The Dump Investments in Troublesome Communist Holdings (DITCH) Act would force nonprofits, university endowments, public pension plans and any other tax-exempt entity to divest from Chinese companies or lose tax-exempt status.
The legislation was introduced yesterday by Congressman Rob Wittman today and colleagues on the House Select Committee on the Chinese Community Party (CCP).
“The Chinese Communist Party is the threat of our lifetime, and we must do everything we can to counter Beijing’s malicious agenda,” Wittman said. “American universities, foundations, and other tax-exempt entities should not receive preferential treatment if they choose to finance a genocidal communist regime. I’m proud to join my colleagues in introducing this critical piece of legislation to ensure we prioritize American interests over profiting off the Chinese market.”
Introduced in the 117th Congress by Sen. Josh Hawley of Missouri, the DITCH Act:
- Defines disqualified Chinese companies as any company:
- Incorporated or based in China
- Has more than 10 percent of the stock (by vote or value) owned by some combination of Chinese entities
- Is directly or indirectly owned by a Chinese entity, including through a derivative instrument or other contractual arrangements
- Allows the Treasury Secretary to grant a waiver to certain non-profit entities if their need to hold certain Chinese assets outweighs the national security risk
- Requires the Secretary to publicize the reasoning
- Requires entities granted a waiver to submit a regular report
- Requires the Treasury Secretary to publish a report within 360 days and then annually describing the patterns of outbound investment into China generally, including a sectoral breakdown
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Rebecca Barnabi
