This legislation, titled the "Foreign Investment Guardrails to Help Thwart (FIGHT) China Act," seeks to safeguard United States national security by addressing threats posed by the People's Republic of China, including Hong Kong and Macau. It establishes mechanisms to restrict financial activities and investments that could support China's military and surveillance capabilities.

Title I of the bill authorizes the President to impose sanctions on covered foreign persons, defined as entities or individuals from a country of concern significantly engaged in its defense or surveillance technology sectors. These sanctions involve blocking and prohibiting transactions in their property and interests within U.S. jurisdiction. The Secretary of the Treasury is required to report annually to Congress on whether entities on the Non-SDN Chinese Military-Industrial Complex Companies List qualify as covered foreign persons.

Title II amends the Defense Production Act of 1950 to introduce new investment restrictions. It empowers the Secretary of the Treasury to prohibit U.S. persons from knowingly engaging in covered national security transactions involving prohibited technologies. These prohibited technologies encompass critical areas such as advanced semiconductors, artificial intelligence models, quantum computing, and hypersonic systems.

The bill also mandates that U.S. persons notify the Secretary of the Treasury about investments in notifiable technologies or certain covered national security transactions not explicitly prohibited. Regulations will be issued to define these transactions and technologies, establish penalties for violations, and provide for waivers in the national interest. A process for non-binding feedback and self-disclosure for potential violations is also included.

The Secretary is required to report regularly to Congress on enforcement actions, assess the definition of prohibited technologies, and summarize notifications received. The legislation also encourages multilateral engagement with allies to coordinate similar investment restriction mechanisms. Furthermore, it allows for the establishment of a public database identifying covered foreign persons in prohibited technologies.

Title III addresses securities and related matters, focusing on the Non-SDN Chinese Military-Industrial Complex Companies List. It requires the Secretary to report biennially on whether certain Chinese entities, including those on other U.S. government lists, should be added to this list. This aims to ensure comprehensive identification of companies posing national security risks.

Crucially, the bill mandates that U.S. persons divest from securities of entities on the Non-SDN Chinese Military-Industrial Complex Companies List within 365 days of the bill's enactment. The President may establish a waiver process for this divestment requirement on a case-by-case basis, provided it serves U.S. national security or foreign policy objectives and Congress is notified.

To implement these provisions, the bill authorizes $150,000,000 for the Department of the Treasury for the first two fiscal years, allowing for transfers to the Department of Commerce for industry outreach. It also grants special hiring authority for up to 15 individuals to carry out the Act. The entire Act will terminate if the People's Republic of China is removed from the list of foreign adversaries in U.S. regulations.