Suppressing Tactics of Prohibited Shells Act; STOP Shells Act
Summary
The STOP Shells Act aims to strengthen export controls by applying licensing requirements to subsidiaries of entities listed on the Entity List or Military End User List under the Export Control Reform Act of 2018. It mandates the Secretary of Commerce to apply these requirements to affiliates owned 50% or more by listed entities. The bill also requires a Foreign Direct Product Rule assessment prior to adding an entity to either list, with congressional notification following any additions or waivers.
Expected Effects
This act will likely increase scrutiny and regulation of international trade involving entities with ties to those already flagged for national security concerns. It could lead to more stringent export licensing processes and potentially impact the operations of companies with complex ownership structures. The act also aims to enhance transparency through congressional oversight.
Potential Benefits
- Strengthened national security by preventing sensitive technologies from reaching potentially hostile entities.
- Enhanced transparency through required congressional notifications.
- Improved alignment of export controls with foreign policy interests.
- Potential for a more robust and secure international trade environment.
- Addresses potential loopholes in existing export control regulations.
Potential Disadvantages
- Potential for increased bureaucratic hurdles for businesses, especially those with international subsidiaries.
- Risk of hindering legitimate trade and economic activity.
- Possible negative impact on international relations if not implemented carefully.
- Compliance costs for businesses to ensure they are not in violation of the new regulations.
- Potential for delays in export licensing processes.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the constitutional power of Congress to regulate commerce with foreign nations (Article I, Section 8, Clause 3). It also relates to the power of the executive branch to conduct foreign policy and ensure national security. The requirement for congressional notification ensures oversight, consistent with the principle of checks and balances.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).