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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle A—Acquisition Policy and Management.

Conference Report

SEC. 804. PROHIBITION ON CONTRACTING WITH PERSONS THAT HAVE FOSSIL FUEL OPERATIONS WITH THE GOVERNMENT OF THE RUSSIAN FEDERATION OR THE RUSSIAN ENERGY SECTOR.

(a) Prohibition.--

(1) In general.--Except as provided under subsections (b), (c),
and (d), the Secretary of Defense may not enter into a contract for the procurement of goods or services with any person that is or that has fossil fuel business operations with a person that is not less than 50 percent owned, individually or collectively, by--

(A) an authority of the Government of the Russian Federation; or

(B) a fossil fuel company that operates in the Russian Federation, except if the fossil fuel company transports oil or gas--

(i) through the Russian Federation for sale outside of
the Russian Federation; and

(ii) that was extracted from a country other than the
Russian Federation with respect to the energy sector of
which the President has not imposed sanctions as of the
date on which the contract is awarded.

(2) Oil and gas origin.--For the purposes of applying the exception under paragraph (1)(B), oil and gas transported by a fossil fuel company shall be deemed to have been extracted from the location of extraction specified in the certificate of origin or other documentation confirming the origin of such oil or gas unless the person with respect to which such exception would apply knew or
had reason to know that such location in such documentation was
false or incorrect.

(b) Exceptions.--

(1) In general.--The prohibition under subsection (a) does not apply to a contract that the Secretary of Defense and the Secretary of State jointly determine--

(A) is necessary--

(i) for purposes of providing humanitarian assistance to the people of Russia; or

(ii) for purposes of providing disaster relief and other urgent life-saving measures;

(B) is vital to the military readiness, basing, or operations of the United States or the North Atlantic Treaty Organization;

(C) is vital to the national security interests of the United States; or

(D) was a business operation with a fossil fuel company in a country other than the Russian Federation that was entered into prior to the date of the enactment of this section.

(2) Notification requirement.--The Secretary of Defense shall notify the appropriate congressional committees of any contract entered into on the basis of an exception provided for under paragraph (1).

(3) Office of foreign assets control licenses.--The prohibition in subsection (a) shall not apply to a person that has a valid license to operate in Russia issued by the Office of Foreign Assets Control of the Department of the Treasury or is otherwise authorized to operate in Russia by the Federal Government notwithstanding the imposition of sanctions.

(4) American diplomatic mission in russia.--The prohibition in subsection (a) shall not apply to contracts related to the operation and maintenance of the United States Government's consular offices and diplomatic posts in Russia.

(c) Applicability.--This section shall take effect on the date of the enactment of this Act and apply with respect to any contract entered into on or after such effective date.

(d) Sunset.--This section shall terminate on December 31, 2029.

(e) Definitions.--In this section:

(1) Appropriate congressional committees.--The term ``appropriate congressional committees'' means--

(A) the Committee on Oversight and Accountability, the Committee on Armed Services, and the Committee on Foreign
Affairs of the House of Representatives; and

(B) the Committee on Homeland Security and Governmental
Affairs, the Committee on Armed Services, and the Committee on Foreign Relations of the Senate.

(2) Business operations.--

(A) In general.--The term ``business operations'' means engaging in commerce in any form, including acquiring, developing, maintaining, owning, selling, possessing, leasing, or operating equipment, facilities, personnel, products, services, personal property, real property, or any other apparatus of business or commerce.

(B) Exceptions.--The term ``business operations'' does not
include--

(i) any shipment subject to price caps as specified in the ``Statement of the G7 and Australia on a Price Cap for Seaborne Russian-Origin Crude Oil'', issued on December 2, 2022, between member countries of that coalition, or the price caps as specified in the ``Statement of the G7 and Australia on price caps for seaborne Russian-origin petroleum products Berlin, Brussels, Canberra, London, Ottawa, Paris, Rome, Tokyo, Washington'', issued on February 4, 2023, between such members, if such shipment complies with the applicable price caps;

(ii) actions taken for the benefit of the country of Ukraine, as determined by the Secretary of Defense; or
(iii) actions taken to support the suspension or termination of business operations for commercial activities during the period beginning on the date of the
enactment of this Act and ending on the date described in subsection (d), including--

(I) any action to secure or divest from facilities,
property, or equipment;

(II) the provision of products or services provided
to reduce or eliminate operations in territory internationally recognized as the Russian Federation or to comply with sanctions relating to the Russian Federation; and

(III) activities that are incident to liquidating, dissolving, or winding down a subsidiary or legal entity in Russia.

(3) Fossil fuel company.--The term ``fossil fuel company'' means a person that--

(A) carries out oil, gas, or coal exploration, development, or production activities;

(B) processes or refines oil, gas, or coal; or

(C) transports, or constructs facilities for the transportation of, Russian oil, gas, or coal.

(4) Person.--The term ``person'' means--

(A) a natural person, corporation, company, business association, partnership, society, trust, or any other nongovernmental entity, organization, or group;

(B) any governmental entity or instrumentality of a government, including a multilateral development institution
(as defined in section 1701(c)(3) of the International Financial Institutions Act (22 U.S.C. 262r(c)(3))); and

(C) any successor, subunit, parent entity, or subsidiary of, or any entity under common ownership or control with, any entity described in subparagraph (A) or (B).