[Congressional Record Volume 146, Number 81 (Friday, June 23, 2000)]
[Extensions of Remarks]
[Page E1107]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       FOREIGN TRUST-BUSTING ACT

                                 ______
                                 

                        HON. BENJAMIN A. GILMAN

                              of new york

                    in the house of representatives

                         Friday, June 23, 2000

  Mr. GILMAN. Mr. Speaker, today I am introducing the Foreign Oil 
Trust-Busting Act, H.R. 4731.
  Crude oil prices are going through the roof, and gasoline prices are 
following them.
  Do illegal activities by foreign oil producers lie at the heart of 
the problem? I believe they do. Can we do something about those illegal 
activities? I believe we can.
  Every day the activities of American firms are subjected to antitrust 
examination in foreign countries. Every day the activities of foreign 
entities are subject to examination by the competition authorities of 
our Nation. This is so because if a price fixing cartel, or other 
restraint on trade adversely affects our Nation, we are entitled to act 
to protect our own interests.
  Yet, even though everyone knows that the Organization of Petroleum 
Exporting Countries openly and blatantly manipulates the price of oil, 
no action is taken against it. OPEC likes to keep energy prices high 
enough to fund their own economies, yet not too high, so as to keep us 
``hooked'' on oil and to keep us from making renewable or other 
alternatives economical. By the same token, they are not adverse to 
periodic and temporary diminutions in energy prices. Those gyrations 
cause havoc in our own oil patch, as wells are taken out of production 
and production is in fact lost permanently.
  Given these open manipulations of the market, which clearly seem to 
violate the antitrust laws, and which certainly have an impact on the 
American economy, why is not legal pressure brought to bear on the 
members of OPEC?
  During the energy crisis of the 1980's the International Association 
of Machinists did in fact bring suit against OPEC. It was dismissed 
because the so-called ``Act of State'' doctrine was invoked by the 
United States Court of Appeals in IAM v. OPEC, 649 F.2d 1354 (9th Cir. 
1981).
  The ``Act of State'' doctrine is a discretionary legal doctrine that 
encourages courts to withhold legal judgement regarding the official 
actions of foreign states. The theory is that the official acts of 
foreign states are more sensitively addressed by the political branches 
of government.
  The Act of State doctrine was invoked in the 1960's to prevent 
actions against the government of Cuba in an expropriation case.
  The Congress passed the ``Second Hickenlooper Amendment'' to forbid 
the application of the doctrine unless a suggestion that it was 
appropriate to apply it was filed on behalf the President of the United 
States; in such cases the Court would have the discretion to apply the 
doctrine. Thus, the Congress permitted a case that had already been 
filed to go forward. The constitutionality of the provision was upheld 
in Banco Nacional de Cuba v. Farr, 383 F.2d 166 (2d Cir. 1966).
  It is my judgement that the Courts should be allowed to proceed to 
try antitrust cases against states and other foreign entities 
manipulating the price or supply of energy without reference to the Act 
of State doctrine. It would not upset our foreign relations if such a 
case proceeded, and if it did, it would be worth it, given the 
potential that the enforcement of antitrust laws would have in busting 
up OPEC.
  This judgement about foreign policy is one that the Congress and not 
the Courts should make.
  It is one thing for high gas prices to result, as they do in Europe, 
in revenues flowing to the government. That is their decision to make. 
It is quite another thing for the profits from artificially high prices 
to unjustly enrich foreign potentates. That is what is happening now. 
Diplomatic niceties will have to take a back seat. Too much damage is 
being inflicted on our economy.
  I recognize that there may be other barriers to a successful lawsuit 
against OPEC members, but those barriers need to be dealt with in other 
Committees, and I welcome the prospect of working on those barriers 
with the Committees of jurisdiction.
  In the interim, we know that the barrier of the ``Act of State 
Doctrine'' must be dealt with, and I urge my colleagues who care about 
high oil prices to join me in cosponsoring this bill.
  A copy of the bill follows:

                               H.R. 4731

       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 ``Foreign Trust Busting Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) it is in the foreign policy interest of the United 
     States for there to be a free market in energy on an 
     international basis;
       (2) a principal reason for high energy prices in the United 
     States is international price fixing that has evaded review 
     under the antitrust laws of the United States because of 
     foreign policy considerations and technical impediments in 
     these laws that prevent the effective enforcement of United 
     States law with respect to international price fixing in the 
     energy market; and
       (3) among these foreign policy and technical impediments is 
     the discretionary federal act of state doctrine which has 
     been used to bar a lawsuit directed at stopping the 
     manipulation of energy supplies and prices because of concern 
     that such litigation might interfere in the foreign policy of 
     the United States.

     SEC. 3. PURPOSES.

       The purposes of this Act are--
       (1) to establish that the foreign policy interest of the 
     United States would be advanced, rather than impeded or 
     complicated, if foreign entities, including foreign cartels 
     and foreign countries participating in such cartels, were 
     held responsible for energy supply and price manipulation 
     that affects the United States economy; and
       (2) to eliminate barriers to the effective application of 
     United States antitrust laws to foreign entities that have 
     manipulated energy supplies or prices.

     SEC. 4. AMENDMENT TO FOREIGN ASSISTANCE ACT OF 1961 RELATING 
                   TO JURISDICTION OF UNITED STATES COURTS IN 
                   CERTAIN ANTITRUST CASES.

       Section 620(e)(2) of the Foreign Assistance Act of 1961 (22 
     U.S.C. 2370(e)(2)) is amended--
       (1) by striking ``(2) Notwithstanding'' and inserting 
     ``(2)(A) Notwithstanding'';
       (2) by striking ``: Provided, That this subparagraph shall 
     not be applicable (1)'' and inserting ``, except, that this 
     subparagraph shall not be applicable'';
       (3) by striking ``or other taking, or (2)'' and inserting 
     the following: ``or other taking.
       ``(B)(i) Notwithstanding any other provision of law, no 
     court in the United States shall decline on the ground of the 
     federal act of state doctrine to make a deterrnination on the 
     merits relating to an action under any antitrust laws in a 
     case asserting the manipulation of energy supplies or prices, 
     except that this subparagraph shall not be applicable''; and
       (4) by adding at the end the following:
       ``(ii) In this subparagraph, the term `antitrust laws' has 
     the meaning given it in subsection (a) of the first section 
     of the Clayton Act (15 U.S.C. 12(a)), except that such term 
     includes section 5 of the Federal Trade Commission Act (15 
     U.S.C. 45) to the extent such section 5 applies to unfair 
     methods of competition.''.

     

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