A bill to amend the National Defense Authorization Act for Fiscal Year 2026 to require inclusion of certain foreign persons in the Non-SDN Chinese Military-Industrial Complex Companies List.

Summary of Bill: S. 4581 (119th Congress)

Purpose and intent

• The bill aims to amend the National Defense Authorization Act (NDAA) for Fiscal Year 2026.
• Specifically, it requires the inclusion of certain foreign persons in the Non-SDN Chinese Military-Industrial Complex Companies List (the “Non-SDN CMC List”).

Key provisions and changes

• Expansion of the list: The legislation directs that particular foreign individuals or entities be added to the Non-SDN CMC List. This list currently identifies foreign persons tied to the Chinese military-industrial complex but not designated on the Specially Designated Nationals (SDN) list. The bill expands the scope to include additional foreign persons as determined appropriate under the statute.
• Authority and process: The bill prescribes procedures for identifying, updating, and publishing the expanded list. This likely involves interagency coordination and formal reporting requirements, consistent with NDAA frameworks.
• Sanctions and regulatory impact: While not spelled out in this summary, inclusion on the Non-SDN CMC List typically triggers sanctions or restrictive measures (e.g., prohibitions on certain transactions, asset freezes, or enhanced screening) consistent with existing NDAA and sanctions authorities.
• Reporting and oversight: The bill would presumably require periodic reporting to Congress on the list additions, rationale for designations, and any related enforcement actions.

Who or what would be affected

• Foreign individuals/entities added to the Non-SDN CMC List: They would face U.S. government sanctions and enhanced screening requirements in financial, business, and defense-arelated activities.
• U.S. government agencies: Agencies responsible for national security, foreign assets control, export controls, and defense oversight would implement and enforce the list, conduct reviews, and coordinate designations.
• U.S. individuals and entities engaging with designated persons: Businesses, financial institutions, and contractors may be subject to compliance obligations, due diligence, and potential restriction on dealings with designated parties.

Procedural and timeline aspects

• Intro and referral: Introduced in the Senate and referred on May 20, 2026, to the Committee on Banking, Housing, and Urban Affairs.
• Sponsor: Co-sponsored by Senator Rick Scott.
• Next steps: The bill would proceed through committee consideration, potential amendments, and, if reported, floor debate and vote in the Senate. If passed, it would move to the House (and potentially a conference if there are differences with NDAA provisions already enacted) for reconciliation.

Notable context

• The bill sits within broader NDAA authorization and sanctions policy, leveraging established mechanisms to constrain actors tied to the Chinese military-industrial complex.
• The emphasis on “Non-SDN” indicates an expansion of targeted designations beyond the SDN list, potentially widening the scope of restricted persons under U.S. sanctions authorities.

If you’d like, I can compare this proposed change to the current Non-SDN CMC List provisions in the NDAA framework or outline potential fiscal and compliance impacts for affected sectors.