[Congressional Record Volume 144, Number 151 (Wednesday, October 21, 1998)]
[Senate]
[Pages S12973-S12974]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 INTERNATIONAL ANTI-BRIBERY ACT OF 1998

  Mr. DeWINE. Mr. President, I ask the Chair lay before the Senate a 
message from the House of Representatives on the bill (S. 2375) 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.
  The PRESIDING OFFICER laid before the Senate the following message 
from the House of Representatives:
       Resolved, That the House disagree to the Senate amendments 
     numbered 2 through 6 of the House amendment to the bill (S. 
     2375) entitled ``An Act 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'', and agree the 
     Senate amendment numbered 1 with the following amendment:
       In lieu of the matter proposed to be stricken by such 
     amendment strike line 8 on page 23 of the House engrossed 
     amendments and all that follows through line 2 on page 25 and 
     insert the following:
       (c) Extension of Legal Process.--
       (1) In general.--Except as required by international 
     agreements to which the United States is a party, an 
     international organization providing commercial 
     communications services, its officials and employees, and its 
     records shall not be accorded immunity from suit or legal 
     process for any act or omission taken in connection with such 
     organization's capacity as a provider, directly or 
     indirectly, of commercial telecommunications services to, 
     from, or within the United States.
       (2) No effect on personal liability.--Paragraph (1) shall 
     not affect any immunity from personal liability of any 
     individual who is an official or employee of an international 
     organization providing commercial communications services.
       (3) Effective date.--This subsection shall take effect on 
     May 1, 1999.
       (d) Elimination or Limitation of Exceptions.--
       (1) Action required.--The President shall, in a manner that 
     is consistent with requirements in international agreements 
     to which the United States is a party, expeditiously take all 
     appropriate actions necessary to eliminate or to reduce 
     substantially all privileges and immunities that are accorded 
     to an international organization described in subparagraph 
     (A) or (B) of subsection (a)(1), its officials, its 
     employees, or its records, and that are not eliminated 
     pursuant to subsection (c).
       (2) Designation of agreements.--The President shall 
     designate which agreements constitute international 
     agreements to which the United States is a party for purposes 
     of this section.


                          colloquy on s. 2375

  Mr. D'AMATO. I am aware that the Senator from Montana has raised 
concerns regarding section 5 of the bill. Do the amendments considered 
by the Senate today satisfy your concerns?
  Mr. SARBANES. If the Senator would yield, as the Ranking Democrat of 
the Senate Banking Committee, I would also like to know the views of 
the Senator from Montana.
  Mr. BURNS. I thank my colleagues. Yes, the amendments do satisfy my 
concerns.
  The amendments to the Foreign Corrupt Practices Act (FCPA) approved 
by the Senate today, to implement in the United States the OECD 
Convention on Combating Bribery of Foreign Public Officials in 
International Business Transactions, are an important achievement in 
ensuring fair play for American companies doing business overseas. The 
value of this legislation for U.S. business fully justifies the action 
we are taking today. However, there are provisions in this bill that 
are unrelated to implementation of the

[[Page S12974]]

OECD convention. I would have preferred a bill that did not contain 
these unrelated provisions, principally embodied in Section 5.
  The House earlier passed S. 2375 with an amendment making significant 
changes to language addressing the treatment of international 
organizations providing commercial communications services which had 
earlier been contained in Section 5 of H.R. 4353 as reported by the 
House Commerce Committee. These changes reflect an agreement between 
the House and Senate Commerce Committee leaders. It is my understanding 
that the House Commerce Committee report accompanying H.R. 4353 
addressing Section 5 of that bill is not germane to the interpretation 
of section 5 in light of the significant changes made therein.
  With respect to Section 5 and the other provisions of the bill 
concerning the international organizations INTELSAT and Inmarsat, the 
Senate is accepting these provisions because of our understanding that 
nothing in the bill will change the immunities treatment of INTELSAT 
and Inmarsat, nor create an inconsistency with U.S. obligations under 
international agreements (e.g., by requiring action or inaction by the 
Executive Branch) or interfere with the President's authorities under 
the constitution to conduct the foreign relations of the United States. 
To achieve the objectives of Section 5, the President can be expected 
to use existing and future negotiations aimed at the privatization of 
the telecommunications services of INTELSAT and Inmarsat.
  I have the following specific views with regard to the bill's 
telecommunications provisions:
  The United States remains in a positions to meet fully its 
obligations under the INTELSAT Headquarters Agreement, an international 
agreement under which the United States has undertaken international 
legal obligations to INTELSAT. Nothing in the statute changes the 
immunity standards of that Agreement. Based on my discussions with the 
administration, I expect that the President will designate the INTELSAT 
Headquarters Agreement under subsection (d)(2).
  The requirement in [section 5(d)(1)] for the President, consistent 
with requirements in international agreements to which the U.S. is a 
party, to take all appropriate actions to eliminate or limit 
substantially any privileges and immunities from suit or legal process 
accorded to an international organization applies only to suits or 
legal process in respect of the organizations' commercial activities. 
Such an interpretation would be consistent with the theory of sovereign 
immunity to which the United States adheres.
  The requirements [in Section 5(d)] for the President, consistent with 
requirements in international agreements to which the U.S. is a party, 
expeditiously take all appropriate actions to eliminate or limit 
substantially privileges and immunities does not compel the President 
to take any action which the President may find to be contrary to the 
interests of the United States and does not compel the President to 
decertify INTELSAT or Inmarsat under the International Organizations 
Immunities Act I am pleased that subsection 5(d) gives the President 
broad discretion to determine what measures are ``appropriate'' to 
achieve the objectives of section 5.
  The bill should not frustrate negotiations by the President to 
privatize successfully the commercial activities of INTELSAT and 
Inmarsat in a fashion that eliminates all privileges and immunities for 
such activities; this being the best means of satisfying the objective 
of fair and open commercial competition.
  I further understand that all efforts of INTELSAT and Inmarsat to 
restructure into private business organizations constitute core 
functions of these organizations, not commercial functions, within the 
meaning of subsection (c)(1) of Section 5.
  I understand that Section (5) of S. 2375 is not intended to overturn 
or disturb any judicial decision interpreting the privileges and 
immunities of signatories of INTELSAT and Inmarsat, especially Alpha 
Lyracom (PanAmSat) v. COMSAT, 946 F.2d 168 (2d Cir. 1991).
  It is my understanding that subsection (d) of Section (5) is intended 
to become effective on May 1, 1999 when subsection (c) becomes 
effective, since the two subsections are intended to operate in 
concert.
  I appreciate the opportunity to clarify the scope and intent of this 
legislation. At this time, I would like to ask the distinguished 
Senator from Arizona, the Chairman of the Committee on Commerce, 
Science and Transportation if he concurs?
  Mr. McCAIN. I thank the Senator from Montana. I do concur with the 
statements just delivered concerning the interpretation of Section 5 in 
S. 2375.
  Mr. BURNS. I thank my colleague from Arizona.
  Mr. DeWINE. Mr. President, I ask that the Senate recede from its 
amendments numbered 2 through 6. I further ask the Senate concur in the 
House amendment to the Senate amendment numbered 1.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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