WASHINGTON, D.C. – Congressman Blaine Luetkemeyer (MO-03), Chairman of the National Security, Illicit Finance and International Financial Institutions Subcommittee and Congressman Brad Sherman (CA-32), Ranking Member of the Capital Markets Subcommittee released the following statements regarding introduction of their bipartisan bill, the Holding Chinese Listed Companies Accountable Act. This legislation would increase accountability of Chinese-based companies on United States exchanges and provide additional scrutiny to safeguard American investors from being defrauded by Chinese companies beholden to the Chinese Communist Party.

“Through the Chinese companies it controls, the CCP has a history of violating American and international laws in order to steal money out of our capital markets. Forced labor, mislabeling goods, and producing false financial statements are just a few ways Chinese companies are defrauding the system. We have the most robust capital markets in the world, and laws in place to ensure their integrity. If we are going to allow CCP-affiliated companies - which have repeatedly displayed their preference for dishonestly and corruption - to be listed on our exchanges, they must meet the highest level of standards” said Luetkemeyer.

--

“In 2020, I was glad lead the House effort to pass the Holding Foreign Companies Accountable Act, working with Senator Kennedy, which required that the audits of Chinese companies be subject to review by the U.S. Public Company Accounting Oversight Board (PCAOB) every three years. Last year, Senator Kennedy and I accelerated these inspections to occur every two years through the Accelerating Holding Foreign Companies Accountable Act. It is time to take the third step. I am delighted to work with Congressman Luetkemeyer to introduce the Holding Chinese Companies Accountable Act, which will require auditors of Chinese companies to be inspected by the PCAOB annually,” said Sherman.

Full text of the bill can be found HERE.

Background: Congress established the PCAOB to inspect audits of public companies, ensuring the information companies provide to the public is accurate, independent and trustworthy. In December 2020, the Holding Foreign Companies Accountable Act, which prohibits foreign companies from listing their securities on any of the U.S. exchanges if the company has failed to comply with the Public Company Accounting Oversight Board’s (PCAOB) audits for three years in a row, was signed into law. In December 2022, the Accelerating Holding Foreign Companies Accountable Act was signed into law. This measure requires foreign companies to comply with PCAOB audits within two consecutive years instead of three.

The Holding Chinese Listed Companies Accountable Act would require Chinese-based companies audits be inspected by the PCAOB every year, and allow the SEC to remove non-compliant Chinese companies from U.S. exchanges accordingly.