[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2375 Placed on Calendar Senate (PCS)]






                                                       Calendar No. 510
105th CONGRESS
  2d Session
                                S. 2375

                          [Report No. 105-277]

 To amend the Securities Exchange Act of 1934 and the Foreign Corrupt 
  Practices Act of 1977, to strengthen prohibitions on international 
      bribery and other corrupt practices, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 30, 1998

Mr. D'Amato from the Committee on Banking, Housing, and Urban Affairs, 
 reported the following original bill; which was read twice and placed 
                            on the calendar

_______________________________________________________________________

                                 A BILL


 
 To amend the Securities Exchange Act of 1934 and the Foreign Corrupt 
  Practices Act of 1977, to strengthen prohibitions on international 
      bribery and other corrupt practices, 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 ``International Anti-Bribery Act of 
1998''.

SEC. 2. AMENDMENTS RELATING TO ISSUERS OF SECURITIES.

    (a) Prohibited Conduct.--Section 30A(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78dd-1(a)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``(B)'' and inserting ``(D)''; and
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) influencing any act or decision of such 
                foreign official in his official capacity;
                    ``(B) inducing such foreign official to do or omit 
                to do any act in violation of the lawful duty of such 
                official;
                    ``(C) securing any improper advantage; or'';
            (2) in paragraph (2)--
                    (A) by striking ``(B)'' and inserting ``(D)''; and
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) influencing any act or decision of such 
                party, official, or candidate in its or his official 
                capacity;
                    ``(B) inducing such party, official, or candidate 
                to do or omit to do an act in violation of the lawful 
                duty of such party, official, or candidate;
                    ``(C) securing any improper advantage; or''; and
            (3) in paragraph (3)--
                    (A) by striking ``(B)'' and inserting ``(D)''; and
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) influencing any act or decision of such 
                foreign official, political party, party official, or 
                candidate in its or his official capacity;
                    ``(B) inducing such foreign official, political 
                party, party official, or candidate to do or omit to do 
                any act in violation of the lawful duty of such foreign 
                official, political party, party official, or 
                candidate;
                    ``(C) securing any improper advantage; or''.
    (b) Officials of International Organizations.--Section 30A(f) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78dd-1(f)) is amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) The term--
                    ``(A) `foreign official' means any officer or 
                employee of a foreign government or any department, 
                agency, or instrumentality thereof, or of a public 
                international organization, or any person acting in an 
                official capacity for or on behalf of any such 
                government, department, agency, or instrumentality, or 
                for or on behalf of any such public international 
                organization; and
                    ``(B) `public international organization' means an 
                organization that has been so designated by Executive 
                order pursuant to section 1 of the International 
                Organizations Immunities Act (22 U.S.C. 288).''; and
            (2) in paragraph (3)(A)(v), by inserting before the period 
        ``to those referred to in clauses (i) through (iv)''.
    (c) Alternative Jurisdiction Over Acts Outside of the United 
States.--Section 30A of the Securities Exchange Act of 1934 (15 U.S.C. 
78dd-1) is amended--
            (1) by redesignating subsection (f) as subsection (g);
            (2) by inserting after subsection (e) the following:
    ``(f) Alternative Jurisdiction.--
            ``(1) In general.--It shall be unlawful for an issuer, or 
        for any United States person that is an officer, director, 
        employee, or agent of such issuer or any stockholder thereof, 
        acting on behalf of that issuer, to corruptly do any act 
        outside of the United States in furtherance of an offer, 
        payment, promise to pay, or authorization of the payment of any 
        money, or offer, gift, promise to give, or authorization of the 
        giving of any thing of value to any of the persons or entities 
        referred to in paragraphs (1), (2), and (3) of subsection (a), 
        for the purposes set forth therein, whether or not that issuer 
        (or that officer, director, employee, agent, or stockholder) 
        makes use of the mails or any means or instrumentality of 
        interstate commerce in furtherance of the offer, gift, payment, 
        promise, or authorization.
            ``(2) Applicability.--This subsection applies only to an 
        issuer that--
                    ``(A) is organized under the laws of the United 
                States, or a State, territory, possession, or 
                commonwealth of the United States or a political 
                subdivision thereof; and
                    ``(B) has a class of securities registered pursuant 
                to section 12 or that is required to file reports under 
                section 15(d).
            ``(3) United states person.--In this subsection, the term 
        `United States person' means--
                    ``(A) a national of the United States (as defined 
                in section 101 of the Immigration and Nationality Act 
                (8 U.S.C. 1101)); and
                    ``(B) any corporation, partnership, association, 
                joint-stock company, business trust, unincorporated 
                organization, or sole proprietorship organized under 
                the laws of the United States or any State, territory, 
                possession, or commonwealth of the United States, or 
                any political subdivision thereof.'';
            (3) in subsection (b), by striking ``Subsection (a)'' and 
        inserting ``Subsections (a) and (f)''; and
            (4) in subsection (c), by striking ``subsection (a)'' and 
        inserting ``subsections (a) and (f)''.
    (d) Penalties.--Section 32(c) of the Securities Exchange Act of 
1934 (15 U.S.C. 78ff(c)) is amended--
            (1) by striking ``section 30A(a) of this title'' each place 
        that term appears and inserting ``subsection (a) or (f) of 
        section 30A''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A), by striking ``or 
                director'' and inserting ``, director, employee, or 
                agent'';
                    (B) by striking subparagraph (B); and
                    (C) by redesignating subparagraph (C) as 
                subparagraph (B).

SEC. 3. AMENDMENTS RELATING TO DOMESTIC CONCERNS.

    (a) Prohibited Conduct.--Section 104(a) of the Foreign Corrupt 
Practices Act of 1977 (15 U.S.C. 78dd-2(a)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``(B)'' and inserting ``(D)''; and
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) influencing any act or decision of such 
                foreign official in his official capacity;
                    ``(B) inducing such foreign official to do or omit 
                to do any act in violation of the lawful duty of such 
                official;
                    ``(C) securing any improper advantage; or'';
            (2) in paragraph (2)--
                    (A) by striking ``(B)'' and inserting ``(D)''; and
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) influencing any act or decision of such 
                party, official, or candidate in its or his official 
                capacity;
                    ``(B) inducing such party, official, or candidate 
                to do or omit to do an act in violation of the lawful 
                duty of such party, official, or candidate;
                    ``(C) securing any improper advantage; or''; and
            (3) in paragraph (3)--
                    (A) by striking ``(B)'' and inserting ``(D)''; and
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) influencing any act or decision of such 
                foreign official, political party, party official, or 
                candidate in its or his official capacity;
                    ``(B) inducing such foreign official, political 
                party, party official, or candidate to do or omit to do 
                any act in violation of the lawful duty of such foreign 
                official, political party, party official, or 
                candidate;
                    ``(C) securing any improper advantage; or''.
    (b) Officials of International Organizations.--Section 104(h) of 
the Foreign Corrupt Practices Act of 1977 (15 U.S.C. 78dd-2(h)) is 
amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) The term--
                    ``(A) `foreign official' means any officer or 
                employee of a foreign government or any department, 
                agency, or instrumentality thereof, or of a public 
                international organization, or any person acting in an 
                official capacity for or on behalf of any such 
                government, department, agency, or instrumentality, or 
                for or on behalf of any such public international 
                organization; and
                    ``(B) `public international organization' means an 
                organization that has been so designated by Executive 
                order pursuant to section 1 of the International 
                Organizations Immunities Act (22 U.S.C. 288).''; and
            (2) in paragraph (4)(A)(v), by inserting before the period 
        ``to those referred to in clauses (i) through (iv)''.
    (c) Alternative Jurisdiction Over Acts Outside of the United 
States.--Section 104 of the Foreign Corrupt Practices Act of 1977 (15 
U.S.C. 78dd-2) is amended--
            (1) by redesignating subsection (h) as subsection (i);
            (2) by inserting after subsection (g) the following:
    ``(h) Alternative Jurisdiction.--
            ``(1) In general.--It shall be unlawful for a United States 
        person to corruptly do any act outside of the United States in 
        furtherance of an offer, payment, promise to pay, or 
        authorization of the payment of any money, or offer, gift, 
        promise to give, or authorization of the giving of any thing of 
        value to any of the persons or entities referred to in 
        paragraphs (1), (2), and (3) of subsection (a), for the 
        purposes set forth therein, whether or not that United States 
        person makes use of the mails or any means or instrumentality 
        of interstate commerce in furtherance of the offer, gift, 
        payment, promise, or authorization.
            ``(2) Definition.--In this subsection, the term `United 
        States person' means--
                    ``(A) a national of the United States (as defined 
                in section 101 of the Immigration and Nationality Act 
                (8 U.S.C. 1101)); and
                    ``(B) any corporation, partnership, association, 
                joint-stock company, business trust, unincorporated 
                organization, or sole proprietorship organized under 
                the laws of the United States or any State, territory, 
                possession, or commonwealth of the United States, or 
                any political subdivision thereof.'';
            (3) in subsection (b), by striking ``Subsection (a)'' and 
        inserting ``Subsections (a) and (h)'';
            (4) in subsection (c), by striking ``subsection (a)'' and 
        inserting ``subsections (a) and (h)''; and
            (5) in subsection (d), by striking ``subsection (a) of this 
        section'' and inserting ``subsection (a) or (h)''.
    (d) Penalties.--Section 104(g) of the Foreign Corrupt Practices Act 
of 1977 (15 U.S.C. 78dd-2(g)) is amended--
            (1) by striking ``subsection (a)'' each place that term 
        appears and inserting ``subsection (a) or (h)'';
            (2) in paragraph (1), by inserting ``that is not a natural 
        person'' after ``domestic concern'' each place that term 
        appears; and
            (3) in paragraph (2)--
                    (A) by striking ``Any officer'' each place that 
                term appears and inserting ``Any natural person that is 
                an officer'';
                    (B) in subparagraph (A), by striking ``or 
                director'' and inserting ``, director, employee, or 
                agent'';
                    (C) by striking subparagraph (B); and
                    (D) by redesignating subparagraph (C) as 
                subparagraph (B).
    (e) Technical Amendment.--Section 104(i)(4)(A) of the Foreign 
Corrupt Practices Act of 1977 (15 U.S.C. 78dd-2(h)(4)(A)), as 
redesignated by subsection (c) of this section, is amended by striking 
``For purposes of paragraph (1), the'' and inserting ``The''.

SEC. 4. AMENDMENT RELATING TO OTHER PERSONS.

    The Foreign Corrupt Practices Act of 1977 (15 U.S.C. 78dd et seq.) 
is amended by inserting after section 104 the following new section:

``SEC. 104A. PROHIBITED FOREIGN TRADE PRACTICES BY PERSONS OTHER THAN 
              ISSUERS OR DOMESTIC CONCERNS.

    ``(a) Prohibited Conduct.--It shall be unlawful for any covered 
person, or for any officer, director, employee, or agent of such 
covered person or any stockholder thereof, acting on behalf of such 
covered person, while in the territory of the United States, corruptly 
to make use of the mails or any means or instrumentality of interstate 
commerce or to do any other act in furtherance of an offer, payment, 
promise to pay, or authorization of the payment of any money, or offer, 
gift, promise to give, or authorization of the giving of anything of 
value to--
            ``(1) any foreign official for purposes of--
                    ``(A) influencing any act or decision of such 
                foreign official in the official capacity of the 
                foreign official;
                    ``(B) inducing such foreign official to do or omit 
                to do any act in violation of the lawful duty of such 
                official;
                    ``(C) securing any improper advantage; or
                    ``(D) inducing such foreign official to use the 
                influence of that official with a foreign government or 
                instrumentality thereof to affect or influence any act 
                or decision of such government or instrumentality,
        in order to assist such covered person in obtaining or 
        retaining business for or with, or directing business to, any 
        person;
            ``(2) any foreign political party or official thereof or 
        any candidate for foreign political office for purposes of--
                    ``(A) influencing any act or decision of such 
                party, official, or candidate in its or his official 
                capacity;
                    ``(B) inducing such party, official, or candidate 
                to do or omit to do an act in violation of the lawful 
                duty of such party, official, or candidate;
                    ``(C) securing any improper advantage; or
                    ``(D) inducing such party, official, or candidate 
                to use its or his influence with a foreign government 
                or instrumentality thereof to affect or influence any 
                act or decision of such government or instrumentality,
        in order to assist such covered person in obtaining or 
        retaining business for or with, or directing business to, any 
        person; or
            ``(3) any person, while knowing that all or a portion of 
        such money or thing of value will be offered, given, or 
        promised, directly or indirectly, to any foreign official, to 
        any foreign political party or official thereof, or to any 
        candidate for foreign political office, for purposes of--
                    ``(A) influencing any act or decision of such 
                foreign official, political party, party official, or 
                candidate in its or his official capacity;
                    ``(B) inducing such foreign official, political 
                party, party official, or candidate to do or omit to do 
                any act in violation of the lawful duty of such foreign 
                official, political party, party official, or 
                candidate;
                    ``(C) securing any improper advantage; or
                    ``(D) inducing such foreign official, political 
                party, party official, or candidate to use its or his 
                influence with a foreign government or instrumentality 
                thereof to affect or influence any act or decision of 
                such government or instrumentality,
        in order to assist such covered person in obtaining or 
        retaining business for or with, or directing business to, any 
        person.
    ``(b) Exception for Routine Governmental Action.--Subsection (a) 
shall not apply to any facilitating or expediting payment to a foreign 
official, political party, or party official, the purpose of which is 
to expedite or to secure the performance of a routine governmental 
action by a foreign official, political party, or party official.
    ``(c) Affirmative Defenses.--It shall be an affirmative defense to 
actions under subsection (a) that--
            ``(1) the payment, gift, offer, or promise of anything of 
        value that was made, was lawful under the written laws and 
        regulations of the country of the foreign official, political 
        party, party official, or candidate; or
            ``(2) the payment, gift, offer, or promise of anything of 
        value that was made was a reasonable and bona fide expenditure, 
        such as travel and lodging expenses, incurred by or on behalf 
        of a foreign official, party, party official, or candidate, and 
        was directly related to--
                    ``(A) the promotion, demonstration, or explanation 
                of products or services; or
                    ``(B) the execution or performance of a contract 
                with a foreign government or agency thereof.
    ``(d) Injunctive Relief.--
            ``(1) In general.--When it appears to the Attorney General 
        that any covered person, or officer, director, employee, agent, 
        or stockholder of a covered person, is engaged, or about to 
        engage, in any act or practice constituting a violation of 
subsection (a), the Attorney General may, in the discretion of the 
Attorney General, bring a civil action in an appropriate district court 
of the United States to enjoin such act or practice, and upon a proper 
showing, a permanent injunction or a temporary restraining order shall 
be granted without bond.
            ``(2) Civil investigations.--For the purpose of any civil 
        investigation that, in the opinion of the Attorney General, is 
        necessary and proper to enforce this section, the Attorney 
        General, or a designee thereof, may administer oaths and 
        affirmations, subpoena witnesses, take evidence, and require 
        the production of any books, papers, or other documents that 
        the Attorney General deems relevant or material to such 
        investigation. The attendance of witnesses and the production 
        of documentary evidence may be required from any place in the 
        United States, or any territory, possession, or commonwealth of 
        the United States, at any designated place of hearing.
            ``(3) Subpoenas.--In the case of contumacy by, or refusal 
        to obey a subpoena issued to, any person, the Attorney General 
        may invoke the aid of any court of the United States within the 
        jurisdiction of which such investigation or proceeding is 
        carried on, or in which such person resides or carries on 
        business, in requiring the attendance and testimony of 
        witnesses and the production of books, papers, or other 
        documents. Any such court may issue an order requiring such 
        person to appear before the Attorney General, or a designee 
        thereof, there to produce records, if so ordered, or to give 
        testimony touching the matter under investigation. Any failure 
        to obey such order of the court may be punished by such court 
        as a contempt thereof.
            ``(4) Process.--All process in any action referred to in 
        this subsection may be served in the judicial district in which 
        such person resides or may be found.
            ``(5) Rules.--The Attorney General may make such rules 
        relating to civil investigations as may be necessary or 
        appropriate to implement this subsection.
    ``(e) Penalties.--
            ``(1) Juridical persons.--Any covered person that is a 
        juridical person that violates subsection (a)--
                    ``(A) shall be fined not more than $2,000,000; and
                    ``(B) shall be subject to a civil penalty of not 
                more than $10,000, imposed in an action brought by the 
                Attorney General.
            ``(2) Natural person.--Any covered person who is a natural 
        person and who--
                    ``(A) willfully violates subsection (a) shall be 
                fined not more than $100,000, or imprisoned not more 
                than 5 years, or both;
                    ``(B) violates subsection (a) shall be subject to a 
                civil penalty of not more than $10,000, imposed in an 
                action brought by the Attorney General.
            ``(3) Payment of fines.--Whenever a fine is imposed under 
        paragraph (2) upon any officer, director, employee, agent, or 
        stockholder of a covered person, such fine may not be paid, 
        directly or indirectly, by that covered person.
    ``(f) Applicability; Other Laws.--This section does not apply--
            ``(1) to any issuer of securities to which section 30A of 
        the Securities Exchange Act of 1934 applies; or
            ``(2) to any domestic concern to which section 104 of this 
        Act applies.
    ``(g) Definitions.--For purposes of this section--
            ``(1) the term--
                    ``(A) `foreign official' means any officer or 
                employee of a foreign government or any department, 
                agency, or instrumentality thereof, or of a public 
                international organization, or any person acting in an 
                official capacity for or on behalf of any such 
                government or department, agency, or instrumentality, 
                or for or on behalf of any such public international 
                organization; and
                    ``(B) `public international organization' means an 
                organization that has been designated by Executive 
                order pursuant to section 1 of the International 
                Organizations Immunities Act (22 U.S.C. 288);
            ``(2) the state of mind of a covered person is `knowing' 
        with respect to conduct, a circumstance, or a result if--
                    ``(A) such covered person is aware that such 
                covered person is engaging in such conduct, that such 
                circumstance exists, or that such result is 
                substantially certain to occur; or
                    ``(B) such covered person has a firm belief that 
                such circumstance exists or that such result is 
                substantially certain to occur;
            ``(3) if knowledge of the existence of a particular 
        circumstance is required for an offense, such knowledge is 
        established if a covered person is aware of a high probability 
        of the existence of such circumstance, unless the covered 
        person actually believes that such circumstance does not exist;
            ``(4) the term `covered person' means--
                    ``(A) any natural person, other than a national of 
                the United States (as defined in section 101(a) of the 
                Immigration and Nationality Act); and
                    ``(B) any corporation, partnership, association, 
                joint-stock company, business trust, unincorporated 
                organization, or sole proprietorship that is organized 
                under the law of a foreign nation or a political 
                subdivision thereof; and
            ``(5) the term `routine governmental action'--
                    ``(A) means only an action that is ordinarily and 
                commonly performed by a foreign official--
                            ``(i) in obtaining permits, licenses, or 
                        other official documents to qualify a person to 
                        do business in a foreign country;
                            ``(ii) in processing governmental papers, 
                        such as visas and work orders;
                            ``(iii) in providing police protection, 
                        mail pickup and delivery, or scheduling 
                        inspections associated with contract 
                        performance or inspections related to transit 
                        of goods across country;
                            ``(iv) in providing phone service, power 
                        and water supply, loading and unloading cargo, 
                        or protecting perishable products or 
                        commodities from deterioration; or
                            ``(v) in actions of a similar nature to 
                        those referred to in clauses (i) through (iv); 
                        and
                    ``(B) does not include any decision by a foreign 
                official regarding whether, or on what terms, to award 
                new business to or to continue business with a 
                particular party, or any action taken by a foreign 
                official involved in the decisionmaking process to 
                encourage a decision to award new business to or 
                continue business with a particular party.''.




                                                       Calendar No. 510

105th CONGRESS

  2d Session

                                S. 2375

                          [Report No. 105-277]

_______________________________________________________________________

                                 A BILL

 To amend the Securities Exchange Act of 1934 and the Foreign Corrupt 
  Practices Act of 1977, to strengthen prohibitions on international 
      bribery and other corrupt practices, and for other purposes.

_______________________________________________________________________

                             July 30, 1998

                 Read twice and placed on the calendar