[House Report 108-635]
[From the U.S. Government Publishing Office]
108th Congress Rept. 108-635
HOUSE OF REPRESENTATIVES
2d Session Part 2
======================================================================
INTERNATIONAL CONSUMER PROTECTION ACT OF 2004
_______
November 16, 2004.--Ordered to be printed
_______
Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 3143]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 3143) to enhance Federal Trade Commission enforcement
against cross-border fraud and deception, having considered the
same, reports favorably thereon with an amendment and
recommends that the bill as amended do pass.
CONTENTS
Page
The Amendment.................................................... 1
Purpose and Summary.............................................. 8
Background and Need for the Legislation.......................... 9
Hearings......................................................... 10
Committee Consideration.......................................... 11
Vote of the Committee............................................ 11
Committee Oversight Findings..................................... 11
New Budget Authority and Tax Expenditures........................ 11
Congressional Budget Office Cost Estimate........................ 11
Performance Goals and Objectives................................. 13
Constitutional Authority Statement............................... 13
Section-by-Section Analysis and Discussion....................... 13
Agency Views..................................................... 17
Changes in Existing Law Made by the Bill, as Reported............ 19
Committee Jurisdiction Letter.................................... 31
Markup Transcript................................................ 34
The Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be referred to as the ``International Consumer
Protection Act of 2004''.
SEC. 2. FOREIGN LAW ENFORCEMENT AGENCY DEFINED.
Section 4 of the Federal Trade Commission Act (15 U.S.C. 44) is
amended by adding at the end the following:
`` `Foreign law enforcement agency' means--
``(A) any agency or judicial authority of a foreign
government, including a foreign state, a political subdivision
of a foreign state, or a multinational organization constituted
by and comprised of foreign states, that is vested with law
enforcement or investigative authority in civil, criminal, or
administrative matters; and
``(B) any multinational or multiagency organization to the
extent that it is acting on behalf of an entity described in
subparagraph (A).''.
SEC. 3. AVAILABILITY OF REMEDIES.
Section 5(a) of the Federal Trade Commission Act (15 U.S.C. 45(a))
is amended by adding at the end the following:
``(4) (A) For purposes of this subsection, the term `unfair or
deceptive acts or practices' shall include such acts or practices
involving foreign commerce that--
``(i) cause or are likely to cause reasonably foreseeable
injury within the United States; or
``(ii) involve material conduct occurring within the United
States.
``(B) All remedies available to the Commission with respect to
unfair and deceptive acts or practices shall be available for acts and
practices described in this paragraph, including restitution to
domestic or foreign victims.''.
SEC. 4. POWERS OF THE COMMISSION.
(a) Publication of Information; Reports.--Section 6(f) of the
Federal Trade Commission Act (15 U.S.C. 46(f)) is amended--
(1) by inserting ``(1)'' after ``such information'' the
first place it appears; and
(2) by striking ``purposes.'' and inserting ``purposes, and
(2) to any officer or employee of any foreign law enforcement
agency under the same circumstances that making material
available to foreign law enforcement agencies is permitted
under section 21(b).''.
(b) Other Powers of the Commission.--Section 6 of the Federal Trade
Commission Act (15 U.S.C. 46) is further amended by inserting after
subsection (i) and before the proviso the following:
``(j) Investigative Assistance for Foreign Law Enforcement
Agencies.--
``(1) In general.--Upon a written request from a foreign
law enforcement agency to provide assistance in accordance with
this subsection, if the requesting agency states that it is
investigating, or engaging in enforcement proceedings against,
possible violations of laws prohibiting fraudulent or deceptive
commercial practices, or other practices substantially similar
to practices prohibited by any provision of the laws
administered by the Commission, other than Federal antitrust
laws (as defined in section 12(5) of the International
Antitrust Enforcement Assistance Act of 1994 (15 U.S.C.
6211(5))), the Commission may provide the assistance described
in paragraph (2) without requiring that the conduct identified
in the request constitute a violation of the laws of the United
States.
``(2) Type of assistance.--In providing assistance to a
foreign law enforcement agency under this subsection, the
Commission may--
``(A) conduct such investigation as the Commission
deems necessary to collect information and evidence
pertinent to the request for assistance, using all
investigative powers authorized by this Act; and
``(B) when the request is from an agency acting to
investigate or pursue the enforcement of civil laws, or
when the Attorney General refers a request to the
Commission from an agency acting to investigate or
pursue the enforcement of criminal laws, seek and
accept appointment by a United States district court of
Commission attorneys to provide assistance to foreign
and international tribunals and to litigants before
such tribunals on behalf of a foreign law enforcement
agency pursuant to section 1782 of title 28, United
States Code.
``(3) Criteria for determination.--In deciding whether to
provide such assistance, the Commission shall consider all
relevant factors, including--
``(A) whether the requesting agency has agreed to
provide or will provide reciprocal assistance to the
Commission;
``(B) whether compliance with the request would
prejudice the public interest of the United States; and
``(C) whether the requesting agency's investigation
or enforcement proceeding concerns acts or practices
that cause or are likely to cause injury to a
significant number of persons.
``(4) International agreements.--If a foreign law
enforcement agency has set forth a legal basis for requiring
execution of an international agreement as a condition for
reciprocal assistance, or as a condition for provision of
materials or information to the Commission, the Commission,
with prior approval and ongoing oversight of the Secretary of
State, and with final approval of the agreement by the
Secretary of State, may negotiate and conclude an international
agreement, in the name of either the United States or the
Commission, for the purpose of obtaining such assistance,
materials, or information. The Commission may undertake in such
an international agreement to--
``(A) provide assistance using the powers set forth
in this subsection;
``(B) disclose materials and information in
accordance with subsection (f) and section 21(b); and
``(C) engage in further cooperation, and protect
materials and information received from disclosure, as
authorized by this Act.
``(5) Additional authority.--The authority provided by this
subsection is in addition to, and not in lieu of, any other
authority vested in the Commission or any other officer of the
United States.
``(6) Limitation.--The authority granted by this subsection
shall not authorize the Commission to take any action or
exercise any power with respect to a bank, a savings and loan
institution described in section 18(f)(3) (15 U.S.C.
57a(f)(3)), a Federal credit union described in section
18(f)(4) (15 U.S.C. 57a(f)(4)), or a common carrier subject to
the Act to regulate commerce, except in accordance with the
proviso following the last designated subsection of section 6
(15 U.S.C. 46).
``(7) Assistance to certain countries.--The Commission may
not provide investigative assistance under this subsection to a
foreign law enforcement agency from a foreign state that the
Secretary of State has determined, in accordance with section
6(j) of the Export Administration Act of 1979 (50 U.S.C. App.
2405(j)), has repeatedly provided support for acts of
international terrorism, unless and until such determination is
rescinded pursuant to section 6(j)(4) of that Act (50 U.S.C.
App. 2405(j)(4)).
``(k) Referral of Evidence for Criminal Proceedings.--
``(1) In general.--Whenever the Commission obtains evidence
that any person, partnership, or corporation, either domestic
or foreign, has engaged in conduct that may constitute a
violation of Federal criminal law, the Commission may transmit
such evidence to the Attorney General, who may institute
criminal proceedings under appropriate statutes. Nothing in
this paragraph affects any other authority of the Commission to
disclose information.
``(2) International information.--The Commission shall
endeavor to ensure, with respect to memoranda of understanding
and international agreements it may conclude, that material it
has obtained from foreign law enforcement agencies acting to
investigate or pursue the enforcement of foreign criminal laws
may be used for the purpose of investigation, prosecution, or
prevention of violations of United States criminal laws.
``(l) Expenditures for Cooperative Arrangements.--The Commission
may expend appropriated funds for--
``(1) operating expenses and other costs of bilateral and
multilateral cooperative law enforcement groups conducting
activities of interest to the Commission and in which the
Commission participates; and
``(2) expenses for consultations and meetings hosted by the
Commission with foreign government agency officials, members of
their delegations, appropriate representatives and staff to
exchange views concerning developments relating to the
Commission's mission, development and implementation of
cooperation agreements, and provision of technical assistance
for the development of foreign consumer protection or
competition regimes, such expenses to include necessary
administrative and logistic expenses and the expenses of
Commission staff and foreign invitees in attendance at such
consultations and meetings including--
``(A) such incidental expenses as meals taken in
the course of such attendance;
``(B) any travel and transportation to or from such
meetings; and
``(C) any other related lodging or subsistence.''.
(c) Authorization of Appropriations.--The Federal Trade Commission
is authorized to expend appropriated funds not to exceed $100,000 per
fiscal year for purposes of section 6(l) of the Federal Trade
Commission Act (15 U.S.C. 46(l)) (as added by subsection (b) of this
Act), including operating expenses and other costs of the following
bilateral and multilateral cooperative law enforcement agencies and
organizations:
(1) The International Consumer Protection and Enforcement
Network.
(2) The International Competition Network.
(3) The Mexico-U.S.-Canada Health Fraud Task Force.
(4) Project Emptor.
(5) The Toronto Strategic Partnership and other regional
partnerships with a nexus in a Canadian province.
(d) Conforming Amendment.--Section 6 of the Federal Trade
Commission Act (15 U.S.C. 46) is amended by striking ``clauses (a) and
(b)'' in the proviso following subsection (l) (as added by subsection
(b) of this section) and inserting ``subsections (a), (b), and (j)''.
SEC. 5. REPRESENTATION IN FOREIGN LITIGATION.
Section 16 of the Federal Trade Commission Act (15 U.S.C. 56) is
amended by adding at the end the following:
``(c) Foreign Litigation.--
``(1) Commission attorneys.--With the concurrence of the
Attorney General, the Commission may designate Commission
attorneys to assist the Attorney General in connection with
litigation in foreign courts on particular matters in which the
Commission has an interest.
``(2) Reimbursement for foreign counsel.--The Commission is
authorized to expend appropriated funds, upon agreement with
the Attorney General, to reimburse the Attorney General for the
retention of foreign counsel for litigation in foreign courts,
and for expenses related to litigation in foreign courts in
which the Commission has an interest.
``(3) Limitation on use of funds.--Nothing in this
subsection authorizes the payment of claims or judgments from
any source other than the permanent and indefinite
appropriation authorized by section 1304 of title 31, United
States Code.
``(4) Other authority.--The authority provided by this
subsection is in addition to any other authority of the
Commission or the Attorney General.''.
SEC. 6. SHARING INFORMATION WITH FOREIGN LAW ENFORCEMENT AGENCIES.
(a) Material Obtained Pursuant to Compulsory Process.--Section
21(b)(6) of the Federal Trade Commission Act (15 U.S.C. 57b-2(b)(6)) is
amended by adding at the end the following: ``The custodian may make
such material available to any foreign law enforcement agency upon the
prior certification of an appropriate official of any such foreign law
enforcement agency, either by a prior agreement or memorandum of
understanding with the Commission or by other written certification,
that such material will be maintained in confidence and will be used
only for official law enforcement purposes, if--
``(A) the foreign law enforcement agency has set forth a
bona fide legal basis for its authority to maintain the
material in confidence;
``(B) the materials are to be used for purposes of
investigating, or engaging in enforcement proceedings related
to, possible violations of--
``(i) foreign laws prohibiting fraudulent or
deceptive commercial practices or other practices
substantially similar to practices prohibited by any
law administered by the Commission;
``(ii) a law administered by the Commission, if
disclosure of the material would further a Commission
investigation or enforcement proceeding; or
``(iii) with the approval of the Attorney General,
other foreign criminal laws, if such foreign criminal
laws are offenses defined in or covered by a criminal
mutual legal assistance treaty in force between the
government of the United States and the foreign law
enforcement agency's government;
``(C) the appropriate Federal banking agency (as defined in
section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
1813(q))) or, in the case of a Federal credit union, the
National Credit Union Administration, has given its prior
approval if the materials to be provided under subparagraph (B)
are requested by the foreign law enforcement agency for the
purpose of investigating, or engaging in enforcement
proceedings based on, possible violations of law by a bank, a
savings and loan institution described in section 18(f)(3) of
the Federal Trade Commission Act (15 U.S.C. 57a(f)(3)), or a
Federal credit union described in section 18(f)(4) of the
Federal Trade Commission Act (15 U.S.C. 57a(f)(4)); and
``(D) the foreign law enforcement agency is not from a
country that the Secretary of State has determined, in
accordance with section 6(j) of the Export Administration Act
of 1979 (50 U.S.C. App. 2405(j)), has repeatedly provided
support for acts of international terrorism, unless and until
such determination is rescinded pursuant to section 6(j)(4) of
that Act (50 U.S.C. App. 2405(j)(4)).
Nothing in the preceding sentence authorizes the disclosure of material
obtained in connection with the administration of the Federal antitrust
laws or foreign antitrust laws (as defined in paragraphs (5) and (7),
respectively, of section 12 of the International Antitrust Enforcement
Assistance Act of 1994 (15 U.S.C. 6211)) to any officer or employee of
a foreign law enforcement agency.''.
(b) Information Supplied by and About Foreign Sources.--Section
21(f) of the Federal Trade Commission Act (15 U.S.C. 57b-2(f)) is
amended to read as follows--
``(f) Exemption From Public Disclosure.--
``(1) In general.--Any material which is received by the
Commission in any investigation, a purpose of which is to
determine whether any person may have violated any provision of
the laws administered by the Commission, and which is provided
pursuant to any compulsory process under this Act or which is
provided voluntarily in place of such compulsory process shall
not be required to be disclosed under section 552 of title 5,
United States Code, or any other provision of law, except as
provided in paragraph (2)(B) of this section.
``(2) Material obtained from a foreign source.--
``(A) Except as provided in subparagraph (B) of
this paragraph, the Commission shall not be required to
disclose under section 552 of title 5, United States
Code, or any other provision of law--
``(i) any material obtained from a foreign
law enforcement agency or other foreign
government agency, if the foreign law
enforcement agency or other foreign government
agency has requested confidential treatment, or
has precluded such disclosure under other use
limitations, as a condition of providing the
material;
``(ii) any material reflecting a consumer
complaint obtained from any other foreign
source, if that foreign source supplying the
material has requested confidential treatment
as a condition of providing the material; or
``(iii) any material reflecting a consumer
complaint submitted to a Commission reporting
mechanism sponsored in part by foreign law
enforcement agencies or other foreign
government agencies.
``(B) Nothing in this subsection shall authorize
the Commission to withhold information from the
Congress or prevent the Commission from complying with
an order of a court of the United States in an action
commenced by the United States or the Commission.''.
SEC. 7. CONFIDENTIALITY, DELAYED NOTICE OF PROCESS.
(a) In General.--The Federal Trade Commission Act (15 U.S.C. 41 et
seq.) is amended by inserting after section 21 the following:
``SEC. 21A. CONFIDENTIALITY AND DELAYED NOTICE OF COMPULSORY PROCESS
FOR CERTAIN THIRD PARTIES.
``(a) Application With Other Laws.--The Right to Financial Privacy
Act (12 U.S.C. 3401 et seq.) and chapter 121 of title 18, United States
Code, shall apply with respect to the Commission, except as otherwise
provided in this section.
``(b) Procedures for Delay of Notification or Prohibition of
Disclosure.--The procedures for delay of notification or prohibition of
disclosure under the Right to Financial Privacy Act (12 U.S.C. 3401 et
seq.) and chapter 121 of title 18, United States Code, including
procedures for extensions of such delays or prohibitions, shall be
available to the Commission, provided that, notwithstanding any
provision therein--
``(1) a court may issue an order delaying notification or
prohibiting disclosure (including extending such an order) in
accordance with the procedures of section 1109 of the Right to
Financial Privacy Act (12 U.S.C. 3409) (if notification would
otherwise be required under that Act), or section 2705 of title
18, United States Code, (if notification would otherwise be
required under chapter 121 of that title), if the presiding
judge or magistrate judge finds that there is reason to believe
that such notification or disclosure may cause an adverse
result, as defined in subsection (g); and
``(2) if notification would otherwise be required under
chapter 121 of title 18, United States Code, the Commission may
delay notification (including extending such a delay) upon the
execution of a written certification in accordance with the
procedures of section 2705 of that title if the Commission
finds that there is reason to believe that notification may
cause an adverse result, as defined in subsection (g).
``(c) Ex Parte Application by Commission.--
``(1) In general.--If neither notification nor delayed
notification by the Commission is required under the Right to
Financial Privacy Act (12 U.S.C. 3401 et seq.) or chapter 121
of title 18, United States Code, the Commission may apply ex
parte to a presiding judge or magistrate judge for an order
prohibiting the recipient of compulsory process issued by the
Commission from disclosing to any other person the existence of
the process, notwithstanding any law or regulation of the
United States, or under the constitution, or any law or
regulation, of any State, political subdivision of a State,
territory of the United States, or the District of Columbia.
The presiding judge or magistrate judge may enter such an order
granting the requested prohibition of disclosure for a period
not to exceed 60 days if there is reason to believe that
disclosure may cause an adverse result, as defined in
subsection (g). The presiding judge or magistrate judge may
grant extensions of this order of up to 30 days each in
accordance with this subsection, except that in no event shall
the prohibition continue in force for more than a total of 9
months.
``(2) Application.--This subsection shall apply only in
connection with compulsory process issued by the Commission
where the recipient of such process is not a subject of the
investigation or proceeding at the time such process is issued.
``(3) Limitation.--No order issued under this subsection
shall prohibit any recipient from disclosing to a Federal
agency that the recipient has received compulsory process from
the Commission.
``(d) No Liability for Failure to Notify.--If neither notification
nor delayed notification by the Commission is required under the Right
to Financial Privacy Act (12 U.S.C. 3401 et seq.) or chapter 121 of
title 18, United States Code, the recipient of compulsory process
issued by the Commission under this Act shall not be liable under any
law or regulation of the United States, or under the constitution, or
any law or regulation, of any State, political subdivision of a State,
territory of the United States, or the District of Columbia, or under
any contract or other legally enforceable agreement, for failure to
provide notice to any person that such process has been issued or that
the recipient has provided information in response to such process. The
preceding sentence does not exempt any recipient from liability for--
``(1) the underlying conduct reported;
``(2) a failure to comply with the record retention
requirements under section 1104(c) of the Right to Financial
Privacy Act (12 U.S.C. 3404), where applicable; or
``(3) any failure to comply with any obligation the
recipient may have to disclose to a Federal agency that the
recipient has received compulsory process from the Commission
or intends to provide or has provided information to the
Commission in response to such process.
``(e) Venue and Procedure.--
``(1) In general.--All judicial proceedings initiated by
the Commission under the Right to Financial Privacy Act (12
U.S.C. 3401 et seq.), chapter 121 of title 18, United States
Code, or this section may be brought in the United States
District Court for the District of Columbia or any other
appropriate United States District Court. All ex parte
applications by the Commission under this section related to a
single investigation may be brought in a single proceeding.
``(2) In camera proceedings.--Upon application by the
Commission, all judicial proceedings pursuant to this section
shall be held in camera and the records thereof sealed until
expiration of the period of delay or such other date as the
presiding judge or magistrate judge may permit.
``(f) Section not to Apply to Antitrust Investigations or
Proceedings.--This section shall not apply to an investigation or
proceeding related to the administration of Federal antitrust laws or
foreign antitrust laws as defined in paragraphs (5) and (7),
respectively, of section 12 of the International Antitrust Enforcement
Assistance Act of 1994 (15 U.S.C. 6211).
``(g) Adverse Result Defined.--For purposes of this section the
term `adverse result' means--
``(1) endangering the life or physical safety of an
individual;
``(2) flight from prosecution;
``(3) the destruction of, or tampering with, evidence;
``(4) the intimidation of potential witnesses; or
``(5) otherwise seriously jeopardizing an investigation or
proceeding related to fraudulent or deceptive commercial
practices or persons involved in such practices, or unduly
delaying a trial related to such practices or persons involved
in such practices, including, but not limited to, by--
``(A) the transfer outside the territorial limits
of the United States of assets or records related to
fraudulent or deceptive commercial practices or related
to persons involved in such practices;
``(B) impeding the ability of the Commission to
identify persons involved in fraudulent or deceptive
commercial practices, or to trace the source or
disposition of funds related to such practices; or
``(C) the dissipation, fraudulent transfer, or
concealment of assets subject to recovery by the
Commission.''.
(b) Conforming Amendment.--Section 16(a)(2) of the Federal Trade
Commission Act (15 U.S.C. 56(a)(2)) is amended--
(1) in subparagraph (C) by striking ``or'' after the
semicolon;
(2) in subparagraph (D) by inserting ``or'' after the
semicolon; and
(3) by inserting after subparagraph (D) the following:
``(E) under section 21A of this Act;''.
SEC. 8. PROTECTION FOR VOLUNTARY PROVISION OF INFORMATION.
The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is further
amended by adding after section 21A (as added by section 7 of this Act)
the following:
``SEC. 21B. PROTECTION FOR VOLUNTARY PROVISION OF INFORMATION.
``(a) In General.--
``(1) No liability for providing certain material.--An
entity described in paragraphs (2) or (3) of subsection (d)
that voluntarily provides material to the Commission that such
entity reasonably believes is relevant to--
``(A) a possible unfair or deceptive act or
practice, as defined in section 5(a) of this Act; or
``(B) assets subject to recovery by the Commission,
including assets located in foreign jurisdictions;
shall not be liable to any person under any law or regulation
of the United States, or under the constitution, or any law or
regulation, of any State, political subdivision of a State,
territory of the United States, or the District of Columbia,
for such provision of material or for any failure to provide
notice of such provision of material or of intention to provide
material.
``(2) Limitations.--Nothing in this subsection shall be
construed to exempt any such entity from liability--
``(A) for the underlying conduct reported; or
``(B) to any Federal agency for providing such
material or for any failure to comply with any
obligation the entity may have to notify a Federal
agency prior to providing such material to the
Commission.
``(b) Certain Financial Institutions.--An entity described in
paragraph (1) of subsection (d) shall, in accordance with section
5318(g)(3) of title 31, United States Code, be exempt from liability
for making a voluntary disclosure to the Commission of any possible
violation of law or regulation, including--
``(1) a disclosure regarding assets, including assets
located in foreign jurisdictions--
``(A) related to possibly fraudulent or deceptive
commercial practices;
``(B) related to persons involved in such
practices; or
``(C) otherwise subject to recovery by the
Commission; or
``(2) a disclosure regarding suspicious chargeback rates
related to possibly fraudulent or deceptive commercial
practices.
``(c) Consumer Complaints.--Any entity described in subsection (d)
that voluntarily provides consumer complaints sent to it, or
information contained therein, to the Commission shall not be liable to
any person under any law or regulation of the United States, or under
the constitution, or any law or regulation, of any State, political
subdivision of a State, territory of the United States, or the District
of Columbia, for such provision of material or for any failure to
provide notice of such provision of material or of intention to so
provide material. This subsection shall not provide any exemption from
liability for the underlying conduct.
``(d) Application.--This section applies to the following entities,
whether foreign or domestic:
``(1) A financial institution as defined in section 5312 of
title 31, United States Code.
``(2) To the extent not included in paragraph (1) a bank or
thrift institution, a commercial bank or trust company, an
investment company, a credit card issuer, an operator of a
credit card system, and an issuer, redeemer, or cashier of
travelers' checks, money orders, or similar instruments.
``(3) A courier service, a commercial mail receiving
agency, an industry membership organization, a payment system
provider, a consumer reporting agency, a domain name registrar
or registry acting as such, and a provider of alternative
dispute resolution services.
``(4) An Internet service provider or provider of telephone
services.''.
SEC. 9. STAFF EXCHANGES.
The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended
by adding after section 25 the following new section:
``SEC. 25A. STAFF EXCHANGES.
``(a) In General.--The Commission may--
``(1) retain or employ officers or employees of foreign
government agencies on a temporary basis as employees of the
Commission pursuant to section 2 of this Act, or section 3101
or section 3109 of title 5, United States Code; and
``(2) detail officers or employees of the Commission to
work on a temporary basis for appropriate foreign government
agencies.
``(b) Reciprocity and Reimbursement.--The staff arrangements
described in subsections (a) need not be reciprocal. The Commission may
accept payment or reimbursement, in cash or in kind, from a foreign
government agency to which this section is applicable, or payment or
reimbursement made on behalf of such agency, for expenses incurred by
the Commission, its members, and employees in carrying out such
arrangements.
``(c) Standards of Conduct.--A person appointed under subsection
(a)(1) shall be subject to the provisions of law relating to ethics,
conflicts of interest, corruption, and any other criminal or civil
statute or regulation governing the standards of conduct for Federal
employees that are applicable to the type of appointment.''.
SEC. 10. INFORMATION SHARING WITH FINANCIAL REGULATORS.
Section 1112(e) of the Right to Financial Privacy Act of 1978 (12
U.S.C. 3412(e)) is amended by inserting ``the Federal Trade
Commission,'' after ``the Securities and Exchange Commission,''.
SEC. 11. PRESERVATION OF EXISTING AUTHORITY.
The authority provided by this Act, and by the Federal Trade
Commission Act (15 U.S.C. 41 et seq.) and the Right to Financial
Privacy Act (12 U.S.C. 3401 et seq.), as such Acts are amended by this
Act, is in addition to, and not in lieu of, any other authority vested
in the Federal Trade Commission or any other officer of the United
States.
SEC. 12. REPORT.
Not later than 3 years after the date of enactment of this Act, the
Federal Trade Commission shall transmit to Congress a report describing
its use of and experience with the authority granted by this Act, along
with any recommendations for additional legislation. The report shall
include--
(1) the number of cross-border complaints received by the
Commission;
(2) identification of the foreign agencies to which the
Commission has provided nonpublic investigative information
under this Act;
(3) the number of times the Commission has used compulsory
process on behalf of foreign law enforcement agencies pursuant
to section 6 of the Federal Trade Commission Act (15 U.S.C.
46), as amended by section 4 of this Act;
(4) a list of international agreements and memoranda of
understanding executed by the Commission that relate to this
Act;
(5) the number of times the Commission has sought delay of
notice pursuant to section 21A of the Federal Trade Commission
Act, as added by section 7 of this Act, and the number of times
a court has granted a delay;
(6) a description of the types of information private
entities have provided voluntarily pursuant to section 21B of
the Federal Trade Commission Act, as added by section 8 of this
Act;
(7) a description of the results of cooperation with
foreign law enforcement agencies under section 21 of the
Federal Trade Commission Act (15 U.S.C. 57-2) as amended by
section 6 of this Act;
(8) an analysis of whether the lack of an exemption from
the disclosure requirements of section 552 of title 5, United
States Code, with regard to information or material voluntarily
provided relevant to possible unfair or deceptive acts or
practices, has hindered the Commission in investigating or
engaging in enforcement proceedings against such practices; and
(9) a description of Commission litigation brought in
foreign courts.
Purpose and Summary
H.R. 3143, the ``International Consumer Protection Act of
2003'' or (``ICPA'') empowers the Federal Trade Commission
(``FTC'') to combat transnational fraudulent and deceptive
commercial practices by granting it new enforcement and
information sharing powers and allowing it to enter into
agreements with its counterpart foreign law enforcement and
consumer protection authorities. The ICPA will combat the
growing problem of cross-border fraud and deception perpetrated
from foreign jurisdictions or by foreign individuals that
adversely affect U.S. consumers and businesses. The legislation
also allows cooperation by the FTC with its foreign
counterparts in cases involving U.S. entities or persons
defrauding foreign consumers.
Background and Need for the Legislation
The advent of the Internet, improved telecommunications,
and the globalization of the economy have created incredible
opportunities by shrinking distances and blurring traditional
barriers. However, some of the international opportunities
being created today are not for legislative entrepreneurs and
consumers, but for more criminal's who seek to deceive and
defraud. What might be called ``cross-border fraud'' is a
burgeoning problem involving those who establish operations in
one country, and use communications that may cross multiple
national borders to deceive or defraud consumers in other
countries.
An increasing number of consumer complaints collected in
the Consumer Sentinel database maintained by the FTC, and an
increasing number of cases brought by it, involve foreign
consumers, foreign businesses or individuals, or assets or
evidence located outside the United States. In 2002, according
to the FTC, 14% of the complaints in the Consumer Sentinel
database (excluding identity theft complaints) were cross-
border complaints, up from 11% in 2000. The 2002 complaints
include over 24,000 complaints by U.S. consumers against
foreign businesses.
Increasingly, the FTC reports that its fraud or deceptive
practices related investigations and cases have some
transnational component. For instance, a typical spam related
case may involve a foreign sender or an e-mail message that
crosses several national boundaries en route to its final
destination. To better enforce existing fraud and consumer
protection laws and meet the enforcement expectations of
Congress, the FTC believes better international cooperation and
additional tools are critical.
The Committee has been informed by the FTC that the
additional authority provided to it in this legislation mirrors
existing authority given to the Securities and Exchange
Commission and some other regulatory agencies. The Committee
understands that the legislation is not intended to be a bold
departure giving unprecedented authorities to the FTC but
rather is intended to harmonize the FTC's international
enforcement and investigatory powers with those of other
similar independent regulatory agencies.
The Committee's favorably reported this legislation with an
amendment that represents the product of discussions between
the FTC and DOJ. This action represents a judgment that the
amendment has improved the bill in some respects: 1)
incorporating a greater consultative role for the Attorney
General when the FTC interacts and makes agreements with
foreign law enforcement agencies or engages in foreign
litigation; 2) preventing interference with Memoranda of
Understanding (``MOU'') with other countries on criminal
matters and the referral of information related to criminal
violations with the Department of Justice; 3) including greater
safeguards for the sharing of information on U.S. citizens and
entities with foreign consumer protection authorities; 4)
ensuring (because of a concern raised by the Committee) that
state sponsors of terrorism do not receive cooperation or
information; 5) placing greater limits on use of materials
obtained by FTC's compulsory process powers; 6) placing greater
limits on use of delayed notice by the FTC when information is
sought from third parties that are not the target of an
investigation; and 7) improving the Federal Government's
liability exposure when the FTC employs volunteer services by
mirroring language of the Volunteer Protection Act of 1997 \1\
rather than the Federal Tort Claims Act.
---------------------------------------------------------------------------
\1\ Pub. L. No. 105-19; codified at 42 U.S.C. Sec. 14503 et. seq.
(2003).
---------------------------------------------------------------------------
As the House Committee on Energy and Commerce noted in its
report on H.R. 3143, this legislation: ``will likely improve
the ability of the Commission and its foreign counterparts to
share information about cross-border fraud and deception, to
conduct joint and parallel investigations [to], render
assistance to each other'' and it ``is critical to achieve more
timely and effective enforcement in cross-border cases.'' \2\
The Committee on the Judiciary does not dispute these findings
about the merits and necessity of the legislation, and it is
concerned about the growing threat of trans-border fraud and
deceptive practices.
---------------------------------------------------------------------------
\2\ H.R. Rept. No. 108-635, Part 1, page 2 (2004)
---------------------------------------------------------------------------
However, the legislation has drawn some criticism from
interest groups concerned about information sharing with
foreign governments, the potential for FTC investigation of
American citizens for activities that may be legal under U.S.
law but which are violations of foreign law, the circumstances
under which delayed notice may be used against the target of an
FTC investigation, and exceptions to the Freedom of Information
Act (``FOIA''). While the Committee believes that the amended
version of the legislation reported by the Committee, (which
embodies the text of H.R. 4996 as introduced) makes
improvements in all of these areas, concerns remain about the
scope of the powers sought, the FTC's need for them, and the
existence of adequate due process and privacy safeguards.
If this legislation becomes law, the Committee expects to
closely monitor the Commission's use of the resulting new
powers. The Committee believes it will be joined in these
oversight efforts by other committees of Congress and Executive
branch agencies in supervising the Commission's employment of
these new powers and monitoring the level of cooperation the
Commission receives from foreign counterpart agencies. The
foremost oversight concern should be any abuses of information
shared about U.S. entities or persons with foreign consumer
protection authorities. The reporting requirements contained in
the legislation are serious, and the FTC should be on notice
that these new authorities can easily be revoked if they are
not used properly or if Congress does not receive adequate
information concerning the FTC's employment of them.
Hearings
No hearings were held by the Committee on the Judiciary on
H.R. 3143 or H.R. 4996.
Committee Consideration
On September 30, 2004, the Committee met in open session
and ordered favorably reported the bill H.R. 3143, with an
amendment, by voice vote, a quorum being present.
Vote of the Committee
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee notes that there
were no recorded votes during the committee's consideration of
H.R. 3143.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 3143, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 14, 2004.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3143, the
International Consumer Protection Act of 2004.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Melissa E.
Zimmerman (for federal costs), who can be reached at 226-2860,
Sarah Puro (for the impact on state and local governments), who
can be reached at 225-3220, and Selena Caldera (for the
private-sector impact), who can be reached at 226-2940.
Sincerely,
Douglas Holtz-Eakin.
Enclosure
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 3143--International Consumer Protection Act of 2004.
H.R. 3143 would expand the authority of the Federal Trade
Commission (FTC) to work with foreign law enforcement agencies
to enforce laws prohibiting fraudulent and deceptive commercial
practices. The bill would allow temporary staff exchanges
between foreign government agencies and the FTC and would
authorize the agency to accept payment in-kind or reimbursement
for costs associated with such exchanges. It also would
authorize the appropriation of up to $100,000 a year for the
FTC to support activities of certain international law
enforcement groups.
Assuming appropriation of the amounts specified in H.R.
3143, CBO estimates that implementing the bill would cost less
than $500,000 over the 2004-2008 period. Enacting the bill
would not affect direct spending or revenues.
H.R. 3143 would authorize the FTC to request that a judge
order the recipient of a summons, subpoena, or other compulsory
process to delay giving notice to anyone that they have been
required to appear as a witness before, or to produce documents
in, an FTC proceeding. The order could be issued,
notwithstanding any State or local laws or regulations, if
there is reason to believe that notification would cause
certain adverse results. Further, the recipient would not be
liable under any State or local laws or regulations for
disclosing information or for failure to provide notice. The
bill also would protect certain entities that voluntarily
provide specified material to the FTC from liability under any
State or local law or regulation that precludes disclosure of
information or requires notification to the interested third
party.
To the extent that State and local governments have laws
that contradict these provisions, the legislation would preempt
those laws and thereby impose mandates under the Unfunded
Mandates Reform Act (UMRA). CBO estimates that the cost of
those mandates would be minimal and would not exceed the
threshold established in UMRA ($60 million in 2004, adjusted
annually for inflation).
H.R. 3143 would exempt from liability those entities
providing certain information on third parties to the FTC. This
exemption would limit the ability of a third party to sue and
thus impose a private-sector mandate under UMRA. CBO estimates
that the cost to the private sector would be minimal and would
fall below the annual threshold for private-sector mandates
established in UMRA ($120 million in 2004, adjusted annually
for inflation).
Section 21B of the Federal Trade Commission Act, as amended
by H.R. 3143, would protect from liability entities voluntarily
providing information to the FTC about possible unfair or
deceptive acts or practices of third parties. By exempting
those entities from liability, H.R. 3143 would limit the
ability of third parties to sue for disclosure or failure to
provide notice of disclosure; such a limit constitutes a
private-sector mandate under UMRA. The direct cost of the
mandate would be the amount awarded in settlements and
judgments (net of costs) to third parties under current law
that would be precluded under H.R. 3143. Due to the exposure to
liability under current law, entities do not voluntarily
provide information on third parties to the FTC. CBO estimates
the costs to the private sector would be minimal, since few, if
any, third-party lawsuits are filed.
On July 9, 2003, CBO transmitted a cost estimate for S.
1234, the Federal Trade Commission Reauthorization Act of 2003,
as ordered reported by the Senate Committee on Commerce,
Science, and Transportation on June 19, 2003. On October 8,
2003, CBO transmitted a cost estimate for H.R. 3143, the
International Consumer Protection Act of 2003, as ordered
reported by the House Committee on Energy and Commerce on
October 1, 2003. H.R. 3143, as ordered reported by the House
Committee on the Judiciary, is nearly identical to the version
of H.R. 3143 that was ordered reported by the House Committee
on Energy and Commerce. The bill contains similar provisions to
those in title II of S. 1234, although S. 1234 would authorize
funding for all operations of the FTC, and this bill would
authorize funding only for support to certain international
law-enforcement groups. All three bills would preempt State and
local law in the same way and would impose the same private-
sector mandate.
The CBO staff contacts for this estimate are Melissa E.
Zimmerman (for federal costs), who can be reached at 226-2860,
Sara Puro (for the impact on State and local governments), who
can be reached at 225-3220, and Selena Caldera (for the
private-sector impact), who can be reached at 226-2940. This
estimate was approved by Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
3143 is intended to protect consumers from cross border fraud
and deceptive commercial practices by improving the ability of
the Federal Trade Commission to cooperate with foreign
counterpart agencies and pursue perpetrators and the profits of
their conduct that are located in foreign jurisdictions.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, Sec. 8 of the Constitution.
Section-by-Section Analysis and Discussion
Section 1. Short Title. Section 1 establishes the short
title of the Act as the ``International Consumer Protection Act
of 2003.''
Section 2. Foreign Law Enforcement Agency Defined. Section
2 amends Sec. 4 of the Federal Trade Commission Act by adding a
definition of ``foreign law enforcement agency.'' It is defined
as: (1) any agency or judicial authority of a foreign
government, including a foreign state, a political subdivision
of a foreign state, or a multinational organization constituted
by and comprised of foreign states, that is vested with law
enforcement or investigative authority in civil, criminal, or
administrative matters; or, (2) any multinational multi-agency
organization to the extent that it is acting on behalf of an
entity described in subparagraph (A). This definition is
integral to the new powers related to court proceedings given
to the FTC throughout the bill.
Section 3. Availability of Remedies. Section 3 amends
Sec. 5(a) of the Federal Trade Commission Act extending the
remedies available under that section to ``unfair or deceptive
acts or practices'' involving foreign commerce. that: (1) cause
or are likely to cause reasonably foreseeable injury within the
United States; or (2) involve material conduct occurring within
the United States. Some of these remedies are administrative
and some involve court proceedings. The language extends both
types of these remedies to an entirely new area. See generally
15 U.S.C. Sec. 45.
Section 4. Powers of the Commission. Section 4 adds new
language to Sec. 6 of the FTCA (15 U.S.C. Sec. 46). First,
Sec. 4(a) of H.R. 3143 amends Sec. 6 of the FTCA to allow the
FTC to reveal confidential business information that it has
gathered in its investigations to foreign law enforcement
agencies. This information may include matters relevant to
criminal investigations that are being conducted by the
Department of Justice. Second, Sec. 4(b) creates new
subsections (j), (k), and (l) of Sec. 6 of the FTCA. New
subsection (j) gives the FTC broad new powers to share law
enforcement information with foreign law enforcement agencies,
to conduct investigations on their behalf, and to enter into
international agreements with them. New subsection (k) empowers
the FTC to receive information relating to criminal matters
from foreign law enforcement authorities and to refer it to the
Department of Justice. New subsection (l) authorizes the FTC to
spend appropriated funds for such purposes. Third, Sec. 4(c)
authorizes the expenditure of $100,000 per fiscal year for the
purposes of the new subsection (l).
Section 5. Representation in Foreign Litigation. Section 5
amends Sec. 16 of the Federal Trade Commission Act by adding a
new Sec. 16(c) to the FTCA (15 U.S.C. Sec. 56) providing that
the FTC can designate FTC attorneys to assist the Attorney
General in the conduct of foreign litigation relating to the
FTC (pursuant to a memorandum of understanding to be negotiated
between the Commission and the Attorney General) and to spend
appropriated funds to hire foreign attorneys to represent it in
foreign courts. The subsection also contains a disclaimer that
the subsection does not authorize the payment of claims from
any source other than the judgment fund. This language has
implications for the power of the Attorney General to direct
litigation on behalf of the United States. See 28 U.S.C.
Sec. 516.
Section 6. Sharing Information with Foreign Law Enforcement
Agencies. Section 6 adds new language to Sec. 21(b)(6) of the
FTCA (15 U.S.C. Sec. 57b-2(b)(6)) that would allow the FTC to
turn over information that it has obtained by compulsory
process enforced by U.S. Federal courts to foreign law
enforcement agencies investigating civil and criminal law
violations subject to certain conditions. This section provides
that the Commission may make material obtained pursuant to
compulsory process available to any foreign law enforcement
agency upon appropriate certification that such material will
be maintained in confidence and will be used only for official
law enforcement purposes. The materials are to be used for
purposes of investigating, or engaging in enforcement
proceedings related to, possible violations of: (1) foreign
laws prohibiting fraudulent or deceptive commercial practices
or other practices, substantially similar to practices
prohibited by any law administered by the Commission; (2) a law
administered by the Commission, if disclosure of the material
would further a Commission investigation or enforcement
proceeding; or (3) with the approval of the Attorney General,
other foreign criminal laws, if such foreign criminal laws are
offenses defined or covered by a criminal mutual legal
assistance treaty in force between the United States and the
foreign law enforcement authority's state. However, the FTC
shall not make available such material to a foreign law
enforcement agency where the activity the person is engaged in
is protected under the Constitution of the United States.
Section 6 also exempts from the Freedom of Information Act,
except in limited circumstances, all information that the FTC
receives in any investigation from a foreign law enforcement or
consumer protection agency as well as consumer complaint
information received from non-governmental foreign sources when
the agency or foreign source providing the material requests
confidentiality as a condition of providing the information.
However, this subsection does not authorize the Commission to
withhold information from the Congress or prevent the
Commission from complying with an order of a court in an action
commenced by the Commission or the United States.
Section 7. Confidentiality, Delayed Notice of Process.
Section 7 creates a new Sec. 21A of the FTCA. This section
gives the FTC power to use the provisions of the Electronic
Communications Privacy Act, including the delayed notice
provisions. See 18 U.S.C. Sec. 2701 et seq. The new section
also establishes court procedures for the use of these powers.
In general, the procedures for delay or prohibition of notice
under the Electronic Communications Privacy Act (18 U.S.C.
Sec. 2701 et seq.) are also made available to the Commission.
In the case of ECPA, the notification is delayed pursuant to
Sec. 2705(a)(1)(B) of Title 18, upon a finding by the
Commission that there is reason to believe that notification
may cause an ``adverse result.'' If the procedures for delay or
prohibition of notice under the Right to Financial Privacy Act
and the Electronic Communications Privacy Act do not apply,
under Sec. 21(A)(c) the Commission may apply ex parte to a
presiding judge or magistrate judge for an order commanding the
recipient of compulsory process issued by the Commission not to
notify any other person of the existence of the process,
notwithstanding any other law. The presiding judge or
magistrate judge may, in turn, enter such an order granting the
requested delay for a period not to exceed 60 days, if there is
reason to believe that notification may cause an adverse
result. The presiding judge or magistrate judge may grant
extensions of this delay of notice of up to 30 days each in
accordance with this subsection, provided that in no event
shall the notice be delayed for more than a total of 9 months.
The recipient of compulsory process issued by the Commission
under this Sec. 21(A)(d) shall not be liable under any law or
under any contract or other legally enforceable agreement, for
failure to provide notice that such process has been issued or
that the recipient has provided information in response to such
process. In doing so, the recipient is not provided with any
exemption from liability for: (1) the underlying conduct
reported; (2) noncompliance with the record retention
requirements under Sec. 3404 of title 12; or (3) noncompliance
with any requirement of a Federal Government agency to disclose
information to that agency. For purposes of this section, the
term ``adverse result'' is defined in detail.20
Section 8. Protection for Voluntary Provision of
Information. Section 8 creates a new Sec. 21B of the FTCA. This
section gives immunity from suit to various persons or entities
who voluntarily disclose information to the FTC that may help
it in an investigation if the entity reasonably believes that
such disclosures are relevant to possible unfair or deceptive
practices, or assets subject to recovery by the Commission,
including assets located in overseas. The section does not
provide any exemption from liability for the underlying
conduct.
Section 9. Staff Exchanges. Section 9 creates a new
Sec. 25A of the FTCA. This section gives the FTC authority to
exchange employees with foreign law enforcement authorities and
it makes those foreign law enforcement
Section 10. Information Sharing with Financial Regulators.
Section 10 amends Sec. 1112(e) of the Right to Financial
Privacy Act (12 U.S.C. Sec. 3412(e)) by adding ``the Federal
Trade Commission'' after ``the Securities and Exchange
Commission.'' This includes the FTC in an exemption that allows
Federal financial and market regulators, including the SEC, to
share financial records, examination reports, or other
appropriate information.
Section 11. Report. Section 11 requires the FTC to report
to Congress not later than 3 years after the date of enactment
on the use of the various new authorities granted by the Act.
Agency Views
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
FEDERAL TRADE COMMISSION ACT
* * * * * * *
Sec. 4. The words defined in this section shall have the
following meaning when found in this Act, to wit:
``Commerce'' means commerce among the several States or
with foreign nations, or in any Territory of the United States
or in the District of Columbia, or between any such Territory
and another, or between any such Territory and any State or
foreign nation, or between the District of Columbia and any
State or Territory or foreign nation.
``Corporation'' shall be deemed to include any company,
trust, so-called Massachusetts trust, or association,
incorporated or unincorporated, which is organized to carry on
business for its own profit or that of its members, and has
shares of capital or capital stock or certificates of interest,
and any company, trust, so-called Massachusetts trust, or
association, incorporated or unincorporated, without shares of
capital or capital stock or certificates of interest, except
partnerships, which is organized to carry on business for its
own profit or that of its members.
``Documentary evidence'' includes all documents, papers,
correspondence, books of account, and financial and corporate
records.
``Acts to regulate commerce'' means the Act entitled ``An
Act to regulate commerce,'' approved February 14, 1887, and all
Acts amendatory thereof and supplementary thereto and the
Communications Act of 1934 and all Acts amendatory thereof and
supplementary thereto.
``Antitrust Acts'' means the Act entitled ``An Act to
protect trade and commerce against unlawful restraints and
monopolies,'' approved July 2, 1890; also sections 73 to 76,
inclusive, of an Act entitled ``An Act to reduce taxation, to
provide revenue for the Government, and for other purposes,''
approved August 27, 1894; also the Act entitled ``An Act to
amend sections 73 and 76 of the Act of August 27, 1894,
entitled `An Act to reduce taxation, to provide revenue for the
Government, and for other purposes,' '' approved February 12,
1913; and also the Act entitled ``An Act to supplement existing
laws against unlawful restraints and monopolies, and for other
purposes,'' approved October 15, 1914.
``Banks'' means the types of banks and other
financial institutions referred to in section 18(f)(2).
``Foreign law enforcement agency'' means--
(A) any agency or judicial authority of a foreign
government, including a foreign state, a political
subdivision of a foreign state, or a multinational
organization constituted by and comprised of foreign
states, that is vested with law enforcement or
investigative authority in civil, criminal, or
administrative matters; and
(B) any multinational or multiagency organization
to the extent that it is acting on behalf of an entity
described in subparagraph (A).
Sec. 5. (a)(1) * * *
* * * * * * *
(4)(A) For purposes of this subsection, the term ``unfair
or deceptive acts or practices'' shall include such acts or
practices involving foreign commerce that--
(i) cause or are likely to cause reasonably
foreseeable injury within the United States; or
(ii) involve material conduct occurring within the
United States.
(B) All remedies available to the Commission with respect
to unfair and deceptive acts or practices shall be available
for acts and practices described in this paragraph, including
restitution to domestic or foreign victims.
* * * * * * *
Sec. 6. That the commission shall also have power--
(a) * * *
* * * * * * *
(f) To make public from time to time such portions of the
information obtained by it hereunder as are in the public
interest; and to make annual and special reports to the
Congress and to submit therewith recommendations for additional
legislation; and to provide for the publication of its reports
and decisions in such form and manner as may be best adapted
for public information and use: Provided, That the Commission
shall not have any authority to make public any trade secret or
any commercial or financial information which is obtained from
any person and which is privileged or confidential, except that
the Commission may disclose such information (1) to officers
and employees of appropriate Federal law enforcement agencies
or to any officer or employee of any State law enforcement
agency upon the prior certification of an officer of any such
Federal or State law enforcement agency that such information
will be maintained in confidence and will be used only for
official law enforcement [purposes.] purposes, and (2) to any
officer or employee of any foreign law enforcement agency under
the same circumstances that making material available to
foreign law enforcement agencies is permitted under section
21(b).
* * * * * * *
(j) Investigative Assistance for Foreign Law Enforcement
Agencies.--
(1) In general.--Upon a written request from a
foreign law enforcement agency to provide assistance in
accordance with this subsection, if the requesting
agency states that it is investigating, or engaging in
enforcement proceedings against, possible violations of
laws prohibiting fraudulent or deceptive commercial
practices, or other practices substantially similar to
practices prohibited by any provision of the laws
administered by the Commission, other than Federal
antitrust laws (as defined in section 12(5) of the
International Antitrust Enforcement Assistance Act of
1994 (15 U.S.C. 6211(5))), the Commission may provide
the assistance described in paragraph (2) without
requiring that the conduct identified in the request
constitute a violation of the laws of the United
States.
(2) Type of assistance.--In providing assistance to
a foreign law enforcement agency under this subsection,
the Commission may--
(A) conduct such investigation as the
Commission deems necessary to collect
information and evidence pertinent to the
request for assistance, using all investigative
powers authorized by this Act; and
(B) when the request is from an agency
acting to investigate or pursue the enforcement
of civil laws, or when the Attorney General
refers a request to the Commission from an
agency acting to investigate or pursue the
enforcement of criminal laws, seek and accept
appointment by a United States district court
of Commission attorneys to provide assistance
to foreign and international tribunals and to
litigants before such tribunals on behalf of a
foreign law enforcement agency pursuant to
section 1782 of title 28, United States Code.
(3) Criteria for determination.--In deciding
whether to provide such assistance, the Commission
shall consider all relevant factors, including--
(A) whether the requesting agency has
agreed to provide or will provide reciprocal
assistance to the Commission;
(B) whether compliance with the request
would prejudice the public interest of the
United States; and
(C) whether the requesting agency's
investigation or enforcement proceeding
concerns acts or practices that cause or are
likely to cause injury to a significant number
of persons.
(4) International agreements.--If a foreign law
enforcement agency has set forth a legal basis for
requiring execution of an international agreement as a
condition for reciprocal assistance, or as a condition
for provision of materials or information to the
Commission, the Commission, with prior approval and
ongoing oversight of the Secretary of State, and with
final approval of the agreement by the Secretary of
State, may negotiate and conclude an international
agreement, in the name of either the United States or
the Commission, for the purpose of obtaining such
assistance, materials, or information. The Commission
may undertake in such an international agreement to--
(A) provide assistance using the powers set
forth in this subsection;
(B) disclose materials and information in
accordance with subsection (f) and section
21(b); and
(C) engage in further cooperation, and
protect materials and information received from
disclosure, as authorized by this Act.
(5) Additional authority.--The authority provided
by this subsection is in addition to, and not in lieu
of, any other authority vested in the Commission or any
other officer of the United States.
(6) Limitation.--The authority granted by this
subsection shall not authorize the Commission to take
any action or exercise any power with respect to a
bank, a savings and loan institution described in
section 18(f)(3) (15 U.S.C. 57a(f)(3)), a Federal
credit union described in section 18(f)(4) (15 U.S.C.
57a(f)(4)), or a common carrier subject to the Act to
regulate commerce, except in accordance with the
proviso following the last designated subsection of
section 6 (15 U.S.C. 46).
(7) Assistance to certain countries.--The
Commission may not provide investigative assistance
under this subsection to a foreign law enforcement
agency from a foreign state that the Secretary of State
has determined, in accordance with section 6(j) of the
Export Administration Act of 1979 (50 U.S.C. App.
2405(j)), has repeatedly provided support for acts of
international terrorism, unless and until such
determination is rescinded pursuant to section 6(j)(4)
of that Act (50 U.S.C. App. 2405(j)(4)).
(k) Referral of Evidence for Criminal Proceedings.--
(1) In general.--Whenever the Commission obtains
evidence that any person, partnership, or corporation,
either domestic or foreign, has engaged in conduct that
may constitute a violation of Federal criminal law, the
Commission may transmit such evidence to the Attorney
General, who may institute criminal proceedings under
appropriate statutes. Nothing in this paragraph affects
any other authority of the Commission to disclose
information.
(2) International information.--The Commission
shall endeavor to ensure, with respect to memoranda of
understanding and international agreements it may
conclude, that material it has obtained from foreign
law enforcement agencies acting to investigate or
pursue the enforcement of foreign criminal laws may be
used for the purpose of investigation, prosecution, or
prevention of violations of United States criminal
laws.
(l) Expenditures for Cooperative Arrangements.--The
Commission may expend appropriated funds for--
(1) operating expenses and other costs of bilateral
and multilateral cooperative law enforcement groups
conducting activities of interest to the Commission and
in which the Commission participates; and
(2) expenses for consultations and meetings hosted
by the Commission with foreign government agency
officials, members of their delegations, appropriate
representatives and staff to exchange views concerning
developments relating to the Commission's mission,
development and implementation of cooperation
agreements, and provision of technical assistance for
the development of foreign consumer protection or
competition regimes, such expenses to include necessary
administrative and logistic expenses and the expenses
of Commission staff and foreign invitees in attendance
at such consultations and meetings including--
(A) such incidental expenses as meals taken
in the course of such attendance;
(B) any travel and transportation to or
from such meetings; and
(C) any other related lodging or
subsistence.
Provided, That the exception of ``banks, savings and loan
institutions described in section 18(f)(3), Federal credit
unions described in section 18(f)(4), and common carriers
subject to the Act to regulate commerce'' from the Commission's
powers defined in [clauses (a) and (b)] subsections (a), (b),
and (j) of this section, shall not be construed to limit the
Commission's authority to gather and compile information to
investigate, or to require reports or answers from, any person,
partnership, or corporation to the extent that such action is
necessary to the investigation of any person, partnership, or
corporation, group of persons, partnerships, or corporations,
or industry which is not engaged, or is engaged only
incidentally in banking, in business as a savings and loan
institution, in business as a Federal credit union, or in
business as a common carrier subject to the Act to regulate
commerce.
The Commission shall establish a plan designed to
substantially reduce burdens imposed upon small businesses as a
result of requirements established by the Commission under
clause (b) relating to the filing of quarterly financial
reports. Such plan shall (1) be established after consultation
with small businesses and persons who use the information
contained in such quarterly financial reports; (2) provide for
a reduction of the number of small businesses required to file
such quarterly financial reports; and (3) make revisions in the
forms used for such quarterly financial reports for the purpose
of reducing the complexity of such forms. The Commission, not
later than December 31, 1980, shall submit such plan to the
Committee on Commerce, Science, and Transportation of the
Senate and to the Committee on Energy and Commerce of the House
of Representatives. Such plan shall take effect not later than
October 31, 1981.
No officer or employee of the Commission or any
Commissioner may publish or disclose information to the public,
or to any Federal agency, whereby any line-of-business data
furnished by a particular establishment or individual can be
identified. No one other than designated sworn officers and
employees of the Commission may examine the line-of-business
reports from individual firms, and information provided in the
line-of-business program administered by the Commission shall
be used only for statistical purposes. Information for carrying
out specific law enforcement responsibilities of the Commission
shall be obtained under practices and procedures in effect on
the date of the enactment of the Federal Trade Commission
Improvements Act of 1980, or as changed by law.
Nothing in this section (other than the provisions of
clause (c) and clause (d)) shall apply to the business of
insurance, except that the Commission shall have authority to
conduct studies and prepare reports relating to the business of
insurance. The Commission may exercise such authority only upon
receiving a request which is agreed to by a majority of the
members of the Committee on Commerce, Science, and
Transportation of the Senate or the Committee on Energy and
Commerce of the House of Representatives. The authority to
conduct any such study shall expire at the end of the Congress
during which the request for such study was made.
* * * * * * *
Sec. 16. (a)(1) * * *
(2) Except as otherwise provided in paragraph (3), in any
civil action--
(A) * * *
* * * * * * *
(C) to obtain judicial review of a rule prescribed
by the Commission, or a cease and desist order issued
under section 5 of this Act; [or]
(D) under the second paragraph of section 9 of this
Act (relating to enforcement of a subpena) and under
the fourth paragraph of such section (relating to
compliance with section 6 of this Act); or
(E) under section 21A of this Act;
* * * * * * *
(c) Foreign Litigation.--
(1) Commission attorneys.--With the concurrence of
the Attorney General, the Commission may designate
Commission attorneys to assist the Attorney General in
connection with litigation in foreign courts on
particular matters in which the Commission has an
interest.
(2) Reimbursement for foreign counsel.--The
Commission is authorized to expend appropriated funds,
upon agreement with the Attorney General, to reimburse
the Attorney General for the retention of foreign
counsel for litigation in foreign courts, and for
expenses related to litigation in foreign courts in
which the Commission has an interest.
(3) Limitation on use of funds.--Nothing in this
subsection authorizes the payment of claims or
judgments from any source other than the permanent and
indefinite appropriation authorized by section 1304 of
title 31, United States Code.
(4) Other authority.--The authority provided by
this subsection is in addition to any other authority
of the Commission or the Attorney General.
* * * * * * *
Sec. 21. (a) * * *
(b)(1) * * *
* * * * * * *
(6) The custodian of any documentary material, written
reports or answers to questions, and transcripts of oral
testimony may deliver to any officers or employees of
appropriate Federal law enforcement agencies, in response to a
written request, copies of such material for use in connection
with an investigation or proceeding under the jurisdiction of
any such agency. The custodian of any tangible things may make
such things available for inspection to such persons on the
same basis. Such materials shall not be made available to any
such agency until the custodian receives certification of any
officer of such agency that such information will be maintained
in confidence and will be used only for official law
enforcement purposes. Such documentary material, results of
inspections of tangible things, written reports or answers to
questions, and transcripts of oral testimony may be used by any
officer or employee of such agency only in such manner and
subject to such conditions as apply to the Commission under
this section. The custodian may make such materials available
to any State law enforcement agency upon the prior
certification of any officer of such agency that such
information will be maintained in confidence and will be used
only for official law enforcement purposes. The custodian may
make such material available to any foreign law enforcement
agency upon the prior certification of an appropriate official
of any such foreign law enforcement agency, either by a prior
agreement or memorandum of understanding with the Commission or
by other written certification, that such material will be
maintained in confidence and will be used only for official law
enforcement purposes, if--
(A) the foreign law enforcement agency has set
forth a bona fide legal basis for its authority to
maintain the material in confidence;
(B) the materials are to be used for purposes of
investigating, or engaging in enforcement proceedings
related to, possible violations of--
(i) foreign laws prohibiting fraudulent or
deceptive commercial practices or other
practices substantially similar to practices
prohibited by any law administered by the
Commission;
(ii) a law administered by the Commission,
if disclosure of the material would further a
Commission investigation or enforcement
proceeding; or
(iii) with the approval of the Attorney
General, other foreign criminal laws, if such
foreign criminal laws are offenses defined in
or covered by a criminal mutual legal
assistance treaty in force between the
government of the United States and the foreign
law enforcement agency's government;
(C) the appropriate Federal banking agency (as
defined in section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q))) or, in the case of a
Federal credit union, the National Credit Union
Administration, has given its prior approval if the
materials to be provided under subparagraph (B) are
requested by the foreign law enforcement agency for the
purpose of investigating, or engaging in enforcement
proceedings based on, possible violations of law by a
bank, a savings and loan institution described in
section 18(f)(3) of the Federal Trade Commission Act
(15 U.S.C. 57a(f)(3)), or a Federal credit union
described in section 18(f)(4) of the Federal Trade
Commission Act (15 U.S.C. 57a(f)(4)); and
(D) the foreign law enforcement agency is not from
a country that the Secretary of State has determined,
in accordance with section 6(j) of the Export
Administration Act of 1979 (50 U.S.C. App. 2405(j)),
has repeatedly provided support for acts of
international terrorism, unless and until such
determination is rescinded pursuant to section 6(j)(4)
of that Act (50 U.S.C. App. 2405(j)(4)).
Nothing in the preceding sentence authorizes the disclosure of
material obtained in connection with the administration of the
Federal antitrust laws or foreign antitrust laws (as defined in
paragraphs (5) and (7), respectively, of section 12 of the
International Antitrust Enforcement Assistance Act of 1994 (15
U.S.C. 6211)) to any officer or employee of a foreign law
enforcement agency.
* * * * * * *
[(f) Any material which is received by the Commission in
any investigation, a purpose of which is to determine whether
any person may have violated any provision of the laws
administered by the Commission, and which is provided pursuant
to any compulsory process under this Act or which is provided
voluntarily in place of such compulsory process shall be exempt
from disclosure under section 552 of title 5, United States
Code.]
(f) Exemption From Public Disclosure.--
(1) In general.--Any material which is received by
the Commission in any investigation, a purpose of which
is to determine whether any person may have violated
any provision of the laws administered by the
Commission, and which is provided pursuant to any
compulsory process under this Act or which is provided
voluntarily in place of such compulsory process shall
not be required to be disclosed under section 552 of
title 5, United States Code, or any other provision of
law, except as provided in paragraph (2)(B) of this
section.
(2) Material obtained from a foreign source.--
(A) Except as provided in subparagraph (B)
of this paragraph, the Commission shall not be
required to disclose under section 552 of title
5, United States Code, or any other provision
of law--
(i) any material obtained from a
foreign law enforcement agency or other
foreign government agency, if the
foreign law enforcement agency or other
foreign government agency has requested
confidential treatment, or has
precluded such disclosure under other
use limitations, as a condition of
providing the material;
(ii) any material reflecting a
consumer complaint obtained from any
other foreign source, if that foreign
source supplying the material has
requested confidential treatment as a
condition of providing the material; or
(iii) any material reflecting a
consumer complaint submitted to a
Commission reporting mechanism
sponsored in part by foreign law
enforcement agencies or other foreign
government agencies.
(B) Nothing in this subsection shall
authorize the Commission to withhold
information from the Congress or prevent the
Commission from complying with an order of a
court of the United States in an action
commenced by the United States or the
Commission.
SEC. 21A. CONFIDENTIALITY AND DELAYED NOTICE OF COMPULSORY PROCESS FOR
CERTAIN THIRD PARTIES.
(a) Application With Other Laws.--The Right to Financial
Privacy Act (12 U.S.C. 3401 et seq.) and chapter 121 of title
18, United States Code, shall apply with respect to the
Commission, except as otherwise provided in this section.
(b) Procedures for Delay of Notification or Prohibition of
Disclosure.--The procedures for delay of notification or
prohibition of disclosure under the Right to Financial Privacy
Act (12 U.S.C. 3401 et seq.) and chapter 121 of title 18,
United States Code, including procedures for extensions of such
delays or prohibitions, shall be available to the Commission,
provided that, notwithstanding any provision therein--
(1) a court may issue an order delaying
notification or prohibiting disclosure (including
extending such an order) in accordance with the
procedures of section 1109 of the Right to Financial
Privacy Act (12 U.S.C. 3409) (if notification would
otherwise be required under that Act), or section 2705
of title 18, United States Code, (if notification would
otherwise be required under chapter 121 of that title),
if the presiding judge or magistrate judge finds that
there is reason to believe that such notification or
disclosure may cause an adverse result, as defined in
subsection (g); and
(2) if notification would otherwise be required
under chapter 121 of title 18, United States Code, the
Commission may delay notification (including extending
such a delay) upon the execution of a written
certification in accordance with the procedures of
section 2705 of that title if the Commission finds that
there is reason to believe that notification may cause
an adverse result, as defined in subsection (g).
(c) Ex Parte Application by Commission.--
(1) In general.--If neither notification nor
delayed notification by the Commission is required
under the Right to Financial Privacy Act (12 U.S.C.
3401 et seq.) or chapter 121 of title 18, United States
Code, the Commission may apply ex parte to a presiding
judge or magistrate judge for an order prohibiting the
recipient of compulsory process issued by the
Commission from disclosing to any other person the
existence of the process, notwithstanding any law or
regulation of the United States, or under the
constitution, or any law or regulation, of any State,
political subdivision of a State, territory of the
United States, or the District of Columbia. The
presiding judge or magistrate judge may enter such an
order granting the requested prohibition of disclosure
for a period not to exceed 60 days if there is reason
to believe that disclosure may cause an adverse result,
as defined in subsection (g). The presiding judge or
magistrate judge may grant extensions of this order of
up to 30 days each in accordance with this subsection,
except that in no event shall the prohibition continue
in force for more than a total of 9 months.
(2) Application.--This subsection shall apply only
in connection with compulsory process issued by the
Commission where the recipient of such process is not a
subject of the investigation or proceeding at the time
such process is issued.
(3) Limitation.--No order issued under this
subsection shall prohibit any recipient from disclosing
to a Federal agency that the recipient has received
compulsory process from the Commission.
(d) No Liability for Failure to Notify.--If neither
notification nor delayed notification by the Commission is
required under the Right to Financial Privacy Act (12 U.S.C.
3401 et seq.) or chapter 121 of title 18, United States Code,
the recipient of compulsory process issued by the Commission
under this Act shall not be liable under any law or regulation
of the United States, or under the constitution, or any law or
regulation, of any State, political subdivision of a State,
territory of the United States, or the District of Columbia, or
under any contract or other legally enforceable agreement, for
failure to provide notice to any person that such process has
been issued or that the recipient has provided information in
response to such process. The preceding sentence does not
exempt any recipient from liability for--
(1) the underlying conduct reported;
(2) a failure to comply with the record retention
requirements under section 1104(c) of the Right to
Financial Privacy Act (12 U.S.C. 3404), where
applicable; or
(3) any failure to comply with any obligation the
recipient may have to disclose to a Federal agency that
the recipient has received compulsory process from the
Commission or intends to provide or has provided
information to the Commission in response to such
process.
(e) Venue and Procedure.--
(1) In general.--All judicial proceedings initiated
by the Commission under the Right to Financial Privacy
Act (12 U.S.C. 3401 et seq.), chapter 121 of title 18,
United States Code, or this section may be brought in
the United States District Court for the District of
Columbia or any other appropriate United States
District Court. All ex parte applications by the
Commission under this section related to a single
investigation may be brought in a single proceeding.
(2) In camera proceedings.--Upon application by the
Commission, all judicial proceedings pursuant to this
section shall be held in camera and the records thereof
sealed until expiration of the period of delay or such
other date as the presiding judge or magistrate judge
may permit.
(f) Section not to Apply to Antitrust Investigations or
Proceedings.--This section shall not apply to an investigation
or proceeding related to the administration of Federal
antitrust laws or foreign antitrust laws as defined in
paragraphs (5) and (7), respectively, of section 12 of the
International Antitrust Enforcement Assistance Act of 1994 (15
U.S.C. 6211).
(g) Adverse Result Defined.--For purposes of this section
the term ``adverse result'' means--
(1) endangering the life or physical safety of an
individual;
(2) flight from prosecution;
(3) the destruction of, or tampering with,
evidence;
(4) the intimidation of potential witnesses; or
(5) otherwise seriously jeopardizing an
investigation or proceeding related to fraudulent or
deceptive commercial practices or persons involved in
such practices, or unduly delaying a trial related to
such practices or persons involved in such practices,
including, but not limited to, by--
(A) the transfer outside the territorial
limits of the United States of assets or
records related to fraudulent or deceptive
commercial practices or related to persons
involved in such practices;
(B) impeding the ability of the Commission
to identify persons involved in fraudulent or
deceptive commercial practices, or to trace the
source or disposition of funds related to such
practices; or
(C) the dissipation, fraudulent transfer,
or concealment of assets subject to recovery by
the Commission.
SEC. 21B. PROTECTION FOR VOLUNTARY PROVISION OF INFORMATION.
(a) In General.--
(1) No liability for providing certain material.--
An entity described in paragraphs (2) or (3) of
subsection (d) that voluntarily provides material to
the Commission that such entity reasonably believes is
relevant to--
(A) a possible unfair or deceptive act or
practice, as defined in section 5(a) of this
Act; or
(B) assets subject to recovery by the
Commission, including assets located in foreign
jurisdictions;
shall not be liable to any person under any law or
regulation of the United States, or under the
constitution, or any law or regulation, of any State,
political subdivision of a State, territory of the
United States, or the District of Columbia, for such
provision of material or for any failure to provide
notice of such provision of material or of intention to
provide material.
(2) Limitations.--Nothing in this subsection shall
be construed to exempt any such entity from liability--
(A) for the underlying conduct reported; or
(B) to any Federal agency for providing
such material or for any failure to comply with
any obligation the entity may have to notify a
Federal agency prior to providing such material
to the Commission.
(b) Certain Financial Institutions.--An entity described in
paragraph (1) of subsection (d) shall, in accordance with
section 5318(g)(3) of title 31, United States Code, be exempt
from liability for making a voluntary disclosure to the
Commission of any possible violation of law or regulation,
including--
(1) a disclosure regarding assets, including assets
located in foreign jurisdictions--
(A) related to possibly fraudulent or
deceptive commercial practices;
(B) related to persons involved in such
practices; or
(C) otherwise subject to recovery by the
Commission; or
(2) a disclosure regarding suspicious chargeback
rates related to possibly fraudulent or deceptive
commercial practices.
(c) Consumer Complaints.--Any entity described in
subsection (d) that voluntarily provides consumer complaints
sent to it, or information contained therein, to the Commission
shall not be liable to any person under any law or regulation
of the United States, or under the constitution, or any law or
regulation, of any State, political subdivision of a State,
territory of the United States, or the District of Columbia,
for such provision of material or for any failure to provide
notice of such provision of material or of intention to so
provide material. This subsection shall not provide any
exemption from liability for the underlying conduct.
(d) Application.--This section applies to the following
entities, whether foreign or domestic:
(1) A financial institution as defined in section
5312 of title 31, United States Code.
(2) To the extent not included in paragraph (1) a
bank or thrift institution, a commercial bank or trust
company, an investment company, a credit card issuer,
an operator of a credit card system, and an issuer,
redeemer, or cashier of travelers' checks, money
orders, or similar instruments.
(3) A courier service, a commercial mail receiving
agency, an industry membership organization, a payment
system provider, a consumer reporting agency, a domain
name registrar or registry acting as such, and a
provider of alternative dispute resolution services.
(4) An Internet service provider or provider of
telephone services.
* * * * * * *
SEC. 25A. STAFF EXCHANGES.
(a) In General.--The Commission may--
(1) retain or employ officers or employees of
foreign government agencies on a temporary basis as
employees of the Commission pursuant to section 2 of
this Act, or section 3101 or section 3109 of title 5,
United States Code; and
(2) detail officers or employees of the Commission
to work on a temporary basis for appropriate foreign
government agencies.
(b) Reciprocity and Reimbursement.--The staff arrangements
described in subsections (a) need not be reciprocal. The
Commission may accept payment or reimbursement, in cash or in
kind, from a foreign government agency to which this section is
applicable, or payment or reimbursement made on behalf of such
agency, for expenses incurred by the Commission, its members,
and employees in carrying out such arrangements.
(c) Standards of Conduct.--A person appointed under
subsection (a)(1) shall be subject to the provisions of law
relating to ethics, conflicts of interest, corruption, and any
other criminal or civil statute or regulation governing the
standards of conduct for Federal employees that are applicable
to the type of appointment.
* * * * * * *
----------
SECTION 1112 OF THE RIGHT TO FINANCIAL PRIVACY ACT OF 1978
USE OF INFORMATION
Sec. 1112. (a) * * *
* * * * * * *
(e) Notwithstanding section 1101(6) or any other
provision of law, the exchange of financial records,
examination reports or other information with respect to a
financial institution, holding company, or a subsidiary of a
depository institution or holding company, among and between
the five member supervisory agencies of the Federal Financial
Institutions Examination Council, the Securities and Exchange
Commission, the Federal Trade Commission, and the Commodity
Futures Trading Commission is permitted.
* * * * * * *
Committee Jurisdiction Letter
Markup Transcript
BUSINESS MEETING
THURSDAY, SEPTEMBER 30, 2004
House of Representatives,
Committee on the Judiciary,
Washington, DC.
The Committee met, pursuant to notice, at 10:05 a.m., in
Room 2141, Rayburn House Office Building, Hon. F. James
Sensenbrenner, Jr. [Chairman of the Committee] presiding.
[Intervening business.]
Chairman Sensenbrenner. Pursuant to notice, I now call up
the bill, H.R. 3143, the ``International Consumer Protection
Act of 2003'' for purposes of markup and move its favorable
recommendation to the House. Without objection, the bill will
be considered as read and open for amendment at any point, and
the Chair recognizes himself for 5 minutes to explain the bill.
I urge my colleagues to join me in favorably reporting this
bill with the amendment in the nature of a substitute that I
will offer.
The legislation provides advanced powers to the Federal
Trade Commission that will improve cooperation and information
sharing with foreign counterparts, provide additional
investigative and enforcement tools and ultimately better
protect American consumers. The bill was ordered reported by
the Energy and Commerce Committee last year and subsequently
sequentially referred to us. There have been interagency
negotiations on this legislation, and the product of these
negotiations is in the amendment in the nature of a substitute
that I will offer.
I ask unanimous consent that my complete statement be put
in the record at this point and am happy to yield to one of the
minority party Members should they wish to say anything.
Gentleman from Virginia.
[The prepared statement of Mr. Sensenbrenner follows:]
Prepared Statement of the Honorable F. James Sensenbrenner, Jr., a
Representative in Congress From the State of Wisconsin, and Chairman,
Committee on the Judiciary
I urge my colleagues to join me in favorably reporting the bill
H.R. 3143 with an amendment in the nature of a substitute that I will
offer. This legislation provides enhanced powers to the Federal Trade
Commission that will improve cooperation and information sharing with
foreign counterparts, provide additional investigative and enforcement
tools, and ultimately better protect American consumers.
H.R. 3143 was the bill ordered reported by the Committee on Energy
& Commerce last year and sequentially referred to the Committee on the
Judiciary. However, months of interagency negotiations between the
Department of Justice, the FTC, the State Department and OMB produced
modifications that have been introduced as a new consensus bill, H.R.
4996.
H.R. 4996 is a notable improvement that addresses concerns raised
about the original bill by the other executive branch agencies and by
outside parties during Congressional hearings. I understand that H.R.
4996 is now the working text of legislation that could come to the
House floor, and it matches companion legislation in the Senate.
Furthermore, I understand that there are no plans to advance the older
version, H.R. 3143 any further, but the Committee on Energy & Commerce
will instead discharge H.R. 4996. Therefore, I will be offering an
amendment in the nature of a substitute that replaces the text of H.R.
3143 with the text of H.R. 4996.
The advent of the Internet, improved telecommunications, and the
globalization of the economy have created incredible opportunities by
shrinking distances and blurring traditional boundaries and barriers.
However, some of the international opportunities being created today
are not for entrepreneurs and consumers, but for criminals who seek to
deceive and defraud.
What might be called ``Cross-border fraud'' is a burgeoning problem
involving those who establish operations in one country, and use
communications that may cross multiple national borders to deceive or
defraud consumers in other countries.
The FTC reports an increasing number of cases brought by the
Commission involve foreign consumers, foreign businesses or
individuals, or assets or evidence located outside the United States.
In 2002, 14% of the complaints in the Consumer Sentinel database
(excluding identity theft complaints) were cross-border complaints, up
from 11% in 2000.
Increasingly, the FTC's fraud-related cases have some cross-border
component. For instance a typical spam related case may involve a
foreign sender or an email message that crosses several national
boundaries en route to its destination. To better enforce existing
fraud and consumer protection laws--like CAN-SPAM--and meet the
enforcement expectations of Congress, the FTC believes better
international cooperation and additional tools are critical.
The additional authority provided to the FTC in this legislation
mirrors the existing authority given to the Securities and Exchange
Commission.
Concerns have been raised throughout the process of crafting the
International Consumer Protection Act about the scope of the powers
sought, the FTC's need for them, and the existence of adequate due
process and privacy safeguards.
I believe the version before us today is much improved and the FTC
has addressed many of these concerns. Therefore, I support advancing
the bill from Judiciary Committee at this time. However, Congress and
the Executive branch should closely monitor the Commission's use of
these new powers and the level of cooperation they receive from their
foreign counterparts--and most importantly monitor for any abuses of
information shared about U.S. entities or persons with foreign consumer
protection authorities.
The reporting requirements of this legislation are serious, and the
FTC is on notice that these new authorities can easily be revoked if
they are not used properly or if Congress does not receive adequate
information.
With that cautionary note, I urge my colleagues to favorably report
the bill with the substitute amendment and help protect American
consumers from cross-border fraud and deceptive practices.
Mr. Scott. Mr. Chairman, I am not familiar with this bill.
It apparently went through the Energy and Commerce Committee,
and there appear to be some--they appear to approve the bill,
but I am just getting information that there is some opposition
and I am not exactly clairvoyant about what the opposition is.
So I just wanted to express that this apparently is not
noncontroversial, and I yield back.
[Letter from the American Civil Liberties Union submitted
by Mr. Scott.]
Chairman Sensenbrenner. Without objection, all Members'
opening statements will appear in the record at this point.
Are there amendments? And I have an amendment in the nature
of a substitute at the desk which the Clerk will report.
The Clerk. Amendment in the nature of a substitute to H.R.
3143 as reported, offered by Mr. Sensenbrenner of Wisconsin.
Strike all after the enacting clause and insert the following.
[The amendment in the nature of a substitute follows:]
Chairman Sensenbrenner. Without objection, the amendment is
considered as read and the Chair recognizes himself for 5
minutes.
As previously noted in my opening statement, this amendment
in the nature of a substitute reflects an interagency consensus
emanating from negotiations between the Justice Department, the
FTC, the State Department, and the OMB, and I urge Members to
support its adoption and yield back the balance of my time.
Are there any second degree amendments to the amendment in
the nature of a substitute? If there are none, the question is
on agreeing to the amendment in the nature of a substitute
offered by the Chair. Those in favor will say aye. Opposed, no.
The ayes appear to have it. The ayes have it, and the amendment
in the nature of a substitute is agreed to.
A reporting quorum is not present. Without objection, the
previous question is ordered on favorably reporting the bill to
the House.
[Intervening business.]
Chairman Sensenbrenner. The unfinished business is the
motion to report favorably the bill, H.R. 3143, as amended. A
reporting quorum is present. All those in favor of reporting
the bill favorably as amended will say aye. Opposed, no. The
ayes appear to have it. The ayes have it. The motion to report
favorably is agreed to.
Without objection, the bill will be reported favorably to
the House in the form of a single amendment in the nature of a
substitute, incorporating the amendments adopted here today.
Without objection, the Chairman is authorized to move to go to
conference pursuant to House rules. Without objection, the
staff is directed to make any technical and conforming changes,
and all Members will be given 2 days as provided by House rules
in which to submit additional, dissenting, supplemental, or
minority views.