Foreign Adversary Investment Prohibition Act
- Bill Number
- H.R. 3635
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- International Affairs
- Status
- Introduced
- Latest Action
- 2025-05-29: Referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, 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
- 2025-06-20T13:20:49Z
AI-Generated Summary
Summary of H.R. 3635: Foreign Adversary Investment Prohibition Act
Purpose
This bill aims to prevent conflicts of interest by prohibiting Members of Congress from engaging in specific financial dealings that could benefit designated foreign adversaries or their controlled entities during their time in office. It seeks to promote transparency and national security by restricting such transactions.
Key Provisions
- Prohibition on Transactions: Members of Congress (including Senators, Representatives, Delegates, and Resident Commissioners) are barred from conducting "covered financial transactions" that directly or indirectly benefit a foreign adversary or an entity owned or controlled by one. This applies throughout their term of service.
- Covered Financial Transactions: These include:
- Gifts, loans, advances, deposits, or any items of value.
- Investments in securities (e.g., stocks or bonds, as defined under U.S. securities law), security futures, or commodities (e.g., goods like oil or metals traded on exchanges).
- Synthetic economic interests, such as those gained through derivatives (financial contracts deriving value from underlying assets, like options or warrants).
- Enforcement and Penalties: The U.S. Attorney General can file a civil lawsuit in federal court against violators. If proven by a preponderance of evidence (meaning more likely than not), courts must impose escalating civil penalties:
- $5,000 for a first violation.
- $10,000 for a second violation.
- $15,000 for each subsequent violation.
- Definitions:
- Foreign Adversary: Specifically lists the People's Republic of China (including Hong Kong), Cuba, Iran, North Korea, Russia, and Venezuela under the Maduro regime.
- No criminal penalties are outlined; enforcement is civil only.
Significant Changes to Existing Law
This legislation introduces a targeted ban on financial transactions for Members of Congress with foreign adversaries, which does not appear to exist in current U.S. law in this specific form. While general ethics rules (e.g., under the House or Senate Ethics Committees) already restrict certain conflicts of interest and foreign gifts, this bill adds a new, explicit prohibition focused on investments and economic dealings with named adversaries. It expands oversight by empowering the Attorney General for civil enforcement, rather than relying solely on congressional self-regulation.
Potential Impacts
- On Government Agencies: The Department of Justice (via the Attorney General) gains new responsibilities for investigating and litigating violations, potentially increasing workload and requiring additional resources for monitoring congressional finances.
- On Citizens: It could enhance public trust in Congress by reducing perceived risks of foreign influence on lawmakers' decisions, though it does not directly affect private citizens' transactions.
- On International Relations: The bill signals a firm U.S. policy against economic ties with these adversaries, potentially straining diplomatic relations with the listed countries and reinforcing sanctions or trade restrictions already in place.
Main Stakeholders Affected
- Members of Congress: Directly restricted in their personal financial activities, requiring divestment or avoidance of certain investments.
- Foreign Adversaries and Entities: Listed governments and their owned/operated businesses may face reduced opportunities to engage with U.S. lawmakers financially.
- U.S. Department of Justice: Responsible for enforcement, including civil actions and penalty collection.
- Congressional Ethics Committees: Indirectly involved, as this complements existing oversight but shifts some authority to the executive branch.
Notable Legal, Constitutional, or Political Implications
- Legal: Relies on civil rather than criminal enforcement, lowering the burden of proof but limiting remedies to fines. It may lead to court challenges over what constitutes a "benefit" to a foreign adversary or the scope of "synthetic" transactions.
- Constitutional: Could raise questions under the Speech or Debate Clause (which protects lawmakers from certain lawsuits related to legislative duties), though it targets personal finances, not official acts. It also aligns with broader national security powers but must avoid infringing on due process rights in enforcement.
- Political: Promotes bipartisan accountability (introduced by members from both parties) but may spark debates on overreach into personal investments or selective targeting of specific countries, potentially influencing future ethics reforms.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Rep. Scholten, Hillary J. [D-MI-3]
Recent Actions
- 2025-05-29: Referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, 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.
- 2025-05-29: Referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, 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.
- 2025-05-29: Introduced in House
- 2025-05-29: Introduced in House
Bill Versions
- Foreign Adversary Investment Prohibition Act — issued 2025-05-29 — PDF (4 pages)