The provision requires reforms for U.S. small business programs to prevent Chinese and Russian shell companies from accessing national security-related technology from them.
WASHINGTON—Today, U.S. Senator Joni Ernst (R-Iowa), a senior member of the Senate Committee on Small Business and Entrepreneurship and the top Republican on the Senate Armed Services Subcommittee on Emerging Threats and Capabilities, had her measure to prevent China and Russia from exploiting Small Business Administration (SBA) programs pass the Senate.
With the Senate considering legislation related to competitiveness with China, Ernst led an effort to require SBA programs—specifically the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs—to make security reforms in order to prevent Chinese and Russian shell companies from accessing national security-related technology from them.
Click here or on the image above to watch Ernst’s remarks on the effort.
“We can and should take serious steps to compete with the Chinese Communist Party, but pouring billions of dollars into research and development with little oversight or accountability is not the answer. Hardworking Iowans’ tax dollars should never be used to subsidize Chinese and Russian shell companies, particularly at the expense of American small businesses, which is why I’m glad the Senate acted today and passed my provision to defend these programs against foreign influence and protect our national security,” said Senator Ernst.
The SBIR and STTR programs provide critical innovation funding to American small businesses. China has become one of the largest beneficiaries of the SBIR and STTR programs because of the lack of adequate oversight. China and other foreign adversaries have been establishing shell companies, acquiring beneficial ownership in American enterprises, selecting key awardee personnel for talent recruitment, and other state directed technology acquisition efforts.
Ernst’s measure—which was adopted as part of the USICA/COMPETES Act today—would prevent Congress from reauthorizing the programs without significant reforms to combat adversarial foreign influence in these programs and to protect our national security.