] and apply with respect to any contract entered into on or after such effective date.

"(d) Sunset.-This section shall terminate on December 31, 2029.

"(e) Definitions.-In this section:

"(1) Appropriate congressional committees.-The term 'appropriate congressional committees' means-

"(A) the Committee on Oversight and Accountability, the Committee on Armed Services, and the Committee on Foreign Affairs of the House of Representatives; and

"(B) the Committee on Homeland Security and Governmental Affairs, the Committee on Armed Services, and the Committee on Foreign Relations of the Senate.

"(2) Business operations.-

"(A) In general.-The term 'business operations' means engaging in commerce in any form, including acquiring, developing, maintaining, owning, selling, possessing, leasing, or operating equipment, facilities, personnel, products, services, personal property, real property, or any other apparatus of business or commerce.

"(B) Exceptions.-The term 'business operations' does not include-

"(i) any shipment subject to price caps as specified in the 'Statement of the G7 and Australia on a Price Cap for Seaborne Russian-Origin Crude Oil', issued on December 2, 2022, between member countries of that coalition, or the price caps as specified in the 'Statement of the G7 and Australia on price caps for seaborne Russian-origin petroleum products Berlin, Brussels, Canberra, London, Ottawa, Paris, Rome, Tokyo, Washington', issued on February 4, 2023, between such members, if such shipment complies with the applicable price caps;

"(ii) actions taken for the benefit of the country of Ukraine, as determined by the Secretary of Defense; or

"(iii) actions taken to support the suspension or termination of business operations for commercial activities during the period beginning on the date of the enactment of this Act and ending on the date described in subsection (d), including-

(I) any action to secure or divest from facilities, property, or equipment;

(II) the provision of products or services provided to reduce or eliminate operations in territory internationally recognized as the Russian Federation or to comply with sanctions relating to the Russian Federation; and

(III) activities that are incident to liquidating, dissolving, or winding down a subsidiary or legal entity in Russia.

"(3) Fossil fuel company.-The term 'fossil fuel company' means a person that-

"(A) carries out oil, gas, or coal exploration, development, or production activities;

"(B) processes or refines oil, gas, or coal; or

"(C) transports, or constructs facilities for the transportation of, Russian oil, gas, or coal.

"(4) Person.-The term 'person' means-

"(A) a natural person, corporation, company, business association, partnership, society, trust, or any other nongovernmental entity, organization, or group;

"(B) any governmental entity or instrumentality of a government, including a multilateral development institution (as defined in section 1701(c)(3) of the International Financial Institutions Act (22 U.S.C. 262r(c)(3))); and

"(C) any successor, subunit, parent entity, or subsidiary of, or any entity under common ownership or control with, any entity described in subparagraph (A) or (B)."

Prohibition of the Department of Defense Procurement Related to Entities Identified as Chinese Military Companies Operating in the United States

Pub. L. 118–31, div. A, title VIII, §805, Dec. 22, 2023, 137 Stat. 315 , provided that:

"(a) Prohibition on Use or Procurement.-

"(1) In general.-Except as provided under subsection (d), the Secretary may not-

"(A) enter into, renew, or extend a contract for the procurement of goods, services, or technology with an entity described in paragraph (2); or

"(B) enter into, renew, or extend a contract for the procurement of goods or services that include goods or services produced or developed by an entity described in paragraph (2).

"(2) Entities described.-An entity described in this paragraph is-

"(A) an entity that is identified in the annual list published in the Federal Register by the Department of Defense of Chinese military companies operating in the United States pursuant to section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 [Pub. L. 116–283] (10 U.S.C. 113 note); or

"(B) any entity subject to the control of an entity described in subparagraph (A).

"(3) Limitation on applicability.-

"(A) In general.-Nothing in paragraph (1) shall prohibit the Secretary from entering into, renewing, or extending a contract for the procurement of goods, services, or technology to provide a service that connects to the facilities of a third party, including backhaul, roaming, or interconnection arrangements.

"(B) Existing contracts.-Nothing in this section shall permit the Secretary to apply the prohibitions in paragraph (1) to existing contracts for goods, services, or technology, including when such contracts are modified, extended, or renewed, entered into prior to the relevant date described in subsection (b).

"(C) Components.-Paragraph (1) shall not apply with respect to components (as defined in section 105 of title 41, United States Code).

"(4) Rulemaking.-

"(A) Entity prohibition.-Not later than one year after the date of the enactment of this Act [Dec. 22, 2023], the Secretary shall amend the Defense Federal Acquisition Regulation Supplement to implement the prohibitions in paragraph (1)(A) for the Department of Defense.

"(B) Goods and services prohibition.-Not later than 545 days after the date of the enactment of this Act, the Secretary shall amend the Defense Federal Acquisition Regulation Supplement to implement the prohibitions in paragraph (1)(B) for the Department of Defense, including-

"(i) best practices to avoid being subject to the prohibitions described in paragraph (1)(B); and

"(ii) technical support to assist affected businesses, institutions, and organizations as is reasonably necessary for those affected entities to comply with this section.

"(b) Effective Dates.-The prohibition under subsection (a)(1)(A) shall take effect on June 30, 2026, and the prohibition under subsection (a)(1)(B) shall take effect on June 30, 2027.

"(c) Waiver Authority.-

"(1) In general.-The Secretary may waive the requirements under subsection (a) with respect to an entity that requests such a waiver if the entity seeking the waiver-

"(A) provides to the Secretary a compelling justification for the additional time to implement the requirements under such subsection, as determined by the Secretary of Defense; and

"(B) provides to the Secretary a phase-out plan to eliminate goods, services, or technology produced or developed by an entity described in subsection (a)(2) from the systems of the entity.

"(2) Duration.-A waiver granted under paragraph (1) may remain in effect until the date on which the Secretary determines that commercially viable providers exist outside of the People's Republic of China that can and are willing to provide the Department of Defense with quality goods and services in the quantity demanded.

"(3) Delegation.-The Secretary may designate the authority under this section only to-

"(A) the service acquisition executive of the military department (as such terms are defined in section 101(a) of title 10, United States Code) concerned; or

"(B) the official responsible for all acquisition functions of such other element or organization of the Department of Defense concerned.

"(d) Exception.-The President shall not be required to apply or maintain the prohibition under subsection (a) for activities subject to the reporting requirements under title V of the National Security Act of 1947 (50 U.S.C. 3091 et seq.), or to any authorized intelligence activities of the United States.

"(e) Definitions.-In this section:

"(1) Control.-The term 'control' has the meaning given that term in part 800.208 of title 31, Code of Federal Regulations, or any successor regulations.

"(2) Secretary.-The term 'Secretary' means the Secretary of Defense."

Prohibition on Certain Procurements From the Xinjiang Uyghur Autonomous Region

Pub. L. 117–81, div. A, title VIII, §848, Dec. 27, 2021, 135 Stat. 1843 , which related to procurement of products mined, produced, or manufactured wholly or in part by forced labor from Xinjiang Uyghur Autonomous Region of the People's Republic of China, was repealed by Pub. L. 117–263, div. A, title VIII, §855(a), Dec. 23, 2022, 136 Stat. 2723 . See section 4661 of this title.

Employment Transparency Regarding Individuals Who Perform Work in the People's Republic of China

Pub. L. 117–81, div. A, title VIII, §855, Dec. 27, 2021, 135 Stat. 1850 , as amended by Pub. L. 118–159, div. A, title VIII, §839, Dec. 23, 2024, 138 Stat. 1988 , provided that:

"(a) Disclosure Requirements.-

"(1) Initial disclosures.-The Secretary of Defense shall require each covered entity to disclose to the Secretary of Defense if the entity employs one or more individuals who will perform work in, for, or are subject to the laws or control of the People's Republic of China on a covered contract when the entity submits a bid or proposal for such covered contract, except that such disclosure shall not be required to the extent that the Secretary determines that such disclosure would not be in the interest of national security.

"(2) Recurring disclosures.-For each of fiscal years 2023 and 2024, the Secretary of Defense shall require each covered entity that is a party to one or more covered contracts in the fiscal year to disclose to the Secretary if the entity employs one or more individuals who perform work in the People's Republic of China on any such contract.

"(3) Matters to be included.-

"(A) In general.-If a covered company required to make a disclosure under paragraph (1) or (2) employs any individual who will perform work in, for, or are subject to the laws or control of the People's Republic of China on a covered contract, such disclosure shall include-

"(i) the total number of such individuals who will perform such work on the covered contracts funded by the Department of Defense; and

"(ii) a description of the physical presence in the People's Republic of China and each other location where work on the covered contract will be performed; and

"(iii) whether an agency or instrumentality of the People's Republic of China or any other covered entity has requested access to data or otherwise acquired data from the covered entity required to make a disclosure under paragraph (1) or (2) pursuant to any law or regulation of the People's Republic of China.

"(B) Additional disclosure of information and additional measures regarding certain entities.-

"(i) In general.-If a covered entity performing a covered contract for services dealing with commercial computer software or noncommercial computer software and is required to make a disclosure under paragraph (1) or (2), such covered entity shall-

     "(I) describe the process for disclosing a cybersecurity vulnerability, if such covered entity is also required to disclose any cybersecurity vulnerability to the Ministry of Industry and Information Technology or any other agency or instrumentality of the People's Republic of China; and

     "(II) provide any information related to how a United States affiliate is notified of a vulnerability described in subclause (I).

"(ii) Issuance of regulations.-Not later than 180 days after the date of the enactment of this subparagraph [Dec. 23, 2024], the Secretary shall revise the Defense Federal Acquisition Regulation Supplement to require-

     "(I) a covered entity to require that an individual or entity performing work on a covered contract in the People's Republic of China on behalf of the covered entity to notify the covered entity within 48 hours of such individual or entity reporting any software vulnerability related to such covered contract to the Ministry of Industry and Information Technology or any other agency or instrumentality of the People's Republic of China; and

     "(II) the covered entity to retain and furnish to the Department of Defense information regarding any cybersecurity vulnerability reported to the Ministry of Industry and Information Technology or any other agency or instrumentality of the People's Republic of China with respect to which the covered entity received a notice pursuant to subclause (I).

"(b) Funding for Covered Entities.-The Secretary of Defense may not award a covered contract to, or renew a covered contract with, a covered entity unless such covered entity has submitted each disclosure such covered entity is required to submit under subsection (a).

"(c) Semi-annual Briefing.-Beginning on January 1, 2023, the Secretary of Defense shall provide to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] semi-annual briefings that summarize the disclosures received by the Department over the previous 180 days pursuant to this section, and such briefings may be classified.

"(d) Definitions.-In this section:

"(1) Covered contract.-The term 'covered contract' means any Department of Defense contract or subcontract for, or including, any information and communications technology, including contracts for commercial products or services.

"(2) Covered entity.-The term 'covered entity' means any corporation, company, limited liability company, limited partnership, business trust, business association, or other similar entity, including any subsidiary thereof, performing work on a covered contract in, for, or subject to the laws or control of the People's Republic of China, including by leasing or owning real property used in the performance of the covered contract in the People's Republic of China.

"(e) Effective Date.-This section shall take effect on July 1, 2022."

Prohibition on Procurements From Chinese Military Companies

Pub. L. 109–163, div. A, title XII, §1211, Jan. 6, 2006, 119 Stat. 3461 , as amended by Pub. L. 112–81, div. A, title XII, §1243(a), (b), Dec. 31, 2011, 125 Stat. 1645 ; Pub. L. 114–328, div. A, title XII, §1296, Dec. 23, 2016, 130 Stat. 2562 ; Pub. L. 117–263, div. A, title VIII, §857(b), Dec. 23, 2022, 136 Stat. 2729 , provided that:

"(a) Prohibition.-The Secretary of Defense may not procure goods or services described in subsection (b), through a contract or any subcontract (at any tier) under a contract, from any Communist Chinese military company, any Chinese military company, any Non-SDN Chinese military-industrial complex company, or any other covered company.

"(b) Goods and Services Covered.-

"(1) In general.-For purposes of subsection (a), and except as provided in paragraph (2), the goods and services described in this subsection are goods and services-

"(A) on the munitions list of the International Traffic in Arms Regulations; or

"(B) on the Commerce Control List that-

"(i) are classified in the 600 series; or

"(ii) contain strategic and critical materials, rare earth elements, or energetic materials used to manufacture missiles or munitions.

"(2) Exceptions.-Goods and services described in this subsection do not include goods or services procured-

"(A) in connection with a visit by a vessel or an aircraft of the United States Armed Forces to the People's Republic of China;

"(B) for testing purposes; or

"(C) for purposes of gathering intelligence.

"(c) Waiver Authorized.-The Secretary of Defense may waive the prohibition in subsection (a) if the Secretary determines that such a waiver is necessary for national security purposes and the Secretary submits to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report described in subsection (d) not less than 15 days before issuing the waiver under this subsection.

"(d) Report.-The report referred to in subsection (c) is a report that identifies the specific reasons for the waiver issued under subsection (c) and includes recommendations as to what actions may be taken to develop alternative sourcing capabilities in the future.

"(e) Definitions.-In this section:

"(1) The term 'Chinese military company' has the meaning given that term by section 1260H(d)(1) [now 1260H(g)(1)] of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283; 10 U.S.C. 113 note).

"(2) The term 'Commerce Control List' means the list maintained by the Bureau of Industry and Security and set forth in Supplement No. 1 to part 774 of the Export Administration Regulations.

"(3) The term 'Communist Chinese military company' has the meaning provided that term by section 1237(b)(4) of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 [Pub. L. 105–261] (50 U.S.C. 1701 note).

"(4) The term 'Export Administration Regulations' has the meaning given that term in section 1742 of the Export Control Reform Act of 2018 (50 U.S.C. 4801).

"(5) The term 'munitions list of the International Traffic in Arms Regulations' means the United States Munitions List contained in part 121 of subchapter M of title 22 of the Code of Federal Regulations.

"(6) The term 'Non-SDN Chinese military-industrial complex company' means any entity on the Non-SDN Chinese Military-Industrial Complex Companies List-

"(A) established pursuant to Executive Order 13959 (50 U.S.C. 1701 note; relating to addressing the threat from securities investments that finance Communist Chinese military companies), as amended before, on, or after the date of the enactment of the [James M. Inhofe] National Defense Authorization Act for Fiscal Year 2023 [Dec. 23, 2022]; and

"(B) maintained by the Office of Foreign Assets Control of the Department of the Treasury.

"(7) The term 'other covered company' means a company that-

"(A) is owned or controlled by the government of the People's Republic of China; and

"(B) is certified by the Secretary of Defense to the congressional defense committees to be a company that must be covered by this section for national security reasons.

"(8) The term 'strategic and critical materials' means materials designated as strategic and critical under section 3(a) of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98b(a)).

"(f) Effective Date.-With respect to goods and services described in clause (ii) of subparagraph (b)(1)(B), the prohibition shall take effect 180 days after the date on which the Secretary of Defense certifies to the congressional defense committees that a sufficient number of commercially viable providers exist outside of the People's Republic of China that collectively can provide the Department of Defense with satisfactory quality and sufficient quantity of such goods or services as and when needed at United States market prices."

[ Pub. L. 112–81, div. A, title XII, §1243(c), Dec. 31, 2011, 125 Stat. 1646 , provided that: "The amendments made by this section [amending section 1211 of Pub. L. 109–163, set out above] take effect on the date of the enactment of this Act [Dec. 31, 2011] and apply with respect to contracts and subcontracts of the Department of Defense entered into on or after the date of the enactment of this Act."]