[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1525 Introduced in Senate (IS)]

  2d Session
                                S. 1525

    To amend title 18 of the United States Code to prevent economic 
     espionage and to provide for the protection of United States 
 proprietary economic information in interstate and foreign commerce, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 25, 1996

   Mr. Cohen introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
    To amend title 18 of the United States Code to prevent economic 
     espionage and to provide for the protection of United States 
 proprietary economic information in interstate and foreign commerce, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Economic Espionage and Protection of 
Proprietary Economic Information Act of 1995''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds that--
            (1) sustaining a healthy and competitive national economy 
        is imperative to maintaining the security of the Nation;
            (2) the development and production of proprietary economic 
        information is an integral part of virtually every aspect of 
        United States trade, commerce, and business;
            (3) the development, production, protection, and lawful 
        exchange, sale, and transfer of proprietary economic 
        information is essential to maintaining the health and 
        competitiveness of critical segments of United States business 
        and industry, and hence to the national economy and the 
        national security;
            (4) much proprietary economic information moves in 
        interstate and foreign commerce, and proprietary economic 
        information that does not move in interstate or foreign 
        commerce directly affects that which does;
            (5) the theft, misappropriation, and wrongful receipt, 
        transfer, exchange, and use of stolen or misappropriated 
        proprietary economic information by foreign governments and 
        their agents or instrumentalities costs the United States 
        Government and United States firms, businesses, industries, and 
        consumers millions of dollars each year;
            (6) the theft, misappropriation, and wrongful receipt, 
        transfer, and use of proprietary economic information belonging 
        to the United States Government and United States firms, 
        businesses, and industry by foreign governments and their 
        agents or instrumentalities directly and substantially 
        threatens the health and competitiveness of critical segments 
        of the United States economy and, consequently, the Nation's 
        security; and
            (7) enforcement of existing State laws protecting 
        proprietary economic information is frustrated by the ease with 
        which stolen or wrongfully appropriated proprietary economic 
        information is transferred across State and national 
        boundaries.
    (b) Purposes.--
            (1) Primary purpose.--The primary purpose of this Act is to 
        protect the national security by preventing economic espionage 
        and furthering the development and lawful use of United States 
        proprietary economic information by protecting it from theft, 
        wrongful destruction or alteration, misappropriation, and 
        conversion by foreign governments and their agents or 
        instrumentalities. This Act is intended to protect the 
        proprietary economic information of the United States 
        Government and United States firms, businesses, industries, and 
        individuals both domestically and abroad by punishing 
        individuals, corporations, and institutions which engage in 
        economic espionage with the intent or purpose of aiding foreign 
        nations or governments and their instrumentalities.
            (2) Secondary purpose.--The secondary purpose of this Act 
        is to affirm that proprietary economic information is included 
        in the term ``goods, wares, or merchandise'' as that term is 
        used in Federal laws relating to stolen property.

SEC. 3. PREVENTION OF ECONOMIC ESPIONAGE AND PROTECTION OF PROPRIETARY 
              ECONOMIC INFORMATION IN INTERSTATE AND FOREIGN COMMERCE.

    (a) Economic Espionage.--Part I of title 18, United States Code, is 
amended by adding after chapter 27 the following new chapter:

``CHAPTER 28--ECONOMIC ESPIONAGE AND PROTECTION OF PROPRIETARY ECONOMIC 
                              INFORMATION

``Sec.
``570. Definitions.
``571. Engaging in economic espionage to aid foreign governments, 
                            corporations, institutions, or 
                            instrumentalities.
``572. Vicarious liability.
``573. Forfeiture.
``574. Extraterritoriality.
``575. Construction with other laws.
``576. Preservation of confidentiality.
``577. Nonapplicability to lawfully authorized law enforcement or 
                            intelligence activities.
``Sec. 570. Definitions
    ``As used in this chapter:
            ``(1) The term `foreign corporation, institution, or 
        instrumentality' means any corporation, agency, component, 
        institution, association, instrumentality, or legal, 
        commercial, or business entity that is substantially owned, 
        controlled, sponsored, commanded, managed, patronized, 
        dominated, or chartered by a foreign government or subdivision 
        of a foreign government.
            ``(2) The term `foreign agent' means any officer, employee, 
        proxy, servant, delegate, or representative of a foreign nation 
        or government.
            ``(3) The term `person' means a natural person, 
        corporation, agency, association, institution, or any other 
        legal, commercial, or business entity.
            ``(4) The term `proprietary economic information' means all 
        forms and types of financial, business, scientific, technical, 
        economic, or engineering information including, but not limited 
        to data, plans, tools, mechanisms, compounds, formulas, 
        designs, prototypes, processes, procedures, programs, codes, or 
        commercial strategies, whether tangible or intangible, and 
        whether stored, compiled, or memorialized physically, 
        electronically, graphically, photographically, or in writing 
        provided that:
                    ``(A) the owner thereof has taken reasonable 
                measures to keep such information confidential; and
                    ``(B) the information is not available generally 
                to, or accessible by, the public.
            ``(5) The term `owner' means the United States person or 
        persons in whom, or United States Government component, 
        department, or agency in which, rightful legal, beneficial, or 
        equitable title to, or license in, proprietary economic 
        information is reposed.
            ``(6) The term `United States person' means--
                    ``(A) in the case of a natural person, a United 
                States citizen or permanent resident alien; and
                    ``(B) in the case of a non-natural person, an 
                entity substantially owned or controlled by the United 
                States Government or by United States citizens or 
                permanent resident aliens, or incorporated in the 
                United States.
``Sec. 571. Engaging in economic espionage to aid foreign nations 
              governments, corporations, institutions, or 
              instrumentalities
    ``(a) Any person who, with intent to, or reason to believe that it 
will injure or disadvantage any owner and benefit or advantage any 
foreign nation, government, corporation, institution, or 
instrumentality who--
            ``(1) steals, wrongfully appropriates, takes, carries away, 
        or conceals, or by fraud, artifice, or deception obtains 
        proprietary economic information;
            ``(2) wrongfully copies, duplicates, sketches, draws, 
        photographs, downloads, uploads, alters, destroys, photocopies, 
        replicates, transmits, delivers, sends, mails, communicates, or 
        conveys proprietary economic information;
            ``(3) being entrusted with, or having lawful possession or 
        control of, or access to, proprietary economic information, 
        wrongfully copies, duplicates, sketches, draws, photographs, 
        downloads, uploads, alters, destroys, photocopies, replicates, 
        transmits, delivers, sends, mails, communicates, or conveys the 
        same;
            ``(4) receives, buys, or possesses proprietary economic 
        information, knowing the same to have been stolen or wrongfully 
        appropriated, obtained, or converted;
            ``(5) attempts to commit any offense described in paragraph 
        (1), (2), (3), or (4);
            ``(6) wrongfully solicits another to commit any offense 
        described in paragraph (1), (2), (3), or (4); or
            ``(7) conspires with one or more other persons to commit 
        any offense described in paragraph (1), (2), (3), or (4), and 
        one or more of such persons do any act to effect the object of 
        the conspiracy,
shall, except as provided in subsection (b), be fined not more than 
$1,000,000, imprisoned not more than 25 years, or both.
    ``(b) Any corporation that commits any offense described in 
subsection (a) shall be fined not more than $50,000,000.
``Sec. 572. Vicarious liability
    ``Any officer, director, manager, or other person occupying a 
position of authority and responsibility for the acquisition, use, or 
management of proprietary economic information for any corporation or 
other business or commercial entity who--
            ``(1) knows or has reason to know that agents or employees 
        of the corporation or entity have wrongfully acquired or 
        manipulated proprietary economic information in violation of 
        section 571(a); and
            ``(2) directly or indirectly authorizes, permits, or 
        suffers the information wrongfully acquired or manipulated to 
        be used to injure or disadvantage any owner and benefit or 
        advantage any foreign nation, government, corporation, 
        institution, or instrumentality,
shall be fined not more than $5,000,000, imprisoned not more than 25 
years, or both.
``Sec. 573. Forfeiture
    ``(a) Notwithstanding any provision of State law, any person 
convicted of a violation of this chapter shall forfeit to the United 
States--
            ``(1) any property constituting, or derived from, any 
        proceeds the person obtained, directly or indirectly, as a 
        result of such violation; and
            ``(2) any of the person's property used, or intended to be 
        used, in any manner or part, to commit, or to facilitate the 
        commission of a violation of this chapter.
    ``(b) The court, in imposing sentence on a defendant for the 
conviction of a violation of this chapter, shall order that the 
defendant forfeit to the United States all property described in 
subsection (a).
    ``(c) Except as provided in subsection (d), the provisions of 
subsections (b), (c), and (e) through (p) of section 413 of the 
Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 
853 (b), (c), and (e)-(p)) shall apply to--
            ``(1) property subject to forfeiture under this section;
            ``(2) any seizure or disposition of such property; and
            ``(3) any administrative or judicial proceeding in relation 
        to such property, if consistent with this section.
    ``(d) Notwithstanding section 524(c) of title 28, there shall be 
deposited in the Crime Victims Fund established under section 1402 of 
the Victims of Crime Act of 1984 (42 U.S.C. 10601) all amounts from the 
forfeiture of property under this section remaining after the payment 
of expenses and sale authorized by law.
``Sec. 574. Extraterritoriality
    ``(a) This chapter applies to conduct occurring within the 
territorial and special maritime jurisdiction of the United States, its 
territories, and possessions.
    ``(b) This chapter applies to conduct occurring outside the 
territorial and special maritime jurisdiction of the United States, its 
territories, and possessions if--
            ``(1) the offender is a United States citizen; or
            ``(2) the victim of the offense is an `owner,' as defined 
        in section 570, and the offense was intended to have, or had, 
        an effect in the United States.
``Sec. 575. Construction with other laws
    ``This chapter shall not be construed to preempt or displace any 
other Federal or State remedies, whether civil or criminal, for the 
misappropriation of proprietary economic information.
``Sec. 576. Preservation of confidentiality
    ``In any prosecution under this chapter, the court shall preserve 
the confidentiality of alleged proprietary economic information by any 
reasonable and lawful means including, but not limited to--
            ``(1) the granting of protective orders in connection with 
        discovery proceedings; and
            ``(2) the holding of in camera hearings, sealing relevant 
        portions of the record, and the ordering of any person involved 
        in the proceedings not to disclose the alleged proprietary 
        economic information without prior court approval. Any owner of 
        the proprietary economic information which is the subject of 
        the offense may request the prosecution to seek such protective 
        action.
``Sec. 577. Nonapplicability to lawfully authorized law enforcement or 
              intelligence activities
    ``Any act in which information is seized, taken, transported, 
transmitted, or transferred pursuant to or in furtherance of any 
lawfully authorized investigative, protective, or intelligence activity 
of a law enforcement agency of the United States, a State, or a 
political subdivision of a State, or an intelligence agency of the 
United States, shall not be considered a violation of section 571(a) or 
572.''.
    (b) Table of Chapters.--The table of chapters for part I of title 
18, United States Code, is amended by inserting after the item for 
chapter 27 the following:

``28. Economic Espionage....................................     570''.

SEC. 4. RELATED AMENDMENTS.

    (a) Stolen Property.--Section 2311 of title 18, United States Code, 
is amended by inserting between the items for ``Cattle'' and 
``livestock'' the following:
    ```Goods, wares, or merchandise' means all forms and types of 
personal property and chattels--
            ``(1) including all forms and types of financial, business, 
        scientific, technical, economic, or engineering information 
        including data, plans, tools, mechanisms, compounds, formulas, 
        designs, prototypes, processes, procedures, programs, codes, or 
        commercial strategies, whether tangible or intangible, and 
        whether stored, compiled, or memorialized physically, 
        electronically, graphically, photographically, or in writing 
        if--
                    ``(A) the owner thereof has taken reasonable 
                measures to keep such property confidential, and
                    ``(B) the property is not available generally to, 
                or accessible by, the public; and
            ``(2) not including any property or chattel seized, taken, 
        transported, transmitted, or transferred pursuant to or in 
        furtherance of any lawfully authorized investigative, 
        protective, or intelligence activity of a law enforcement 
        agency of the United States, a State, or a political 
        subdivision of a State, or of an intelligence agency of the 
        United States.''.
    (b) Racketeer Influenced and Corrupt Organizations.--Section 
1961(1)(B) of title 18, United States Code, is amended by inserting 
between ``sections 471, 472, and 473 (relating to counterfeiting),'' 
and ``section 659 (relating to theft from interstate shipment)'' the 
following: ``sections 571 and 572 (relating to economic espionage and 
protection of proprietary economic information in interstate and 
foreign commerce),''.
    (c) Wire and Electronic Communications Interception and 
Interception of Oral Communications.--Section 2516(1)(a) of title 18, 
United States Code, is amended by inserting the following between ``or 
under the following chapters of this title:'' and ``chapter 37 
(relating to espionage)'' the following: ``chapter 28 (relating to 
economic espionage and protection of proprietary economic information 
in interstate and foreign commerce),''.
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