Proposed NDAA Amendment Would Scrutinize Dual-Use Exports to China

A Republican amendment would require the Defense and Commerce departments to write a report on the types and number of American dual-use technologies that Chinese Communist Party-linked entities have acquired over the past five years. The report also would have to describe the main methods of acquisition and recommend ways to better protect against the foreign acquisition of dual-use items.

Other China-related amendments include a Republican proposal that would direct the State and Defense departments to develop a strategy to discourage other countries from buying Chinese military equipment, including by reforming the U.S. foreign arms sales process. Another Republican amendment would direct DOD to determine whether two leading Chinese display providers -- BOE Technology Group and Tianma Microelectronics Co. -- should be added to the 1260H list of Chinese military companies.

Several amendments address China-related investment. Democratic proposals would prohibit outbound investment in DOD-designated Chinese military companies, bar investing in the securities of companies that are on various U.S. sanctions lists, and prevent index funds from investing in Chinese companies. A Republican proposal would require DOD to write a report on China’s efforts to build or buy strategic foreign ports.

Beyond China, a Democratic amendment that was previously introduced as a stand-alone bill would increase sanctions and export controls on Russia over its invasion of Ukraine (see 2504150026).

Several amendments deal with Turkey. A Republican measure would require the Defense, State and Treasury departments to write a report to Congress on Turkish-Iranian cooperation to evade U.S. sanctions. Another Republican amendment would require reporting on whether Turkey has supported U.S.-designated terrorist organizations. Two Republican proposals would block the sale of F-35 or F-16 aircraft to Turkey unless certain conditions were met.

Other proposed amendments would:

• ease export controls on drones and missile technology
• reform defense trade within the Australia-U.K.-U.S. (AUKUS) security partnership
• repeal two Syria sanctions laws
• require a report on the enforcement of U.S. sanctions against North Korea
• prohibit the sale of oil from the U.S. Strategic Petroleum Reserve to China, Iran, North Korea and Russia
• limit defense exports to countries accused of transnational repression against U.S. citizens
• increase nine congressional notification thresholds for arms sales
• increase the congressional notification threshold for exporting U.S. Munitions List Category I items from $1 million to $5 million
• require an annual review of whether any defense exports available through the Foreign Military Sales (FMS) program but not the Direct Commercial Sales (DCS) licensing process should become eligible for DCS
• prohibit foreign military sales to countries facing scrutiny from certain international tribunals
• require a report on whether U.S. military equipment sent to the United Arab Emirates has been used to commit human rights violations in other countries
• require a Treasury report on financial institutions that support terrorist activity
• require foreign branches of U.S. banks to comply with U.S. financial sanctions on Russia and Belarus.

As of midday Aug. 28, House members had proposed a total of more than 460 amendments on a wide range of topics. The House Rules Committee will decide which amendments will be considered when the full House takes up the NDAA later this year.