[Senate Report 117-28]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 96
117th Congress     }                                     {      Report
                                 SENATE
 1st Session       }                                     {      117-28
_______________________________________________________________________

                                     



     BANNING OPERATIONS AND LEASES WITH THE ILLEGITIMATE VENEZUELAN

                        AUTHORITARIAN REGIME ACT

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                 S. 688

             TO PROHIBIT CONTRACTING WITH PERSONS THAT HAVE
   BUSINESS OPERATIONS WITH THE MADURO REGIME, AND FOR OTHER PURPOSES









[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]








                 July 12, 2021.--Ordered to be printed
                             _________
                              
                              
                 U.S. GOVERNMENT PUBLISHING OFFICE
                 
19-010                   WASHINGTON : 2021


























        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware           ROB PORTMAN, Ohio
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona              RAND PAUL, Kentucky
JACKY ROSEN, Nevada                  JAMES LANKFORD, Oklahoma
ALEX PADILLA, California             MITT ROMNEY, Utah
JON OSSOFF, Georgia                  RICK SCOTT, Florida
                                     JOSH HAWLEY, Missouri

                   David M. Weinberg, Staff Director
                    Zachary I. Schram, Chief Counsel
   Lena C. Chang, Director of Governmental Affairs and Senior Counsel
                  Michelle M. Benecke, Senior Counsel
                Pamela Thiessen, Minority Staff Director
  Andrew C. Dockham, Minority Chief Counsel and Deputy Staff Director
       Jeremy H. Hayes, Minority Senior Professional Staff Member
                     Laura W. Kilbride, Chief Clerk



















                                                       Calendar No. 96
117th Congress     }                                     {      Report
                                 SENATE
 1st Session       }                                     {      117-28

======================================================================



 
    BANNING OPERATIONS AND LEASES WITH THE ILLEGITIMATE VENEZUELAN 
                        AUTHORITARIAN REGIME ACT

                                _______
                                

                 July 12, 2021.--Ordered to be printed

                                _______
                                

 Mr. Peters, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 688]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 688) to prohibit 
contracting with persons that have business operations with the 
Maduro regime, and for other purposes, having considered the 
same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                                CONTENTS

                                                                      Page
  I. Purpose and Summary..............................................   1
 II. Background and Need for the Legislation..........................   2
III. Legislative History..............................................   3
 IV. Section-by-Section Analysis......................................   3
  V. Evaluation of Regulatory Impact..................................   4
 VI. Congressional Budget Office Cost Estimate........................   4
VII. Changes in Existing Law Made by the Bill, as Reported............   5

                         I. PURPOSE AND SUMMARY

    The purpose of S. 688, the Banning Operations and Leases 
with the Illegitimate Venezuelan Authoritarian Regime (BOLIVAR) 
Act, is to prohibit Federal agencies from contracting for the 
procurement of goods or services with any person that has 
business operations with an authority of the government of 
Venezuela that is not recognized as the legitimate government 
of Venezuela by the United States Government. This prohibition 
does not apply to contracts that support United States 
Government activities in Venezuela, to those who have a valid 
license from the Office of Foreign Assets Control, or to 
contracts related to the American diplomatic mission in 
Venezuela. The legislation also provides exceptions for 
instances where the Secretary of State determines that the 
business operations with the illegitimate Venezuelan government 
are necessary for the provision of humanitarian assistance, 
disaster relief, other urgent life-saving measures, 
noncombatant evacuations, or is otherwise in the national 
security interests of the United States.\1\
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    \1\On June 19, 2019, the Committee approved S. 1151, the Venezuelan 
Contracting Restriction Act, which is substantially similar to S. 688. 
Accordingly, this Committee report is in large part a reproduction of 
the Committee report for S. 1151, S. Rep. No. 116-85.
---------------------------------------------------------------------------

              II. BACKGROUND AND THE NEED FOR LEGISLATION

    Nicolas Maduro was elected President of Venezuela on April 
14, 2013, following the death of former Socialist Party 
President Hugo Chavez. Under Maduro, the Venezuelan government 
has abused the rights of the Venezuelan people through 
violence, control, repression, and by cracking down on public 
demonstrations.\2\ Security forces have repressed opposition 
parties through detention, military prosecution, and the 
excessive use of force against protestors.\3\ Opponents and 
critics of the regime risk being detained, imprisoned, 
tortured, and assassinated.\4\ According to a 2019 United 
Nations Human Rights report, Venezuelan security forces killed 
at least 5,287 people during security operations in 2018, 
alleging ``resistance to authority.'' Between January 1 and May 
19 of 2019, another 1,569 people were killed.\5\
---------------------------------------------------------------------------
    \2\Human Rights Watch, World Report 2017: Events of 2016, 661-667 
(https://www.hrw.org/sites/default/files/world_report_download/wr2017-
web.pdf).
    \3\Id.
    \4\Id.
    \5\Press Release, Office of the High Commissioner, United Nations, 
UN Human Rights Report on Venezuela Urges Immediate Measures to Halt 
and Remedy Grave Rights Violations (July 4, 2019) (https://
www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=24788⟪
ID=E).
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    In addition to committing pervasive human rights abuses, 
Maduro's regime has exploited the economy and engaged in 
widespread corruption.\6\ Despite having among the world's 
largest oil reserves, millions of Venezuelans starve because 
the government fails to import sufficient food for the 
Venezuelan people, engages in rampant corruption of the food 
distribution program, and rejects offers of humanitarian 
aid.\7\ Maduro's regime has been compared to a criminal 
organization;\8\ is involved in drug trafficking, money 
laundering,\9\ and illegal gold transfers;\10\ and is said to 
associate with terrorist groups.\11\ For years, Maduro's inner 
circle has enriched itself by capitalizing on a network of 
corruption while his people struggle to survive.\12\
---------------------------------------------------------------------------
    \6\Fact Sheet, Office of the Spokesperson, U.S. Department of 
State, Nicolas Maduro: Corruption and Chaos in Venezuela (Aug. 6, 2019) 
(https://cl.usembassy.gov/nicolas-maduro-corruption-and-chaos-in-
venezuela-2/).
    \7\Id.; see also, The U.S. Says Maduro is Blocking Aid to Starving 
People. The Venezuelan Says His People Aren't Beggars, Washington Post 
(Feb. 8, 2019) (https://www.washingtonpost.com/world/2019/02/08/us-
says-maduro-is-blocking-aid-starving-people-venezuelan-says-his-people-
arent-beggars/).
    \8\Study Finds Venezuela Criminal Enterprise is Blunting Effects of 
U.S. Sanctions, Miami Herald (May 15, 2019) (https://
www.miamiherald.com/news/nation-world/world/americas/venezuela/
article230420019.html).
    \9\U.S. Accuses Maduro, Venezuelan Party Official of Drug Trade 
Profiteering, Reuters (May 18, 2018) (https://www.reuters.com/article/
us-usa-venezuela-sanctions/u-s-accuses-maduro-venezuelan-party-
official-of-drug-trade-profiteering-idUSKCN1IJ2JZ).
    \10\These are the Refineries Processing Venezuela's ``Blood 
Gold''--and Helping Maduro Stay in Power, Miami Herald (July 23, 2019) 
(https://www.miamiherald.com/news/nation-world/world/americas/
venezuela/article232452267.html).
    \11\Venezuela Is Terrorist Sanctuary: Colombian President, U.S. 
News (July 29, 2019) (https://www.usnews.com/news/world/articles/2019-
07-29/venezuela-is-terrorist-sanctuary-colombian-president).
    \12\How Miami, a Major Destination for Venezuelan Gold, is Helping 
Prop up Maduro's Regime, Miami Herald (July 23, 2019, updated August 5, 
2019) (https://www.miamiherald.com/news/nation-world/world/americas/
venezuela/article230669164.html); see also, Nicolas Maduro: Corruption 
and Chaos in Venezuela, supra note 5.
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    The United States has sanctioned entities affiliated with 
the Maduro regime, while allowing transactions with the 
legitimate Venezuelan government, the Interim President Juan 
Guaido and the Venezuelan National Assembly.\13\ Sanctions are 
enforced through the Office of Foreign Assets Control (OFAC) 
and State Department diplomatic actions. However, U.S. dollars 
continue to flow to Maduro despite OFAC restrictions. One 
factor is that current law does not prevent U.S. contractors 
from doing business with Maduro while also contracting with the 
U.S. Government unless they are businesses specifically 
identified by OFAC as prohibited from doing so.
---------------------------------------------------------------------------
    \13\Press Release, U.S Department of the Treasury, Treasury 
Sanctions Nicholas Maduro's Son for Serving in Venezuela's Illegitimate 
Government (June 28, 2019) (https://home.treasury.gov/news/press-
releases/sm719); see also, Treasury Sanctions Maduro Regime Officials 
for Undermining Democratic Order in Venezuela (September 4, 2020) 
(https://home.treasury.gov/news/press-releases/sm1115).
---------------------------------------------------------------------------
    The BOLIVAR Act closes this loophole. It complements 
existing efforts, such as sanctions, by prohibiting an 
executive agency from entering into a contract for the 
procurement of goods or services with any person that has 
business operations with the illegitimate government of the 
Maduro regime, as well as any successor governments not 
recognized as legitimate by the United States. The bill 
outlines particular exceptions.

                        III. LEGISLATIVE HISTORY

    S. 688 was introduced on March 10, 2021, by Senators Rick 
Scott (R-FL), Marco Rubio (R-FL), Thom Tillis (R-NC), and Jacky 
Rosen (D-NV).
    The bill was referred to the Committee on Homeland Security 
and Governmental Affairs. The Committee considered S. 688 at a 
business meeting on March 17, 2021. S. 688 passed by voice vote 
en bloc with Senators Peters, Rosen, Padilla, Portman, Johnson, 
Lankford, Romney, Scott, and Hawley present.

        IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title

    This section establishes the short title of the bill as the 
``Banning Operations and Leases with the Illegitimate 
Venezuelan Authoritarian Regime Act,'' or the ``BOLIVAR Act.''

Section 2. Prohibition on contracting with persons that have business 
        operations with the Maduro regime

    This section prohibits Federal agencies from contracting 
for goods and services with any person that knowingly engages 
in significant business operations with an authority of the 
Government of Venezuela that is not recognized as the 
legitimate Government of Venezuela. This prohibition does not 
apply to contracts that support U.S. Government activities in 
Venezuela, to those who have a valid license from the Office of 
Foreign Assets Control, or to contracts related to the American 
diplomatic mission in Venezuela.
    This section also provides exceptions for instances where 
the Secretary of State determines that the business operations 
with the illegitimate Venezuelan government are necessary for 
the provision of humanitarian assistance, disaster relief, 
other urgent life-saving measures, noncombatant evacuations, or 
is otherwise in the national security interests of the United 
States. It requires that Congress be notified of any exception 
for those reasons.
    Finally, the bill provides that the Secretary of State may 
waive the prohibition after determining it is in the national 
interest to do so.

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATES

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 23, 2021.
Hon. Gary C. Peters,
Chairman, Committee on Homeland Security and Governmental 
        Affairs,
Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 688, the BOLIVAR 
Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    S. 688 would generally prohibit any executive agency from 
entering into a contract with any person that has business 
operations with any authority of the Venezuelan government that 
is not recognized as the legitimate government by the United 
States. That prohibition could be waived for certain contracts, 
such as those determined by the Secretary of State to be in the 
national security interests of the United States.
    CBO is unaware of any contracts that executive agencies 
have with entities associated with the Venezuelan government. 
However, CBO estimates that the costs for the Department of 
State to discover and monitor any future contracts would be 
less than $500,000 annually and total about $1 million over the 
2021-2026 period. Such spending would be subject to the 
availability of appropriated funds.
    The CBO staff contact for this estimate are Sunita D'Monte 
(for the Department of State) and Matthew Pickford (for general 
government). The estimate was reviewed by H. Samuel Papenfuss, 
Deputy Director of Budget Analysis.

       VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    Because S. 688 would not repeal or amend any provision of 
current law, it would make no changes in existing law within 
the meaning of clauses (a) and (b) of paragraph XXVI of the 
Standing Rules of the Senate.

                                  [all]