(a)In this section:
(1)(A)The term “country of risk” means a foreign country determined by the Secretary, in accordance with subparagraph (B), to present a risk of theft of United States intellectual property or a threat to the national security of the United States if nationals of the country, or entities owned or controlled by the country or nationals of the country, participate in any research, development, demonstration, or deployment activity authorized under this division or division A or an amendment made by this division or division A.
(B)In making a determination under subparagraph (A), the Secretary, in coordination with the Director of the Office of Intelligence and Counterintelligence, shall take into consideration—
(i)the most recent World Wide Threat Assessment of the United States Intelligence Community, prepared by the Director of National Intelligence; and
(ii)the most recent National Counterintelligence Strategy of the United States.
(2)The term “covered support” means any grant, contract, subcontract, award, loan, program, support, or other activity authorized under this division or division A, or an amendment made by this division or division A.
(3)The term “entity of concern” means any entity, including a national, that is—
(A)identified under section 1237(b) of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 (50 U.S.C. 1701 note; Public Law 105–261); (B)identified under section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (10 U.S.C. 113 note; Public Law 116–283); (C)on the Entity List maintained by the Bureau of Industry and Security of the Department of Commerce and set forth in Supplement No. 4 to part 744 of title 15, Code of Federal Regulations;
(D)included in the list required by section 9(b)(3) of the Uyghur Human Rights Policy Act of 2020 (Public Law 116–145; 134 Stat. 656); or (E)identified by the Secretary, in coordination with the Director of the Office of Intelligence and Counterintelligence and the applicable office that would provide, or is providing, covered support, as posing an unmanageable threat—
(i)to the national security of the United States; or
(ii)of theft or loss of United States intellectual property.
(5)The term “Secretary” means the Secretary of Energy.
(b)(1)The Secretary shall develop and maintain tools and processes to manage and mitigate research security risks, such as a science and technology risk matrix, informed by threats identified by the Director of the Office of Intelligence and Counterintelligence, to facilitate determinations of the risk of loss of United States intellectual property or threat to the national security of the United States posed by activities carried out under any covered support.
(2)In developing and using the tools and processes developed under paragraph (1), the Secretary shall—
(A)deploy risk-based approaches to evaluating, awarding, and managing certain research, development, demonstration, and deployment activities, including designations that will indicate the relative risk of activities;
(B)assess, to the extent practicable, ongoing high-risk activities;
(C)designate an officer or employee of the Department of Energy to be responsible for tracking and notifying recipients of any covered support of unmanageable threats to United States national security or of theft or loss of United States intellectual property posed by an entity of concern;
(D)consider requiring recipients of covered support to implement additional research security mitigations for higher-risk activities if appropriate; and
(E)support the development of research security training for recipients of covered support on the risks posed by entities of concern.
(3)The tools and processes developed under paragraph (1) shall be evaluated annually and updated as needed, with threat-informed input from the Office of Intelligence and Counterintelligence, to reflect changes in the risk designation under paragraph (2)(A) of research, development, demonstration, and deployment activities conducted by the Department.
(c)(1)Except as provided in paragraph (2), no entity of concern, or individual that owns or controls, is owned or controlled by, or is under common ownership or control with an entity of concern, may receive, or perform work under, any covered support.
(2)(A)The Secretary may waive the prohibition under paragraph (1) if determined by the Secretary to be in the national interest.
(B)Not less than 2 weeks prior to issuing a waiver under subparagraph (A), the Secretary shall notify the Committee on Energy and Natural Resources of the Senate and the Committee on Science, Space, and Technology of the House of Representatives of the intent to issue the waiver, including a justification for the waiver.
(3)(A)On finding that any entity of concern or individual described in paragraph (1) has received covered support and has not received a waiver under paragraph (2), the Secretary shall terminate all covered support to that entity of concern or individual, as applicable.
(B)An entity of concern or individual identified under subparagraph (A) shall be—
(i)prohibited from receiving or participating in covered support for a period of not less than 1 year but not more than 10 years, as determined by the Secretary; or
(ii)instead of the penalty described in clause (i), subject to any other penalties authorized under applicable law or regulations that the Secretary determines to be in the national interest.
(C)Prior to imposing a penalty under subparagraph (B), the Secretary shall notify the Committee on Energy and Natural Resources of the Senate and the Committee on Science, Space, and Technology of the House of Representatives of the intent to impose the penalty, including a description of and justification for the penalty.
(4)The Secretary shall—
(A)share information about the unmanageable threats described in subsection (a)(3)(E) with other Federal agencies; and
(B)develop consistent approaches to identifying entities of concern.
(d)This section shall be applied in a manner consistent with the obligations of the United States under international agreements.
(e)Not later than 240 days after August 9, 2022, the Secretary shall submit to Congress a report that—
(1)describes—
(A)the tools and processes developed under subsection (b)(1) and any updates to those tools and processes; and
(B)if applicable, the science and technology risk matrix developed under that subsection and how that matrix has been applied;
(2)includes a mitigation plan for managing risks posed by countries of risk with respect to future or ongoing research and development activities of the Department of Energy; and
(3)defines critical research areas, designated by risk, as determined by the Secretary.
