[Congressional Record Volume 147, Number 76 (Tuesday, June 5, 2001)]
[Senate]
[Pages S5838-S5839]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CAMPBELL:
  S. 988. A bill to provide that countries receiving foreign assistance 
be conducive to United States business; to the Committee on Foreign 
Relations.
  Mr. CAMPBELL. Mr. President, today I introduce the International 
Anti-Corruption Act of 2001. This legislation addresses the growing 
problem of official and unofficial corruption abroad. This bill is 
based on S. 1514, which I introduced in the 106th Congress.
  Endemic corruption around the world negatively impacts both the 
United States and the citizens of countries where corruption is 
tolerated. Overseas corruption directly hurts U.S. businesses as they 
endeavor to expand internationally. U.S. workers are affected when 
corruption closes doors to our exports. In addition, the honest and 
hard working citizens of countries stricken with corruption suffer as 
they are compelled to pay bribes to officials and other people in 
positions of power just to get the permits and licenses they need to 
get things done. The trade barrier created by corruption also limits 
the purchasing choices available to these people. Finally, many leading 
U.S. companies that are eager to invest and build factories overseas to 
produce consumer goods for consumption in those countries, often wisely 
choose not to do so because they are not willing to deal with the 
corruption they would encounter. Overall, honest and hard working 
people living all around the world suffer as productive output is 
unjustly harmed.
  As the Chairman of the Commission on Security and Cooperation in 
Europe, known as the Helsinki Commission, I am working to address the 
problem of corruption. In the 106th Congress, I chaired a Commission 
hearing that focused on the issues of bribery and corruption in the 
region of the Organization for Security and Cooperation in Europe, an 
area stretching from Vancouver to Vladivostok. During this hearing, the 
Commission heard that, in economic terms, rampant corruption and 
organized crime in this vast region has cost U.S. businesses billions 
of dollars in lost contracts with direct implications for our economy.
  In addition, two years ago while attending the annual session of the 
OSCE Parliamentary Assembly in St. Petersburg, Russia, I had an 
opportunity to sit down with U.S. business representatives and learned, 
first-hand, about the many obstacles they face.
  Ironically, in some of the biggest recipients of U.S. foreign 
assistance--countries like Russia and Ukraine--the climate is either 
not conducive or outright hostile to American business.
  The time has come to stop providing aid as usual to those countries 
which line up to receive our assistance, only to turn around and fleece 
U.S. businesses conducting legitimate operations in these countries. 
For this reason, I am introducing the International Anti-Corruption Act 
of 2001 to require the State Department to submit a report and the 
President to certify by March 1 of each year that countries which are 
receiving U.S. foreign aid are, in fact, conducive to American 
businesses and investors. If a country is found to be hostile to 
American businesses, aid from the United States would be cut off. The 
certification would be specifically based on whether a country is 
making progress in, and is committed to, economic reform aimed at 
eliminating corruption.
  In fact, monitoring and measuring corruption, and the corresponding 
overall economic freedom, is nothing new. The Heritage Foundation 
regularly produces a comprehensive report entitled the ``Index of 
Economic Freedom.'' This year's 2001 report ranks 155 countries on the 
basis of 10 criteria, including ``government intervention, foreign 
investment and black market.'' While corruption is not identified 
individually in this report, you can bet there is a strong negative 
correlation between overall economic freedom and corruption. The more 
economic freedom you have, the less corruption you will have. It should 
be no surprise that the countries with the lowest levels of economic 
freedom are the very same countries that suffer from economic 
stagnation year after year. We owe it

[[Page S5839]]

to the good people trapped in corrupt political systems to do what we 
can to help root out and get rid of this corruption.
  Under this bill, if the President certifies that a country's business 
climate is not conducive for U.S. businesses, that country will, in 
effect, be put on probation. The country would continue to receive U.S. 
foreign aid through that end of the fiscal year, but aid would be cut 
off on the first day of the next fiscal year unless the President 
certifies the country is making significant progress in implementing 
the specified economic indicators and is committed to recognizing the 
involvement of U.S. business.
  My bill also includes the customary waiver authority where the 
national interests of the United States are at stake. For countries 
certified as hostile to or not conducive for U.S. business, aid can 
continue if the President determines it is in the national security 
interest of the United States. However, the determination expires after 
six months unless the President determines its continuation is 
important to our national security interest.
  I also included a provision which would allow aid to continue to meet 
urgent humanitarian needs, including food, medicine, disaster and 
refugee relief, to support democratic political reform and rule of law 
activities, and to create private sector and non-governmental 
organizations that are independent of government control, or to develop 
a free market economic system.
  Instead of jumping on the bandwagon to pump millions of additional 
American tax dollars into countries which are hostile to U.S. 
businesses and investors, we should be working to root out the kinds of 
bribery and corruption that have an overall chilling effect on much 
needed foreign investment. Left unchecked, such corruption will 
continue to undermine fledgling democracies worldwide and further 
impede moves toward a genuine free market economy. I believe the 
legislation I am introducing today is a critical step this direction, 
and I urge my colleagues to support its passage.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 988

       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-
     Corruption Act of 2001''.

     SEC. 2. LIMITATIONS ON FOREIGN ASSISTANCE.

       (a) Report and Certification.--
       (1) In general.--Not later than March 1 of each year, the 
     President shall submit to the appropriate committees a 
     certification described in paragraph (2) and a report for 
     each country that received foreign assistance under part I of 
     the Foreign Assistance Act of 1961 during the fiscal year. 
     The report shall describe the extent to which each such 
     country is making progress with respect to the following 
     economic indicators:
       (A) Implementation of comprehensive economic reform, based 
     on market principles, private ownership, equitable treatment 
     of foreign private investment, adoption of a legal and policy 
     framework necessary for such reform, protection of 
     intellectual property rights, and respect for contracts.
       (B) Elimination of corrupt trade practices by private 
     persons and government officials.
       (C) Moving toward integration into the world economy.
       (2) Certification.--The certification described in this 
     paragraph means a certification as to whether, based on the 
     economic indicators described in subparagraphs (A) through 
     (C) of paragraph (1), each country is--
       (A) conducive to United States business;
       (B) not conducive to United States business; or
       (C) hostile to United States business.
       (b) Limitations on Assistance.--
       (1) Countries hostile to united states business.--
       (A) General limitation.--Beginning on the date the 
     certification described in subsection (a) is submitted--
       (i) none of the funds made available for assistance under 
     part I of the Foreign Assistance Act of 1961 (including 
     unobligated balances of prior appropriations) may be made 
     available for the government of a country that is certified 
     as hostile to United States business pursuant to such 
     subsection (a); and
       (ii) the Secretary of the Treasury shall instruct the 
     United States Executive Director of each multilateral 
     development bank to vote against any loan or other 
     utilization of the funds of such institution to or by any 
     country with respect to which a certification described in 
     clause (i) has been made.
       (B) Duration of limitations.--Except as provided in 
     subsection (c), the limitations described in clauses (i) and 
     (ii) of subparagraph (A) shall apply with respect to a 
     country that is certified as hostile to United States 
     business pursuant to subsection (a) until the President 
     certifies to the appropriate committees that the country is 
     making significant progress in implementing the economic 
     indicators described in subsection (a)(1) and is no longer 
     hostile to United States business.
       (2) Countries not conducive to united states business.--
       (A) Probationary period.--A country that is certified as 
     not conducive to United States business pursuant to 
     subsection (a), shall be considered to be on probation 
     beginning on the date of such certification.
       (B) Required improvement.--Unless the President certifies 
     to the appropriate committees that the country is making 
     significant progress in implementing the economic indicators 
     described in subsection (a) and is committed to being 
     conducive to United States business, beginning on the first 
     day of the fiscal year following the fiscal year in which a 
     country is certified as not conducive to United States 
     business pursuant to subsection (a)(2)--
       (i) none of the funds made available for assistance under 
     part I of the Foreign Assistance Act of 1961 (including 
     unobligated balances of prior appropriations) may be made 
     available for the government of such country; and
       (ii) the Secretary of the Treasury shall instruct the 
     United States Executive Director of each multilateral 
     development bank to vote against any loan or other 
     utilization of the funds of such institution to or by any 
     country with respect to which a certification described in 
     subparagraph (A) has been made.
       (C) Duration of limitations.--Except as provided in 
     subsection (c), the limitations described in clauses (i) and 
     (ii) of subparagraph (B) shall apply with respect to a 
     country that is certified as not conducive to United States 
     business pursuant to subsection (a) until the President 
     certifies to the appropriate committees that the country is 
     making significant progress in implementing the economic 
     indicators described in subsection (a)(1) and is conducive to 
     United States business.
       (c) Exceptions.--
       (1) National security interest.--Subsection (b) shall not 
     apply with respect to a country described in subsection (b) 
     (1) or (2) if the President determines with respect to such 
     country that making such funds available is important to the 
     national security interest of the United States. Any such 
     determination shall cease to be effective 6 months after 
     being made unless the President determines that its 
     continuation is important to the national security interest 
     of the United States.
       (2) Other exceptions.--Subsection (b) shall not apply with 
     respect to--
       (A) assistance to meet urgent humanitarian needs (including 
     providing food, medicine, disaster, and refugee relief);
       (B) democratic political reform and rule of law activities;
       (C) the creation of private sector and nongovernmental 
     organizations that are independent of government control; and
       (D) the development of a free market economic system.

     SEC. 3. TOLL-FREE NUMBER.

       The Secretary of Commerce shall make available a toll-free 
     telephone number for reporting by members of the public and 
     United States businesses on the progress that countries 
     receiving foreign assistance are making in implementing the 
     economic indicators described in section 2(a)(1). The 
     information obtained from the toll-free telephone reporting 
     shall be included in the report required by section 2(a).

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Appropriate committees.--The term ``appropriate 
     committees'' means the Committee on International Relations 
     of the House of Representatives and the Committee on Foreign 
     Relations of the Senate.
       (2) Multilateral development bank.--The term ``multilateral 
     development bank'' means the International Bank for 
     Reconstruction and Development, the International Development 
     Association, and the European Bank for Reconstruction and 
     Development.

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