[Senate Report 118-29]
[From the U.S. Government Publishing Office]


                                                   Calendar No. 73

118th Congress}                                           { Report
                                 SENATE
 1st Session  }                                           { 118-29

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

                   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. 257

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

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                  May 16, 2023.--Ordered to be printed
                  
                              __________

                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
                           WASHINGTON : 2023                    
          
-----------------------------------------------------------------------------------     
                 
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

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

                   David M. Weinberg, Staff Director
                    Zachary I. Schram, Chief Counsel
                  Michelle M. Benecke, Senior Counsel
           William E. Henderson III, Minority Staff Director
              Christina N. Salazar, Minority Chief Counsel
                  Andrew J. Hopkins, Minority Counsel
                     Laura W. Kilbride, Chief Clerk
                     
                     
                                                   Calendar No. 73

118th Congress}                                           { Report
                                 SENATE
 1st Session  }                                           { 118-29

======================================================================                     
 
    BANNING OPERATIONS AND LEASES WITH THE ILLEGITIMATE VENEZUELAN 
                        AUTHORITARIAN REGIME ACT

                                _______
                                

                  May 16, 2023.--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. 257]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 257) 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 of the Bill, as Reported.............3
  V. Evaluation of Regulatory Impact..................................4
 VI. Congressional Budget Office Cost Estimate........................5
VII. Changes in Existing Law Made by the Bill, as Reported............5

                         I. PURPOSE AND SUMMARY

    The purpose of S. 257, 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 March 17, 2021, the Committee approved S. 688, the BOLIVAR 
Act. That bill, as reported, is substantially similar to S. 257. 
Accordingly, this committee report is in many respects similar to the 
committee report for S. 688. See S. Rept 117-28.
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              II. BACKGROUND AND NEED FOR THE 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. Opponents and 
critics of the regime risk being detained, imprisoned, 
tortured, and assassinated. 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.''\3\ Between January 1 and May 19 of 
2019, another 1,569 people were killed.
---------------------------------------------------------------------------
    \2\Human Rights Watch, World Report 2017: Events of 2016, 661-667 
(www.hrw.org/sites/
default/files/world_report_download/wr2017-web.pdf).
    \3\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) (www.ohchr.org/EN/
NewsEvents/Pages/DisplayNews.aspx?NewsID=24788&LangID=E).
---------------------------------------------------------------------------
    In addition to committing pervasive human rights abuses, 
Maduro's regime has exploited the economy and engaged in 
widespread corruption.\4\ 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.\5\ Maduro's regime has been compared to a criminal 
organization;\6\ is involved in drug trafficking, money 
laundering,\7\ and illegal gold transfers;\8\ and is said to 
associate with terrorist groups.\9\ For years, Maduro's inner 
circle has enriched itself by capitalizing on a network of 
corruption while his people struggle to survive.\10\
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    \4\Fact Sheet, Office of the Spokesperson, U.S. Department of 
State, Nicolas Maduro: Corruption and Chaos in Venezuela (Aug. 6, 2019) 
(cl.usembassy.gov/nicolas-maduro-corruption-and-chaos-in-venezuela-2/).
    \5\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) (www.washingtonpost.com/world/2019/02/08/us-says-maduro-
is-blocking-aid-starving-people-venezuelan-says-his-people-arent-
beggars/).
    \6\Study Finds Venezuela Criminal Enterprise is Blunting Effects of 
U.S. Sanctions, Miami Herald (May 15, 2019) (www.miamiherald.com/news/
nation-world/world/americas/venezuela/article230420019.html).
    \7\U.S. Accuses Maduro, Venezuelan Party Official of Drug Trade 
Profiteering, Reuters (May 18, 2018) (www.reuters.com/article/us-usa-
venezuela-sanctions/u-s-accuses-maduro-venezuelan-party-official-of-
drug-trade-profiteering-idUSKCN1IJ2JZ).
    \8\These are the Refineries Processing Venezuela's ``Blood Gold''--
and Helping Maduro Stay in Power, Miami Herald (July 23, 2019) 
(www.miamiherald.com/news/nation-world/world/americas/venezuela/
article232452267.html).
    \9\Venezuela Is Terrorist Sanctuary: Colombian President, U.S. News 
(July 29, 2019) (www.usnews.com/news/world/articles/2019-07-29/
venezuela-is-terrorist-sanctuary-colombian-president).
    \10\How Miami, a Major Destination for Venezuelan Gold, is Helping 
Prop up Maduro's Regime, Miami Herald (July 23, 2019, updated Aug. 5, 
2019) (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.\11\ Sanctions are 
enforced through the Office of Foreign Assets Control (OFAC) 
and State Department diplomatic actions.
---------------------------------------------------------------------------
    \11\Press Release, U.S. Department of the Treasury, Treasury 
Sanctions Nicholas Maduro's Son for Serving in Venezuela's Illegitimate 
Government (June 28, 2019) (home.treasury.gov/news/press-releases/
sm719); see also, Treasury Sanctions Maduro Regime Officials for 
Undermining Democratic Order in Venezuela (Sept. 4, 2020) 
(home.treasury.gov/news/press-releases/sm1115).
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    The BOLIVAR Act 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. The BOLIVAR Act was 
first introduced by Senator Rick Scott in the 117th Congress. 
It passed the Senate by voice vote on December 15, 2022, but 
did not become law.\12\
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    \12\S. 688, 117th Cong. (2021).
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                        III. LEGISLATIVE HISTORY

    Senator Rick Scott (R-FL) introduced S. 257, the BOLIVAR 
Act, on February 2, 2023, with Senators Jacky Rosen (D-NV), 
Marco Rubio (R-FL), and Thom Tillis (R-NC) as original 
cosponsors. The bill was referred to the Committee on Homeland 
Security and Governmental Affairs.
    The Committee considered S. 257 at a business meeting on 
March 29, 2023. During the business meeting, the bill was 
ordered reported favorably by roll call vote of 10 yeas and 1 
nay, with Senators Peters, Hassan, Rosen, Padilla, Ossoff, 
Blumenthal, Lankford, Romney, Scott, and Hawley voting in the 
affirmative, and with Senator Paul voting in the negative. 
Senators Carper, Sinema, Johnson, and Marshall voted yea by 
proxy, for the record only.

        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

    Subsection (a) 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 by the United States.
    Subsection (b) 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. The Secretary of State must notify the 
appropriate congressional committees of any contract entered 
into on the basis of one of these exceptions.
    Subsections (c) and (d) clarify the prohibition does not 
apply to contracts that support U.S. Government activities in 
Venezuela or to contracts with international organizations. It 
also does not apply to contracts related to the operation and 
maintenance of the U.S. Government's facilities in Venezuela.
    Subsection (e) provides that the Secretary of State may 
waive the prohibition after determining it is in the national 
interest to do so.
    Subsection (f) defines: ``appropriate congressional 
committees,'' ``business operations,'' ``executive agency,'' 
``Government of Venezuela,'' and ``person.''
    Finally, subsection (g) stipulates that this section 
applies to any contract entered into during the three-year 
period beginning on the date of enactment.

                   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
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    S. 257 would prohibit executive branch agencies from 
entering into contracts with entities that have significant 
business operations with the Venezuelan government unless the 
United States recognizes that government as legitimate. The 
Secretary of State could waive that prohibition for contracts 
to provide humanitarian assistance, disaster relief, or that 
are in the national security interests of the United States.
    CBO is not aware of any contracts that would be banned 
under the bill. CBO estimates monitoring contracting activity 
for compliance would cost the Department of State less than 
$500,000 annually and total about $1 million over the 2023-2028 
period. Such spending would be subject to the availability of 
appropriated funds.
    The CBO staff contacts for this estimate are Sunita D'Monte 
(for the Department of State) and Matthew Pickford (for general 
government). The estimate was reviewed by Chad Chirico, Deputy 
Director of Budget Analysis.
                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

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

    Because S. 257 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]