§ 4581. Prohibition on investments
Prohibition on investments
In general
The Secretary may prohibit, in accordance with regulations issued under subsection (e), a United States person, including its controlled foreign entities, from knowingly engaging in a covered national security transaction in any prohibited technology.
Evasion
Any action that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate the prohibition set forth in subsection (a) is prohibited.
Exemptions
National interest exemption
Subject to subsection (d), the Secretary is authorized to exempt from the prohibition set forth in subsection (a) any activity determined by the President, in consultation with the Secretary, or delegated to the Secretary, in coordination with the Secretary of Commerce, the Secretary of State, and, as appropriate, the heads of other relevant Federal departments and agencies, to be in the national interest of the United States.
Intelligence exemption
Regulations issued under subsection (e) shall not apply to any authorized intelligence activities of the United States.
Congressional notification
The Secretary shall—
notify the appropriate congressional committees not later than five business days after issuing an exemption under subsection (c); and
include in such notification an identification of the national interest justifying the use of the exemption, subject to appropriate confidentiality and classification requirements.
Regulations
In general
The Secretary, in consultation with the Secretary of Commerce, the Secretary of State and, as appropriate, the heads of other relevant Federal departments and agencies, may issue or update existing regulations to carry out this section subject to public notice and comment in accordance with subchapter II of chapter 5 and chapter 7 of title 5, and not subject to the requirements of section 4559 of this title. The regulations issued pursuant to this paragraph shall, as necessary, amend, terminate, supersede, revoke, or streamline existing requirements in part 850 of title 31, Code of Federal Regulations (the Outbound Investment Rule) and shall provide a reasonable timeframe for compliance.
Non-binding feedback
In general
The regulations issued under paragraph (1) shall include a process under which a person can request to receive non-binding feedback on a confidential basis, or as anonymized guidance to the public, as to whether a transaction would constitute a covered national security transaction in a prohibited technology.
Authority to limit frivolous feedback requests
In establishing the process required by subparagraph (A), the Secretary may prescribe limitations on requests for feedback identified as frivolous for purposes of this subsection.
Notice; opportunity to cure
In general
The regulations issued under paragraph (1) shall account for whether a United States person has self-identified and self-disclosed a violation of the prohibition set forth in subsection (a) in determining the legal consequences of that violation.
Self-disclosure letters
The regulations issued under paragraph (1) shall dictate the form and content of a letter of self-disclosure, which shall include relevant facts about the violation, why the United States person believes its activity to have violated the prohibition set forth in subsection (a), and a proposal for mitigation of the harm of such action.
Low-burden regulations
In issuing regulations under paragraph (1), the Secretary should balance the priority of protecting the national security interest of the United States while, to the extent practicable—
minimizing the cost and complexity of compliance for affected parties, including the duplication of reporting requirements under current regulations;
adopting the least burdensome alternative that achieves regulatory objectives; and
prioritizing transparency and stakeholder involvement in the process of issuing the rules.
Burden of proof
In accordance with section 556(d) of title 5, in an enforcement action for a violation of the prohibition set forth in subsection (a), the burden of proof shall be upon the Secretary.