[Congressional Record Volume 165, Number 119 (Tuesday, July 16, 2019)]
[Senate]
[Pages S4847-S4850]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                           Order of Procedure

  Mr. RISCH. Mr. President, I ask unanimous consent that amendment No. 
910 be withdrawn and the only amendments in order to Treaties Calendar 
No. 1 be the Paul amendment Nos. 924 to the treaty and 921 to the 
resolution of ratification; further, that at 5 p.m. today, the Senate 
vote on the Paul amendment No. 924; that following disposition of that 
amendment, the resolution of ratification be reported and the Senate 
vote on Paul amendment No. 921 take place; that following disposition 
of that amendment, the Senate vote on the resolution of ratification 
with no intervening action or debate; that if the resolution of 
ratification is agreed to, the motion to reconsider be considered made 
and laid upon the table and the President be immediately notified of 
the Senate's action; further, that the only amendments in order to 
treaties Calendar Nos. 2, 3, and 4 be the Paul amendment Nos. 922, 919, 
923, 918, and 920; finally, that the cloture motions in relation to 
treaties Calendar Nos. 2, 3, and 4 be withdrawn, the pending amendments 
to the treaties be withdrawn, and the Senate vote on ratification of 
the treaties at a time to be determined by the majority leader in 
consultation with the Democratic leader on Wednesday, July 17.
  Finally, I ask unanimous consent that the cloture motions with 
respect to the Corker, Blanchard, and Tapia nominations ripen following 
disposition of Treaties Calendar No. 4.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (Mrs. BLACKBURN assumed the Chair.)
  The PRESIDING OFFICER (Mr. Cassidy). Under the previous order, the 
pending amendments are withdrawn.
  The Senator from Kentucky.


                           Amendment No. 924

  Mr. PAUL. Mr. President, I call up my amendment No. 924.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The senior assistant legislative clerk read as follows:

       The Senator from Kentucky [Mr. Paul] proposes an amendment 
     numbered 924 to Treaty Document No. 113-4.

  Mr. PAUL. I ask unanimous consent that the reading of the amendment 
be waived.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

        (Purpose: To amend the Protocol to protect tax privacy)

       In paragraph 1 of Article 27 of the Convention, as amended 
     by Article XIII of the Protocol, strike ``such information as 
     is

[[Page S4848]]

     foreseeably relevant'' and insert ``such information as is 
     individualized and relevant to an individual investigation''.

  Mr. PAUL. Mr. President, for several years now, I have been working 
on tax treaties that we have with other countries to try to protect 
Americans' privacy. I think it is very important that your personal 
information--what you buy with your credit card, what checks you write, 
and what you do with your bank account--is private. It is yours, and it 
is not to be sifted through or rummaged through by the government.
  I am very, very concerned that, over time, particularly with 
technology, the IRS is gaining too much power at the push of a button 
to simply sift through our bank accounts looking for anomalies.
  I think it is important that we protect Americans who live overseas. 
About 8 million Americans live overseas, and I think the vast majority 
of them are law-abiding citizens.
  This debate has been going on for several years now. I first tried to 
engage the Obama administration in this. We had meeting after meeting 
but no meaningful engagement. Currently, we have been involved in 
negotiations with the Trump administration, which has been more open to 
discussions of how we protect Americans' privacies. Unfortunately, 
these negotiations were sabotaged by the Republican leader, who chose 
to bring these tax treaties forward at a time when we were in the 
middle of negotiations. This is very disappointing to me because I 
think we were at the point of actually achieving a deal that would 
protect the privacy of Americans. This process has been severely 
damaged and short-circuited by the Republican leader's choosing to push 
this forward and destroy the negotiations that we were having at the 
time.
  When we look at these treaties, and we say, ``well, how could we make 
them better,'' there are ways that we could actually make them better. 
There are also ways that these treaties could have come up at any point 
in time in the past. No one Senator can really block legislation. The 
fact that this legislation hasn't come up for several years is really 
due to the fact that the Republican leader has failed to engage in any 
meaningful compromise or discussion over these.
  The treaties are being brought up against my objections now. So they 
could have been brought up against my objections 2 years ago, 4 years 
ago, or 6 years ago. Really, the fault and the responsibility for the 
delay of these tax treaties lies squarely at the foot of the Republican 
leader, who has failed to engage on this subject and has, rather, 
chosen at the end just to rush them through without any meaningful 
debate.
  Americans are constitutionally guaranteed to be free from 
unreasonable, suspicionless search--or at least we used to be. Today 
this Chamber begins consideration of four tax treaties, and each one of 
them contains provisions that would violate the fundamental right to be 
free from unreasonable searches.
  To be sure, these treaties would bestow benefits to the United States 
and our trading partners, and those provisions have my support. In 
fact, I have said for years now that I support the gist of the treaties 
and that they try to prevent double taxation and they make it easier 
for companies to do business overseas, as well as to do business in our 
country. That is why I have said from the beginning: Let's negotiate a 
settlement. Let's try to put taxpayer protections into the treaties. 
But at every point we have been stymied.
  I don't think the benefits of these treaties should come at the grave 
expense of violating the rights of every American with a foreign bank 
account, regardless of whether there is a shred of evidence that a 
crime has been committed.
  These treaties make it easier for tax authorities, such as the IRS, 
to obtain an American citizen's bank deposit account information. 
Previously, the IRS could only obtain such information if it was 
necessary to address a tax dispute, but that is not the standard these 
treaties will keep. In the past, there had to be at least an accusation 
of wrongdoing, an accusation of fraud, or an accusation that a taxpayer 
was doing something against the law. These treaties, though, would 
allow the IRS--the government Agency that instills terror in every 
citizen it contacts, the government Agency that has almost limitless 
power to put anybody out of business--to obtain individual bank account 
records if that information is ``foreseeably relevant'' or ``may be 
relevant.''
  Think for a minute what the standard is here. So if you happen to be 
an American who does business overseas, if it may be relevant, the 
government can look in your bank account. Really, the standard is ``may 
be relevant'' to the Tax Code, ``may be relevant'' to a question, 
instead of ``is relevant'' to an active investigation concerning 
wrongdoing by a taxpayer. I think this is a big mistake. It is going to 
lead to bulk transfer of information from countries back and forth.
  We live in an era where some people leave one country or another, 
hoping to get away from totalitarianism and hoping to get away from the 
snooping authorities that may well debit their account or control their 
account based on their political behavior. I think it is a mistake to 
allow the information to be transferred back and forth without any kind 
of standard. The standard is ``foreseeably relevant,'' or ``may be 
relevant.'' What kind of standard is that?
  Historically, the standard required, at the very least, is an 
accusation of a crime. It will no longer require that. Will it require 
suspicion of a crime? No, it will require anything the government asks 
that it may be relevant to the treaty, that it may be relevant to the 
Tax Code, which is basically no standard at all. No American overseas 
will have any kind of protection of their privacy.
  Some recent international court decisions have provided an idea as to 
what meets this new standard. According to the Swiss Federal Supreme 
Court, under the new standard of these new tax treaties and the 
``foreseeably relevant'' standard, an information request will only be 
denied if the link between the requested data and the information is 
improbable. No consideration is necessary as to whether there is 
reasonable suspicion of a crime. People can go after the information, 
basically, based on no accusation of a crime or no suspicion of a 
crime. It will be a fishing expedition.

  Perhaps we should thank the Swiss Federal Supreme Court for 
effectively telling us what we already knew, that the ``foreseeably 
relevant'' standard is really no standard at all.
  At a time when the United States is over $22 trillion in debt and 
running annual trillion-dollar deficits, these treaties would empower 
the IRS to obtain sensitive bank account information under the weakest 
of pretenses. In short, the information is exchanged with no questions 
asked, no reasonable suspicion, and no due process in an effort to 
swell the coffers of the U.S. Treasury.
  I am outraged by this. The Senate should be outraged, and the 
American people should be outraged that their liberties are so 
cavalierly cast aside to accommodate the IRS's perpetual search for 
more taxpayers to shake down.
  My amendment to the treaties would end bulk exchanges of financial 
records by simply mandating that the United States and our treaty 
partners would exchange information only if an identified individual is 
subject to an individual investigation related to the enforcement of 
the Tax Code. I am not against going after people not paying their 
taxes, but I am against going after the 8 million Americans who live 
overseas and are just trying to abide by the laws and just trying to 
earn a living.
  While those who have evaded their tax obligations must be held to 
account, the power to search and seize is not absolute in the United 
States or in any free country. A government dedicated to securing the 
blessings of liberty does not allow the IRS to rummage through our bank 
accounts hoping to find a crime.
  Obtaining the deposit account information of an American should be 
done on an individualized basis without resorting to indiscriminate 
sweeps of sensitive information gathering.
  I urge every Senator to stand up for the Fourth Amendment rights of 
all Americans and to support my amendment.

[[Page S4849]]

  My amendment would simply do this. It would put a standard into the 
treaties that says that there has to be suspicion. You have to 
individualize an investigation. You can't push a button and search 
through 8 million Americans' bank records overseas. If we allow this to 
go without personal privacy protections, we are setting ourselves up 
for a dystopian nightmare, where the government looks at every 
transaction, every purchase, and everything we do in our lives. It is a 
big mistake to let this go.
  There is no reason why this couldn't be corrected.
  I have spoken to the countries involved, and they have assured me 
that there is not a problem at all with making these amendment changes 
to the treaties. Yet they have fallen on deaf ears.
  It is a sad day for Americans taxpayers and a sad day for privacy 
that these tax treaties are being rushed through. I strongly object and 
hope other Senators will consider voting for taxpayer privacy.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. RISCH. Mr. President, I ask unanimous consent that the vote take 
place after the completion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. RISCH. Mr. President and fellow Senators, today the Senate is 
considering four tax protocols. These treaties--and these are 
treaties--have been approved by substantial bipartisan majorities in 
the Foreign Relations Committee in multiple successive Congresses. Two 
of these four protocols were reported out of committee without 
objection during the four most recent Congresses. It is in the interest 
of U.S. taxpayers that these be approved, and it is time for these to 
be approved.
  I am honored that on my watch, we have finally brought these to the 
floor and brought them here at this moment to actually adopt these 
treaties, which will be adopted when the vote is called.
  Tax treaties benefit U.S. businesses and citizens in a number of 
ways. Tax treaties create certainty for the business community. They 
promote a favorable business environment by minimizing uncertainty and 
helping U.S. businesses grow.
  In the case of Americans working and conducting business abroad, tax 
treaties are indispensable in that respect. Tax treaties facilitate 
trade and investment by preventing double taxation. They provide U.S. 
taxpayers and investors with greater clarity about their tax burden. 
They provide tools to ensure that U.S. taxpayers are treated equally 
and fairly overseas, allowing them to invest and compete abroad with 
the knowledge that they will not face discriminatory barriers.
  Tax treaties strengthen the ability of U.S. businesses to explore new 
opportunities abroad by establishing a predictable framework for how a 
tax burden will be assessed. These treaties also provide tools to help 
resolve tax disputes between the United States and our tax treaty 
partners. Without these tools, U.S. investors would have limited 
ability to resolve these problems on their own.
  It is not just businesses that benefit from tax treaties. These 
treaties impose reasonable limits in the amount of tax the other 
country can impose on a U.S. person who might live or work overseas. 
Tax treaties help us ensure that the United States can maintain an 
appropriate tax base by preventing tax fraud.
  One of our colleagues has raised concerns about how the treaties deal 
with individual privacy and sensitive information. These treaties 
protect taxpayer information in a manner consistent with decades-long, 
established standards and practices under U.S. domestic law. These 
standards and practices have been upheld by the U.S. Supreme Court for 
more than half of a century. They have been used by administrations of 
both parties for decades. Changing the standard now would create 
confusion related to global administration of our tax laws.
  I do not view this issue as an impediment or a change to how these 
matters have been successfully handled in the past. I ask my colleagues 
to oppose any amendments to these treaties. The treaties are consistent 
with the U.S.-modeled tax treaty and with a decades-long practice of 
implementing and enforcing our tax laws.
  To be clear, any amendment to this resolution that materially changes 
the underlying provisions of these treaties will require acceptance by 
both our President and the foreign partner or the treaty cannot be 
ratified. These amendments constitute a material change to the 
treaties. They are damaging and would lead to, potentially, years of 
further delay when further delay is simply not acceptable.
  These treaties had been held up for 8 years, and I am very pleased 
that this week we are finally moving forward in our role of advice and 
consent to the President on these commonsense treaties. It is time to 
move for the Senate to act on these treaties and a vote.
  I urge my colleagues to approve them and to vote against the proposed 
amendments.
  Mr. RISCH. Mr. President, I ask unanimous consent that Senator Paul 
have up to 5 minutes of debate prior to the second tranche of votes in 
this series.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.


                       Vote on Amendment No. 924

  The PRESIDING OFFICER. Under the previous order, the question is on 
agreeing to the pending amendment.
  Mr. GRASSLEY. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  The bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Colorado (Mr. Bennet), 
the Senator from New York (Mrs. Gillibrand), the Senator from 
California (Ms. Harris), and the Senator from Vermont (Mr. Sanders) are 
necessarily absent.
  The PRESIDING OFFICER (Ms. McSally). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 4, nays 92, as follows:

                      [Rollcall Vote No. 207 Ex.]

                                YEAS--4

     Cruz
     Lee
     Paul
     Sullivan

                                NAYS--92

     Alexander
     Baldwin
     Barrasso
     Blackburn
     Blumenthal
     Blunt
     Booker
     Boozman
     Braun
     Brown
     Burr
     Cantwell
     Capito
     Cardin
     Carper
     Casey
     Cassidy
     Collins
     Coons
     Cornyn
     Cortez Masto
     Cotton
     Cramer
     Crapo
     Daines
     Duckworth
     Durbin
     Enzi
     Ernst
     Feinstein
     Fischer
     Gardner
     Graham
     Grassley
     Hassan
     Hawley
     Heinrich
     Hirono
     Hoeven
     Hyde-Smith
     Inhofe
     Isakson
     Johnson
     Jones
     Kaine
     Kennedy
     King
     Klobuchar
     Lankford
     Leahy
     Manchin
     Markey
     McConnell
     McSally
     Menendez
     Merkley
     Moran
     Murkowski
     Murphy
     Murray
     Perdue
     Peters
     Portman
     Reed
     Risch
     Roberts
     Romney
     Rosen
     Rounds
     Rubio
     Sasse
     Schatz
     Schumer
     Scott (FL)
     Scott (SC)
     Shaheen
     Shelby
     Sinema
     Smith
     Stabenow
     Tester
     Thune
     Tillis
     Toomey
     Udall
     Van Hollen
     Warner
     Warren
     Whitehouse
     Wicker
     Wyden
     Young

                             NOT VOTING--4

     Bennet
     Gillibrand
     Harris
     Sanders
  The amendment (No. 924) was rejected.
  The PRESIDING OFFICER. The clerk will report the resolution of 
ratification.
  The bill clerk read as follows:

       Resolution of Advice and Consent of the Protocol Amending 
     the Convention between the United States of America and the 
     Kingdom of Spain for the Avoidance of Double Taxation and the 
     Prevention of Fiscal Evasion with respect to Taxes on Income 
     and its Protocol, signed at Madrid on February 22, 1990, and 
     a related Memorandum of Understanding, signed on January 14, 
     2013, at Madrid, together with correcting notes dated July 
     23, 2013, and January 31, 2014 (the Protocol).

  The PRESIDING OFFICER. The Senator from Kentucky.


                           Amendment No. 921

  Mr. PAUL. I call up my amendment No. 921.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Kentucky [Mr. Paul] proposes an amendment 
     numbered 921 to the resolution of ratification for treaty 
     document No. 113-4.

  The amendment (No. 921) is as follows:


 =========================== NOTE =========================== 

  
  On page S4849, July 16, 2019, third column, the following 
appears: The PRESIDING OFFICER. The clerk will report the 
amendment. The bill clerk read as follows: The Senator from 
Kentucky [Mr. Paul] proposes an amendment numbered 921 to the 
resolution of ratification for treaty document No. 130-4. The 
amendment (No. 921) is as follows:
  
  The online Record has been corrected to read: The PRESIDING 
OFFICER. The clerk will report the amendment. The bill clerk read 
as follows: The Senator from Kentucky [Mr. Paul] proposes an 
amendment numbered 921 to the resolution of ratification for 
treaty document No. 113-4. The amendment (No. 921) is as follows:


 ========================= END NOTE ========================= 



[[Page S4850]]


  


          (Purpose: To provide a reservation to the Protocol)

       In section 1, in the section heading, strike ``declaration 
     and conditions'' and insert ``declaration, conditions, and a 
     reservation''.
       In section 1, strike ``declaration of section 2 and the 
     conditions in section 3'' and insert ``declaration of section 
     2, the conditions in section 3, and the reservation in 
     section 4''.
       At the end, add the following:

     SEC. 4. RESERVATION.

       The advice and consent of the Senate under section 1 is 
     subject to the following reservation: In the case of the 
     United States, the provisions of paragraph 2 of Article XV 
     shall apply as if the Protocol had entered into force on 
     January 1, 2019.

  Mr. PAUL. I ask unanimous consent that the reading of the amendment 
be waived.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PAUL. Madam President, I am offering a reservation to these 
treaties that would maximize the benefit for individuals and businesses 
that are impacted by these tax provisions.
  My proposed reservation would establish only for the United States--
and only for our tax purposes--an effective date of January 1, 2019. By 
entering into these treaties, the United States and our partners are 
committing to the same set of tax rules and solving the problems of 
double taxation that plague businesses that operate in several 
countries.
  Senate debate on the merits of these treaties has taken many years, 
and there is no reason to punish American companies that paid their 
foreign taxes but then were double-taxed by the IRS due to the lack of 
a ratified treaty.
  As I have said many times, I support the benefit of these treaties. I 
wish we added privacy protections, but I do support the benefits of 
avoiding double taxation.
  I also support making whole those who have been double-taxed, and I 
think it is the right thing to do to backdate these to the beginning of 
the year. My proposed reservation would grant these companies and the 
IRS the additional benefit of having a uniform tax for 2019.
  To give an example of a company in my State that would benefit, North 
American Stainless cannot pay dividends without being subject to double 
taxation. If we were to make this retroactive, we would not punish this 
company in my State. It is disappointing to me that the senior Senator 
from Kentucky led the opposition to this amendment because it would 
stand to greatly benefit a Kentucky company. It also would stand to 
greatly benefit many companies around the country if we were simply to 
make this retroactive.
  We talked to the countries involved, and there is not one country 
that expressed any reservation about this. It is with great 
disappointment that I have to oppose the senior Senator from Kentucky, 
who is opposing this amendment and rallying those in the body to 
prevent this from being retroactive. This would in no way slow down the 
treaties, and it is inappropriately said by some that it would. These 
treaties would go through with flying colors, and the reservation would 
apply only to our country.
  I hope those who are thinking about how to vote on this will consider 
voting to make these treaties start in January 1 of this year.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
921.
  Mr. CRAPO. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  The senior assistant bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Colorado (Mr. Bennet), 
the Senator from New York (Mrs. Gillibrand), the Senator from 
California (Ms. Harris), and the Senator from Vermont (Mr. Sanders) are 
necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 4, nays 92, as follows:

                      [Rollcall Vote No. 208 Ex.]

                                YEAS--4

     Cruz
     Lee
     Paul
     Sullivan

                                NAYS--92

     Alexander
     Baldwin
     Barrasso
     Blackburn
     Blumenthal
     Blunt
     Booker
     Boozman
     Braun
     Brown
     Burr
     Cantwell
     Capito
     Cardin
     Carper
     Casey
     Cassidy
     Collins
     Coons
     Cornyn
     Cortez Masto
     Cotton
     Cramer
     Crapo
     Daines
     Duckworth
     Durbin
     Enzi
     Ernst
     Feinstein
     Fischer
     Gardner
     Graham
     Grassley
     Hassan
     Hawley
     Heinrich
     Hirono
     Hoeven
     Hyde-Smith
     Inhofe
     Isakson
     Johnson
     Jones
     Kaine
     Kennedy
     King
     Klobuchar
     Lankford
     Leahy
     Manchin
     Markey
     McConnell
     McSally
     Menendez
     Merkley
     Moran
     Murkowski
     Murphy
     Murray
     Perdue
     Peters
     Portman
     Reed
     Risch
     Roberts
     Romney
     Rosen
     Rounds
     Rubio
     Sasse
     Schatz
     Schumer
     Scott (FL)
     Scott (SC)
     Shaheen
     Shelby
     Sinema
     Smith
     Stabenow
     Tester
     Thune
     Tillis
     Toomey
     Udall
     Van Hollen
     Warner
     Warren
     Whitehouse
     Wicker
     Wyden
     Young

                             NOT VOTING--4

     Bennet
     Gillibrand
     Harris
     Sanders
  The amendment (No. 921) was rejected.
  The PRESIDING OFFICER. The question is on agreeing to the resolution 
of ratification.
  Mr. CORNYN. Madam President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  The senior assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Colorado (Mr. Bennet), 
the Senator from New York (Mrs. Gillibrand), the Senator from 
California (Ms. Harris), and the Senator from Vermont (Mr. Sanders) are 
necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 94, nays 2, as follows:

                      [Rollcall Vote No. 209 Ex.]

                                YEAS--94

     Alexander
     Baldwin
     Barrasso
     Blackburn
     Blumenthal
     Blunt
     Booker
     Boozman
     Braun
     Brown
     Burr
     Cantwell
     Capito
     Cardin
     Carper
     Casey
     Cassidy
     Collins
     Coons
     Cornyn
     Cortez Masto
     Cotton
     Cramer
     Crapo
     Cruz
     Daines
     Duckworth
     Durbin
     Enzi
     Ernst
     Feinstein
     Fischer
     Gardner
     Graham
     Grassley
     Hassan
     Hawley
     Heinrich
     Hirono
     Hoeven
     Hyde-Smith
     Inhofe
     Isakson
     Johnson
     Jones
     Kaine
     Kennedy
     King
     Klobuchar
     Lankford
     Leahy
     Manchin
     Markey
     McConnell
     McSally
     Menendez
     Merkley
     Moran
     Murkowski
     Murphy
     Murray
     Perdue
     Peters
     Portman
     Reed
     Risch
     Roberts
     Romney
     Rosen
     Rounds
     Rubio
     Sasse
     Schatz
     Schumer
     Scott (FL)
     Scott (SC)
     Shaheen
     Shelby
     Sinema
     Smith
     Stabenow
     Sullivan
     Tester
     Thune
     Tillis
     Toomey
     Udall
     Van Hollen
     Warner
     Warren
     Whitehouse
     Wicker
     Wyden
     Young

                                NAYS--2

     Lee
     Paul
       

                             NOT VOTING--4

     Bennet
     Gillibrand
     Harris
     Sanders
  The PRESIDING OFFICER. On this vote, the yeas are 94, the nays are 2.
  Two-thirds of the Senators voting, having voted in the affirmative, 
the resolution of ratification is agreed to.
  The resolution of ratification was agreed to as follows:

                          ____________________