10 U.S.C. § 4874 — Award of certain contracts to entities controlled by a foreign government: prohibition

(a) A Department of Defense or Department of Energy contract under a national-security program may not be awarded to an entity controlled by a foreign government if the entity must receive access to information in a proscribed category to perform the contract.

(b) (1) The responsible Secretary may waive this rule if: (A) the Secretary determines that the waiver is essential to United States national-security interests; or (B) the contract is for environmental restoration, remediation, or waste management at a Defense or Energy facility, and: (i) the Secretary determines that the waiver will advance that department’s environmental objectives and will not harm United States national-security interests; and (ii) the entity is controlled by a foreign government with which the Secretary is authorized to exchange Restricted Data under 42 U.S.C. § 2164(c). (2) For a waiver under (1)(B), the responsible Secretary must notify Congress. The contract may be awarded only after the 45-day period beginning when the committees receive the notice has ended.

(c) (1) “Entity controlled by a foreign government” includes: (A) any domestic or foreign organization or corporation effectively owned or controlled by a foreign government; and (B) an individual acting for a foreign government, as the responsible Secretary determines. It does not include an organization or corporation that a foreign government owns but does not control, directly or indirectly, if that ownership took effect before October 23, 1992. (2) “Proscribed category of information” means: (A) for Defense contracts, a category that (i) includes special access information; (ii) the Secretary of Defense determines includes information whose disclosure to an entity controlled by a foreign government is not in the national-security interests of the United States; and (iii) the Secretary of Defense defines in regulations for this section; and (B) for Energy contracts, a category that (i) the Secretary of Energy determines includes information described in (A)(ii); and (ii) the Secretary of Energy defines in regulations for this section. (3) “Secretary concerned” means the Secretary of Defense for Defense contracts and the Secretary of Energy for Energy contracts.