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HR 7075

Divesting from Communist China’s Military Act of 2026

119th Congress Introduced by Scott Perry and 1 co-sponsor

Requires Treasury to add identified Chinese military companies to NS-CMIC List within 90 days of DoD finding, triggering divestment and EO 13959 sanctions.

Introduced in House
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Bill Summary · HR 7075

Summary of HR 7075 — Divesting from Communist China’s Military Act of 2026

Jurisdiction: United States | Session: 119th Congress | Introduced: January 14, 2026

1) Purpose and Intent

  • The bill requires the Secretary of the Treasury to add any entity identified as a Chinese military company to the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC List), if not already listed.
  • Its overarching aim is to tighten financial and investment flows to Chinese military companies by ensuring they appear on the NS-CMIC List and are thus subject to related U.S. sanctions and divestment restrictions.

2) Key Provisions and Changes

Short Title

  • Referred to as the “Divesting from Communist China's Military Act of 2026.”

Findings (Sec. 2)

  • Recites prior executive actions and statutes addressing the PRC’s military-civil fusion strategy and national security concerns related to Chinese surveillance technology and the Chinese military-industrial complex.
  • Notes that the Department of Defense (DoD) has prohibitions in place on certain procurements involving Chinese military companies (NDAs and NDAs-like restrictions) with phased timelines:
    • Beginning June 30, 2026: DoD cannot enter new contracts with identified Chinese military companies or entities under control of such companies.
    • Beginning June 30, 2027: DoD cannot purchase end products or services produced or developed by those companies indirectly through third parties.
  • Emphasizes the need for harmonized enforcement across sanctions regimes and the role of Congress in aligning treatment of national security risks.

Inclusion on NS-CMIC List (Sec. 3)

  • General Rule: Within 90 days after the Secretary of Defense identifies an entity as a Chinese military company operating in the U.S. under 10 U.S.C. 113 note, the Secretary of the Treasury shall include that entity on the NS-CMIC List if it is not already listed.
  • Effect of Inclusion:
    • For most entities, once included, the prohibitions under Executive Order 13959 apply within 60 days.
    • There is a one-year divestment window during which U.S. persons may buy or sell publicly traded securities of the entity solely to divest, in whole or in part.
  • Definitions (Key Terms):
    • NS-CMIC List: The Treasury’s list of non-SDN Chinese Military-Industrial Complex Companies maintained under EO 13959 (and successor orders).
    • Executive Orders: EO 13959 and EO 14032, relating to securities investments that finance Communist Chinese Military Companies and related security concerns.
    • Publicly Traded Security: Securities traded on U.S. or other exchanges, including derivatives or securities designed to provide investment exposure to the described securities.
    • United States Person: Broad definition including U.S. citizens, permanent residents, entities organized under U.S. law, or any person in the United States.
    • Chinese Military Company: As defined by 10 U.S.C. 113 note, including entities directly/indirectly owned or controlled by or affiliated with the People’s Liberation Army, Chinese military/security agencies, the MIIT, SASAC, SASTIND, and other related bodies, and identified as military-civil fusion contributors to the Chinese defense-industrial base; and engaged in commercial services, manufacturing, producing, or exporting.

3) Who/What Would Be Affected

  • Chinese entities identified as “Chinese military companies” operating in the United States (as determined by DoD under 10 U.S.C. 113 note) would be added to the NS-CMIC List by the Treasury.
  • United States persons (individuals and entities) holding publicly traded securities of such entities would face restrictions:
    • Prohibitions under EO 13959 would apply after inclusion (with limited 1-year divestment window).
    • During the 1-year divestment period, public trading of the company’s securities would be permitted only to facilitate divestment.
  • DoD procurement policies: Restrictions on purchasing from or contracting with these companies commence on specified future dates (June 30, 2026 for new contracts; June 30, 2027 for end products/services via third parties), reinforcing the financial restrictions.

4) Procedural and Timeline Aspects

  • Timeline Highlights:
    • Identification by DoD of a Chinese military company operating in the U.S triggers Treasury action to add to NS-CMIC List within 90 days.
    • Inclusion triggers mentally (60-day countdown) to apply EO 13959 prohibitions.
    • A one-year divestment period begins on the date of inclusion.
  • Oversight:
    • Definitions of “appropriate congressional committees” include the Senate Committee on Banking, Housing, and Urban Affairs, and the House Committee on Financial Services, indicating which committees would oversee this legislation.
  • Cross-Agency Coordination:
    • The bill references harmonization across sanctions regimes (Executive Orders, DoD procurement restrictions) to ensure consistent treatment of national security risk from Chinese military companies.

Note: The bill proposes to codify and accelerate linkage between defense identifications and treasury listing, with a structured divestment window to reduce market exposure to identified Chinese military entities.

Compiled from official sources — confirm details with the bill’s official record.

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