Legislation introduced on July 20 by U.S. Rep. John Moolenaar (R-MI) would expand federal economic espionage law by treating companies based in countries designated as foreign adversaries as foreign government instrumentalities, making it easier to prosecute the theft of U.S. trade secrets carried out on their behalf.
The congressman says the Stop PRC Economic Espionage Act of 2026, H.R. 9789, is intended to bolster protections for American businesses and sensitive technologies from foreign-backed espionage.
“The Stop PRC Economic Espionage Act will update our nation’s espionage laws and make it harder for spies and intelligence assets to escape justice based on the technicality of what counts as a ‘foreign instrumentality,’” said bill sponsor Rep. Moolenaar, chairman of the U.S. House Select Committee on China. “In China, everything is an instrument controlled by the state, there are no private companies.”
The Chinese Communist Party’s sweeping national security law, he noted, “empowers its strategy of military-civil fusion and the pursuit of its military ambitions across all industries.”
The economic espionage statute currently holds that one needs to intend or know the offense will benefit a foreign government or agent, or a “foreign instrumentality,” which is defined in the statute as “any agency, bureau, ministry, component, institution, association, or any legal, commercial, or business organization, corporation, firm, or entity that is substantially owned, controlled, sponsored, commanded, managed, or dominated by a foreign government.”
The national security laws of the People’s Republic of China make plain that all businesses operate effectively as an arm of the Chinese state, and U.S. law should reflect that reality, according to a bill summary provided by Rep. Moolenaar’s staff.
H.R. 9789 would include organizations “domiciled” in a “covered country” — China, Russia, Iran, and North Korea — as a foreign instrumentality for purposes of criminal prosecution, the summary says.