Sponsors (2)
The bill strengthens deterrence and enforcement against economic espionage tied to certain foreign nations and gives businesses and prosecutors clearer legal tools, but it raises legal risk and compliance costs for U.S. firms with foreign ties and heightens privacy and civil‑liberties concerns.
Companies that handle sensitive intellectual property — including government contractors, financial institutions, and utilities/energy firms — gain broader legal protection and deterrence against economic espionage by explicitly covering entities domiciled in specified 'covered' nations.
Federal law enforcement and prosecutors have clearer statutory authority to pursue espionage cases involving entities domiciled in those foreign nations, which should improve consistency and effectiveness of enforcement.
Tech workers and firms that manage proprietary data gain stronger legal remedies when theft involves entities tied to covered nations, increasing incentives and tools to protect trade secrets and other IP.
U.S. companies with affiliates or partners domiciled in listed 'covered' nations could face increased criminal exposure even when there is no evidence of foreign ownership or control, creating legal uncertainty and risk for those businesses.
Small businesses and other U.S. firms may be discouraged from legitimate commercial relationships with firms domiciled in those nations and will likely incur higher transaction and due-diligence costs.
The broader statutory reach could lead to increased surveillance or investigations of entities and individuals with tenuous ties to covered nations, raising privacy and civil‑liberties concerns for workers, contractors, and others with foreign links.
Based on analysis of 2 sections of legislative text.
Expands the definition of "foreign instrumentality" in the economic espionage statute to include entities domiciled in a covered nation under 10 U.S.C. § 4872, in addition to those substantially owned.
Official title: Amend 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.
Introduced July 16, 2026 by John Cornyn · Last progress July 16, 2026
Broadens the federal criminal definition of “foreign instrumentality” for economic espionage to include entities domiciled in a "covered nation" as defined in 10 U.S.C. § 4872. The change keeps the existing ownership-based test and adds domicile in a covered nation as an alternative basis for treating an entity as a foreign instrumentality. The practical effect is to expand the set of foreign-linked entities that can be treated as instrumentalities under the economic espionage statute, which can increase criminal exposure for persons and organizations who steal, obtain, or receive trade secrets for the benefit of those entities or nations designated under 10 U.S.C. § 4872 (commonly understood to refer to the People’s Republic of China and similarly designated states).