Sponsor
John Moolenaar
Representative · R-MI
Representative · R-MI
The bill strengthens prosecutors' ability to treat companies tied to adversary states as state instruments to protect national security and trade secrets, but it raises civil‑liberties concerns, legal uncertainty for foreign‑linked businesses, and compliance costs for U.S. firms.
Federal prosecutors and national-security investigators can more easily treat companies domiciled in designated 'covered nations' as foreign instrumentalities, aiding espionage and foreign-influence investigations and prosecutions.
U.S. legal authorities gain broader tools to deter and punish theft or illegal transfer of data and trade secrets by entities tied to adversary states, which could help protect American companies and workers' intellectual property.
Individuals and entities with ties to designated covered nations may face expanded surveillance and investigative scrutiny, raising civil‑liberties and due‑process risks for immigrants, foreign‑born researchers, and workers.
Companies and investors domiciled in or doing business with covered nations could be criminally designated or face enforcement risk even where direct government control isn't proven, creating legal uncertainty that may chill cross-border investment and commerce.
U.S. firms with cross‑border subsidiaries, supply chains, or contracts in covered nations may face increased compliance complexity and costs to avoid inadvertent enforcement exposure.
Based on analysis of 2 sections of legislative text.
Expands the criminal-law definition of "foreign instrumentality" to cover entities domiciled in any "covered nation" listed in 10 U.S.C. § 4872.
Official title: To amend section 1839 of title 18, United States Code, to provide that an entity domiciled in a foreign adversary country is a foreign instrumentality for purposes of the prohibition on economic espionage under such section.
Introduced July 20, 2026 by John Moolenaar · Last progress July 20, 2026
Expands the federal criminal definition of “foreign instrumentality” so that any entity domiciled in a statutory “covered nation” is treated as a foreign instrumentality for economic espionage law. The change ties the criminal-code definition to the separate statutory list of covered nations in 10 U.S.C. § 4872, broadening the set of foreign-linked entities that can trigger enhanced investigation and prosecution under economic espionage statutes. The amendment is narrowly drafted and technical: it only revises the definitional language in 18 U.S.C. § 1839(1) and does not create new spending, programs, or deadlines. The practical effect is to make domicile in a covered nation an independent legal basis for treating an entity as a foreign government-linked actor in prosecutions involving trade secret theft and related offenses.