110 HR 180 : Darfur Accountability and Divestment
U.S. House of Representatives
2007-08-03
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.This Act may be cited as the
Darfur Accountability and Divestment
Act
.
2.The Congress finds as follows:
(1)In the 108th Congress, the House of
Representatives adopted House Concurrent Resolution 467 on July 22, 2004, by a
unanimous vote of 422–0, which—
(A)declares that the
atrocities unfolding in the Darfur region of Sudan are genocide;
(B)declares that the Government of Sudan has
violated the Convention on the Prevention and Punishment of the Crime of
Genocide;
(C)urges the Administration to seriously
consider multilateral intervention to stop genocide in Darfur should the United
Nations Security Council fail to act; and
(D)calls on the Administration to impose
targeted sanctions, including visa bans and the freezing of assets of the
Sudanese National Congress and affiliated business and individuals directly
responsible for the atrocities in Darfur.
(2)In the 109th Congress, the House of
Representatives passed H.R. 3127, the Darfur Peace and Accountability Act of
2006, on April 5, 2006, by a vote of 416–3, which—
(A)appeals to the
international community, including the United Nations, the European Union, and
the North Atlantic Treaty Organization (NATO), to immediately mobilize
sufficient political, military, and financial resources to support and expand
the African Union Mission in Sudan (AMIS);
(B)blocks assets and restricts travel of any
individual the President determines is responsible for acts of genocide, war
crimes, or crimes against humanity in the Darfur region of Sudan; and
(C)offers United States support for the
International Criminal Court's efforts to prosecute those responsible for acts
of genocide in Darfur.
(3)On September 9, 2004, former Secretary of
State Colin Powell stated before the Committee on Foreign Relations of the
Senate that genocide was being committed in the Darfur region of Sudan and that
the Government of Sudan and the government-supported Janjaweed militias bear
responsibility for the genocide.
(4)On September 21, 2004, President George W.
Bush affirmed the Secretary of State's finding in an address before the United
Nations General Assembly, stating that the world is witnessing terrible
suffering and horrible crimes in the Darfur region of Sudan, crimes the
Government of the United States has concluded are genocide.
(5)On May 29, 2007, President George W. Bush
affirmed that the Government of Sudan is complicit in the bombing, murder, and
rape of innocent civilians in Darfur and again declared that these actions
rightfully constitute genocide.
(6)Although the Government of the United
States currently bans United States companies from conducting business
operations in Sudan, millions of Americans are inadvertently supporting the
Government of Sudan by investing in foreign companies that conduct business
operations in Sudan that disproportionately benefit the Sudanese regime in
Khartoum.
(7)Several States and governmental entities,
through legislation and other means, have expressed their desire, or are
considering measures—
(A)to divest any equity in, or to refuse to
provide debt capital to, certain companies that operate in Sudan;
(B)to disassociate themselves and the
beneficiaries of their public pension and endowment funds from directly or
indirectly supporting the Darfur genocide; and
(C)to prohibit themselves from entering into
or renewing contracts for the procurement of goods or services with certain
companies that have a direct investment in, or conduct business operations in,
Sudan.
(8)California, Colorado, Florida, Hawaii,
Indiana, Illinois, Iowa, Kansas, Maine, Minnesota, New Jersey, New York,
Oregon, Rhode Island, Texas and Vermont have passed legislation to divest State
funds from companies that conduct business operations in Sudan. Massachusetts,
Michigan, North Carolina, Ohio, Pennsylvania, South Carolina, and Wisconsin are
considering legislation to divest State funds from companies that conduct
business operations in Sudan. Arkansas, Connecticut, Maryland, and Ohio have
passed non-binding divestment legislation with respect to Sudan.
(9)Denver, Colorado, Los Angeles, California,
Miami Beach, Florida, New Haven, Connecticut, Newton, Massachusetts,
Philadelphia, Pennsylvania, Pittsburgh, Pennsylvania, Providence, Rhode Island,
and San Francisco, California have passed legislation mandating divestment of
city funds from companies that conduct business operations in Sudan.
(10)American University, Amherst College,
Andover Newton Theological School, Boston University, Bowdoin College, Brandeis
University, Brown University, Colby College, Columbia University, Connecticut
College, Cornell University, Dartmouth College, Drew University, Duke
University, Emory University, Hampton University, Harvard University, Hendrix
College, Howard University, Lee University, Massachusetts Institute of
Technology, Middlebury College, Nazareth College, Northwestern University,
Oberlin College, Queen’s University, Reconstructionist Rabbinical College,
Regis University, Samford University, Seton Hall, Smith College, Stanford
University, Swarthmore College, Trinity College, University of California,
University of Colorado, University of Connecticut, University of Denver,
University of Illinois, University of Maryland, University of Massachusetts,
University of Minnesota, University of Pennsylvania, University of Rochester,
University of Southern California, University of Vermont, University of
Virginia, University of Washington, University of Wisconsin System, Vassar
College, Wellesley College, Wheaton College, Williams College, and Yale
University have divested their funds from or placed restrictions on investment
of their funds in certain companies that conduct business operations in
Sudan.
(11)Divestment has proven effective in similar
situations, as in 1986, when State pension funds and university endowments were
divested from companies that conducted business operations in South Africa,
which was critical to ending apartheid in that country, and by 1994, when the
first free elections in South Africa took place, a substantial number of
States, counties, cities, universities, and colleges in the United States had
adopted partial or total divestment policies.
(12)Economic pressure against the Government of
Sudan has been effective in pushing Sudan to cooperate with the United States
on counterterrorism efforts and in part in agreeing to negotiations with the
Sudan People’s Liberation Army of South Sudan which resulted in the
Comprehensive Peace Agreement of 2005.
(13)Congress acknowledges that divestment
should be used sparingly and under extraordinary circumstances. This Act is
based on unique circumstances, specifically, the reprehensible and abhorrent
genocide occurring in Sudan.
(14)The business operations of companies in
countries that perpetrate grave abuses of human rights, especially the uniquely
monstrous crime of genocide, are of concern to many United States investors and
citizens even when these operations represent a small fraction of a company's
total business.
(15)State and city pension funds have routinely
but unsuccessfully sought to acquire and utilize data from the Federal
Government on companies for investment decisions.
(16)There is an increasing interest by States,
local governments, educational institutions, and private institutions to seek
to disassociate themselves from companies that support the Government of
Sudan.
(17)Policy makers and fund managers may find
moral, prudential, or reputational reasons to divest from companies that accept
the business risk of operating in countries that are subject to international
economic sanctions or that have business relationships with countries,
governments, or entities with which any United States company would be
prohibited from dealing because of economic sanctions imposed by the United
States.
(18)The world community has a moral obligation
to work to do everything possible to stop the ongoing genocidal practices of
the Government of Sudan in the Darfur region.
3.Transparency in
capital markets
(a)List of persons
directly investing in or conducting business operations in certain Sudanese
sectors
(1)Not later than 6 months
after the date of the enactment of this Act and every 6 months thereafter, the
Secretary of the Treasury, in consultation with the Secretary of Energy, the
Secretary of State, the Securities and Exchange Commission, and the heads of
other appropriate Federal departments and agencies, shall, using only publicly
available (including proprietary) information, ensure publication in the
Federal Register of a list of each person, whether within or outside of the
United States, that, as of the date of the publication, has a direct investment
in, or is conducting, business operations in Sudan’s power production, mineral
extraction, oil-related, or military equipment industries, subject to paragraph
(2). To the extent practicable, the list shall include a description of the
investment made by each such person, including the dollar value, intended
purpose, and status of the investment, as of the date of the
publication.
(2)The
Secretary of the Treasury shall exclude a person from the list if all of the
business operations by reason of which the person would otherwise be included
on the list—
(A)are conducted under contract directly and
exclusively with the regional government of southern Sudan;
(B)are conducted under a license from the
Office of Foreign Assets Control, or are expressly exempted under Federal law
from the requirement to be conducted under such a license;
(C)consist of providing goods or services to
marginalized populations of Sudan;
(D)consist of
providing goods or services to an internationally recognized peacekeeping force
or humanitarian organization;
(E)consist of
providing goods or services that are used only to promote health or
education;
(F)are conducted by a person that has also
undertaken significant humanitarian efforts as described in section
10(14)(B);
(G)have been voluntarily suspended; or
(H)will cease within
1 year after the adoption of a formal plan to cease the operations, as
determined by the Secretary.
(3)Consideration of
scrutinized business operationsThe Secretary of the Treasury should give
serious consideration to including on the list any company that has a
scrutinized business operation with respect to Sudan (within the meaning of
section 10(4)).
(4)The Secretary of the
Treasury shall, at least 30 days before the list is published under paragraph
(1), notify each person that the Secretary intends to include on the
list.
(5)Delay in
including persons on the listAfter notifying a person under paragraph
(4), the Secretary of the Treasury may delay including that person on the list
for up to 60 days if the Secretary determines and certifies to the Congress
that the person has taken specific and effective actions to terminate the
involvement of the person in the activities that resulted in the notification
under paragraph (4).
(6)Removal of
persons from the listThe
Secretary of the Treasury may remove a person from the list before the next
publication of the list under paragraph (1) if the Secretary determines that
the person no longer has a direct investment in or is no longer conducting
business operations as described in paragraph (1).
(7)Advance notice
to congressNot later than 30
days (or, in the case of the first such list, 60 days) before the date by which
paragraph (1) requires the list to be published, the Secretary of the Treasury
shall submit to the Committees on Financial Services, on Education and Labor,
and on Oversight and Government Reform of the House of Representatives and the
Committees on Banking, Housing, and Urban Affairs, on Health, Education, Labor,
and Pensions, and on Homeland Security and Governmental Affairs of the Senate a
copy of the list which the Secretary intends to publish under paragraph
(1).
(b)The Secretary of the
Treasury shall ensure that the list is published on an appropriate, publicly
accessible government website, updating the list as necessary to take into
account any person removed from the list under subsection (a)(6).
(c)In this section, the term
investment
has the meaning given in section 4(b)(3).
4.Authority of
State and local governments to divest from certain companies directly invested
in certain Sudanese sectors
(a)It is the policy of
the United States to support the decision of any State or local government to
divest from, and to prohibit the investment of assets controlled by the State
or local government in, persons on—
(1)the list most
recently published under section 3(a)(1), as modified under section 3(a)(6);
or
(2)any list developed
by the State or local government for the purpose of divestment from certain
persons described in subsection (b)(1)(B) of this section.
(b)
(1)Notwithstanding any
other provision of law, a State or local government may adopt and enforce
measures to divest the assets of the State or local government from, or
prohibit investment of the assets of the State or local government in—
(A)persons that are
included on the list most recently published under section 3(a)(1) of this Act,
as modified under section 3(a)(6) of this Act; or
(B)persons having a direct investment in, or
carrying on a trade or business (within the meaning of
section
162 of the Internal Revenue Code of 1986) in Sudan or with the
Government of Sudan, if the measures require the State or local government, as
the case may be, to the maximum extent practicable, to—
(i)provide written
notice to each person to whom the measures are to be applied; and
(ii)not apply the measures to a person—
(I)before the end of
the 90-day period beginning with the date written notice is provided to the
person pursuant to clause (i); or
(II)if the person
demonstrates to the State or local government, as the case may be, that the
person is no longer involved in the activities by reason of which the measures
would otherwise be applied to the person.
(2)This subsection applies to measures adopted
by a State or local government before, on, or after the date of the enactment
of this Act.
(3)In
this subsection:
(A)The investment
of assets
includes—
(i)a commitment or
contribution of assets; and
(ii)a loan or other
extension of credit of assets.
(B)The
term assets
refers to public monies and includes any pension,
retirement, annuity, or endowment fund, or similar instrument, that is
controlled, directly or indirectly, by a State or local government.
(c)A
measure of a State or local government that is authorized by subsection (b) is
not preempted by any Federal law or regulation.
5.It is the sense of
the Congress that a divestment measure authorized under section 4 or a measure
authorized under section 9 to prohibit State or local contracts would not
violate the United States Constitution because such a measure—
(1)is not pre-empted
under the Supremacy Clause;
(2)is authorized by
the Congress as an appropriate measure with regard to interstate or foreign
commerce; and
(3)is authorized by
the Congress as a measure that promotes the foreign policy of the United
States.
6.Safe harbor for
changes of investment policies by asset managersSection 13 of the Investment Company Act of
1940 (15 U.S.C.
80a–13) is amended by adding at the end the following new
subsection:
(c)Safe harbor for
changes in investment policiesNotwithstanding any other provision of
Federal or State law, no person may bring any civil, criminal, or
administrative action against any registered investment company or person
providing services to such registered investment company (including its
investment adviser), or any employee, officer, or director thereof, based
solely upon the investment company divesting from, or avoiding investing in,
securities issued by companies that are included on the list most recently
published under section 3(a)(1) of the Darfur Accountability and Divestment
Act, as modified under section 3(a)(6) of that Act. For purposes of this
subsection the term person
shall include the Federal government,
and any State or political subdivision of a
State.
.
7.Safe harbor for
changes of investment policies by employee benefit plansSection 404 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1104) is amended by
adding at the end the following new subsection:
(n)No person shall be treated as breaching any
of the responsibilities, obligations, or duties imposed upon fiduciaries by
this title for divesting plan assets from, or avoiding investing plan assets
in, persons that are included on the list most recently published under section
3(a)(1) of the Darfur Accountability and Divestment Act, as modified under
section 3(a)(6) of such Act. Any divestiture of plan assets from, or avoidance
of investing plan assets in, persons that are included on such list shall be
treated as in accordance with this title and the documents and instruments
governing the
plan.
.
8.Prohibition on
united states government contracts
(a)Notwithstanding any other provision of law,
the Government of the United States shall not enter into or renew a contract
for the procurement of goods or services with persons that are included on the
list most recently published under section 3(a)(1), as modified under section
3(a)(6).
(b)The President may
waive the prohibition in subsection (a) on a case-by-case basis if the
President determines and certifies in writing to the Congress that it is
important to the national security interests of the United States to do
so.
9.Authority of
State and local governments to prohibit contracts
(a)It is the policy of the United States to support the
decision of any State or local government to prohibit the State or local
government, as the case may be, from entering into or renewing a contract as
described in subsection (b).
(b)Authority to
prohibit contractsNotwithstanding any other provision of law, a
State or local government may adopt and enforce measures to prohibit the State
or local government, as the case may be, from entering into or renewing a
contract for the procurement of goods or services with persons that are
included on the list most recently published under section 3(a)(1), as modified
under section 3(a)(6).
10.For purposes of this Act:
(1)The
term person
, except in paragraph (6), means—
(A)a natural person
as well as a corporation, company, business association, partnership, society,
trust, 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);
and
(C)any successor,
subunit, or subsidiary of any entity described in subparagraph (A) or
(B).
(2)The
term State
includes the District of Columbia, the Commonwealth
of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.
(3)State or local
government
(A)The term State or local government
includes—
(i)any
State and any agency or instrumentality thereof;
(ii)any
local government within a State, and any agency or instrumentality
thereof;
(iii)any other
governmental instrumentality; and
(iv)any
public institution of higher education.
(B)Public
institution of higher educationThe term public
institution of higher education
means a public institution of higher
education within the meaning of the Higher Education Act of 1965.
(4)Scrutinized
business operationA company
has a scrutinized business operation with respect to Sudan if—
(A)(i)the company has business
operations that involve contracts with or provision of supplies or services
to—
(I)the
Government of Sudan;
(II)a
company in which the Government of Sudan has any direct or indirect equity
share;
(III)a
consortium or project commissioned by the Government of Sudan; or
(IV)a
company involved in a consortium or project commissioned by the Government of
Sudan; and
(ii)(I)- (aa)more than 10 percent of
the revenues or assets of the company that are linked to Sudan involve
oil-related activities or mineral extraction activities;
- (bb)less than 75 percent of the
revenues or assets of the company that are linked to Sudan involve contracts
with, or provision of oil-related or mineral extracting products or services to
the regional government of southern Sudan or a project or consortium created
exclusively by that regional government; and
- (cc)the company has failed to take
substantial action with respect to the business operations referred to in
clause (i) of this subparagraph or as described in subparagraph (B) or (C) of
paragraph (14); or
(II)- (aa)more than 10 percent of the revenues or
assets of the company that are linked to Sudan involve power production
activities;
- (bb)less than 75 percent of the power
production activities of the company include projects whose intent is to
provide power or electricity to the marginalized populations of Sudan;
and
- (cc)the company has failed to take substantial
action with respect to the business operations referred to in clause (i) of
this subparagraph or as described in subparagraph (B) or (C) of paragraph
(14);
(B)the company supplies military equipment in
Sudan, unless the company clearly shows that—
(i)the
military equipment cannot be used to facilitate offensive military actions in
Sudan; or
(ii)the
company implements rigorous and verifiable safeguards to prevent use of the
equipment by forces actively participating in armed conflict, including
through—
(I)post-sale tracking
of the equipment by the company;
(II)certification
from a reputable and objective third party that such equipment is not being
used by a party participating in armed conflict in Sudan; or
(III)sale of the
equipment solely to the regional government of southern Sudan or any
internationally recognized peacekeeping force or humanitarian organization;
or
(C)the Secretary of
the Treasury has determined that the company has been complicit in the Darfur
genocide.
(5)The term
business operations
means engaging in commerce in any form in
Sudan, including by 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.
(6)The term company
means any
natural person, legal person, sole proprietorship, organization, association,
corporation, partnership, firm, joint venture, franchisor, franchisee,
financial institution, utility, public franchise, trust, enterprise, limited
partnership, limited liability partnership, limited liability company, or other
business entity or association, including all wholly-owned subsidiaries,
majority-owned subsidiaries, parent companies, or affiliates of such business
entities or associations, that exists for profit-making purposes.
(7)The
term complicit
means has taken actions in the preceding 20
months which have directly supported or promoted the genocidal campaign in
Darfur, including preventing Darfur’s victimized population from communicating
with each other, encouraging Sudanese citizens to speak out against an
internationally approved security force for Darfur, actively working to deny,
cover up, or alter evidence of human rights abuses in Darfur, or other similar
actions.
(8)The term
Government of Sudan
means the government in Khartoum, Sudan,
which is led by the National Congress Party (formerly known as the National
Islamic Front) or any successor government formed on or after October 13, 2006
(including the coalition National Unity Government agreed upon in the
Comprehensive Peace Agreement for Sudan), and does not include the regional
government of southern Sudan.
(9)Marginalized
populations of sudanThe term
marginalized populations of Sudan
includes—
(A)the portion of the
population in the Darfur region that has been victimized;
(B)the portion of the
population of southern Sudan victimized by Sudan’s North-South civil
war;
(C)the Beja,
Rashidiya, and other similarly affected groups of eastern Sudan;
(D)the Nubian and
other similarly affected groups in Sudan’s Abyei, Southern Blue Nile, and Nuba
Mountain regions; and
(E)the Amri, Hamadab,
Manasir, and other similarly affected groups of northern Sudan.
(10)The term
military equipment
means—
(A)weapons, arms,
military supplies, and equipment that readily may be used for military
purposes, including radar systems or military-grade transport vehicles;
or
(B)supplies or
services sold or provided directly or indirectly to any force actively
participating in armed conflict in Sudan.
(11)Mineral
extraction activitiesThe
term mineral extraction activities
includes—
(A)exploring,
extracting, processing, transporting, or wholesale selling or trading of
elemental minerals or associated metal alloys or oxides (ore), including gold,
copper, chromium, chromite, diamonds, iron, iron ore, silver, tungsten,
uranium, and zinc, and
(B)facilitating any
activity described in subparagraph (A), including by providing supplies or
services in support of the activity.
(12)
(A)Except as provided in subparagraph (B), the term
oil-related activities
includes—
(i)exporting,
extracting, producing, refining, processing, exploring for, transporting,
selling, or trading oil;
(ii)constructing,
maintaining, or operating a pipeline, refinery, or other oilfield
infrastructure; and
(iii)facilitating any
activity described in clause (i) or (ii), including by providing supplies or
services in support of the activity.
(B)
(i)A
company that is involved in the retail sale of gasoline or related consumer
products in Sudan but is not involved in any other activity described in
subparagraph (A) shall not be considered to be involved in an oil-related
activity.
(ii)A
company that is involved in leasing, or that owns, rights to an oil block in
Sudan but is not involved in any other activity described in subparagraph (A)
shall not be considered to be involved in an oil-related activity.
(13)Power
production activitiesThe
term power production activities
means—
(A)any business
operation that involves a project commissioned by the National Electricity
Corporation of Sudan or other similar Government of Sudan entity whose purpose
is to facilitate power generation and delivery, including establishing
power-generating plants or hydroelectric dams, selling or installing components
for the project, providing service contracts related to the installation or
maintenance of the project; and
(B)facilitating an
activity described in subparagraph (A), including by providing supplies or
services in support of the activity.
(14)The term
substantial action
means—
(A)adopting,
publicizing, and implementing a formal plan to cease scrutinized business
operations within 1 year after the date of the enactment of this Act, and
refraining from any new scrutinized business operations;
(B)undertaking
significant humanitarian efforts—
(i)in
conjunction with an international development or humanitarian organization, the
regional government of southern Sudan, or a non-profit entity;
(ii)substantial in
relationship to the size and scope of the business operations with respect to
Sudan;
(iii)of
benefit to 1 or more marginalized populations of Sudan; and
(iv)evaluated and certified by an independent
third party to meet the requirements of clauses (i) through (iii); or
(C)materially
improving conditions for the victimized population in Darfur.
11.It is the sense of
the Congress that the governments of all other countries should adopt measures,
similar to those contained in this Act, to publicize the activities of all
persons that, through their financial dealings, knowingly or unknowingly enable
the Government of Sudan to continue to oppress and commit genocide against
people in the Darfur region and other regions of Sudan, and to authorize
divestment from, and the avoidance of further investment in, the
persons.
12.This Act shall terminate 30 days after the
date on which—
(1)the President has
certified to Congress that—
(A)the Darfur
genocide has been halted for at least 12 months; and
(B)the Government of
Sudan has honored its commitments to—
(i)abide by United
Nations Security Council Resolution 1706;
(ii)cease attacks on
civilians;
(iii)demobilize and
demilitarize the Janjaweed and associated militias;
(iv)grant free and
unfettered access for delivery of humanitarian assistance; and
(v)allow for the safe
and voluntary return of refugees and internally displaced persons; and
(2)the United States
has revoked all sanctions against the Government of Sudan and the officials of
such government, including sanctions authorized by—
(A)the Sudan Peace
Act (Public
Law 107–245);
(B)the Comprehensive
Peace in Sudan Act of 2004 (Public Law
108–497);
(C)the USA PATRIOT
Improvement and Reauthorization Act of 2005 (Public Law
109–177);
(D)the Darfur Peace
and Accountability Act of 2006 (Public Law 109–344); and
(E)any other Federal
law or Executive order.
Passed the House of
Representatives July 31, 2007.
Lorraine C. Miller,
Clerk.