HR1531-119

What This Bill Does

The PROTECT Taiwan Act creates a conditional U.S. policy response to a Chinese threat against Taiwan. If the President informs Congress under the Taiwan Relations Act that actions by the People's Republic of China create a threat to Taiwan's security or social or economic system and a danger to U.S. interests, U.S. policy becomes to seek, to the maximum extent practicable, to exclude PRC representatives from meetings, proceedings, and activities of the Group of Twenty, Bank for International Settlements, Financial Stability Board, Basel Committee on Banking Supervision, International Association of Insurance Supervisors, and International Organization of Securities Commissions. The Treasury Secretary, Federal Reserve Board, and Securities and Exchange Commission must take all necessary steps to advance that policy. The President may waive the exclusion policy for a specific organization by reporting to House Financial Services and Senate Banking that the waiver is in the U.S. national interest and explaining the reasons. The Act expires 5 years after enactment or 30 days after the President notifies Congress that termination is in the U.S. national interest, whichever comes earlier.

Who Benefits and How

Taiwan benefits from a U.S. financial-diplomatic pressure tool triggered by PRC threats. U.S. foreign-policy officials benefit from a statutory policy directing exclusion efforts in major financial regulatory forums. The Treasury Department, Federal Reserve Board, and SEC benefit from clear congressional instruction on how to respond within their international regulatory networks. Taiwan supporters in Congress benefit from a concrete sanction-like consequence short of direct financial sanctions. U.S. allies concerned about PRC coercion benefit from a defined U.S. position in forums such as the G20, BIS, and Financial Stability Board.

Who Bears the Burden and How

PRC representatives face potential exclusion from major financial regulatory meetings and activities after a triggering presidential notice. The President must decide whether to issue the Taiwan Relations Act notice, whether to waive exclusions for specific organizations, and whether to terminate the Act early. Treasury, the Federal Reserve Board, and SEC must take all necessary steps to advance the exclusion policy. International financial organizations may face diplomatic conflict over PRC participation. House Financial Services and Senate Banking must receive waiver reports and reasons.

Key Provisions

• Triggers U.S. policy after a Taiwan Relations Act notice of PRC threats to Taiwan and U.S. interests.
• Directs maximum practicable exclusion of PRC representatives from the G20, BIS, Financial Stability Board, Basel Committee, IAIS, and IOSCO.
• Requires Treasury, the Federal Reserve Board, and SEC to advance the exclusion policy.
• Allows organization-specific presidential waivers with national-interest reports to Congress.
• Sunsets the Act after 5 years or 30 days after presidential national-interest termination notice.
• Uses financial-regulatory forum access as pressure against PRC coercion of Taiwan.