The CLEAR Act of 2025: One-Stop Shopping for US Government Entity Watchlists

The newly proposed Chinese List Entity Alignment and Review Act of 2025, or the CLEAR Act, is essentially a government housekeeping bill designed to make sure Uncle Sam is using all of his notes. It doesn't create any new restrictions on its own, but it mandates a procedural change: the Secretary (likely of Defense or Treasury) must now review every single entity that the U.S. government has added to any other list of restrictions or scrutiny over the past year. The purpose? To see if those entities should also be slapped onto the official list of Chinese military companies.

Cutting Through the Bureaucratic Fog

Think of the U.S. government as a massive corporation with a dozen different departments, each maintaining its own spreadsheet of 'problematic' entities—maybe one list for trade violations, another for human rights concerns, and a third for sanctions. Right now, those lists don't always talk to each other seamlessly. This bill, by amending Section 1260H(b)(3) of the existing National Defense Authorization Act, forces that conversation. It ensures that if the Department of Commerce flags a Chinese entity for, say, using U.S. tech in a way they shouldn't, the Department maintaining the military company list has to formally review that entity for inclusion. It's a move toward better coordination and a more comprehensive approach to national security monitoring.

The Real-World Checkmark

For most people, this sounds like pure inside-baseball—and it is. But the real-world impact surfaces for anyone invested in, or working with, companies that operate internationally. If you run a U.S. tech firm that sells components to a Chinese manufacturer, and that manufacturer lands on any U.S. government watchlist (even an obscure one), the CLEAR Act ensures it will get a quick second look for the high-profile Chinese military company list. Inclusion on that list often means significant restrictions on U.S. investment and trade. For investors, this means the risk profile of certain foreign companies could change much faster, as designations are streamlined across agencies.

The Challenge of the Catch-All

While the goal is coordination, the bill’s language introduces a medium level of vagueness. The requirement is to review entities added to “any other list concerning restrictions or scrutiny.” The breadth of “any other list” is huge. It could include publicly available lists, but also potentially internal or less transparent agency watchlists. This raises a practical concern: if the criteria for getting onto those initial, smaller lists are themselves vague or lack robust public justification, this new procedural requirement could lead to entities being designated as Chinese military companies without the rigorous, specific evidence one might expect for such a serious designation. For the entities themselves, and the people who rely on them for supply chains or jobs, the scrutiny just got a whole lot broader and potentially less predictable.