[Congressional Record Volume 162, Number 139 (Wednesday, September 14, 2016)]
[Senate]
[Pages S5723-S5725]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. GRASSLEY:
  S. 3323. A bill to improve the Foreign Sovereign Immunities Act of 
1976, and for other purposes; to the Committee on the Judiciary.
  Mr. GRASSLEY. Mr. President, I have mentioned before that I have been 
paying attention to foreign state-owned companies' growing investments 
in American companies and commercial markets. I would like to spend a 
few minutes discussing that issue today.
  It is becoming increasingly clear that foreign state-owned companies 
are highly involved in international commerce and competing with 
companies that are privately owned by shareholders, not governments. 
This trend is part and parcel of globalization. While there are some 
obvious benefits to globalization, we also need to be aware of the 
challenges it may bring with it, and I think this is one of those.
  To give one example, I have seen this trend at work in the 
agricultural sector. ChemChina, a Chinese state-owned company, is 
currently working on a deal to buy the Swiss-based seed company, 
Syngenta. About a third of Syngenta's revenue comes from North 
America--meaning the company is heavily involved with American farmers, 
including Iowans--and that's why I'm interested in the transaction.
  I have already been considering the approval aspect of this proposed 
merger. Senator Stabenow and I asked the Committee on Foreign 
Investment in the United States to review thoroughly the proposed 
Syngenta acquisition with the Department of Agriculture's help. We 
raised the issue because, as I have said before, protecting the safety 
and integrity of our food system is a national security imperative.
  Now there is another aspect of this issue I would like to focus on 
today. Consider this the flip-side of the approval question. As their 
involvement in international commerce grows, how can we ensure that 
foreign state-owned companies are held to the same standards and 
requirements as their non-state-owned counterparts.
  First consider two age-old principles of international law. One is 
that American courts don't exercise jurisdiction over foreign 
governments as a matter of comity and respect for equally independent 
sovereigns. This is called ``foreign sovereign immunity.'' The second 
is that when foreign governments do in fact enter into commerce and 
behave like market participants--conducting a state-owned business, for 
example--they are not entitled to foreign sovereign immunity because 
they are no longer acting as a sovereign, but rather as a business. In 
that case they should be treated just like any other market 
participant. This is called the ``commercial activity exception'' to 
the principle of foreign sovereign immunity. Congress codified both of 
these age-old principles in the Foreign Sovereign Immunities Act of 
1976.
  These principles are well and good, but I am concerned that, in some 
cases, they may not have their intended effects in today's global 
marketplace.
  Some foreign state-owned companies have recently used the defense of 
foreign sovereign immunity--the principle that a foreign government 
can't be sued in American courts--as a litigation tactic to avoid 
claims by American consumers and companies that non-state-owned foreign 
companies would have to answer. In some cases, foreign state-owned 
corporate parent companies have succeeded in escaping Americans' 
claims. They have done this by arguing that the entity conducted 
commercial activities only through a particular subsidiary--not a 
parent company often closer to the foreign sovereign. Unless a 
plaintiff--which may be an American company or consumer--is able to 
show complete control of the subsidiary by the parent company, the 
parent company is able to get out of court before the plaintiffs can 
even try to make their case.
  This results in two problems. First, there's an unequal playing field 
where state-owned foreign companies benefit from a defense not 
available to non-state-owned companies. Second, there is an uphill 
battle for American companies and consumers seeking to sue state-owned 
entities as opposed to non-state-owned entities. When a foreign state-
owned entity raises the defense of foreign sovereign immunity, American 
companies and consumers don't even get the chance to prove their case.
  Consider the example I talked about a few months ago. American 
plaintiffs brought claims against Chinese manufacturers of much of the 
drywall used to rebuild the Gulf Coast after Hurricanes Katrina and 
Rita. The drywall in question was manufactured by two Chinese 
companies--one owned by a German parent and one owned by a Chinese 
state-owned parent company.
  The court considering these plaintiffs' claims had this to say: ``In 
stark contrast to the straight forwardness with which the . . . 
litigation proceeded against the [German] defendants, the litigation 
against the Chinese entities has taken a different course.'' The 
German, non-state-owned parent company appeared in court and 
participated in a bellwether trial where plaintiffs were allowed to try 
to make out their cases.
  The manufacturer with a Chinese state-owned parent ``failed timely to 
answer or otherwise enter an appearance'' in court--and didn't do so 
for nearly two years. In fact, it waited until the court had already 
entered a judgment against it. Only then did the Chinese state-owned 
company finally appear in court. When it did, it argued, that it was 
immune from suit in the United States because it was a state-owned 
company. After approximately 6 years of litigation, it ultimately 
succeeded in its request for dismissal. In contrast to the German 
parent company, the plaintiffs didn't have a chance to try to prove up 
their case against the Chinese parent company

[[Page S5724]]

merely because it happened to be owned by a foreign government. I think 
that is a problem.
  To address these issues I am proposing a modest fix to the Foreign 
Sovereign Immunities Act. This change would extend the jurisdiction of 
United States courts to state-owned corporate affiliates of foreign 
state-owned companies insofar as their commercial activities are 
concerned. It wouldn't create any additional substantive causes of 
action against these foreign state-owned companies. Instead, it would 
mean only that a foreign state-owned company would have to respond to 
the claims brought by American companies and consumers, just like any 
other foreign company that isn't owned by a government.
  The fix has two main results--correcting the problems I just 
mentioned. First, it levels the playing field between foreign state-
owned and foreign private companies by making both subject to suit in 
the United States on the same footing, as the ``commercial activity 
exception'' originally contemplated. Second, it brings clarity to the 
sometimes opaque structure of foreign state-owned enterprises and 
provides American companies and consumers the chance to prove their 
case against these companies just as against private companies.
  In an age when sovereign owned entities, with increasingly complex 
structures, are interacting with American companies and consumers more 
than ever it is appropriate to re-examine the ``commercial activity'' 
exception and to update it. We have to make sure it is working as it 
was designed and historically understood.
                                 ______
                                 
      By Mr. ALEXANDER (for himself, Ms. Ayotte, Mr. Barrasso, Mr. 
        Cochran, Mr. Johnson, Mr. Kirk, Mr. Perdue, and Mr. Portman):
  S. 3326. A bill to give States the authority to provide temporary 
access to affordable private health insurance options outside of 
Obamacare exchanges; read the first time.
  Mr. ALEXANDER. Mr. President, I am here to talk about another issue 
that is also a real emergency. Later today, I will introduce, with 
other Senators, the State Flexibility to Provide Affordable Health 
Options Act. This bill addresses a real emergency. It provides 
immediate relief to families who use their ObamaCare subsidies to buy 
insurance on failing ObamaCare exchanges for the 2017 health care plan 
year.
  Here is an example. If you are a single mother in Memphis who gets an 
ObamaCare subsidy to buy health insurance for your family, you might 
have read that Tennessee's insurance commissioner says your rates may 
be more than 60 percent higher for the same health insurance policy for 
next year, 2017.
  You may be eligible for an ObamaCare subsidy. This could soften the 
blow of some premium increases, but there is also a good chance the 
insurance you currently have may be gone by this November, 2 months 
from now, when you sign up for your insurance for next year, 2017. You 
will have to figure out how to stretch your subsidy dollars as your 
options shrink. Maybe the new plan options don't include your doctor in 
their network so you will have to pay higher copays for your office 
visits. Maybe you need to buy a new plan altogether with new doctors. 
You can spend the new year trying to move all your records from your 
child's old doctor to your child's new doctor, if you can get an 
appointment.
  This legislation will do two things for you and the nearly 11 million 
Americans who buy health insurance for themselves or their families on 
ObamaCare exchanges. No. 1, it gives States with a failing ObamaCare 
exchange the authority to allow residents to use their ObamaCare 
subsidy to purchase any health care plan of their choice, even those 
off the exchange for the 2017 plan year.
  This opportunity would be available in every single State. It will 
give Governors the opportunity to step in if he or she determines this 
emergency relief is ``necessary to ensure that residents of the state 
have access to an adequate number of affordable private health 
insurance options in the individual or small group markets.''
  This bill means, the mother in Memphis can shop around for a health 
insurance policy that meets her family's needs but is unavailable on 
the exchange in Tennessee. When she goes to pay for it, she can use the 
ObamaCare subsidy currently limited to exchange plans.
  The second thing this bill does is this. If a State chooses to use 
this authority to allow residents to use subsidies outside the 
exchange, the legislation will waive the ObamaCare law's requirement 
that you must buy a specific health care plan or pay a fine of as much 
as $2,000 for a family of four next year. In other words, if that 
mother cannot find affordable insurance options that meet her family's 
needs, meaning a plan that covers the right doctors and services on the 
ObamaCare exchange, then she doesn't have to waste her money or the 
taxpayer's money on a plan she does not want or does not need. She will 
not be threatened with paying a fine if she doesn't. The individual 
mandate and its penalty will be lifted.
  Without this emergency bill, she is locked into a failing exchange. 
The only place her subsidy works is the exchange, and in the words of 
Tennessee's insurance commissioner last week, Tennessee's exchange is 
``very near collapse.''
  ObamaCare is unraveling at an alarming rate. In November, Americans 
in nearly one-third of the Nation's counties will have only one 
insurance carrier to choose from, when they have to buy health 
insurance on their regional ObamaCare exchange. Most Americans on the 
exchanges will face higher rates.
  In my home State of Tennessee, residents will see their rates 
increase between 44 and 62 percent, on the average, next year. So even 
for a healthy, 40-year-old, nonsmoking Tennessean with the lowest price 
silver plan on Tennessee's exchange, premiums increased last year to 
$262 a month. Next year it is $333 a month.
  Tennessee had to take extreme measures to allow these increases 
because insurance companies told the State: If you don't let us file 
for rate increases, we will have to leave. If that happened, 
Tennesseans might have had only one insurer to choose from. That is 
what is happening in States all over the country as ObamaCare plans and 
rates get locked in for next year.
  According to the consulting firm Avalere Health, Americans buying 
insurance in one-third of ObamaCare exchange regions next year may have 
only one insurer to choose from. People buying on an ObamaCare exchange 
will have only one insurance carrier to choose from in the following 
States: Alaska, Alabama, Oklahoma, South Carolina, and Wyoming, 
according to the Kaiser Family Foundation.
  The same Kaiser Family Foundation report found that in a growing 
number of States, States that have multiple insurers offering plans 
statewide will have only one insurer selling policies in a majority of 
counties. Tennessee is one of those States.
  Last year, Tennesseans could choose ObamaCare plans between at least 
2 insurers in all 95 counties in our State. For next year, 2017, it is 
estimated that 60 percent of Tennessee's counties will have only one 
insurer offering ObamaCare plans. North Carolina is experiencing the 
same thing. Next year, 90 percent of the counties in North Carolina are 
estimated to have only one insurer offering ObamaCare plans, up from 23 
percent last year.
  There is a similar picture in West Virginia, Utah, South Carolina, 
Nevada, Arizona, Mississippi, Missouri, and Florida. Just last week, 
the Concord Monitor in New Hampshire published an article with this 
headline: ``Maine health insurance cooperative leaves N.H. market, 
reeling from losses.'' That is their headline.
  The story goes on to describe how this health insurance plan will no 
longer be operating in New Hampshire after experiencing over $10 
million in losses in the ObamaCare exchange over just the first two 
quarters of this year alone.
  That move leaves more than 11,000 individuals in the Granite State 
looking for new health care plans.
  The bill I am introducing will not fix ObamaCare for Americans. It is 
not a permanent solution, but it does give the mom in Memphis a real 
solution for next year, for 2017. It lets her know we are on her side 
and we have not forgotten her and her family as we seek to

[[Page S5725]]

repeal ObamaCare and replace it with step-by-step reforms that 
transform the health care delivery system by putting patients in 
charge, giving them more choices, and reducing the cost of health care 
so more people can afford it, which is precisely the alternative 
Republicans offered in 2008, 2009, and 2010, when ObamaCare was debated 
and voted in.
  It also highlights the big structural change we will need to make in 
the near future to avoid a near collapse of our Nation's health 
insurance market.
  Americans get their insurance, our insurance, through many different 
places, some from Medicare, some from Medicaid, and most from their 
employers, but nearly 11 million buy their insurance through the 
exchanges.
  If the ObamaCare policyholder isn't bearing the cost of the higher 
premiums I just described, then you--the taxpayer--will because a large 
portion of ObamaCare premiums are subsidized with tax dollars. There is 
no excuse for having a failing insurance market where taxpayers are 
paying most of the bill and costs are so out of control that we may 
soon have a situation where no insurance company is willing to sell 
insurance on an ObamaCare exchange.
  Where does that leave these 11 million Americans? ObamaCare and its 
one-size-fits all takeover of health care robs States of their 
abilities to provide access to affordable health care plans in a way 
that makes sense for their State populations and economies.
  ObamaCare was supposed to create a marketplace where people would 
have more access to affordable, private health insurance plans. Robust, 
private, market competition was supposed to spur innovative insurance 
design and help drive down costs. But just the opposite has happened, 
as those stuck in ObamaCare are facing fewer and more expensive 
options.
  Long term, Americans should have the freedom to make their own 
choices about their families' health care needs.
  But short-term, in November, nearly 11 million Americans need freedom 
from the ObamaCare exchanges. And this legislation that I will 
introduce later today with other Senators will provide that 
immediately.

                          ____________________