Sponsors (2)
The bill strengthens national-security and trade-secret enforcement against entities tied to adversary states, but at the cost of legal uncertainty, broader investigative powers that raise civil-liberties concerns, and increased compliance burdens for businesses with foreign ties.
Federal prosecutors can more easily treat companies domiciled in designated 'covered nations' as foreign instrumentalities, strengthening U.S. investigations into espionage and foreign influence.
U.S. firms and workers gain broader legal tools to deter and penalize data theft or illegal transfer by entities tied to adversary states, potentially improving protection of trade secrets and intellectual property.
Immigrants, foreign-linked businesses, and others with ties to covered nations could face expanded surveillance and investigative reach, raising civil liberties and due-process concerns.
Companies and investors domiciled in covered nations may be at risk of criminal designation even without clear proof of government control, creating legal uncertainty that can chill international commerce and investment.
U.S. companies with cross-border subsidiaries or contracts in covered nations will face more complex compliance obligations and higher legal costs to avoid risks under the new classification rules.
Based on analysis of 2 sections of legislative text.
Treats entities domiciled in a statutorily defined “covered nation” as “foreign instrumentalities” for economic espionage prosecutions.
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
Amends the criminal code definition of “foreign instrumentality” so that any entity domiciled in a statutorily defined “covered nation” is treated as a foreign instrumentality for purposes of economic espionage law. The change makes domicile in a covered nation itself sufficient to qualify an entity as a foreign instrumentality, in addition to existing criteria like foreign government ownership or control. The amendment links the criminal-law term to the separate definition of “covered nation” in 10 U.S.C. § 4872, broadening the range of entities that prosecutors can treat as arms of a foreign state in economic espionage prosecutions. It is a targeted statutory change with direct implications for enforcement and for entities and people who deal with companies domiciled in those covered nations.