The Stop Funding Our Adversaries Act of 2023 prohibits federal agencies from directly or indirectly conducting or supporting research that will be conducted by the Government of the People’s Republic of China, the Chinese Communist Party, their agents or instrumentalities, or any entity owned or controlled by them. The prohibition covers agency actions through grants, subgrants, contracts, cooperative agreements and “other funding vehicles,” and the text names several large research‑active agencies while adding a catch‑all for any other federal agency.
This is a blunt statutory bar that would require agencies and awardees to screen for ownership and control ties and to change how multinational or multi‑partner research is structured. The operative language creates several practical and legal uncertainties — notably undefined terms (agent, instrumentality, owned or controlled, and “will be conducted by”) and no waiver, definition, or enforcement mechanism — that will drive compliance costs, program redesign, and likely litigation or agency rulemaking if enacted.
At a Glance
What It Does
The bill prohibits federal agencies from directly or indirectly funding research that will be conducted by the PRC government, the Chinese Communist Party, any of their agents or instrumentalities, or entities owned or controlled by those actors. It applies through grants, subgrants, contracts, cooperative agreements, and other funding vehicles and explicitly lists several cabinet agencies while covering any other federal agency.
Who It Affects
The ban primarily affects federal research funders and their award recipients: federal research programs at DoD, DOE, HHS, EPA, Interior, Transportation, VA, and other agencies; universities, national labs, and private contractors that collaborate with Chinese‑affiliated organizations; and intermediaries that administer subawards or international consortia.
Why It Matters
The statutory language would force immediate changes in grant due diligence, contracting flow‑downs, and collaboration structures and could curtail partnerships with Chinese institutions and any U.S. entities owned or controlled by PRC actors. For program managers and compliance officers, the bill raises fundamental questions about how to determine ‘ownership,’ prove where research will be conducted, and handle existing multi‑party grants.
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What This Bill Actually Does
At its core, the bill creates a categorical prohibition: federal funds may not support research if the research will be carried out by the People’s Republic of China, the Chinese Communist Party, their agents or instrumentalities, or by entities they own or control. The operative text names several cabinet agencies with large research portfolios but then extends the ban to “any other Federal agency,” which means the restriction is intended to be government‑wide rather than limited to the agencies listed.
The statute ties the prohibition to the identity of who will conduct the research rather than to the physical location of work; that is, it bars funding when the performing party is a covered Chinese state/CCP actor or an entity under their ownership or control. It bars a broad set of funding mechanisms — grants, subgrants, contracts, cooperative agreements and “other funding vehicles” — which means both direct awards and downstream subawards/subcontracts are in scope.Importantly, the bill does not define key terms.
The statute does not specify what counts as an “agent or instrumentality,” how to measure “owned or controlled” (e.g., by percentage ownership, board control, or de facto influence), or how an agency should determine that research “will be conducted by” a covered actor. The text also contains no waiver, exception for classified or national‑security programs, grandfathering language for ongoing awards, or enforcement and penalty provisions.
Those omissions will leave agencies and awardees to decide how to implement the ban, likely through rulemaking, grant terms, or preaward vetting processes.For institutions and companies, the practical effect will be to force more rigorous ownership and affiliation disclosures, to retool collaborations to avoid covered performing parties, or to decline participation in projects with Chinese partners. For multi‑national consortia and international research infrastructure, the bill creates a contract design challenge: projects will need explicit flow‑downs guaranteeing that no portion of the research “will be conducted by” a covered actor, or else funds must be blocked or reallocated.
Absent clear definitions, agencies may adopt conservative compliance positions that disrupt legitimate scientific cooperation and spook awardees, or they may seek narrow administrative interpretations that preserve certain collaborations — either path will produce compliance burden and legal risk.
The Five Things You Need to Know
The bill bars federal agencies from directly or indirectly funding research that will be conducted by the PRC government, the Chinese Communist Party, any of their agents or instrumentalities, or any entity they own or control.
Covered funding mechanisms include grants, subgrants, contracts, cooperative agreements, and any other funding vehicles — catching both prime awards and downstream subawards/subcontracts.
The statute names multiple research agencies (DoD, VA, Energy, EPA, Interior, Transportation, HHS) and then adds a catch‑all—“or any other Federal agency”—making the prohibition government‑wide.
The bill contains no definitions for critical terms (agent, instrumentality, owned or controlled, or what it means for research to “will be conducted by”), and it provides no waiver, exception, or grandfathering for existing awards.
The text includes no enforcement provision, penalty scheme, or administrative path for agencies to implement the ban, leaving compliance method and legal exposure to agency rulemaking and future litigation.
Section-by-Section Breakdown
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Short title
This single‑line section names the law the “Stop Funding Our Adversaries Act of 2023.” It establishes the bill’s political framing but does not affect legal scope; the operative effect comes entirely from Section 2. Practically, the short title signals congressional intent to target funding ties to the PRC and the Chinese Communist Party.
Who is prohibited from funding — agencies covered
Section 2 begins by listing executive branch agencies with substantial research programs (Secretary of Defense, Secretary of Veterans Affairs, Secretary of Energy, Administrator of the EPA, Secretaries of the Interior and Transportation, Secretary of HHS) and then adds “or any other Federal agency.” That structure means the ban is not limited to the named agencies; every federal department and agency that funds research would be subject to the prohibition. For agency counsel, that creates a uniform legal obligation across disparate grantmaking regimes, from DoD contracts to NIH grants to Energy lab cooperative agreements.
What funding is prohibited — scope of covered actors and funding vehicles
The operative paragraph prohibits federal agencies from directly or indirectly conducting or supporting research through grants, subgrants, contracts, cooperative agreements, or other funding vehicles when the research “will be conducted by” the PRC government, the Chinese Communist Party, their agents or instrumentalities, or entities owned or controlled by them. The wording captures both prime awards and downstream transactions, and it bases coverage on the identity and ownership/control of the performing party rather than expressly on geographical location. That phrasing expands the ban to any award that would result in covered Chinese state/CCP actors actually performing the work, including through subcontracting or joint performance.
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Who Benefits
- Federal national‑security policymakers and defense programs — The ban reduces the legal and funding pathways that could put sensitive research (e.g., defense‑adjacent technologies) under the control of PRC state or CCP actors, aligning grant rules with precautionary security goals.
- U.S. contractors, labs, and universities without PRC ownership or control — Those institutions may face less competition for federal awards where Chinese‐affiliated organizations previously participated, potentially increasing their share of certain grants.
- Domestic industries in strategically sensitive sectors (semiconductors, advanced AI, quantum) — By limiting avenues for state‑linked PRC entities to access U.S.‑funded research, the bill aims to reduce technology transfer risk that could strengthen foreign competitors.
- Compliance, due‑diligence, and legal advisory firms — The need to vet ownership, control, and affiliations will create sustained demand for third‑party screening services and legal guidance.
Who Bears the Cost
- U.S. universities and academic researchers with existing Chinese collaborations — They will face lost partnerships, disrupted multi‑institution projects, and new administrative burdens to certify that research will not be conducted by covered actors.
- Federal agencies and program offices — Agencies must redesign award terms, implement vetting processes, and possibly halt or restructure ongoing awards, imposing programmatic and administrative costs without provided funding for implementation.
- Small businesses and U.S. companies with Chinese investment or joint‑ventures — Entities that are owned or controlled by PRC actors could be excluded from federal research programs even if their U.S. operations previously participated in funded research.
- International consortia and NGOs that rely on U.S. federal funding — Multinational projects may need to bifurcate activities, reallocate funds, or forgo U.S. funding to preserve Chinese partner participation, reducing project effectiveness.
Key Issues
The Core Tension
The bill pits two legitimate objectives against one another: protecting national security and key technologies by preventing state‑linked adversaries from conducting U.S.‑funded research, versus preserving the openness of scientific collaboration that accelerates discovery and depends on international partnerships. The statute solves decisively for security through an across‑the‑board ban, but it does so without calibrated definitions, exceptions, or implementation tools — a trade‑off that reduces one risk while creating significant legal, administrative, and scientific costs.
Two practical and legal fault lines stand out. First, the bill’s operative language relies on terms the statute does not define. “Agent or instrumentality,” “owned or controlled,” and the trigger phrase “will be conducted by” are foundational to determining who is excluded, but the text provides no benchmarks (percentage ownership, board control, contractual influence) or procedural standard for attribution.
That vagueness forces agencies either to adopt conservative, broad interpretations that exclude entities with any tenuous link to China, or to undertake detailed fact‑by‑fact inquiries that will consume program resources and slow grantmaking.
Second, the bill creates an implementation gap: it does not provide an administrative process for agencies to make control determinations, no waiver for classified or uniquely important national‑security research, no grandfathering for ongoing awards, and no penalties or appeal rights for entities deemed ineligible. Those omissions mean agencies will likely fill the vacuum through agency guidance, contracting clauses, and procurement rules — a patchwork that could produce inconsistent outcomes, mission disruption, and litigation over vagueness or arbitrary decisionmaking.
Finally, although the title references “research in China,” the operative text targets who conducts the research; that mismatch creates additional uncertainty about whether location‑based collaborations (U.S. funder + U.S. performer + Chinese collaborator abroad) are in or out of scope.
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