Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, released the following statement after being named a Member of the House who will go to conference with the Senate over the House’s America COMPETES Act of 2022:
“I am pleased to be appointed by Speaker Pelosi as a member of the conference committee for the America COMPETES Act of 2022. This bipartisan, bicameral piece of legislation strengthens the competitiveness of the U.S. economy and businesses, requires the federal government to work with Congress to ensure the safety and security of America’s and our allies’ economies, and counters anti-competitive actions taken by China.
“My Committee colleagues and I have authored several provisions that are key to achieving these goals. Among other things, this includes provisions that would leverage U.S. interests in multilateral development banks to respond to predatory loan arrangements of China, provide debt relief to developing countries, strengthen anti-money laundering authorities at the Treasury Department and bolster the U.S. response to the COVID-19 pandemic.
“With this announcement, we are taking yet another crucial step toward getting this on the President’s desk. I am also pleased that Representative Sylvia Garcia will join me in representing the interests of the Financial Services Committee. I look forward to working with my colleagues in the House and the Senate on both sides of aisle, and I am confident that we can get this done to supercharge our economy to compete and win in the 21st century and ensure America remains competitive – now and forever.”
Over the past several months, Chairwoman Waters worked closely with members on the Financial Services Committee and with Speaker Pelosi to ensure that Committee priorities were included in the legislation. See below for a summary of provisions authored by House Democratic Members in the America COMPETES Act:
U.S. Policy on World Bank Group and Asian Development Bank Loans to China, (Title I): This provision, which is identical to H.R. 6475, by Chairwoman Waters (D-CA) directs the Treasury to vote against any loans to China from the World Bank or Asian Development Bank unless the Secretary of Treasury has certified to Congress that China credibly participates in multilateral debt relief initiatives on terms comparable to other G-20 governments; allows borrowing countries to seek restructuring of China loans in official multilateral debt relief forums; allows for the public disclosure of the terms and conditions of its loans to other countries; and such assistance contributes significantly to the provision of a global public good that serves the national interest of the United States, such as limiting the negative impacts of climate change.
Prohibitions or Conditions on Certain Transmittal of Funds, (Title II): This provision by Rep. Jim Himes (D-CT) streamlines the process by which special measures may be introduced and modernizes the authorities granted to the Financial Crimes Enforcement Network (FinCEN) by allowing the agency to pursue bad actors like those laundering the proceeds of Chinese ransomware and or declared a Primary Money Laundering Concern due to support to North Korea’s sanctions evasion. The provision is similar to an amendment offered by Mr. Himes to H.R. 4350, the National Defense Authorization Act for Fiscal Year 2022, which passed the House.
U.S. Stock Exchange Trading Prohibition for Two Consecutive Auditor Non-Inspection Years, (Title III): This provision by Rep. Brad Sherman (D-CA) shortens the grace period that US stock exchange listed companies currently have, under Holding Foreign Company Accountable Act of 2020, to comply with the Public Company Accounting Oversight Board (PCAOB) inspection requirements. The current law allows for three years to either comply with PCAOB rules or get delisted from US stock exchanges. This provision is identical to Mr. Sherman’s H.R. 6285, Accelerating Holding Foreign Companies Accountable Act.
Combating Wildlife Trafficking Financing and Proceeds Study Act, (Title IV): This provision, which is identical to H.R. 6477, by Rep. Madeleine Dean (D-PA) requires the Treasury to study wildlife trafficking and its proceeds, including an examination of the proliferation of online platforms and the convergence of trafficking commodities, financial enablers, and illicit networks, many of which are fueled by Chinese criminal activity and demand.
Study on Chinese Support for Afghan Illicit Finance, (Title V): This provision by Rep. Stephen Lynch (D-MA) directs Treasury’s Office of Terrorism and Financial Intelligence to brief Congress on the identification and analysis of Chinese economic, commercial, and financial connections to Afghanistan which fuel both Chinese and Taliban interests, to include illicit financial networks involved in narcotics trafficking, illicit financial transactions, official corruption, natural resources exploitation, and terrorist networks.
U.S. Policy on Multilateral Development Bank Co-Financing Arrangements with China’s Infrastructure Bank, (Title VI): This provision, which is identical to H.R. 6476, by Rep. Ritchie Torres (D-NY) directs Treasury to vote against any program or project at the multilateral development banks (MDBs, like the World Bank) if the project includes co-financing provided by the China-led Asian Infrastructure Investment Bank (AIIB), unless the Secretary has certified that the AIIB has demonstrated a track record of providing grants and concessional assistance to the world’s poorest countries.
China Financial Threat Mitigation, (Title VII): This provision by Rep. Abigail Spanberger (D-VA) will require the Treasury Department to study and issue a report analyzing risks to U.S. financial stability and the global economy emanating from the People’s Republic of China and provide recommendations to U.S. representatives of relevant international organizations to better monitor and take action to mitigate such risks. The report is due to Congress by December 31, 2022, and the unclassified portions of the report must be published by that date. The House previously passed a similar provision offered by Rep. Spanberger as an amendment to H.R. 4350, the National Defense Authorization Act for Fiscal Year 2022.
Support for Debt Relief for Developing Countries, (Title VIII): This provision by Rep. Alexandria Ocasio-Cortez (D-NY) directs the Secretary of Treasury and the United States representatives at the International Monetary Fund and the World Bank to engage with international financial institutions, official creditors, and relevant commercial creditor groups to advocate for the effective implementation of the G-20’s Common Framework—the first multilateral debt relief initiative aimed at easing the debt burdens of developing countries to include China as an official creditor—through the establishment of clear procedures and a commitment to transparency and equitable burden-sharing through broad creditor participation.
COVID-19 Emergency Medical Supplies Enhancement, (Title X): This provision by Rep. Juan Vargas (D-CA) builds on the Defense Production Act’s (DPA) purpose to ensure our nation has the materials necessary to respond to COVID-19. It would allow certain medical materials to qualify for purchase and increased production under the DPA. It would also allow the federal government to prioritize state, local or tribal governments’ orders. Finally, it provides a framework for streamlined private sector engagement, directs the President to support the supply chain production of essential COVID-19 related medical materials, and requires reporting on purchases made and contracts entered under DPA authorities. Rep. Vargas sponsored substantially similar provision, H.R. 3125, the COVID-19 Emergency Medical Supplies Enhancement Act of 2021, which previously passed the House in May 2021.
Afghan Trade Zones for Licit Trade, (Title XI): This provision by Rep. Jake Auchincloss (D-MA) would direct the Treasury Department and the State Department to conduct a study to determine whether licenses could be granted under existing sanctions programs for specific individuals in order to operate a foreign trade zone in Afghanistan while maintaining U.S. national security interests.
Interagency Task Force to Address Chinese Market Manipulation, (Title XII): This provision by Rep. Josh Gottheimer (D-NJ) would establish an interagency task force to address Chinese market manipulation in the United States and expands the study and strategy on money laundering by the People’s Republic of China to include risks of contributing to corruption.
Disclosure Requirements relating to Certain Exempted Transactions, (Title XIII): This provision by Rep. Brad Sherman (D-CA) would require issuers of securities that take advantage of certain exemptions from registration with the Securities and Exchange Commission (SEC) to submit basic information to the SEC regarding the issuer and the country in which it is based. This provision also requires a report to Congress that compiles on quarterly basis of issuers of exempt securities that invest in China.
SAFE Banking for State-Regulated Cannabis Businesses, (Title XIV): This provision led by Rep. Ed Perlmutter (D-CO) would help ensure cannabis businesses operating in nearly all states that have legalized its use have access to basic banking products and services. Cannabis businesses are currently forced to operate on a cash-only basis, which has created a serious public safety risk for employees, businesses, and communities, as well as providing opportunities for tax evasion and money laundering. This provision would provide a safe harbor for financial institutions that provide services and products to cannabis businesses, along with their service providers (e.g. electricians, plumbers, etc.). The House previously passed similar legislation, the Secure And Fair Enforcement (SAFE) Banking Act sponsored by Rep. Perlmutter, as a standalone bill in September 2019 and May 2021. The House also passed a similar provision when it was included in the Heroes Act in May 2020 and in a refined version of the Heroes Act October 2020, as well as a provision of the National Defense Authorization Act (NDAA) for Fiscal Year 2022 in September 2021.