S-1358-119
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Sponsored by Rick Scott (R-FL)
What it does
This bill would require the Securities and Exchange Commission (SEC) to mandate that publicly traded companies disclose three categories of information: (1) their sourcing and due diligence activities related to supply chains connected to forced labor in Xinjiang, China; (2) any transactions with companies on the Commerce Department's Entity List or designated by the Treasury Department as Chinese Military-Industrial Complex Companies; and (3) for U.S. companies with facilities in China, whether a Chinese Communist Party committee operates within the company and a summary of that committee's involvement in corporate decisions.
Who benefits
Investors and shareholders who would gain more information to assess supply chain and geopolitical risk in their portfolios. Human rights advocacy organizations and Uyghur communities who would gain greater corporate accountability around forced labor. U.S. companies that already avoid Xinjiang supply chains, who would benefit from a level playing field. Domestic manufacturers competing with companies that use lower-cost forced labor supply chains. National security analysts and policymakers who would gain visibility into corporate ties to Chinese military-linked entities.
Who is hurt
Publicly traded companies with complex global supply chains that would face compliance costs to audit and document Xinjiang-linked sourcing. U.S. companies operating in China that would be required to publicly disclose sensitive internal governance information, potentially straining business relationships with Chinese partners or authorities. Smaller publicly traded companies with fewer compliance resources. Investors in companies that may face reputational or operational disruption from required disclosures. The SEC, which would bear new rulemaking and enforcement burdens.
Supporters argue
Supporters argue that investors currently lack reliable, standardized information about whether companies are exposed to forced labor supply chains or entangled with Chinese military-linked entities — risks that carry both ethical and material financial consequences. They contend the Uyghur Forced Labor Prevention Act (2021) already established a legal presumption against Xinjiang-sourced goods, making supply chain transparency a logical extension of existing law, and that SEC disclosure requirements are a well-established, market-based mechanism to surface material risks without banning any business activity outright.
Opponents argue
Opponents argue that mandating disclosure of Chinese Communist Party committee activity within U.S. companies' China operations could expose those companies to retaliation by Chinese authorities, potentially harming employees, assets, and operations on the ground. They contend that the SEC's authority to compel ESG-related disclosures is already under legal challenge, and that post-Loper Bright, courts will independently scrutinize whether the SEC has clear statutory authority to require this specific category of geopolitical and governance reporting — raising the prospect that resulting rules could be struck down.
Constitutional context
The bill directs the SEC to issue disclosure rules, implicating the major questions doctrine under West Virginia v. EPA (2022) and the end of Chevron deference under Loper Bright v. Raimondo (2024). If the SEC's existing statutory authority under the Securities Exchange Act does not clearly authorize geopolitical and forced-labor supply chain disclosures, courts applying independent judgment could invalidate resulting rules without explicit congressional authorization in the bill itself.
Checks and balances
Congress would direct the SEC to expand its disclosure requirements, giving the executive branch's SEC new rulemaking authority; checks include judicial review of SEC rules under the major questions doctrine and post-Loper Bright independent statutory interpretation, as well as congressional oversight of SEC rulemaking.
Historical precedent
The Uyghur Forced Labor Prevention Act (2021) established a rebuttable presumption that goods from Xinjiang involve forced labor and barred their importation, representing the closest direct legislative precedent for federal action targeting Xinjiang supply chains.