Stop PRC Economic Espionage Act of 2026
- Sponsor
- Rep. Moolenaar, John R. [R-MI-2]
- Committees
- Judiciary Committee (primary)
- Last action
- Jul 20, 2026
Bottom line
The bill broadens the scope of entities subject to economic espionage prohibitions by including any entity based in designated adversary countries, regardless of direct government control.
What it actually does
This bill expands the definition of "foreign instrumentality" under federal economic espionage law (18 U.S.C. 1839(1)). Currently, an entity is a foreign instrumentality if it is substantially controlled by a foreign government. This bill adds that any entity domiciled in a "covered nation" (specifically including China, Russia, North Korea, and Iran, as defined in 10 U.S.C. 4872) is also considered a foreign instrumentality, making it easier to prosecute economic espionage cases against such entities.
Proponents argue
Supporters argue this bill closes a loophole in existing economic espionage law, making it easier to combat intellectual property theft and trade secret misappropriation by entities from foreign adversary countries. They contend that entities domiciled in countries like China are inherently susceptible to government influence or coercion, making direct proof of government control difficult and unnecessary for prosecution. This proactive measure is seen as essential for protecting U.S. economic security and technological advantage.
Opponents contend
Critics might argue that this bill creates an overly broad and potentially discriminatory definition of "foreign instrumentality," which could ensnare legitimate businesses and individuals merely due to their country of domicile. They may contend that it shifts the burden of proof unfairly and could lead to unintended consequences, such as discouraging foreign investment or collaboration, or provoking retaliatory measures from affected countries. Some might also argue that existing law is sufficient if properly enforced.
The bill text is extremely short and straightforward, making it highly accessible for any reader to understand its direct legislative impact.
Section 2, amending 18 U.S.C. 1839(1).
Expansion of "Foreign Instrumentality" Definition for Economic Espionage
This provision amends the definition of "foreign instrumentality" in federal law concerning economic espionage. Previously, an entity was considered a foreign instrumentality if it was substantially owned, controlled, or dominated by a foreign government. The bill adds that any entity domiciled in a "covered nation" (which includes countries like China, Russia, North Korea, and Iran as defined in 10 U.S.C. 4872) will also automatically be considered a foreign instrumentality, regardless of direct government control. This change aims to streamline prosecutions for economic espionage.
Supporters argue
Proponents argue that this expanded definition is crucial for national security, as it recognizes the inherent risk posed by entities operating within foreign adversary countries, where governments can exert covert influence or compel cooperation. They believe it streamlines prosecution and acts as a deterrent against state-sponsored or state-enabled economic espionage.
Critics contend
Opponents might argue that this provision is overly broad, potentially criminalizing legitimate business activities by entities simply because of their domicile. They may contend it could lead to accusations of guilt by association, harm international trade relations, and disproportionately impact individuals or companies with no direct ties to adversary governments' espionage efforts.
Tradeoffs
The bill balances the desire for stronger national security and protection of intellectual property against concerns about potentially overbroad legal definitions and their impact on international commerce and diplomatic relations. It trades a higher burden of proof for direct government control for a broader, geographically-based presumption of foreign instrumentality.
The bill defines "foreign instrumentality" by referencing "a covered nation, as defined in section 4872 of title 10." This external reference specifies the countries targeted by the bill, which include the People's Republic of China, the Russian Federation, the Democratic People's Republic of Korea, and the Islamic Republic of Iran.
Section 2, amending 18 U.S.C. 1839(1)(B).
Why it matters:This is standard legislative practice to avoid redundancy and ensure consistency across statutes, rather than an attempt to obscure.
Case for: Referencing existing definitions ensures legal consistency and avoids the need to repeatedly list the same set of nations in multiple statutes, simplifying legislative drafting.
Case against: A reader unfamiliar with 10 U.S.C. 4872 might not immediately grasp the full implications of the bill without additional research, potentially obscuring the direct impact on specific countries.
Estimated impact: Clarifies the specific nations whose domiciled entities will face increased scrutiny under economic espionage laws.