WASHINGTON – U.S. Senator John Cornyn (R-TX), Chairman of the Senate Select Committee on Intelligence Tom Cotton (R-AR), and Chairman of the House Select Committee on China John Moolenaar (MI-02) introduced the Stop PRC Economic Espionage Act, which would amend current law to help ensure Chinese companies – which are inherently controlled by the Chinese Communist Party – and those committing economic espionage to their benefit are held accountable for their crimes:

“There are no ‘private’ companies in China because they are – by law and design – beholden to the Chinese Communist Party,” said Sen. Cornyn. “This bill is a commonsense fix to reflect that reality, account for the PRC’s state-sponsored efforts to cheat and steal their way ahead in emerging tech, AI, and defense, and enable our government to prosecute without the burden of proving the obvious.”

“Communist China treats every business as an arm of the state. Anyone stealing trade secrets to benefit a Chinese business does so for the benefit of their government,” said Select Committee on Intelligence Chairman Cotton. “Our bill accepts that reality in law and would remove the requirement to show that a Chinese company is controlled by the Communist Chinese government.”

“The Stop PRC Economic Espionage Act will update our nation’s espionage laws and make it harder for spies and intelligence assets to escape justice based on the technicality of what counts as a ‘foreign instrumentality.’ In China, everything is an instrument controlled by the state, there are no private companies. The CCP’s sweeping national security law empowers its strategy of military-civil fusion and the pursuit of its military ambitions across all industries,” said Select Committee on China Chairman John Moolenaar.

Background:

Under the current economic espionage statute, one needs to intend or know the offense will benefit a foreign government or agent, or a “foreign instrumentality.” Foreign instrumentality is defined in the statute as “any agency, bureau, ministry, component, institution, association, or any legal, commercial, or business organization, corporation, firm, or entity that is substantially owned, controlled, sponsored, commanded, managed, or dominated by a foreign government.” Given the national security laws of the People’s Republic of China (PRC), any business organization there is effectively an arm of the state and U.S. law should reflect that reality.

The Stop PRC Economic Espionage Act would define any such organization that is based in a “covered country” – China, Russia, Iran, and North Korea – as a foreign instrumentality. The current standard for showing that an organization is “substantially” owned or controlled by the foreign government would apply to all other countries.