U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

49–010 

" ! SENATE 109TH CONGRESS

2d Session 

REPORT

2006

109–219 

Calendar No. 372 

UNDERTAKING SPAM, SPYWARE, AND 

FRAUD ENFORCEMENT WITH ENFORCERS 

BEYOND BORDERS ACT OF 2005 

R E P O R T 

OF THE

COMMITTEE ON COMMERCE, SCIENCE, AND 

TRANSPORTATION 

ON

S. 1608 

MARCH 14, 2006.—Ordered to be printed 


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(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

TED STEVENS, Alaska, Chairman 

DANIEL K. INOUYE, Hawaii, Co-Chairman 

JOHN MCCAIN, Arizona 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

GORDON H. SMITH, Oregon 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

JOHN E. SUNUNU, New Hampshire 

JIM DEMINT, South Carolina 

DAVID VITTER, Louisiana 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

BYRON L. DORGAN, North Dakota 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK LAUTENBERG, New Jersey 

E. BENJAMIN NELSON, Nebraska 

MARK PRYOR, Arkansas 

LISA SUTHERLAND, Staff Director 

CHRISTINE DRAGER KURTH, Deputy Staff Director 

KEN NAHIGIAN, Chief Counsel 

MARGARET CUMMISKY, Democratic Staff Director and Chief Counsel 

SAMUEL WHITEHORN, Democratic Deputy Staff Director and General Counsel 


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49–010 

Calendar No. 372 

109TH CONGRESS REPORT " ! SENATE 2d Session 109–219 

UNDERTAKING SPAM, SPYWARE, AND FRAUD ENFORCEMENT WITH ENFORCERS BEYOND BORDERS ACT OF 

2005 

MARCH 14, 2006.—Ordered to be printed 

Mr. STEVENS, from the Committee on Commerce, Science, and 

Transportation, submitted the following 

R E P O R T 

[To accompany S. 1608] 

The Committee on Commerce, Science, and Transportation, to 

which was referred the bill (S. 1608) to enhance Federal Trade 

Commission enforcement against illegal spam, spyware, cross-border fraud and deception, and for other purposes, having considered 

the same, reports favorably thereon without amendment and recommends that the bill do pass. 

PURPOSE OF THE BILL

S. 1608 would amend the Federal Trade Commission Act (FTCA) 

(15 U.S.C. 41 et seq.) to improve the Federal Trade Commission’s 

(FTC or Commission) ability to provide more timely and effective 

international consumer protection. The bill also includes a provision authorizing the FTC to accept gifts and services under certain 

circumstances. 

BACKGROUND AND NEEDS

The FTC is an independent Federal agency established by statute in 1914 to protect American consumers. The Commission’s 

mandate has two distinct provisions: first, to protect consumers 

from unfair or deceptive acts or practices in or affecting commerce, 

and second, to protect consumers from unfair methods of competition. The agency enforces at least 50 statutes and is the only Federal agency with both consumer protection and competition jurisdiction in broad sectors of the economy. 


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1See FTC testimony from Chairman Majoras to United States Senate Committee on Commerce, Science, and Transportation, Subcommittee on Trade, Tourism, and Economic Development, October 5, 2005—in which the FTC states: ‘‘The FTC’s ability to pursue distributors of 

spyware, spam, and other Internet threats to consumers would be significantly improved if the 

Congress were to pass the U.S. SAFE WEB Act, introduced by Chairman Smith in the Senate 

as S. 1608. The Act makes it easier for the FTC to share information and otherwise cooperate 

with foreign law enforcement officials. The Internet knows no boundaries, and it is critical to 

improve the FTC’s ability to work with the officials of other countries to prevent online conduct 

that undermines consumer confidence in the Internet as a medium of communication and commerce.’’

The Commission has proposed legislative changes to the FTCA 

seeking authorization to expand its authority under section 5 of the 

FTCA to protect consumers from fraudulent and deceptive trade 

practices perpetrated outside the United States. 

The FTC reports that cross-border consumer complaints registered in the Consumer Sentinel consumer complaint database 

have risen from 11 percent of all complaints received in 2000, to 

16 percent in 2004. The Commission attributes this increase primarily to the global proliferation of the Internet and improvements 

in telecommunications technologies. S. 1608 would improve the 

Commission’s ability to protect consumers from illegal spyware, 

spam, cross-border fraud and deception, and other consumer protection law violations. 1

According to the FTC, the Commission’s cross-border fraud language, which is contained in S. 1608, is the product of negotiations 

between the FTC and various other governmental entities including, among others, the Department of Justice (DOJ), the Department of State, the Federal Deposit Insurance Corporation (FDIC), 

and the Federal Reserve. These negotiations were designed to properly define the scope of the FTC’s jurisdiction vis-a-vis the functions of those agencies. 

The bill also would allow the FTC to accept reimbursement for 

services undertaken on behalf of any domestic or foreign law enforcement agency. FTC staff members occasionally provide investigative or other services to a requesting law enforcement agency 

with no expectation that the Commission will be reimbursed for 

any expenses incurred. The FTC also may work in conjunction with 

staff of other law enforcement agencies to investigate or prosecute 

a matter. Thus, the Commission has requested authority to accept 

reimbursement if offered. Such authority would be useful in instances where expense-sharing arrangements have not been resolved in advance. The Securities Exchange Act of 1934 provides 

similar authority to the Securities and Exchange Commission. 

The bill also would authorize the FTC to accept gifts and services 

under certain circumstances. Occasionally, the Commission is offered gifts, donations, bequests, and volunteer services, but such receipt is prohibited by law. For example, volunteer services are prohibited, as is the acceptance of even a trade regulation publication 

that might be useful in the Commission’s library. In order to legally accept such gifts or other items, the Commission would need 

to receive statutory authority. The Federal Communications Commission (FCC) and the Consumer Product Safety Commission 

(CPSC) have similar authority to accept gifts and services. 


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SUMMARY OF PROVISIONS

S. 1608 would amend the FTCA to authorize the FTC to: (1) 

share information involving cross-border fraud with foreign consumer protection agencies; (2) secure confidential information from 

those foreign consumer protection agencies; (3) take fraud-based 

legal action in foreign jurisdictions; (4) seek redress on behalf of 

foreign consumers victimized by United States-based wrongdoers; 

(5) make criminal referrals for cross-border criminal activity; (5) 

strengthen its relationship with foreign consumer protection agencies; (6) provide investigative and other services to a requesting law 

enforcement agency and accept payment of reimbursement from 

that agency for the Commission’s involvement; and (7) receive gifts 

or other items that would be useful to the Commission as long as 

a conflict of interest is not created by such receipt. 

LEGISLATIVE HISTORY

During the 108th Congress, the Competition, Foreign Commerce, 

and Infrastructure Subcommittee held a hearing on June 11, 2003, 

to examine possible changes to the FTCA and discuss key issues 

before the FTC. Subsequent to the hearing, Senators McCain and 

Smith introduced the Federal Trade Commission Reauthorization 

Act of 2003 (S. 1234). On June 19, 2003, the Committee met in 

open Executive Session to consider an amendment in the nature of 

a substitute to S. 1234 offered by Senators McCain and Smith. The 

substitute amendment was adopted, and the bill was ordered by 

voice vote to be reported as amended. 

S. 1234 was placed on the Senate legislative calendar on August 

26, 2003. On September 15, 2004, the Senate amended and passed 

S. 1234 by unanimous consent. 

On July 29, 2005, Senators Smith, McCain, Inouye, and Nelson 

of Florida introduced S. 1608, the Undertaking Spam, Spyware, 

and Fraud Enforcement With Enforcers Beyond Borders Act of 

2005. S. 1608 is virtually identical to S. 1234. The Trade, Tourism, 

and Economic Development Subcommittee held a hearing on October 5, 2005, to discuss the Commission’s efforts to combat spyware, 

including its views on S. 1608. 

On December 15, 2005, the Committee met in open Executive 

Session and, by voice vote, ordered S. 1608 reported without 

amendment. 

ESTIMATED COSTS

In accordance with paragraph 11(a) of rule XXVI of the Standing 

Rules of the Senate and section 403 of the Congressional Budget 

Act of 1974, the Committee provides the following cost estimate, 

prepared by the Congressional Budget Office: 

JANUARY 31, 2006. 

Hon. TED STEVENS, Chairman, Committee on Commerce, Science, and Transportation, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1608, the Undertaking 

Spam, Spyware, and Fraud Enforcement With Enforcers Beyond 

Borders Act of 2005. 


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If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Melissa Z. Petersen. 

Sincerely, 

DONALD B. MARRON, 

Acting Director. 

Enclosure. 

S. 1608—Undertaking Spam, Spyware, and Fraud Enforcement 

With Enforcers Beyond Borders Act of 2005 

Summary: S. 1608 would provide new administrative tools to the 

Federal Trade Commission (FTC) to support enforcement of federal 

laws related to unfair and deceptive trade practices. The bill would 

enhance the FTC’s ability to pursue violations that affect domestic 

commerce but are committed outside the United States—such as 

the use of computer software (known as spyware) to collect personal information without a user’s consent and the use of unsolicited email (known as spam) that is deceptive. 

CBO estimates that implementing S. 1608 would cost $1 million 

in 2006 and $9 million over the 2006–2011 period, assuming appropriation of the amounts specified and estimated to be necessary. 

Enacting the bill would not have a significant effect on direct 

spending or revenues. 

S. 1608 contains intergovernmental mandates as defined in the 

Unfunded Mandates Reform Act (UMRA), but CBO estimates that 

costs, if any, would be small and would not exceed the threshold 

established by UMRA for intergovernmental mandates ($64 million 

in 2006, adjusted annually for inflation). 

S. 1608 would impose a private-sector mandate, as defined in 

UMRA, by limiting the ability of certain third parties to sue. CBO 

expects that the direct cost of the mandate would fall well below 

the annual threshold established by UMRA for private-sector mandates ($128 million in 2006, adjusted annually for inflation). 

Estimated cost to the Federal Government: The estimated budgetary impact of S. 1608 is shown in the following table. The cost 

of this legislation falls within budget function 370 (commerce and 

housing credit). 

By fiscal year, in millions of dollars— 

2006 2007 2008 2009 2010 2011 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level ...................................................... 1 1 1 2 2 2 

Estimated Outlays ........................................................................ 1 1 1 2 2 2 

Basis of Estimate: For this estimate, CBO assumes that the specified and estimated amounts needed to implement S. 1608 will be 

appropriated for each year and that outlays will follow historical 

patterns for similar programs. 

Spending subject to appropriation 

Implementing S. 1608 would increase spending by the FTC for 

enforcing laws related to unfair and deceptive trade practices, subject to the availability of appropriated funds. S. 1608 also would 

authorize the appropriation of $100,000 a year for collaborating 

with foreign governments and participating in multinational organizations related to law enforcement. Based on information proVerDate Aug 31 2005 01:33 Mar 16, 2006 Jkt 049010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\SR219.XXX SR219

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vided by the FTC, CBO estimates that implementing the bill would 

cost about $1 million in 2006 and about $9 million over the 2006–

2011 period, assuming appropriation of the amounts specified and 

estimated to be necessary. 

The bill would allow the FTC to accept reimbursements for expenses made on behalf of foreign or domestic law enforcement 

agencies. Such reimbursements would be recorded as an offset to 

the agency’s discretionary spending. Based on information provided 

by the FTC, CBO estimates that any reimbursements would be 

minimal and would not have a significant effect on spending subject to appropriation. 

Revenues and direct spending 

Enacting S. 1608 could increase federal revenues and direct 

spending as a result of additional civil and criminal penalties assessed for violations of laws relating to unfair and deceptive practices in commerce. Collections of civil penalties are recorded in the 

budget as revenues. Collections of criminal penalties are recorded 

in the budget as revenues, deposited in the Crime Victims Fund, 

and later spent. CBO estimates, however, that any additional revenues and direct spending that would result from enacting the bill 

would not be significant because of the relatively small number of 

cases likely to be involved. 

Finally, a provision in S. 1608 would authorize the FTC to accept 

and use donations of cash, property, and other gifts. Monetary gifts 

are classified in the budget as revenues, and spending of such sums 

would constitute direct spending. Based on information provided by 

the FTC, CBO estimates that any collections and subsequent 

spending would be minimal, and that enacting this provision would 

not have a significant effect on revenues or direct spending. 

Estimated impact on state, local, and tribal governments: Sections 7 and 8 of S. 1608 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 UMRA. CBO estimates 

that the cost of complying with these mandates would be minimal 

and would not exceed the threshold established in UMRA ($64 million in 2006, adjusted for inflation). 

Estimated impact on the private sector: S. 1608 would impose a 

private-sector mandate, as defined in UMRA, by limiting the ability 

of certain third parties to sue. CBO expects that the direct cost of 

the mandate would fall well below the annual threshold estabVerDate Aug 31 2005 22:55 Mar 15, 2006 Jkt 049010 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\SR219.XXX SR219

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lished by UMRA for private-sector mandates ($128 million in 2006, 

adjusted annually for inflation). 

By exempting from liability entities that voluntarily provide information about third parties to the Federal Trade Commission, S. 

1608 would limit the ability of those third parties to sue for the disclosure or for failure to provide notice of disclosure. Such a limitation would constitute a private-sector mandate under UMRA. The 

direct cost of the mandate would be the forgone net value of settlements and damage awards. According to the FTC, no such thirdparty lawsuits have been filed, and they expect that it is unlikely 

there will be any new cases filed under current law. Consequently, 

CBO expects that costs to the private sector would be small relative to UMRA’s threshold. 

Estimate prepared by: Federal Costs: Melissa Z. Petersen. Impact on State, Local, and Tribal Governments: Sarah Puro. Impact 

on the Private Sector: Paige Piper/Bach. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

REGULATORY IMPACT STATEMENT

Because S. 1608 does not create any new programs, the legislation will have no additional regulatory impact, and will result in 

no additional reporting requirements. The legislation will have no 

further effect on the number or types of individuals and businesses 

regulated, the economic impact of such regulation, the personal privacy of affected individuals, or the paperwork required from such 

individuals and businesses. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title; findings; purpose 

This section describes Congress’ findings that cross-border fraud 

is a growing international problem that affects American consumers and businesses. The proliferation of Internet and telecommunications technologies has accentuated the problem of such 

fraud. Increasingly, foreign consumers are affected. The Commission’s ability to obtain effective consumer fraud relief is impeded by 

its limited authority. Improving the Commission’s ability to share 

information with its foreign counterparts is expected to allow for 

more timely and effective consumer fraud relief. 

Section 2. Foreign law enforcement agency defined 

This section would amend section 4 of the FTCA to include the 

definition of ‘‘foreign law enforcement agency.’’

Section 3. Availability of remedies 

This section would amend section 5(a) of the FTCA by adding to 

the term ‘‘unfair or deceptive acts or practices’’ involving foreign 

commerce to include those that cause or are likely to cause injury 

within the United States or involve material conduct within the 

United States. 

This section also would make all remedies available to the Commission with respect to unfair and deceptive acts involving foreign 

commerce that may cause injury within the United States. 


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Section 4. Powers of the Commission 

This section would amend Section 6(f) of the FTCA by inserting 

Subsection (j) that would add investigative assistance for foreign 

law enforcement agencies, including the criteria for international 

agreements determining such assistance. This new subsection also 

would provide that the FTC, with approval from the Secretary of 

State, may negotiate and conclude an international agreement in 

order to obtain foreign assistance. The authority granted to the 

FTC in this subsection would not apply to financial institutions, 

such as banks, savings and loan institutions, or federal credit 

unions. 

When the Commission receives a request for assistance from a 

foreign law enforcement agency, the Commission would be required 

to ensure that it agrees to such a request only when the request 

relates to a provision of foreign law that prohibits a fraudulent or 

deceptive commercial practice or other practice that is ‘‘substantially similar’’ to a practice that is prohibited by a law administered 

by the Commission. Examples of foreign laws that do not meet the 

‘‘substantially similar’’ requirement include a foreign restriction 

against non-misleading and substantiated comparative advertising, 

or a restriction on freedom of expression in a foreign law that 

would be protected expression under the First Amendment of the 

U.S. Constitution. 

This section also would prohibit the Commission from providing 

investigative assistance to a foreign law enforcement agency from 

a foreign state that has supported acts of international terrorism. 

Subsection (k) relates to the referral of evidence for criminal proceedings, specifying that the FTC would be required to share domestic and foreign evidence with the Attorney General that may be 

relevant to a violation of Federal criminal law. 

Subsection (l) would allow for expenditures for cooperative arrangements for operating expenses and other costs of bilateral and 

multilateral law enforcement groups conducting activities of interest to the FTC. 

This section would authorize $100,000 per fiscal year to the FTC 

for operating costs and other costs of bilateral and multilateral cooperative law enforcement agencies. 

Section 5. Representation in foreign litigation 

This section would amend section 16 of the FTCA to authorize 

the FTC to retain foreign counsel to assist the Department of Justice’s Office of Foreign Litigation in pursuing cases in foreign jurisdictions. 

Section 6. Sharing information with foreign law enforcement agencies 

This section would amend section 21(b)(6) of the FTCA to allow 

the FTC to share information with other agencies and expand existing authority to share compelled or confidential information with 

foreign law enforcers in consumer protection cases. Currently, information that is confidential or that has been compelled cannot be 

shared with foreign law enforcement agencies without the consent 

of the entity submitting the information. This section exempts the 

FTC from public disclosure of material received in the course of an 

investigation obtained from either domestic or foreign sources. 


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The Committee expects that the Commission will use discretion 

when determining whether, when, and how to agree to a foreign 

law enforcement agency’s request for assistance. In particular, the 

Committee underscores its belief that requests to investigate consumer protection-related violations affecting U.S. residents are the 

most appropriate types of requests for providing assistance to foreign law enforcement agencies. 

Before granting a request to provide investigative assistance to 

a foreign law enforcement agency, the FTC would need to be satisfied that the requesting entity is a legitimate law enforcement 

agency as defined in the Act, and that the request relates to an appropriate investigation or enforcement proceeding of that agency. 

Before the FTC can provide assistance, the foreign law enforcement 

agency must make a written request for assistance and must include a statement that it is investigating or enforcing against possible fraudulent or deceptive commercial practices or violations of 

a law substantially similar to a consumer protection law enforced 

by the Commission. The Committee believes that the Commission 

should require that the foreign law enforcement agency provide 

more information when the Commission has not worked with the 

foreign law enforcement agency before or when the foreign legal 

prohibition at issue is complex. 

Section 7. Confidentiality; delayed notice of process 

This section would create a new section 21A in the FTCA to authorize the FTC to provide delayed notice to suspected perpetrators 

of fraud (currently entitled to such notice under the Right to Financial Privacy Act (RFPA) (12 U.S. C. 3401 et seq.)) that the FTC is 

requesting information about them from financial institutions. 

Under this section, the FTC would be able to apply for an ex 

parte application in the event neither notification nor delayed notification is required under the RFPA. All judicial proceedings initiated by the FTC under the RFPA may be brought to the United 

States District Court and be held in camera. This section would not 

apply to antitrust investigations or proceedings. 

Section 8. Protection for voluntary provision of information 

This section would create a new section 21B in the FTCA to authorize the FTC to delay notice to individuals being investigated by 

allowing third parties to keep Civil Investigative Demands (CIDs) 

confidential notwithstanding Federal or State law. The FTC often 

obtains information when investigating fraud by issuing CIDs to 

third parties. This section also protects entities from liability under 

applicable Federal and State laws for voluntary disclosures they 

make to the FTC concerning consumer fraud, or concerning recovery of assets for consumer redress. 

Section 9. Staff exchanges 

This section would create a new section 25A of the FTCA to authorize the FTC to participate in foreign staff exchange programs, 

and to make and accept full or partial reimbursement in such exchanges. 


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Section 10. Information sharing with financial regulators 

This section amends Section 1112(e) of the RFPA to allow the 

FTC to share appropriate information with financial and market 

regulators. 

Section 11. Authority to accept reimbursements, gifts, and voluntary 

and uncompensated services 

This section would amend the FTCA by redesignating section 26 

as section 28 and by creating a new section 26 and 27 that would 

authorize the FTC to accept reimbursement from other agencies for 

assistance provided in investigations or otherwise, and accept gifts, 

donations and voluntary services consistent with ethical guidelines, 

respectively. 

Section 12. Preservation of existing authority 

This section states that the authority provided in this Act would 

add to the authority currently vested in the FTC, and would not 

replace any existing authorities. 

Section 13. Report 

This section would require that, within three years of the enactment date, the FTC shall transmit a report to Congress describing 

its experience with the authority granted by this Act, along with 

any recommendations for additional legislation. 

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, 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 material is printed in italic, existing law in which no change is proposed is shown in roman): 

FINANCIAL PRIVACY ACT OF 1978 

SEC. 1112. USE OF INFORMATION. 

[12 U.S.C. 3412] 

(a) TRANSFER OF FINANCIAL RECORDS TO OTHER AGENCIES OR

DEPARTMENTS; CERTIFICATION.—Financial records originally obtained pursuant to this title shall not be transferred to another 

agency or department unless the transferring agency or department certifies in writing that there is reason to believe that the 

records are relevant to a legitimate law enforcement inquiry, or intelligence or counterintelligence activity, investigation or analysis 

related to international terrorism within the jurisdiction of the receiving agency or department. 

(b) MAILING OF COPY OF CERTIFICATION AND NOTICE TO CUS- TOMER.—When financial records subject to this title are transferred 

pursuant to subsection (a), the transferring agency or department 

shall, within fourteen days, send to the customer a copy of the certification made pursuant to subsection (a) and the following notice, 

which shall state the nature of the law enforcement inquiry with 

reasonable specificity: ‘‘Copies of, or information contained in, your 

financial records lawfully in possession of ---------- have been furnished to ---------- pursuant to the Right of Financial Privacy Act of 

1978 for the following purpose: ----------. If you believe that this 


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transfer has not been made to further a legitimate law enforcement 

inquiry, you may have legal rights under the Financial Privacy Act 

of 1978 or the Privacy Act of 1974.’’. (c) COURT-ORDERED DELAYS IN MAILING.—Notwithstanding subsection (b), notice to the customer may be delayed if the transferring agency or department has obtained a court order delaying notice pursuant to section 1109(a) and (b) and that order is still in 

effect, or if the receiving agency or department obtains a court 

order authorizing a delay in notice pursuant to section 1109(a) and 

(b). Upon the expiration of any such period of delay, the transferring agency or department shall serve to the customer the notice 

specified in subsection (b) above and the agency or department that 

obtained the court order authorizing a delay in notice pursuant to 

section 1109(a) and (b) shall serve to the customer the notice specified in section 1109(b). 

(d) EXCHANGES OF EXAMINATION REPORTS BY SUPERVISORY AGENCIES; TRANSFER OF FINANCIAL RECORDS TO DEFEND CUSTOMER

ACTION; WITHHOLDING OF INFORMATION.—Nothing in this title prohibits any supervisory agency from exchanging examination reports 

or other information with another supervisory agency. Nothing in 

this title prohibits the transfer of a customer’s financial records 

needed by counsel for a Government authority to defend an action 

brought by the customer. Nothing in this title shall authorize the 

withholding of information by any officer or employee of a supervisory agency from a duly authorized committee or subcommittee 

of the Congress. 

(e) FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL SU- PERVISORY AGENCIES; AUTHORIZATION OF EXCHANGE OF FINANCIAL

RECORDS OR OTHER INFORMATION.—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 any 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. 

(f) TRANSFER TO ATTORNEY GENERAL.— (1) IN GENERAL.—Nothing in this title shall apply when financial records obtained by an agency or department of the 

United States are disclosed or transferred to the Attorney General or the Secretary of the Treasury upon the certification by 

a supervisory level official of the transferring agency or department that— (A) there is reason to believe that the records may be 

relevant to a violation of Federal criminal law; and 

(B) the records were obtained in the exercise of the agency’s or department’s supervisory or regulatory functions. 

(2) LIMITATION ON USE.—Records so transferred shall be used 

only for criminal investigative or prosecutive purposes, for civil 

actions under section 951 of the Financial Institutions Reform, 

Recovery, and Enforcement Act of 1989, or for forfeiture under 

sections 981 or 982 of title 18, United States Code, by the Department of Justice and only for criminal investigative purposes relating to money laundering and other financial crimes 


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by the Department of the Treasury and shall, upon completion 

of the investigation or prosecution (including any appeal), be 

returned only to the transferring agency or department. No 

agency or department so transferring such records shall be 

deemed to have waived any privilege applicable to those 

records under law. 

FEDERAL TRADE COMMISSION ACT 

SEC. 4. DEFINITIONS. 

[15 U.S.C. 44] 

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—

(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; and 

(2) any multinational organization, to the extent that it is acting on behalf of an entity described in paragraph (1). 


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SEC. 5. UNFAIR METHODS OF COMPETITION UNLAWFUL; PREVENTION 

BY COMMISSION. 

[15 U.S.C. 45] 

(a) DECLARATION OF UNLAWFULNESS; POWER TO PROHIBIT UNFAIR

PRACTICES; INAPPLICABILITY TO FOREIGN TRADE.—

(1) Unfair methods of competition in or affecting commerce, 

and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful. 

(2) The Commission is hereby empowered and directed to 

prevent persons, partnerships, or corporations, except banks, 

savings and loan institutions described in section 18(f)(3), Federal credit unions described in section 18(f)(4), common carriers 

subject to the Acts to regulate commerce, air carriers and foreign air carriers subject to the Federal Aviation Act of 1958, 

and persons, partnerships, or corporations insofar as they are 

subject to the Packers and Stockyards Act, 1921, as amended, 

except as provided in section 406(b) of said Act, from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce. 

(3) This subsection shall not apply to unfair methods of competition involving commerce with foreign nations (other than 

import commerce) unless—

(A) such methods of competition have a direct, substantial, and reasonably foreseeable effect—

(i) on commerce which is not commerce with foreign 

nations, or on import commerce with foreign nations; 

or 

(ii) on export commerce with foreign nations, of a 

person engaged in such commerce in the United 

States; and 

(B) such effect gives rise to a claim under the provisions 

of this subsection, other than this paragraph. If this subsection applies to such methods of competition only because of the operation of subparagraph (A)(ii), this subsection shall apply to such conduct only for injury to export business in the United States. 

(4)(A) For purposes of subsection (a), the term ‘‘unfair or deceptive acts or practices’’ includes 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. 

(b) PROCEEDING BY COMMISSION; MODIFYING AND SETTING ASIDE

ORDERS.—Whenever the Commission shall have reason to believe 

that any such person, partnership, or corporation has been or is 

using any unfair method of competition or unfair or deceptive act 

or practice in or affecting commerce, and if it shall appear to the 

Commission that a proceeding by it in respect thereof would be to 

the interest of the public, it shall issue and serve upon such person, 

partnership, or corporation a complaint stating its charges in that 


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respect and containing a notice of a hearing upon a day and at a 

place therein fixed at least thirty days after the service of said complaint. The person, partnership, or corporation so complained of 

shall have the right to appear at the place and time so fixed and 

show cause why an order should not be entered by the Commission 

requiring such person, partnership, or corporation to cease and desist from the violation of the law so charged in said complaint. Any 

person, partnership, or corporation may make application, and 

upon good cause shown may be allowed by the Commission to intervene and appear in said proceeding by counsel or in person. The 

testimony in any such proceeding shall be reduced to writing and 

filed in the office of the Commission. If upon such hearing the 

Commission shall be of the opinion that the method of competition 

or the act or practice in question is prohibited by this Act, it shall 

make a report in writing in which it shall state its findings as to 

the facts and shall issue and cause to be served on such person, 

partnership, or corporation an order requiring such person, partnership, or corporation to cease and desist from using such method 

of competition or such act or practice. Until the expiration of the 

time allowed for filing a petition for review, if no such petition has 

been duly filed within such time, or, if a petition for review has 

been filed within such time then until the record in the proceeding 

has been filed in a court of appeals of the United States, as hereinafter provided, the Commission may at any time, upon such notice 

and in such manner as it shall deem proper, modify or set aside, 

in whole or in part, any report or any order made or issued by it 

under this section. After the expiration of the time allowed for filing a petition for review, if no such petition has been duly filed 

within such time, the Commission may at any time, after notice 

and opportunity for hearing, reopen and alter, modify, or set aside, 

in whole or in part, any report or order made or issued by it under 

this section, whenever in the opinion of the Commission conditions 

of fact or of law have so changed as to require such action or if the 

public interest shall so require, except that (1) the said person, 

partnership, or corporation may, within sixty days after the service 

upon him or it of said report or order entered after such a reopening, obtain a review thereof in the appropriate court of appeals of 

the United States, in the manner provided in subsection (c) of this 

section; and (2) in the case of an order, the Commission shall reopen any such order to consider whether such order (including any 

affirmative relief provision contained in such order) should be altered, modified, or set aside, in whole or in part, if the person, partnership, or corporation involved files a request with the Commission which makes a satisfactory showing that changed conditions 

of law or fact require such order to be altered, modified, or set 

aside, in whole or in part. The Commission shall determine whether to alter, modify, or set aside any order of the Commission in response to a request made by a person, partnership, or corporation 

under paragraph (2) not later than 120 days after the date of the 

filing of such request. 

(c) REVIEW OF ORDER; REHEARING.—Any person, partnership, or 

corporation required by an order of the Commission to cease and 

desist from using any method of competition or act or practice may 

obtain a review of such order in the court of appeals of the United 

States, within any circuit where the method of competition or the 


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act or practice in question was used or where such person, partnership, or corporation resides or carries on business, by filing in the 

court, within sixty days from the date of the service of such order, 

a written petition praying that the order of the Commission be set 

aside. A copy of such petition shall be forthwith transmitted by the 

clerk of the court to the Commission, and thereupon the Commission shall file in the court the record in the proceeding, as provided 

in section 2112 of title 28, United States Code. Upon such filing of 

the petition the court shall have jurisdiction of the proceeding and 

of the question determined therein concurrently with the Commission until the filing of the record and shall have power to make and 

enter a decree affirming, modifying, or setting aside the order of 

the Commission, and enforcing the same to the extent that such 

order is affirmed and to issue such writs as are ancillary to its 

jurisdiction or are necessary in its judgment to prevent injury to 

the public or to competitors pendente lite. The findings of the Commission as to the facts, if supported by evidence, shall be conclusive. To the extent that the order of the Commission is affirmed, 

the court shall thereupon issue its own order commanding obedience to the terms of such order of the Commission. If either party 

shall apply to the court for leave to adduce additional evidence, and 

shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for the 

failure to adduce such evidence in the proceeding before the Commission, the court may order such additional evidence to be taken 

before the Commission and to be adduced upon the hearing in such 

manner and upon such terms and conditions as to the court may 

seem proper. The Commission may modify its findings as to the 

facts, or make new findings, by reason of the additional evidence 

so taken, and it shall file such modified or new findings, which, if 

supported by evidence, shall be conclusive, and its recommendation, if any, for the modification or setting aside of its original 

order, with the return of such additional evidence. The judgment 

and decree of the court shall be final, except that the same shall 

be subject to review by the Supreme Court upon certiorari, as provided in section 240 of the Judicial Code. 

(d) JURISDICTION OF COURT.—Upon the filing of the record with 

it the jurisdiction of the court of appeals of the United States to 

affirm, enforce, modify, or set aside orders of the Commission shall 

be exclusive. 

(e) EXTENSION FROM LIABILITY.—No order of the Commission or 

judgment of court to enforce the same shall in anywise relieve or 

absolve any person, partnership, or corporation from any liability 

under the Antitrust Acts. 

(f) SERVICE OF COMPLAINTS, ORDERS AND OTHER PROCESSES; RETURN.—Complaints, orders, and other processes of the Commission 

under this section may be served by anyone duly authorized by the 

Commission, either (a) by delivering a copy thereof to the person 

to be served, or to a member of the partnership to be served, or 

the president, secretary, or other executive officer or a director of 

the corporation to be served; or (b) by leaving a copy thereof at the 

residence or the principal office or place of business of such person, 

partnership, or corporation; or (c) by mailing a copy thereof by registered mail or by certified mail addressed to such person, partnership, or corporation at his or its residence or principal office or 


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place of business. The verified return by the person so serving said 

complaint, order, or other process setting forth the manner of said 

service shall be proof of the same, and the return post office receipt 

for said complaint, order, or other process mailed by registered 

mail or by certified mail as aforesaid shall be proof of the service 

of the same. 

(g) FINALITY OF ORDER.—An order of the Commission to cease 

and desist shall become final— (1) Upon the expiration of the time allowed for filing a petition for review, if no such petition has been duly filed within 

such time; but the Commission may thereafter modify or set 

aside its order to the extent provided in the last sentence of 

subsection (b). 

(2) Except as to any order provision subject to paragraph (4), 

upon the sixtieth day after such order is served, if a petition 

for review has been duly filed; except that any such order may 

be stayed, in whole or in part and subject to such conditions 

as may be appropriate, by— (A) the Commission; 

(B) an appropriate court of appeals of the United States, 

if (i) a petition for review of such order is pending in such 

court, and (ii) an application for such a stay was previously submitted to the Commission and the Commission, 

within the 30-day period beginning on the date the application was received by the Commission, either denied the 

application or did not grant or deny the application; or 

(C) the Supreme Court, if an applicable petition for certiorari is pending. 

(3) For purposes of subsection (m)(1)(B) and of section 

19(a)(2), if a petition for review of the order of the Commission 

has been filed— (A) upon the expiration of the time allowed for filing a 

petition for certiorari, if the order of the Commission has 

been affirmed or the petition for review has been dismissed by the court of appeals and no petition for certiorari has been duly filed; 

(B) upon the denial of a petition for certiorari, if the 

order of the Commission has been affirmed or the petition 

for review has been dismissed by the court of appeals; or 

(C) upon the expiration of 30 days from the date of 

issuance of a mandate of the Supreme Court directing that 

the order of the Commission be affirmed or the petition for 

review be dismissed. 

(4) In the case of an order provision requiring a person, partnership, or corporation to divest itself of stock, other share capital, or assets, if a petition for review of such order of the Commission has been filed—

(A) upon the expiration of the time allowed for filing a 

petition for certiorari, if the order of the Commission has 

been affirmed or the petition for review has been dismissed by the court of appeals and no petition for certiorari has been duly filed; 

(B) upon the denial of a petition for certiorari, if the 

order of the Commission has been affirmed or the petition 

for review has been dismissed by the court of appeals; or 


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(C) upon the expiration of 30 days from the date of 

issuance of a mandate of the Supreme Court directing that 

the order of the Commission be affirmed or the petition for 

review be dismissed. 

(h) MODIFICATION OR SETTING ASIDE OF ORDER BY SUPREME

COURT.—If the Supreme Court directs that the order of the Commission be modified or set aside, the order of the Commission rendered in accordance with the mandate of the Supreme Court shall 

become final upon the expiration of thirty days from the time it 

was rendered, unless within such thirty days either party has instituted proceedings to have such order corrected to accord with the 

mandate, in which event the order of the Commission shall become 

final when so corrected. 

(i) MODIFICATION OR SETTING ASIDE OF ORDER BY COURT OF APPEALS.—If the order of the Commission is modified or set aside by 

the court of appeals, and if (1) the time allowed for filing a petition 

for certiorari has expired and no such petition has been duly filed, 

or (2) the petition for certiorari has been denied, or (3) the decision 

of the court has been affirmed by the Supreme Court, then the 

order of the Commission rendered in accordance with the mandate 

of the court of appeals shall become final on the expiration of thirty 

days from the time such order of the Commission was rendered, 

unless within such thirty days either party has instituted proceedings to have such order corrected so that it will accord with the 

mandate, in which event the order of the Commission shall become 

final when so corrected. 

(j) REHEARING UPON ORDER OR REMAND.—If the Supreme Court 

orders a rehearing; or if the case is remanded by the court of appeals to the Commission for a rehearing, and if (1) the time allowed 

for filing a petition for certiorari has expired, and no such petition 

has been duly filed, or (2) the petition for certiorari has been denied, or (3) the decision of the court has been affirmed by the Supreme Court, then the order of the Commission rendered upon such 

rehearing shall become final in the same manner as though no 

prior order of the Commission had been rendered. 

(k) ‘‘MANDATE’’ DEFINED.—As used in this section the term ‘‘mandate,’’ in case a mandate has been recalled prior to the expiration 

of thirty days from the date of issuance thereof, means the final 

mandate. 

(l) PENALTY FOR VIOLATION OF ORDER; INJUNCTIONS AND OTHER

APPROPRIATE EQUITABLE RELIEF.—Any person, partnership, or corporation who violates an order of the Commission after it has become final, and while such order is in effect, shall forfeit and pay 

to the United States a civil penalty of not more than $10,000 for 

each violation, which shall accrue to the United States and may be 

recovered in a civil action brought by the Attorney General of the 

United States. Each separate violation of such an order shall be a 

separate offense, except that in the case of a violation through continuing failure to obey or neglect to obey a final order of the Commission, each day of continuance of such failure or neglect shall be 

deemed a separate offense. In such actions, the United States district courts are empowered to grant mandatory injunctions and 

such other and further equitable relief as they deem appropriate in 

the enforcement of such final orders of the Commission. 


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(m) CIVIL ACTIONS FOR RECOVERY OF PENALTIES FOR KNOWING

VIOLATIONS OF RULES AND CEASE AND DESIST ORDERS RESPECTING

UNFAIR OR DECEPTIVE ACTS OR PRACTICES; JURISDICTION; MAXIMUM AMOUNT OF PENALTIES; CONTINUING VIOLATIONS; DE NOVO

DETERMINATIONS; COMPROMISE OR SETTLEMENT PROCEDURE.—

(1)(A) The Commission may commence a civil action to recover a civil penalty in a district court of the United States 

against any person, partnership, or corporation which violates 

any rule under this Act respecting unfair or deceptive acts or 

practices (other than an interpretive rule or a rule violation of 

which the Commission has provided is not an unfair or deceptive act or practice in violation of subsection (a)(1)) with actual 

knowledge or knowledge fairly implied on the basis of objective 

circumstances that such act is unfair or deceptive and is prohibited by such rule. In such action, such person, partnership, 

or corporation shall be liable for a civil penalty of not more 

than $10,000 for each violation. 

(B) If the Commission determines in a proceeding under subsection (b) that any act or practice is unfair or deceptive, and 

issues a final cease and desist order, other than a consent 

order, with respect to such act or practice, then the Commission may commence a civil action to obtain a civil penalty in 

a district court of the United States against any person, partnership, or corporation which engages in such act or practice—

(1) after such cease and desist order becomes final 

(whether or not such person, partnership, or corporation 

was subject to such cease and desist order), and 

(2) with actual knowledge that such act or practice is unfair or deceptive and is unlawful under subsection (a)(1) of 

this section. In such action, such person, partnership, or 

corporation shall be liable for a civil penalty of not more 

than $10,000 for each violation. 

(C) In the case of a violation through continuing failure to 

comply with a rule or with section 5(a)(1), each day of continuance of such failure shall be treated as a separate violation, for 

purposes of subparagraphs (A) and (B). In determining the 

amount of such a civil penalty, the court shall take into account the degree of culpability, any history of prior such conduct, ability to pay, effect on ability to continue to do business, 

and such other matters as justice may require. 

(2) If the cease and desist order establishing that the act or 

practice is unfair or deceptive was not issued against the defendant in a civil penalty action under paragraph (1)(B) the 

issues of fact in such action against such defendant shall be 

tried de novo. Upon request of any party to such an action 

against such defendant, the court shall also review the determination of law made by the Commission in the proceeding 

under subsection (b) that the act or practice which was the 

subject of such proceeding constituted an unfair or deceptive 

act or practice in violation of subsection (a). 

(3) The Commission may compromise or settle any action for 

a civil penalty if such compromise or settlement is accompanied by a public statement of its reasons and is approved by 

the court. 


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(n) DEFINITION OF UNFAIR ACTS OR PRACTICES.—The Commission 

shall have no authority under this section or section 18 to declare 

unlawful an act or practice on the grounds that such act or practice 

is unfair unless the act or practice causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by 

consumers themselves and not outweighed by countervailing benefits to consumers or to competition. In determining whether an act 

or practice is unfair, the Commission may consider established 

public policies as evidence to be considered with all other evidence. 

Such public policy considerations may not serve as a primary basis 

for such determination. 

SEC. 6. ADDITIONAL POWERS OF COMMISSION. 

[15 U.S.C 46] 

The commission shall also have power— (a) INVESTIGATION OF PERSONS, PARTNERSHIPS, OR CORPORA- TIONS.—To gather and compile information concerning, and to investigate from time to time the organization, business, conduct, 

practices, and management of any person, partnership, or corporation engaged in or whose business affects commerce, excepting 

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, and its relation to 

other persons, partnerships, and corporations. 

(b) REPORTS OF PERSONS, PARTNERSHIPS, AND CORPORATIONS.— To require, by general or special orders, persons, partnerships, and 

corporations engaged in or whose business affects commerce, excepting 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, or any 

class of them, or any of them, respectively, to file with the commission in such form as the commission may prescribe annual or special, or both annual and special, reports, or answers in writing to 

specific questions, furnishing to the commission such information 

as it may require as to the organization, business, conduct, practices, management, and relation to other corporations, partnerships, and individuals of the respective persons, partnerships, and 

corporations filing such reports or answers in writing. Such reports 

and answers shall be made under oath, or otherwise, as the commission may prescribe, and shall be filed with the commission 

within such reasonable period as the commission may prescribe, 

unless additional time be granted in any case by the commission. 

(c) INVESTIGATION OF COMPLIANCE WITH ANTITRUST DECREES.— Whenever a final decree has been entered against any defendant 

corporation in any suit brought by the United States to prevent 

and restrain any violation of the antitrust Acts, to make investigation, upon its own initiative, of the manner in which the decree has 

been or is being carried out, and upon the application of the Attorney General it shall be its duty to make such investigation. It shall 

transmit to the Attorney General a report embodying its findings 

and recommendations as a result of any such investigation, and the 

report shall be made public in the discretion of the commission. 

(d) INVESTIGATIONS OF VIOLATIONS OF ANTITRUST STATUTES.—

Upon the direction of the President or either House of Congress to 

investigate and report the facts relating to any alleged violations 

of the antitrust Acts by any corporation. 


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(e) READJUSTMENT OF BUSINESS OF CORPORATIONS VIOLATING

ANTITRUST STATUTES.—Upon the application of the Attorney General to investigate and make recommendations for the readjustment of the business of any corporation alleged to be violating the 

antitrust Acts in order that the corporation may thereafter maintain its organization, management, and conduct of business in accordance with law. 

(f) PUBLICATION OF INFORMATION; REPORTS.—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 øpurposes.¿ 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). 

(g) CLASSIFICATION OF CORPORATIONS; REGULATIONS.—From time 

to time to classify corporations and (except as provided in section 

18(a)(2) of this Act) to make rules and regulations for the purpose 

of carrying out the provisions of this Act. 

(h) INVESTIGATIONS OF FOREIGN TRADE CONDITIONS; REPORTS.—

To investigate, from time to time, trade conditions in and with foreign countries where associations, combinations, or practices of 

manufacturers, merchants, or traders, or other conditions, may affect the foreign trade of the United States, and to report to Congress thereon, with such recommendations as it deems advisable. 

(i) With respect to the International Antitrust Enforcement Assistance Act of 1994, to conduct investigations of possible violations 

of foreign antitrust laws (as defined in section 12 of such Act). 

(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))), to 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. 


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(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. 


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57a(f)(4)), or a common carrier subject to the Act to regulate 

commerce, except in accordance with the undesignated 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, to 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.—To 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 øclauses 

(a) and (b)¿ subsections (a), (b), and (j) of this section, shall not be 


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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. 

Section 16 of the Federal Trade Commission Act 

* * * * * * * 

SEC. 16. COMMENCEMENT, DEFENSE, INTERVENTION AND SUPERVISION OF LITIGATION AND APPEAL BY COMMISSION OR 

ATTORNEY GENERAL. 

[15 U.S.C. 56] 

(a) PROCEDURE FOR EXERCISE OF AUTHORITY TO LITIGATE OR APPEAL.—


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(1) Except as otherwise provided in paragraph (2) or (3), if—

(A) before commencing, defending, or intervening in, any 

civil action involving this Act (including an action to collect 

a civil penalty) which the Commission, or the Attorney 

General on behalf of the Commission, is authorized to commence, defend, or intervene in, the Commission gives written notification and undertakes to consult with the Attorney General with respect to such action; and 

(B) the Attorney General fails within 45 days after receipt of such notification to commence, defend, or intervene 

in, such action; the Commission may commence, defend, or 

intervene in, and supervise the litigation of, such action 

and any appeal of such action in its own name by any of 

its attorneys designated by it for such purpose. 

(2) Except as otherwise provided in paragraph (3), in any 

civil action—

(A) under section 13 of this Act (relating to injunctive relief); 

(B) under section 19 of this Act (relating to consumer redress); 

(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; øor¿ 

(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 a compliance 

with section 6 of this Act); or 

(E) under section 21A of this Act; 

the Commission shall have exclusive authority to commence or 

defend, and supervise the litigation of, such action and any appeal of such action in its own name by any of its attorneys designated by it for such purpose, unless the Commission authorizes the Attorney General to do so. The Commission shall inform the Attorney General of the exercise of such authority 

and such exercise shall not preclude the Attorney General from 

intervening on behalf of the United States in such action and 

any appeal of such action as may be otherwise provided by law. 

(3)(A) If the Commission makes a written request to the Attorney General, within the 10-day period which begins on the 

date of the entry of the judgment in any civil action in which 

the Commission represented itself pursuant to paragraph (1) or 

(2), to represent itself through any of its attorneys designated 

by it for such purpose before the Supreme Court in such action, 

it may do so, if—

(i) the Attorney General concurs with such request; or 

(ii) the Attorney General, within the 60-day period 

which begins on the date of the entry of such judgment—

(a) refuses to appeal or file a petition for writ of certiorari with respect to such civil action, in which case 

he shall give written notification to the Commission of 

the reasons for such refusal within such 60-day period; 

or 

(b) the Attorney General fails to take any action 

with respect to the Commission’s request. 


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(B) In any case where the Attorney General represents the 

Commission before the Supreme Court in any civil action in 

which the Commission represented itself pursuant to paragraph (1) or (2), the Attorney General may not agree to any 

settlement, compromise, or dismissal of such action, or confess 

error in the Supreme Court with respect to such action, unless 

the Commission concurs. 

(C) For purposes of this paragraph (with respect to representation before the Supreme Court), the term ‘‘Attorney General’’

includes the Solicitor General. 

(4) If, prior to the expiration of the 45-day period specified 

in paragraph (1) of this section or a 60-day period specified in 

paragraph (3), any right of the Commission to commence, defend, or intervene in, any such action or appeal may be extinguished due to any procedural requirement of any court with 

respect to the time in which any pleadings, notice of appeal, or 

other acts pertaining to such action or appeal may be taken, 

the Attorney General shall have one-half of the time required 

to comply with any such procedural requirement of the court 

(including any extension of such time granted by the court) for 

the purpose of commencing, defending, or intervening in the 

civil action pursuant to paragraph (1) or for the purpose of refusing to appeal or file a petition for writ of certiorari and the 

written notification or failing to take any action pursuant to 

paragraph 3(A)(ii). 

(5) The provisions of this subsection shall apply notwithstanding chapter 31 of title 28, United States Code, or any 

other provision of law. 

(b) CERTIFICATION BY COMMISSION TO ATTORNEY GENERAL FOR

CRIMINAL PROCEEDINGS.—Whenever the Commission has reason to 

believe that any person, partnership, or corporation is liable for a 

criminal penalty under this Act, the Commission shall certify the 

facts to the Attorney General, whose duty it shall be to cause appropriate criminal proceedings to be brought. 

(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.’’. 

* * * * * * * 


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SEC. 21. CONFIDENTIALITY. 

[15 U.S.C. 57b–2] 

(a) DEFINITIONS.—For purposes of this section: 

(1) The term ‘‘material’’ means documentary material, tangible things, written reports or answers to questions, and transcripts of oral testimony. 

(2) The term ‘‘Federal agency’’ has the meaning given it in 

section 552(e) of title 5, United States Code. 

(b) PROCEDURES RESPECTING DOCUMENTS, TANGIBLE THINGS, OR

TRANSCRIPTS OF ORAL TESTIMONY RECEIVED PURSUANT TO COM- PULSORY PROCESS IN INVESTIGATION.— (1) With respect to any document, tangible thing, or transcript of oral testimony received by the Commission pursuant 

to compulsory process in an investigation, a purpose of which 

is to determine whether any person may have violated any provision of the laws administered by the Commission, the procedures established in paragraph (2) through paragraph (7) shall 

apply. 

(2)(A) The Commission shall designate a duly authorized 

agent to serve as custodian of documentary material, tangible 

things, or written reports or answers to questions, and transcripts of oral testimony, and such additional duly authorized 

agents as the Commission shall determine from time to time 

to be necessary to serve as deputies to the custodian. 

(B) Any person upon whom any demand for the production 

of documentary material has been duly served shall make such 

material available for inspection and copying or reproduction 

to the custodian designated in such demand at the principal 

place of business of such person (or at such other place as such 

custodian and such person thereafter may agree and prescribe 

in writing or as the court may direct pursuant to section 20(h)) 

on the return date specified in such demand (or on such later 

date as such custodian may prescribe in writing). Such person 

may upon written agreement between such person and the custodian substitute copies for originals of all or any part of such 

material. 

(3)(A) The custodian to whom any documentary material, 

tangible things, written reports or answers to questions, and 

transcripts of oral testimony are delivered shall take physical 

possession of such material, reports or answers, and transcripts, and shall be responsible for the use made of such material, reports or answers, and transcripts, and for the return of 

material, pursuant to the requirements of this section. 

(B) The custodian may prepare such copies of the documentary material, written reports or answers to questions, and 

transcripts of oral testimony, and may make tangible things 

available, as may be required for official use by any duly authorized officer or employee of the Commission under regulations which shall be promulgated by the Commission. Notwithstanding subparagraph (C), such material, things, and transcripts may be used by any such officer or employee in connection with the taking of oral testimony under this section. 

(C) Except as otherwise provided in this section, while in the 

possession of the custodian, no documentary material, tangible 

things, reports or answers to questions, and transcripts of oral 


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testimony shall be available for examination by any individual 

other than a duly authorized officer or employee of the Commission without the consent of the person who produced the 

material, things, or transcripts. Nothing in this section is intended to prevent disclosure to either House of the Congress or 

to any committee or subcommittee of the Congress, except that 

the Commission immediately shall notify the owner or provider 

of any such information of a request for information designated 

as confidential by the owner or provider. 

(D) While in the possession of the custodian and under such 

reasonable terms and conditions as the Commission shall prescribe—

(i) documentary material, tangible things, or written reports shall be available for examination by the person who 

produced the material, or by any duly authorized representative of such person; and 

(ii) answers to questions in writing and transcripts of 

oral testimony shall be available for examination by the 

person who produced the testimony or by his attorney. 

(4) Whenever the Commission has instituted a proceeding 

against a person, partnership, or corporation, the custodian 

may deliver to any officer or employee of the Commission documentary material, tangible things, written reports or answers 

to questions, and transcripts of oral testimony for official use 

in connection with such proceeding. Upon the completion of the 

proceeding, the officer or employee shall return to the custodian any such material so delivered which has not been received into the record of the proceeding. 

(5) If any documentary material, tangible things, written reports or answers to questions, and transcripts of oral testimony 

have been produced in the course of any investigation by any 

person pursuant to compulsory process and— (A) any proceeding arising out of the investigation has 

been completed; or 

(B) no proceeding in which the material may be used has 

been commenced within a reasonable time after completion 

of the examination and analysis of all such material and 

other information assembled in the course of the investigation; then the custodian shall, upon written request of the 

person who produced the material, return to the person 

any such material which has not been received into the 

record of any such proceeding (other than copies of such 

material made by the custodian pursuant to paragraph 

(3)(B)). 

(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 


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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 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 


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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. 

(7) In the event of the death, disability, or separation from 

service in the Commission of the custodian of any documentary 

material, tangible things, written reports or answers to questions, and transcripts of oral testimony produced under any demand issued under this Act, or the official relief of the custodian from responsibility for the custody and control of such material, the Commission promptly shall—

(A) designate under paragraph (2)(A) another duly authorized agent to serve as custodian of such material; and 

(B) transmit in writing to the person who produced the 

material or testimony notice as to the identity and address 

of the successor so designated. Any successor designated 

under paragraph (2)(A) as a result of the requirements of 

this paragraph shall have (with regard to the material involved) all duties and responsibilities imposed by this section upon his predecessor in office with regard to such material, except that he shall not be held responsible for any 

default or dereliction which occurred before his designation. 

(c) INFORMATION CONSIDERED CONFIDENTIAL.—

(1) All information reported to or otherwise obtained by the 

Commission which is not subject to the requirements of subsection (b) shall be considered confidential when so marked by 

the person supplying the information and shall not be disclosed, except in accordance with the procedures established in 

paragraph (2) and paragraph (3). 

(2) If the Commission determines that a document marked 

confidential by the person supplying it may be disclosed because it is not a trade secret or commercial or financial information which is obtained from any person and which is privileged or confidential, within the meaning of section 6(f), then 

the Commission shall notify such person in writing that the 

Commission intends to disclose the document at a date not less 

than 10 days after the date of receipt of notification. 

(3) Any person receiving such notification may, if he believes 

disclosure of the document would cause disclosure of a trade 

secret, or commercial or financial information which is obtained from any person and which is privileged or confidential, 

within the meaning of section 6(f), before the date set for release of the document, bring an action in the district court of 

the United States for the district within which the documents 

are located or in the United States District Court for the District of Columbia to restrain disclosure of the document. Any 

person receiving such notification may file with the appropriate district court or court of appeals of the United States, 

as appropriate, an application for a stay of disclosure. The docVerDate Aug 31 2005 22:55 Mar 15, 2006 Jkt 049010 PO 00000 Frm 00030 Fmt 6659 Sfmt 6601 E:\HR\OC\SR219.XXX SR219

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uments shall not be disclosed until the court has ruled on the 

application for a stay. 

(d) PARTICULAR DISCLOSURES ALLOWED.— (1) The provisions of subsection (c) shall not be construed to 

prohibit—

(A) the disclosure of information to either House of the 

Congress or to any committee or subcommittee of the Congress, except that the Commission immediately shall notify 

the owner or provider of any such information of a request 

for information designated as confidential by the owner or 

provider; 

(B) the disclosure of the results of any investigation or 

study carried out or prepared by the Commission, except 

that no information shall be identified nor shall information be disclosed in such a manner as to disclose a trade 

secret of any person supplying the trade secret, or to disclose any commercial or financial information which is obtained from any person and which is privileged or confidential; 

(C) the disclosure of relevant and material information 

in Commission adjudicative proceedings or in judicial proceedings to which the Commission is a party; or 

(D) the disclosure to a Federal agency of disaggregated 

information obtained in accordance with section 3512 of 

title 44, United States Code, except that the recipient 

agency shall use such disaggregated information for economic, statistical, or policymaking purposes only, and shall 

not disclose such information in an individually identifiable form. 

(2) Any disclosure of relevant and material information in 

Commission adjudicative proceedings or in judicial proceedings 

to which the Commission is a party shall be governed by the 

rules of the Commission for adjudicative proceedings or by 

court rules or orders, except that the rules of the Commission 

shall not be amended in a manner inconsistent with the purposes of this section. 

(e) EFFECT ON OTHER STATUTORY PROVISIONS LIMITING DISCLO- SURE.—Nothing in this section shall supersede any statutory provision which expressly prohibits or limits particular disclosures by 

the Commission, or which authorizes disclosures to any other Federal agency. 

ø(f) EXEMPTION FROM DISCLOSURE.—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 proVerDate Aug 31 2005 22:55 Mar 15, 2006 Jkt 049010 PO 00000 Frm 00031 Fmt 6659 Sfmt 6603 E:\HR\OC\SR219.XXX SR219

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vided 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) IN GENERAL.—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) SAVINGS PROVISION.—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) of this section; 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 execuVerDate Aug 31 2005 22:55 Mar 15, 2006 Jkt 049010 PO 00000 Frm 00032 Fmt 6659 Sfmt 6603 E:\HR\OC\SR219.XXX SR219

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tion 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) of this section. 

(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.—


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(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 


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provision of material or for any failure to provide notice of such 

provision of material or of intention to so 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 ComVerDate Aug 31 2005 22:55 Mar 15, 2006 Jkt 049010 PO 00000 Frm 00035 Fmt 6659 Sfmt 6603 E:\HR\OC\SR219.XXX SR219

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mission 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 subsection (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. 26. REIMBURSEMENT OF EXPENSES. 

The Commission may accept payment or reimbursement, in cash 

or in kind, from a domestic or foreign law enforcement agency, or 

payment or reimbursement made on behalf of such agency, for expenses incurred by the Commission, its members, or employees in 

carrying out any activity pursuant to a statute administered by the 

Commission without regard to any other provision of law. Any such 

payments or reimbursements shall be considered a reimbursement 

to the appropriated funds of the Commission. 

SEC. 27. GIFTS AND VOLUNTARY AND UNCOMPENSATED SERVICES. 

(a) IN GENERAL.—In furtherance of its functions the Commission 

may accept, hold, administer, and use unconditional gifts, donations, and bequests of real, personal, and other property and, notwithstanding section 1342 of 10 title 31, United States Code, accept 

voluntary and uncompensated services. 

(b) LIMITATIONS.—

(1) CONFLICTS OF INTEREST.—The Commission shall establish written guidelines setting forth criteria to be used in determining whether the acceptance, holding, administration, or use 

of a gift, donation, or bequest pursuant to subsection (a) would 

reflect unfavorably upon the ability of the Commission or any 

employee to carry out its responsibilities or official duties in a 

fair and objective manner, or would compromise the integrity or 

the appearance of the integrity of its programs or any official 

involved in those programs. 

(2) VOLUNTARY SERVICES.—A person who provides voluntary 

and uncompensated service under subsection (a) shall be considered a Federal employee for purposes of—

(A) chapter 81 of title 5, United States Code, (relating to 

compensation for injury); and 

(B) 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. 

(3) TORT LIABILITY OF VOLUNTEERS.—A person who provides 

voluntary and uncompensated service under subsection (a), 

while assigned to duty, shall be deemed a volunteer of a nonprofit organization or governmental entity for purposes of the 


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35 

Volunteer Protection Act of 1997 (42 U.S.C. 14501 et seq.). Subsection (d) of section 4 of such Act (42 U.S.C. 14503(d)) shall 

not apply for purposes of any claim against such volunteer. 

SEC. ø26¿ 28. SHORT TITLE. 

This Act may be cited as the ‘‘Federal Trade Commission Act.’’

Æ 


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