Foreign Investment Guardrails to Help Thwart (FIGHT) China Act
- Bill Number
- H.R. 2246
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- International Affairs
- Status
- Introduced
- Latest Action
- 2025-03-21: Referred to the Committee on Foreign Affairs, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2026-01-10T06:51:22Z
AI-Generated Summary
Summary of H.R. 2246: Foreign Investment Guardrails to Help Thwart (FIGHT) China Act
Purpose
The legislation aims to safeguard U.S. national security by targeting investments and activities linked to China's military-industrial complex and sensitive technologies. It imposes sanctions on specific Chinese entities, restricts or requires reporting on U.S. investments in high-risk technologies involving China, and strengthens existing lists of restricted companies to prevent U.S. capital from supporting China's defense, surveillance, and advanced tech sectors.
Key Provisions
- Title I: Imposition of Sanctions
- Authorizes the President (delegated to the Secretary of the Treasury) to block property and prohibit transactions involving "covered foreign persons"—entities in China (including Hong Kong and Macau) engaged in significant defense or surveillance technology operations.
- Draws on powers from the International Emergency Economic Powers Act (IEEPA), a law allowing economic measures during national emergencies.
- Requires annual reports to Congress assessing entities on the Non-SDN Chinese Military-Industrial Complex Companies List (a Treasury-maintained list of Chinese firms linked to military activities) for sanction eligibility.
- Includes exceptions for U.S. intelligence activities and government operations; allows consideration of information from allies or NGOs.
- Title II: Prohibition and Notification on Investments Relating to Covered National Security Transactions
- Amends the Defense Production Act (DPA), a law promoting domestic industrial capabilities for national defense, to add a new title prohibiting U.S. persons (citizens, companies, or residents) from engaging in "covered national security transactions" in "prohibited technologies."
- Prohibited technologies include advanced semiconductors, AI models trained with massive computing power, quantum computing, hypersonic systems, and supercomputers—areas where Chinese involvement could threaten U.S. security.
- Covered national security transactions cover equity investments, loans, joint ventures, or asset acquisitions with "covered foreign persons" (Chinese-linked entities) that enable these technologies.
- Requires notifications to the Treasury for transactions in "notifiable technologies" (less critical but still sensitive, like certain AI for military or surveillance uses) within 30 days of completion.
- Mandates regulations issued under the Administrative Procedure Act (APA), a process ensuring public input and fairness; includes waivers for national interest (with congressional notice), penalties up to $250,000 or twice the transaction value, and self-disclosure options to reduce penalties.
- Establishes a public database of covered foreign persons, annual reports on enforcement and trends, and multilateral coordination with U.S. allies to align restrictions.
- Exceptions exclude minor transactions, publicly traded securities, and routine financial services.
- Title III: Securities and Related Matters
- Requires biennial reports assessing Chinese entities on other U.S. restriction lists (e.g., Commerce's Entity List for export controls) for addition to the Non-SDN List.
- Mandates rules prohibiting U.S. persons from holding securities in listed companies after one year, with a grace period for divestment.
- Allows case-by-case waivers for national security reasons, with congressional notification.
- General Provisions
- Defines key terms like "country of concern" (China, including Hong Kong and Macau) and "U.S. person."
- Authorizes $150 million over two years for Treasury and Commerce to implement and educate stakeholders; special hiring authority for up to 15 positions.
- Terminates if Commerce removes China from its "foreign adversaries" list.
- Ensures severability (invalid parts don't affect the whole) and preserves other U.S. laws.
Significant Changes to Existing Law
- Expands IEEPA sanctions beyond current executive orders (e.g., EO 13959 on Chinese military companies) by mandating reviews of additional lists and broadening "covered foreign persons" to include CCP members and controlled entities.
- Introduces novel DPA amendments for outbound investment controls, shifting from voluntary reviews (like under CFIUS for inbound deals) to mandatory prohibitions and notifications— a first for restricting U.S. capital flows to specific foreign tech sectors.
- Enhances the Non-SDN List with automatic divestment requirements and inter-agency data sharing, moving from advisory to enforceable restrictions on securities.
- Adds regulatory safeguards like public comment, low-burden rules, and government burden of proof in enforcement, differing from some prior sanctions regimes.
Potential Impacts
- Government Agencies: Increases responsibilities for Treasury (lead implementation, reports) and Commerce (coordination, outreach), with dedicated funding and hiring to manage compliance; requires annual testimony and strategies for ally engagement, potentially straining resources but enhancing oversight.
- Citizens and Businesses: U.S. investors and firms in tech/finance face new restrictions on China deals, risking penalties or forced divestment; notifications add paperwork but include self-cure options to ease compliance for smaller players.
- International Relations: Could heighten U.S.-China tensions by curbing economic ties in strategic sectors, prompting Chinese retaliation; promotes cooperation with allies (e.g., via shared protocols) to build a unified front against tech threats, potentially strengthening partnerships like with the EU or Japan.
Main Stakeholders Affected
- U.S. Government Agencies: Treasury (sanctions, notifications), Commerce (tech assessments, outreach), State (diplomacy), and Congress (oversight via reports and requests).
- U.S. Persons and Businesses: Investors, venture funds, tech companies, and financial institutions engaging with China, particularly in semiconductors, AI, quantum, and defense—may need to alter strategies or divest.
- Chinese Entities: Firms, government bodies, and CCP-linked organizations in prohibited sectors, facing blocked U.S. investments and sanctions.
- Allies and International Partners: Governments and firms in allied nations encouraged to adopt similar rules, affecting global supply chains.
- NGOs and Public: Can submit confidential tips for the database, influencing enforcement.
Notable Legal, Constitutional, or Political Implications
- Legal: Relies on established IEEPA and DPA authorities but mandates APA-compliant regulations for transparency and due process (e.g., public notice, burden of proof on government in penalties); preserves other laws via a "rule of construction," avoiding conflicts with export controls or securities rules.
- Constitutional: Sanctions and prohibitions could raise due process concerns if applied broadly, but exceptions for intelligence and waivers provide flexibility; inter-agency info-sharing enhances efficiency without new surveillance powers.
- Political: Reflects bipartisan concern over China as a strategic rival, potentially escalating economic decoupling; annual reports and congressional involvement ensure accountability but may politicize tech classifications, influencing U.S. innovation policy and global trade dynamics.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (6)
Rep. Moolenaar, John R. [R-MI-2], Rep. McCaul, Michael T. [R-TX-10], Rep. Golden, Jared F. [D-ME-2], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Wagner, Ann [R-MO-2], Rep. LaHood, Darin [R-IL-16]
Recent Actions
- 2025-03-21: Referred to the Committee on Foreign Affairs, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-03-21: Referred to the Committee on Foreign Affairs, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-03-21: Introduced in House
- 2025-03-21: Introduced in House
Bill Versions
- Foreign Investment Guardrails to Help Thwart (FIGHT) China Act — issued 2025-03-21 — PDF (55 pages)