108TH CONGRESS REPT. 108–635 " ! HOUSE OF REPRESENTATIVES 2d Session Part 2 

INTERNATIONAL CONSUMER PROTECTION ACT OF 2004 

NOVEMBER 16, 2004.—Ordered to be printed 

Mr. SENSENBRENNER, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

[To accompany H.R. 3143] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 3143) to enhance Federal Trade Commission enforcement 

against cross-border fraud and deception, having considered the 

same, reports favorably thereon with an amendment and recommends that the bill as amended do pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 1 

Purpose and Summary ............................................................................................ 8 

Background and Need for the Legislation ............................................................. 9 

Hearings ................................................................................................................... 10 

Committee Consideration ........................................................................................ 11 

Vote of the Committee ............................................................................................. 11 

Committee Oversight Findings ............................................................................... 11 

New Budget Authority and Tax Expenditures ...................................................... 11 

Congressional Budget Office Cost Estimate .......................................................... 11 

Performance Goals and Objectives ......................................................................... 13 

Constitutional Authority Statement ...................................................................... 13 

Section-by-Section Analysis and Discussion .......................................................... 13 

Agency Views ........................................................................................................... 17 

Changes in Existing Law Made by the Bill, as Reported ..................................... 19 

Committee Jurisdiction Letter ................................................................................ 31 

Markup Transcript .................................................................................................. 34 

THE AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

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SECTION 1. SHORT TITLE. 

This Act may be referred to as the ‘‘International Consumer Protection Act of 

2004’’. 

SEC. 2. FOREIGN LAW ENFORCEMENT AGENCY DEFINED. 

Section 4 of the Federal Trade Commission Act (15 U.S.C. 44) is amended by 

adding at the end the following: 

‘‘ ‘Foreign law enforcement agency’ means— 

‘‘(A) any agency or judicial authority of a foreign government, including a 

foreign state, a political subdivision of a foreign state, or a multinational organization constituted by and comprised of foreign states, that is vested with law 

enforcement or investigative authority in civil, criminal, or administrative matters; and 

‘‘(B) any multinational or multiagency organization to the extent that it is 

acting on behalf of an entity described in subparagraph (A).’’. 

SEC. 3. AVAILABILITY OF REMEDIES. 

Section 5(a) of the Federal Trade Commission Act (15 U.S.C. 45(a)) is amended 

by adding at the end the following: 

‘‘(4) (A) For purposes of this subsection, the term ‘unfair or deceptive acts or 

practices’ shall include such acts or practices involving foreign commerce that— 

‘‘(i) cause or are likely to cause reasonably foreseeable injury within the 

United States; or 

‘‘(ii) involve material conduct occurring within the United States. 

‘‘(B) All remedies available to the Commission with respect to unfair and deceptive acts or practices shall be available for acts and practices described in this paragraph, including restitution to domestic or foreign victims.’’. 

SEC. 4. POWERS OF THE COMMISSION. 

(a) PUBLICATION OF INFORMATION; REPORTS.—Section 6(f) of the Federal Trade 

Commission Act (15 U.S.C. 46(f)) is amended— 

(1) by inserting ‘‘(1)’’ after ‘‘such information’’ the first place it appears; and 

(2) by striking ‘‘purposes.’’ and inserting ‘‘purposes, and (2) to any officer 

or employee of any foreign law enforcement agency under the same circumstances that making material available to foreign law enforcement agencies 

is permitted under section 21(b).’’. 

(b) OTHER POWERS OF THE COMMISSION.—Section 6 of the Federal Trade Commission Act (15 U.S.C. 46) is further amended by inserting after subsection (i) and 

before the proviso the following: 

‘‘(j) INVESTIGATIVE ASSISTANCE FOR FOREIGN LAW ENFORCEMENT AGENCIES.— 

‘‘(1) IN GENERAL.—Upon a written request from a foreign law enforcement 

agency to provide assistance in accordance with this subsection, if the requesting agency states that it is investigating, or engaging in enforcement proceedings against, possible violations of laws prohibiting fraudulent or deceptive 

commercial practices, or other practices substantially similar to practices prohibited by any provision of the laws administered by the Commission, other 

than Federal antitrust laws (as defined in section 12(5) of the International 

Antitrust Enforcement Assistance Act of 1994 (15 U.S.C. 6211(5))), the Commission may provide the assistance described in paragraph (2) without requiring 

that the conduct identified in the request constitute a violation of the laws of 

the United States. 

‘‘(2) TYPE OF ASSISTANCE.—In providing assistance to a foreign law enforcement agency under this subsection, the Commission may— 

‘‘(A) conduct such investigation as the Commission deems necessary to 

collect information and evidence pertinent to the request for assistance, 

using all investigative powers authorized by this Act; and 

‘‘(B) when the request is from an agency acting to investigate or pursue 

the enforcement of civil laws, or when the Attorney General refers a request to the Commission from an agency acting to investigate or pursue the 

enforcement of criminal laws, seek and accept appointment by a United 

States district court of Commission attorneys to provide assistance to foreign and international tribunals and to litigants before such tribunals on 

behalf of a foreign law enforcement agency pursuant to section 1782 of title 

28, United States Code. 

‘‘(3) CRITERIA FOR DETERMINATION.—In deciding whether to provide such assistance, the Commission shall consider all relevant factors, including— 

‘‘(A) whether the requesting agency has agreed to provide or will provide reciprocal assistance to the Commission; 

‘‘(B) whether compliance with the request would prejudice the public interest of the United States; and 

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‘‘(C) whether the requesting agency’s investigation or enforcement proceeding concerns acts or practices that cause or are likely to cause injury 

to a significant number of persons. 

‘‘(4) INTERNATIONAL AGREEMENTS.—If a foreign law enforcement agency has 

set forth a legal basis for requiring execution of an international agreement as 

a condition for reciprocal assistance, or as a condition for provision of materials 

or information to the Commission, the Commission, with prior approval and ongoing oversight of the Secretary of State, and with final approval of the agreement by the Secretary of State, may negotiate and conclude an international 

agreement, in the name of either the United States or the Commission, for the 

purpose of obtaining such assistance, materials, or information. The Commission may undertake in such an international agreement to— 

‘‘(A) provide assistance using the powers set forth in this subsection; 

‘‘(B) disclose materials and information in accordance with subsection 

(f) and section 21(b); and 

‘‘(C) engage in further cooperation, and protect materials and information received from disclosure, as authorized by this Act. 

‘‘(5) ADDITIONAL AUTHORITY.—The authority provided by this subsection is 

in addition to, and not in lieu of, any other authority vested in the Commission 

or any other officer of the United States. 

‘‘(6) LIMITATION.—The authority granted by this subsection shall not authorize the Commission to take any action or exercise any power with respect 

to a bank, a savings and loan institution described in section 18(f)(3) (15 U.S.C. 

57a(f)(3)), a Federal credit union described in section 18(f)(4) (15 U.S.C. 

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

in accordance with the proviso following the last designated subsection of section 6 (15 U.S.C. 46). 

‘‘(7) ASSISTANCE TO CERTAIN COUNTRIES.—The Commission may not provide 

investigative assistance under this subsection to a foreign law enforcement 

agency from a foreign state that the Secretary of State has determined, in accordance with section 6(j) of the Export Administration Act of 1979 (50 U.S.C. 

App. 2405(j)), has repeatedly provided support for acts of international terrorism, unless and until such determination is rescinded pursuant to section 

6(j)(4) of that Act (50 U.S.C. App. 2405(j)(4)). 

‘‘(k) REFERRAL OF EVIDENCE FOR CRIMINAL PROCEEDINGS.— 

‘‘(1) IN GENERAL.—Whenever the Commission obtains evidence that any 

person, partnership, or corporation, either domestic or foreign, has engaged in 

conduct that may constitute a violation of Federal criminal law, the Commission 

may transmit such evidence to the Attorney General, who may institute criminal proceedings under appropriate statutes. Nothing in this paragraph affects 

any other authority of the Commission to disclose information. 

‘‘(2) INTERNATIONAL INFORMATION.—The Commission shall endeavor to ensure, with respect to memoranda of understanding and international agreements it may conclude, that material it has obtained from foreign law enforcement agencies acting to investigate or pursue the enforcement of foreign criminal laws may be used for the purpose of investigation, prosecution, or prevention of violations of United States criminal laws. 

‘‘(l) EXPENDITURES FOR COOPERATIVE ARRANGEMENTS.—The Commission may 

expend appropriated funds for— 

‘‘(1) operating expenses and other costs of bilateral and multilateral cooperative law enforcement groups conducting activities of interest to the Commission and in which the Commission participates; and 

‘‘(2) expenses for consultations and meetings hosted by the Commission 

with foreign government agency officials, members of their delegations, appropriate representatives and staff to exchange views concerning developments relating to the Commission’s mission, development and implementation of cooperation agreements, and provision of technical assistance for the development 

of foreign consumer protection or competition regimes, such expenses to include 

necessary administrative and logistic expenses and the expenses of Commission 

staff and foreign invitees in attendance at such consultations and meetings including— 

‘‘(A) such incidental expenses as meals taken in the course of such attendance; 

‘‘(B) any travel and transportation to or from such meetings; and 

‘‘(C) any other related lodging or subsistence.’’. 

(c) AUTHORIZATION OF APPROPRIATIONS.—The Federal Trade Commission is authorized to expend appropriated funds not to exceed $100,000 per fiscal year for purposes of section 6(l) of the Federal Trade Commission Act (15 U.S.C. 46(l)) (as added 

by subsection (b) of this Act), including operating expenses and other costs of the 

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following bilateral and multilateral cooperative law enforcement agencies and organizations: 

(1) The International Consumer Protection and Enforcement Network. 

(2) The International Competition Network. 

(3) The Mexico-U.S.-Canada Health Fraud Task Force. 

(4) Project Emptor. 

(5) The Toronto Strategic Partnership and other regional partnerships with 

a nexus in a Canadian province. 

(d) CONFORMING AMENDMENT.—Section 6 of the Federal Trade Commission Act 

(15 U.S.C. 46) is amended by striking ‘‘clauses (a) and (b)’’ in the proviso following 

subsection (l) (as added by subsection (b) of this section) and inserting ‘‘subsections 

(a), (b), and (j)’’. 

SEC. 5. REPRESENTATION IN FOREIGN LITIGATION. 

Section 16 of the Federal Trade Commission Act (15 U.S.C. 56) is amended by 

adding at the end the following: 

‘‘(c) FOREIGN LITIGATION.— 

‘‘(1) COMMISSION ATTORNEYS.—With the concurrence of the Attorney General, the Commission may designate Commission attorneys to assist the Attorney General in connection with litigation in foreign courts on particular matters 

in which the Commission has an interest. 

‘‘(2) REIMBURSEMENT FOR FOREIGN COUNSEL.—The Commission is authorized to expend appropriated funds, upon agreement with the Attorney General, 

to reimburse the Attorney General for the retention of foreign counsel for litigation in foreign courts, and for expenses related to litigation in foreign courts in 

which the Commission has an interest. 

‘‘(3) LIMITATION ON USE OF FUNDS.—Nothing in this subsection authorizes 

the payment of claims or judgments from any source other than the permanent 

and indefinite appropriation authorized by section 1304 of title 31, United 

States Code. 

‘‘(4) OTHER AUTHORITY.—The authority provided by this subsection is in addition to any other authority of the Commission or the Attorney General.’’. 

SEC. 6. SHARING INFORMATION WITH FOREIGN LAW ENFORCEMENT AGENCIES. 

(a) MATERIAL OBTAINED PURSUANT TO COMPULSORY PROCESS.—Section 21(b)(6) 

of the Federal Trade Commission Act (15 U.S.C. 57b–2(b)(6)) is amended by adding 

at the end the following: ‘‘The custodian may make such material available to any 

foreign law enforcement agency upon the prior certification of an appropriate official 

of any such foreign law enforcement agency, either by a prior agreement or memorandum of understanding with the Commission or by other written certification, 

that such material will be maintained in confidence and will be used only for official 

law enforcement purposes, if— 

‘‘(A) the foreign law enforcement agency has set forth a bona fide legal basis 

for its authority to maintain the material in confidence; 

‘‘(B) the materials are to be used for purposes of investigating, or engaging 

in enforcement proceedings related to, possible violations of— 

‘‘(i) foreign laws prohibiting fraudulent or deceptive commercial practices or other practices substantially similar to practices prohibited by any 

law administered by the Commission; 

‘‘(ii) a law administered by the Commission, if disclosure of the material would further a Commission investigation or enforcement proceeding; 

or 

‘‘(iii) with the approval of the Attorney General, other foreign criminal 

laws, if such foreign criminal laws are offenses defined in or covered by a 

criminal mutual legal assistance treaty in force between the government of 

the United States and the foreign law enforcement agency’s government; 

‘‘(C) the appropriate Federal banking agency (as defined in section 3(q) of 

the Federal Deposit Insurance Act (12 U.S.C. 1813(q))) or, in the case of a Federal credit union, the National Credit Union Administration, has given its prior 

approval if the materials to be provided under subparagraph (B) are requested 

by the foreign law enforcement agency for the purpose of investigating, or engaging in enforcement proceedings based on, possible violations of law by a 

bank, a savings and loan institution described in section 18(f)(3) of the Federal 

Trade Commission Act (15 U.S.C. 57a(f)(3)), or a Federal credit union described 

in section 18(f)(4) of the Federal Trade Commission Act (15 U.S.C. 57a(f)(4)); 

and 

‘‘(D) the foreign law enforcement agency is not from a country that the Secretary of State has determined, in accordance with section 6(j) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)), has repeatedly provided supVerDate Aug 04 2004 20:54 Nov 16, 2004 Jkt 039006 PO 00000 Frm 00004 Fmt 6659 Sfmt 6621 E:\HR\OC\HR635P2.108 HR635P2
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port for acts of international terrorism, unless and until such determination is 

rescinded pursuant to section 6(j)(4) of that Act (50 U.S.C. App. 2405(j)(4)). 

Nothing in the preceding sentence authorizes the disclosure of material obtained in 

connection with the administration of the Federal antitrust laws or foreign antitrust 

laws (as defined in paragraphs (5) and (7), respectively, of section 12 of the International Antitrust Enforcement Assistance Act of 1994 (15 U.S.C. 6211)) to any officer or employee of a foreign law enforcement agency.’’. 

(b) INFORMATION SUPPLIED BY AND ABOUT FOREIGN SOURCES.—Section 21(f) of 

the Federal Trade Commission Act (15 U.S.C. 57b–2(f)) is amended to read as follows— 

‘‘(f) EXEMPTION FROM PUBLIC DISCLOSURE.— 

‘‘(1) IN GENERAL.—Any material which is received by the Commission in 

any investigation, a purpose of which is to determine whether any person may 

have violated any provision of the laws administered by the Commission, and 

which is provided pursuant to any compulsory process under this Act or which 

is provided voluntarily in place of such compulsory process shall not be required 

to be disclosed under section 552 of title 5, United States Code, or any other 

provision of law, except as provided in paragraph (2)(B) of this section. 

‘‘(2) MATERIAL OBTAINED FROM A FOREIGN SOURCE.— 

‘‘(A) Except as provided in subparagraph (B) of this paragraph, the 

Commission shall not be required to disclose under section 552 of title 5, 

United States Code, or any other provision of law— 

‘‘(i) any material obtained from a foreign law enforcement agency 

or other foreign government agency, if the foreign law enforcement 

agency or other foreign government agency has requested confidential 

treatment, or has precluded such disclosure under other use limitations, as a condition of providing the material; 

‘‘(ii) any material reflecting a consumer complaint obtained from 

any other foreign source, if that foreign source supplying the material 

has requested confidential treatment as a condition of providing the 

material; or 

‘‘(iii) any material reflecting a consumer complaint submitted to a 

Commission reporting mechanism sponsored in part by foreign law enforcement agencies or other foreign government agencies. 

‘‘(B) Nothing in this subsection shall authorize the Commission to withhold information from the Congress or prevent the Commission from complying with an order of a court of the United States in an action commenced 

by the United States or the Commission.’’. 

SEC. 7. CONFIDENTIALITY, DELAYED NOTICE OF PROCESS. 

(a) IN GENERAL.—The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is 

amended by inserting after section 21 the following: 

‘‘SEC. 21A. CONFIDENTIALITY AND DELAYED NOTICE OF COMPULSORY PROCESS FOR CERTAIN THIRD PARTIES. 

‘‘(a) APPLICATION WITH OTHER LAWS.—The Right to Financial Privacy Act (12 

U.S.C. 3401 et seq.) and chapter 121 of title 18, United States Code, shall apply 

with respect to the Commission, except as otherwise provided in this section. 

‘‘(b) PROCEDURES FOR DELAY OF NOTIFICATION OR PROHIBITION OF DISCLOSURE.—The procedures for delay of notification or prohibition of disclosure under the 

Right to Financial Privacy Act (12 U.S.C. 3401 et seq.) and chapter 121 of title 18, 

United States Code, including procedures for extensions of such delays or prohibitions, shall be available to the Commission, provided that, notwithstanding any provision therein— 

‘‘(1) a court may issue an order delaying notification or prohibiting disclosure (including extending such an order) in accordance with the procedures of 

section 1109 of the Right to Financial Privacy Act (12 U.S.C. 3409) (if notification would otherwise be required under that Act), or section 2705 of title 18, 

United States Code, (if notification would otherwise be required under chapter 

121 of that title), if the presiding judge or magistrate judge finds that there is 

reason to believe that such notification or disclosure may cause an adverse result, as defined in subsection (g); and 

‘‘(2) if notification would otherwise be required under chapter 121 of title 

18, United States Code, the Commission may delay notification (including extending such a delay) upon the execution of a written certification in accordance 

with the procedures of section 2705 of that title if the Commission finds that 

there is reason to believe that notification may cause an adverse result, as defined in subsection (g). 

‘‘(c) EX PARTE APPLICATION BY COMMISSION.— 

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‘‘(1) IN GENERAL.—If neither notification nor delayed notification by the 

Commission is required under the Right to Financial Privacy Act (12 U.S.C. 

3401 et seq.) or chapter 121 of title 18, United States Code, the Commission 

may apply ex parte to a presiding judge or magistrate judge for an order prohibiting the recipient of compulsory process issued by the Commission from disclosing to any other person the existence of the process, notwithstanding any 

law or regulation of the United States, or under the constitution, or any law 

or regulation, of any State, political subdivision of a State, territory of the 

United States, or the District of Columbia. The presiding judge or magistrate 

judge may enter such an order granting the requested prohibition of disclosure 

for a period not to exceed 60 days if there is reason to believe that disclosure 

may cause an adverse result, as defined in subsection (g). The presiding judge 

or magistrate judge may grant extensions of this order of up to 30 days each 

in accordance with this subsection, except that in no event shall the prohibition 

continue in force for more than a total of 9 months. 

‘‘(2) APPLICATION.—This subsection shall apply only in connection with compulsory process issued by the Commission where the recipient of such process 

is not a subject of the investigation or proceeding at the time such process is 

issued. 

‘‘(3) LIMITATION.—No order issued under this subsection shall prohibit any 

recipient from disclosing to a Federal agency that the recipient has received 

compulsory process from the Commission. 

‘‘(d) NO LIABILITY FOR FAILURE TO NOTIFY.—If neither notification nor delayed 

notification by the Commission is required under the Right to Financial Privacy Act 

(12 U.S.C. 3401 et seq.) or chapter 121 of title 18, United States Code, the recipient 

of compulsory process issued by the Commission under this Act shall not be liable 

under any law or regulation of the United States, or under the constitution, or any 

law or regulation, of any State, political subdivision of a State, territory of the 

United States, or the District of Columbia, or under any contract or other legally 

enforceable agreement, for failure to provide notice to any person that such process 

has been issued or that the recipient has provided information in response to such 

process. The preceding sentence does not exempt any recipient from liability for— 

‘‘(1) the underlying conduct reported; 

‘‘(2) a failure to comply with the record retention requirements under section 1104(c) of the Right to Financial Privacy Act (12 U.S.C. 3404), where applicable; or 

‘‘(3) any failure to comply with any obligation the recipient may have to disclose to a Federal agency that the recipient has received compulsory process 

from the Commission or intends to provide or has provided information to the 

Commission in response to such process. 

‘‘(e) VENUE AND PROCEDURE.— 

‘‘(1) IN GENERAL.—All judicial proceedings initiated by the Commission 

under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.), chapter 121 

of title 18, United States Code, or this section may be brought in the United 

States District Court for the District of Columbia or any other appropriate 

United States District Court. All ex parte applications by the Commission under 

this section related to a single investigation may be brought in a single proceeding. 

‘‘(2) IN CAMERA PROCEEDINGS.—Upon application by the Commission, all judicial proceedings pursuant to this section shall be held in camera and the 

records thereof sealed until expiration of the period of delay or such other date 

as the presiding judge or magistrate judge may permit. 

‘‘(f) SECTION NOT TO APPLY TO ANTITRUST INVESTIGATIONS OR PROCEEDINGS.— 

This section shall not apply to an investigation or proceeding related to the administration of Federal antitrust laws or foreign antitrust laws as defined in paragraphs 

(5) and (7), respectively, of section 12 of the International Antitrust Enforcement Assistance Act of 1994 (15 U.S.C. 6211). 

‘‘(g) ADVERSE RESULT DEFINED.—For purposes of this section the term ‘adverse 

result’ means— 

‘‘(1) endangering the life or physical safety of an individual; 

‘‘(2) flight from prosecution; 

‘‘(3) the destruction of, or tampering with, evidence; 

‘‘(4) the intimidation of potential witnesses; or 

‘‘(5) otherwise seriously jeopardizing an investigation or proceeding related 

to fraudulent or deceptive commercial practices or persons involved in such 

practices, or unduly delaying a trial related to such practices or persons involved in such practices, including, but not limited to, by— 

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‘‘(A) the transfer outside the territorial limits of the United States of 

assets or records related to fraudulent or deceptive commercial practices or 

related to persons involved in such practices; 

‘‘(B) impeding the ability of the Commission to identify persons involved in fraudulent or deceptive commercial practices, or to trace the 

source or disposition of funds related to such practices; or 

‘‘(C) the dissipation, fraudulent transfer, or concealment of assets subject to recovery by the Commission.’’. 

(b) CONFORMING AMENDMENT.—Section 16(a)(2) of the Federal Trade Commission Act (15 U.S.C. 56(a)(2)) is amended— 

(1) in subparagraph (C) by striking ‘‘or’’ after the semicolon; 

(2) in subparagraph (D) by inserting ‘‘or’’ after the semicolon; and 

(3) by inserting after subparagraph (D) the following: 

‘‘(E) under section 21A of this Act;’’. 

SEC. 8. PROTECTION FOR VOLUNTARY PROVISION OF INFORMATION. 

The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is further amended 

by adding after section 21A (as added by section 7 of this Act) the following: 

‘‘SEC. 21B. PROTECTION FOR VOLUNTARY PROVISION OF INFORMATION. 

‘‘(a) IN GENERAL.— ‘‘(1) NO LIABILITY FOR PROVIDING CERTAIN MATERIAL.—An entity described 

in paragraphs (2) or (3) of subsection (d) that voluntarily provides material to 

the Commission that such entity reasonably believes is relevant to— 

‘‘(A) a possible unfair or deceptive act or practice, as defined in section 

5(a) of this Act; or 

‘‘(B) assets subject to recovery by the Commission, including assets located in foreign jurisdictions; 

shall not be liable to any person under any law or regulation of the United 

States, or under the constitution, or any law or regulation, of any State, political subdivision of a State, territory of the United States, or the District of Columbia, for such provision of material or for any failure to provide notice of such 

provision of material or of intention to provide material. 

‘‘(2) LIMITATIONS.—Nothing in this subsection shall be construed to exempt 

any such entity from liability— 

‘‘(A) for the underlying conduct reported; or 

‘‘(B) to any Federal agency for providing such material or for any failure to comply with any obligation the entity may have to notify a Federal 

agency prior to providing such material to the Commission. 

‘‘(b) CERTAIN FINANCIAL INSTITUTIONS.—An entity described in paragraph (1) of 

subsection (d) shall, in accordance with section 5318(g)(3) of title 31, United States 

Code, be exempt from liability for making a voluntary disclosure to the Commission 

of any possible violation of law or regulation, including— 

‘‘(1) a disclosure regarding assets, including assets located in foreign jurisdictions— 

‘‘(A) related to possibly fraudulent or deceptive commercial practices; 

‘‘(B) related to persons involved in such practices; or 

‘‘(C) otherwise subject to recovery by the Commission; or 

‘‘(2) a disclosure regarding suspicious chargeback rates related to possibly 

fraudulent or deceptive commercial practices. 

‘‘(c) CONSUMER COMPLAINTS.—Any entity described in subsection (d) that voluntarily provides consumer complaints sent to it, or information contained therein, to 

the Commission shall not be liable to any person under any law or regulation of 

the United States, or under the constitution, or any law or regulation, of any State, 

political subdivision of a State, territory of the United States, or the District of Columbia, for such provision of material or for any failure to provide notice of such 

provision of material or of intention to so provide material. This subsection shall not 

provide any exemption from liability for the underlying conduct. 

‘‘(d) APPLICATION.—This section applies to the following entities, whether foreign or domestic: 

‘‘(1) A financial institution as defined in section 5312 of title 31, United 

States Code. 

‘‘(2) To the extent not included in paragraph (1) a bank or thrift institution, 

a commercial bank or trust company, an investment company, a credit card 

issuer, an operator of a credit card system, and an issuer, redeemer, or cashier 

of travelers’ checks, money orders, or similar instruments. 

‘‘(3) A courier service, a commercial mail receiving agency, an industry 

membership organization, a payment system provider, a consumer reporting 

agency, a domain name registrar or registry acting as such, and a provider of 

alternative dispute resolution services. 

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‘‘(4) An Internet service provider or provider of telephone services.’’. 

SEC. 9. STAFF EXCHANGES. 

The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended by adding 

after section 25 the following new section: 

‘‘SEC. 25A. STAFF EXCHANGES. 

‘‘(a) IN GENERAL.—The Commission may— 

‘‘(1) retain or employ officers or employees of foreign government agencies 

on a temporary basis as employees of the Commission pursuant to section 2 of 

this Act, or section 3101 or section 3109 of title 5, United States Code; and 

‘‘(2) detail officers or employees of the Commission to work on a temporary 

basis for appropriate foreign government agencies. 

‘‘(b) RECIPROCITY AND REIMBURSEMENT.—The staff arrangements described in 

subsections (a) need not be reciprocal. The Commission may accept payment or reimbursement, in cash or in kind, from a foreign government agency to which this 

section is applicable, or payment or reimbursement made on behalf of such agency, 

for expenses incurred by the Commission, its members, and employees in carrying 

out such arrangements. 

‘‘(c) STANDARDS OF CONDUCT.—A person appointed under subsection (a)(1) shall 

be subject to the provisions of law relating to ethics, conflicts of interest, corruption, 

and any other criminal or civil statute or regulation governing the standards of conduct for Federal employees that are applicable to the type of appointment.’’. 

SEC. 10. INFORMATION SHARING WITH FINANCIAL REGULATORS. 

Section 1112(e) of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3412(e)) 

is amended by inserting ‘‘the Federal Trade Commission,’’ after ‘‘the Securities and 

Exchange Commission,’’. 

SEC. 11. PRESERVATION OF EXISTING AUTHORITY. 

The authority provided by this Act, and by the Federal Trade Commission Act 

(15 U.S.C. 41 et seq.) and the Right to Financial Privacy Act (12 U.S.C. 3401 et 

seq.), as such Acts are amended by this Act, is in addition to, and not in lieu of, 

any other authority vested in the Federal Trade Commission or any other officer of 

the United States. 

SEC. 12. REPORT. 

Not later than 3 years after the date of enactment of this Act, the Federal 

Trade Commission shall transmit to Congress a report describing its use of and experience with the authority granted by this Act, along with any recommendations 

for additional legislation. The report shall include— 

(1) the number of cross-border complaints received by the Commission; 

(2) identification of the foreign agencies to which the Commission has provided nonpublic investigative information under this Act; 

(3) the number of times the Commission has used compulsory process on 

behalf of foreign law enforcement agencies pursuant to section 6 of the Federal 

Trade Commission Act (15 U.S.C. 46), as amended by section 4 of this Act; 

(4) a list of international agreements and memoranda of understanding executed by the Commission that relate to this Act; 

(5) the number of times the Commission has sought delay of notice pursuant to section 21A of the Federal Trade Commission Act, as added by section 

7 of this Act, and the number of times a court has granted a delay; 

(6) a description of the types of information private entities have provided 

voluntarily pursuant to section 21B of the Federal Trade Commission Act, as 

added by section 8 of this Act; 

(7) a description of the results of cooperation with foreign law enforcement 

agencies under section 21 of the Federal Trade Commission Act (15 U.S.C. 57– 

2) as amended by section 6 of this Act; 

(8) an analysis of whether the lack of an exemption from the disclosure requirements of section 552 of title 5, United States Code, with regard to information or material voluntarily provided relevant to possible unfair or deceptive 

acts or practices, has hindered the Commission in investigating or engaging in 

enforcement proceedings against such practices; and 

(9) a description of Commission litigation brought in foreign courts. 

PURPOSE AND SUMMARY

H.R. 3143, the ‘‘International Consumer Protection Act of 2003’’ 

or (‘‘ICPA’’) empowers the Federal Trade Commission (‘‘FTC’’) to 

combat transnational fraudulent and deceptive commercial pracVerDate Aug 04 2004 20:54 Nov 16, 2004 Jkt 039006 PO 00000 Frm 00008 Fmt 6659 Sfmt 6601 E:\HR\OC\HR635P2.108 HR635P2
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tices by granting it new enforcement and information sharing powers and allowing it to enter into agreements with its counterpart 

foreign law enforcement and consumer protection authorities. The 

ICPA will combat the growing problem of cross-border fraud and 

deception perpetrated from foreign jurisdictions or by foreign individuals that adversely affect U.S. consumers and businesses. The 

legislation also allows cooperation by the FTC with its foreign 

counterparts in cases involving U.S. entities or persons defrauding 

foreign consumers. 

BACKGROUND AND NEED FOR THE LEGISLATION

The advent of the Internet, improved telecommunications, and 

the globalization of the economy have created incredible opportunities by shrinking distances and blurring traditional barriers. However, some of the international opportunities being created today 

are not for legislative entrepreneurs and consumers, but for more 

criminal’s who seek to deceive and defraud. What might be called 

‘‘cross-border fraud’’ is a burgeoning problem involving those who 

establish operations in one country, and use communications that 

may cross multiple national borders to deceive or defraud consumers in other countries. 

An increasing number of consumer complaints collected in the 

Consumer Sentinel database maintained by the FTC, and an increasing number of cases brought by it, involve foreign consumers, 

foreign businesses or individuals, or assets or evidence located outside the United States. In 2002, according to the FTC, 14% of the 

complaints in the Consumer Sentinel database (excluding identity 

theft complaints) were cross-border complaints, up from 11% in 

2000. The 2002 complaints include over 24,000 complaints by U.S. 

consumers against foreign businesses. 

Increasingly, the FTC reports that its fraud or deceptive practices related investigations and cases have some transnational component. For instance, a typical spam related case may involve a foreign sender or an e-mail message that crosses several national 

boundaries en route to its final destination. To better enforce existing fraud and consumer protection laws and meet the enforcement 

expectations of Congress, the FTC believes better international cooperation and additional tools are critical. 

The Committee has been informed by the FTC that the additional authority provided to it in this legislation mirrors existing 

authority given to the Securities and Exchange Commission and 

some other regulatory agencies. The Committee understands that 

the legislation is not intended to be a bold departure giving unprecedented authorities to the FTC but rather is intended to harmonize 

the FTC’s international enforcement and investigatory powers with 

those of other similar independent regulatory agencies. 

The Committee’s favorably reported this legislation with an 

amendment that represents the product of discussions between the 

FTC and DOJ. This action represents a judgment that the amendment has improved the bill in some respects: 1) incorporating a 

greater consultative role for the Attorney General when the FTC 

interacts and makes agreements with foreign law enforcement 

agencies or engages in foreign litigation; 2) preventing interference 

with Memoranda of Understanding (‘‘MOU’’) with other countries 

on criminal matters and the referral of information related to 

10 

1Pub. L. No. 105–19; codified at 42 U.S.C. § 14503 et. seq. (2003). 2 H.R. Rept. No. 108–635, Part 1, page 2 (2004) 

criminal violations with the Department of Justice; 3) including 

greater safeguards for the sharing of information on U.S. citizens 

and entities with foreign consumer protection authorities; 4) ensuring (because of a concern raised by the Committee) that state sponsors of terrorism do not receive cooperation or information; 5) placing greater limits on use of materials obtained by FTC’s compulsory process powers; 6) placing greater limits on use of delayed notice by the FTC when information is sought from third parties that 

are not the target of an investigation; and 7) improving the Federal 

Government’s liability exposure when the FTC employs volunteer 

services by mirroring language of the Volunteer Protection Act of 

1997 1 rather than the Federal Tort Claims Act. 

As the House Committee on Energy and Commerce noted in its 

report on H.R. 3143, this legislation: ‘‘will likely improve the ability 

of the Commission and its foreign counterparts to share information about cross-border fraud and deception, to conduct joint and 

parallel investigations [to], render assistance to each other’’ and it 

‘‘is critical to achieve more timely and effective enforcement in 

cross-border cases.’’ 2 The Committee on the Judiciary does not dispute these findings about the merits and necessity of the legislation, and it is concerned about the growing threat of trans-border 

fraud and deceptive practices. 

However, the legislation has drawn some criticism from interest 

groups concerned about information sharing with foreign governments, the potential for FTC investigation of American citizens for 

activities that may be legal under U.S. law but which are violations 

of foreign law, the circumstances under which delayed notice may 

be used against the target of an FTC investigation, and exceptions 

to the Freedom of Information Act (‘‘FOIA’’). While the Committee 

believes that the amended version of the legislation reported by the 

Committee, (which embodies the text of H.R. 4996 as introduced) 

makes improvements in all of these areas, concerns remain about 

the scope of the powers sought, the FTC’s need for them, and the 

existence of adequate due process and privacy safeguards. 

If this legislation becomes law, the Committee expects to closely 

monitor the Commission’s use of the resulting new powers. The 

Committee believes it will be joined in these oversight efforts by 

other committees of Congress and Executive branch agencies in supervising the Commission’s employment of these new powers and 

monitoring the level of cooperation the Commission receives from 

foreign counterpart agencies. The foremost oversight concern 

should be any abuses of information shared about U.S. entities or 

persons with foreign consumer protection authorities. The reporting 

requirements contained in the legislation are serious, and the FTC 

should be on notice that these new authorities can easily be revoked if they are not used properly or if Congress does not receive 

adequate information concerning the FTC’s employment of them. 

HEARINGS

No hearings were held by the Committee on the Judiciary on 

H.R. 3143 or H.R. 4996. 

11 

COMMITTEE CONSIDERATION

On September 30, 2004, the Committee met in open session and 

ordered favorably reported the bill H.R. 3143, with an amendment, 

by voice vote, a quorum being present. 

VOTE OF THE COMMITTEE

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee notes that there were no 

recorded votes during the committee’s consideration of H.R. 3143. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee reports that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 3143, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, October 14, 2004. 

Hon. F. JAMES SENSENBRENNER, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3143, the International 

Consumer Protection Act of 2004. 

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

to provide them. The CBO staff contacts are Melissa E. Zimmerman (for federal costs), who can be reached at 226–2860, Sarah 

Puro (for the impact on state and local governments), who can be 

reached at 225–3220, and Selena Caldera (for the private-sector 

impact), who can be reached at 226–2940. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN. 

Enclosure 

cc: Honorable John Conyers, Jr. 

Ranking Member 

12 

H.R. 3143—International Consumer Protection Act of 2004. 

H.R. 3143 would expand the authority of the Federal Trade Commission (FTC) to work with foreign law enforcement agencies to enforce laws prohibiting fraudulent and deceptive commercial practices. The bill would allow temporary staff exchanges between foreign government agencies and the FTC and would authorize the 

agency to accept payment in-kind or reimbursement for costs associated with such exchanges. It also would authorize the appropriation of up to $100,000 a year for the FTC to support activities of 

certain international law enforcement groups. 

Assuming appropriation of the amounts specified in H.R. 3143, 

CBO estimates that implementing the bill would cost less than 

$500,000 over the 2004–2008 period. Enacting the bill would not 

affect direct spending or revenues. 

H.R. 3143 would authorize the FTC to request that a judge order 

the recipient of a summons, subpoena, or other compulsory process 

to delay giving notice to anyone that they have been required to appear as a witness before, or to produce documents in, an FTC proceeding. The order could be issued, notwithstanding any State or 

local laws or regulations, if there is reason to believe that notification would cause certain adverse results. Further, the recipient 

would not be liable under any State or local laws or regulations for 

disclosing information or for failure to provide notice. The bill also 

would protect certain entities that voluntarily provide specified material to the FTC from liability under any State or local law or regulation that precludes disclosure of information or requires notification to the interested third party. 

To the extent that State and local governments have laws that 

contradict these provisions, the legislation would preempt those 

laws and thereby impose mandates under the Unfunded Mandates 

Reform Act (UMRA). CBO estimates that the cost of those mandates would be minimal and would not exceed the threshold established in UMRA ($60 million in 2004, adjusted annually for inflation). 

H.R. 3143 would exempt from liability those entities providing 

certain information on third parties to the FTC. This exemption 

would limit the ability of a third party to sue and thus impose a 

private-sector mandate under UMRA. CBO estimates that the cost 

to the private sector would be minimal and would fall below the 

annual threshold for private-sector mandates established in UMRA 

($120 million in 2004, adjusted annually for inflation). 

Section 21B of the Federal Trade Commission Act, as amended 

by H.R. 3143, would protect from liability entities voluntarily providing information to the FTC about possible unfair or deceptive 

acts or practices of third parties. By exempting those entities from 

liability, H.R. 3143 would limit the ability of third parties to sue 

for disclosure or failure to provide notice of disclosure; such a limit 

constitutes a private-sector mandate under UMRA. The direct cost 

of the mandate would be the amount awarded in settlements and 

judgments (net of costs) to third parties under current law that 

would be precluded under H.R. 3143. Due to the exposure to liability under current law, entities do not voluntarily provide information on third parties to the FTC. CBO estimates the costs to the 

private sector would be minimal, since few, if any, third-party lawsuits are filed. 

13 

On July 9, 2003, CBO transmitted a cost estimate for S. 1234, 

the Federal Trade Commission Reauthorization Act of 2003, as ordered reported by the Senate Committee on Commerce, Science, 

and Transportation on June 19, 2003. On October 8, 2003, CBO 

transmitted a cost estimate for H.R. 3143, the International Consumer Protection Act of 2003, as ordered reported by the House 

Committee on Energy and Commerce on October 1, 2003. H.R. 

3143, as ordered reported by the House Committee on the Judiciary, is nearly identical to the version of H.R. 3143 that was ordered 

reported by the House Committee on Energy and Commerce. The 

bill contains similar provisions to those in title II of S. 1234, although S. 1234 would authorize funding for all operations of the 

FTC, and this bill would authorize funding only for support to certain international law-enforcement groups. All three bills would 

preempt State and local law in the same way and would impose the 

same private-sector mandate. 

The CBO staff contacts for this estimate are Melissa E. Zimmerman (for federal costs), who can be reached at 226–2860, Sara Puro 

(for the impact on State and local governments), who can be 

reached at 225–3220, and Selena Caldera (for the private-sector 

impact), who can be reached at 226–2940. This estimate was approved by Peter H. Fontaine, Deputy Assistant Director for Budget 

Analysis. 

PERFORMANCE GOALS AND OBJECTIVES

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 3143 is intended 

to protect consumers from cross border fraud and deceptive commercial practices by improving the ability of the Federal Trade 

Commission to cooperate with foreign counterpart agencies and 

pursue perpetrators and the profits of their conduct that are located in foreign jurisdictions. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, § 8 of the Constitution. 

SECTION-BY-SECTION ANALYSIS AND DISCUSSION

Section 1. Short Title. Section 1 establishes the short title of the 

Act as the ‘‘International Consumer Protection Act of 2003.’’ 

Section 2. Foreign Law Enforcement Agency Defined. Section 2 

amends § 4 of the Federal Trade Commission Act by adding a definition of ‘‘foreign law enforcement agency.’’ It is defined as: (1) any 

agency or judicial authority of a foreign government, including a 

foreign state, a political subdivision of a foreign state, or a multinational organization constituted by and comprised of foreign 

states, that is vested with law enforcement or investigative authority in civil, criminal, or administrative matters; or, (2) any multinational multi-agency organization to the extent that it is acting on 

behalf of an entity described in subparagraph (A). This definition 

is integral to the new powers related to court proceedings given to 

the FTC throughout the bill. 

14 

Section 3. Availability of Remedies. Section 3 amends § 5(a) of the 

Federal Trade Commission Act extending the remedies available 

under that section to ‘‘unfair or deceptive acts or practices’’ involving foreign commerce. that: (1) cause or are likely to cause reasonably foreseeable injury within the United States; or (2) involve material conduct occurring within the United States. Some of these 

remedies are administrative and some involve court proceedings. 

The language extends both types of these remedies to an entirely 

new area. See generally 15 U.S.C. § 45. 

Section 4. Powers of the Commission. Section 4 adds new language to § 6 of the FTCA (15 U.S.C. § 46). First, § 4(a) of H.R. 3143 

amends § 6 of the FTCA to allow the FTC to reveal confidential 

business information that it has gathered in its investigations to 

foreign law enforcement agencies. This information may include 

matters relevant to criminal investigations that are being conducted by the Department of Justice. Second, § 4(b) creates new 

subsections (j), (k), and (l) of § 6 of the FTCA. New subsection (j) 

gives the FTC broad new powers to share law enforcement information with foreign law enforcement agencies, to conduct investigations on their behalf, and to enter into international agreements 

with them. New subsection (k) empowers the FTC to receive information relating to criminal matters from foreign law enforcement 

authorities and to refer it to the Department of Justice. New subsection (l) authorizes the FTC to spend appropriated funds for such 

purposes. Third, § 4(c) authorizes the expenditure of $100,000 per 

fiscal year for the purposes of the new subsection (l). 

Section 5. Representation in Foreign Litigation. Section 5 amends 

§ 16 of the Federal Trade Commission Act by adding a new § 16(c) 

to the FTCA (15 U.S.C. § 56) providing that the FTC can designate 

FTC attorneys to assist the Attorney General in the conduct of foreign litigation relating to the FTC (pursuant to a memorandum of 

understanding to be negotiated between the Commission and the 

Attorney General) and to spend appropriated funds to hire foreign 

attorneys to represent it in foreign courts. The subsection also contains a disclaimer that the subsection does not authorize the payment of claims from any source other than the judgment fund. This 

language has implications for the power of the Attorney General to 

direct litigation on behalf of the United States. See 28 U.S.C. § 516. 

Section 6. Sharing Information with Foreign Law Enforcement 

Agencies. Section 6 adds new language to § 21(b)(6) of the FTCA (15 

U.S.C. § 57b–2(b)(6)) that would allow the FTC to turn over information that it has obtained by compulsory process enforced by U.S. 

Federal courts to foreign law enforcement agencies investigating 

civil and criminal law violations subject to certain conditions. This 

section provides that the Commission may make material obtained 

pursuant to compulsory process available to any foreign law enforcement agency upon appropriate certification that such material 

will be maintained in confidence and will be used only for official 

law enforcement purposes. The materials are to be used for purposes of investigating, or engaging in enforcement proceedings related to, possible violations of: (1) foreign laws prohibiting fraudulent or deceptive commercial practices or other practices, substantially similar to practices prohibited by any law administered by 

the Commission; (2) a law administered by the Commission, if disclosure of the material would further a Commission investigation 

15 

or enforcement proceeding; or (3) with the approval of the Attorney 

General, other foreign criminal laws, if such foreign criminal laws 

are offenses defined or covered by a criminal mutual legal assistance treaty in force between the United States and the foreign law 

enforcement authority’s state. However, the FTC shall not make 

available such material to a foreign law enforcement agency where 

the activity the person is engaged in is protected under the Constitution of the United States. 

Section 6 also exempts from the Freedom of Information Act, except in limited circumstances, all information that the FTC receives 

in any investigation from a foreign law enforcement or consumer 

protection agency as well as consumer complaint information received from non-governmental foreign sources when the agency or 

foreign source providing the material requests confidentiality as a 

condition of providing the information. However, this subsection 

does not authorize the Commission to withhold information from 

the Congress or prevent the Commission from complying with an 

order of a court in an action commenced by the Commission or the 

United States. 

Section 7. Confidentiality, Delayed Notice of Process. Section 7 

creates a new § 21A of the FTCA. This section gives the FTC power 

to use the provisions of the Electronic Communications Privacy 

Act, including the delayed notice provisions. See 18 U.S.C. § 2701 

et seq. The new section also establishes court procedures for the 

use of these powers. In general, the procedures for delay or prohibition of notice under the Electronic Communications Privacy Act (18 

U.S.C. § 2701 et seq.) are also made available to the Commission. 

In the case of ECPA, the notification is delayed pursuant to 

§ 2705(a)(1)(B) of Title 18, upon a finding by the Commission that 

there is reason to believe that notification may cause an ‘‘adverse 

result.’’ If the procedures for delay or prohibition of notice under 

the Right to Financial Privacy Act and the Electronic Communications Privacy Act do not apply, under § 21(A)(c) the Commission 

may apply ex parte to a presiding judge or magistrate judge for an 

order commanding the recipient of compulsory process issued by 

the Commission not to notify any other person of the existence of 

the process, notwithstanding any other law. The presiding judge or 

magistrate judge may, in turn, enter such an order granting the requested delay for a period not to exceed 60 days, if there is reason 

to believe that notification may cause an adverse result. The presiding judge or magistrate judge may grant extensions of this delay 

of notice of up to 30 days each in accordance with this subsection, 

provided that in no event shall the notice be delayed for more than 

a total of 9 months. The recipient of compulsory process issued by 

the Commission under this § 21(A)(d) shall not be liable under any 

law or under any contract or other legally enforceable agreement, 

for failure to provide notice that such process has been issued or 

that the recipient has provided information in response to such 

process. In doing so, the recipient is not provided with any exemption from liability for: (1) the underlying conduct reported; (2) noncompliance with the record retention requirements under § 3404 of 

title 12; or (3) noncompliance with any requirement of a Federal 

Government agency to disclose information to that agency. For purposes of this section, the term ‘‘adverse result’’ is defined in detail.20 

16 

Section 8. Protection for Voluntary Provision of Information. Section 8 creates a new § 21B of the FTCA. This section gives immunity from suit to various persons or entities who voluntarily disclose information to the FTC that may help it in an investigation 

if the entity reasonably believes that such disclosures are relevant 

to possible unfair or deceptive practices, or assets subject to recovery by the Commission, including assets located in overseas. The 

section does not provide any exemption from liability for the underlying conduct. 

Section 9. Staff Exchanges. Section 9 creates a new § 25A of the 

FTCA. This section gives the FTC authority to exchange employees 

with foreign law enforcement authorities and it makes those foreign law enforcement 

Section 10. Information Sharing with Financial Regulators. Section 10 amends § 1112(e) of the Right to Financial Privacy Act (12 

U.S.C. § 3412(e)) by adding ‘‘the Federal Trade Commission’’ after 

‘‘the Securities and Exchange Commission.’’ This includes the FTC 

in an exemption that allows Federal financial and market regulators, including the SEC, to share financial records, examination 

reports, or other appropriate information. 

Section 11. Report. Section 11 requires the FTC to report to Congress not later than 3 years after the date of enactment on the use 

of the various new authorities granted by the Act. 

17 

AGENCY VIEWS


3143AG1.eps
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3143AG2.eps
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CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman): 

FEDERAL TRADE COMMISSION ACT 

* * * * * * * 

SEC. 4. The words defined in this section shall have the following meaning when found in this Act, to wit: 

‘‘Commerce’’ means commerce among the several States or 

with foreign nations, or in any Territory of the United States or in 

the District of Columbia, or between any such Territory and another, or between any such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation. 

‘‘Corporation’’ shall be deemed to include any company, trust, 

so-called Massachusetts trust, or association, incorporated or unincorporated, which is organized to carry on business for its own 

profit or that of its members, and has shares of capital or capital 

stock or certificates of interest, and any company, trust, so-called 

Massachusetts trust, or association, incorporated or unincorporated, without shares of capital or capital stock or certificates of 

interest, except partnerships, which is organized to carry on business for its own profit or that of its members. 

‘‘Documentary evidence’’ includes all documents, papers, correspondence, books of account, and financial and corporate records. 

‘‘Acts to regulate commerce’’ means the Act entitled ‘‘An Act to 

regulate commerce,’’ approved February 14, 1887, and all Acts 

amendatory thereof and supplementary thereto and the Communications Act of 1934 and all Acts amendatory thereof and supplementary thereto. 

‘‘Antitrust Acts’’ means the Act entitled ‘‘An Act to protect 

trade and commerce against unlawful restraints and monopolies,’’ 

approved July 2, 1890; also sections 73 to 76, inclusive, of an Act 

entitled ‘‘An Act to reduce taxation, to provide revenue for the Government, and for other purposes,’’ approved August 27, 1894; also 

the Act entitled ‘‘An Act to amend sections 73 and 76 of the Act 

of August 27, 1894, entitled ‘An Act to reduce taxation, to provide 

revenue for the Government, and for other purposes,’ ’’ approved 

February 12, 1913; and also the Act entitled ‘‘An Act to supplement 

existing laws against unlawful restraints and monopolies, and for 

other purposes,’’ approved October 15, 1914. 

‘‘Banks’’ means the types of banks and other financial institutions referred to in section 18(f)(2). 

‘‘Foreign law enforcement agency’’ means— 

(A) any agency or judicial authority of a foreign government, including a foreign state, a political subdivision of a foreign state, or a multinational organization constituted by and 

comprised of foreign states, that is vested with law enforcement 

20 

or investigative authority in civil, criminal, or administrative 

matters; and 

(B) any multinational or multiagency organization to the 

extent that it is acting on behalf of an entity described in subparagraph (A). 

SEC. 5. (a)(1) * * * 

* * * * * * * 

(4)(A) For purposes of this subsection, the term ‘‘unfair or deceptive acts or practices’’ shall include such acts or practices involving 

foreign commerce that— 

(i) cause or are likely to cause reasonably foreseeable injury 

within the United States; or 

(ii) involve material conduct occurring within the United 

States. 

(B) All remedies available to the Commission with respect to 

unfair and deceptive acts or practices shall be available for acts and 

practices described in this paragraph, including restitution to domestic or foreign victims. 

* * * * * * * 

SEC. 6. That the commission shall also have power— 

(a) * * * 

* * * * * * * 

(f) To make public from time to time such portions of the information obtained by it hereunder as are in the public interest; and 

to make annual and special reports to the Congress and to submit 

therewith recommendations for additional legislation; and to provide for the publication of its reports and decisions in such form 

and manner as may be best adapted for public information and 

use: Provided, That the Commission shall not have any authority 

to make public any trade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential, except that the Commission may disclose 

such information (1) to officers and employees of appropriate Federal law enforcement agencies or to any officer or employee of any 

State law enforcement agency upon the prior certification of an officer of any such Federal or State law enforcement agency that such 

information will be maintained in confidence and will be used only 

for official law enforcement 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). 

* * * * * * * 

(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 

21 

Assistance Act of 1994 (15 U.S.C. 6211(5))), the Commission 

may provide the assistance described in paragraph (2) without 

requiring that the conduct identified in the request constitute a 

violation of the laws of the United States. 

(2) TYPE OF ASSISTANCE.—In providing assistance to a foreign law enforcement agency under this subsection, the Commission may— 

(A) conduct such investigation as the Commission 

deems necessary to collect information and evidence pertinent to the request for assistance, using all investigative 

powers authorized by this Act; and 

(B) when the request is from an agency acting to investigate or pursue the enforcement of civil laws, or when the 

Attorney General refers a request to the Commission from 

an agency acting to investigate or pursue the enforcement 

of criminal laws, seek and accept appointment by a United 

States district court of Commission attorneys to provide assistance to foreign and international tribunals and to litigants before such tribunals on behalf of a foreign law enforcement agency pursuant to section 1782 of title 28, 

United States Code. 

(3) CRITERIA FOR DETERMINATION.—In deciding whether to 

provide such assistance, the Commission shall consider all relevant factors, including— 

(A) whether the requesting agency has agreed to provide or will provide reciprocal assistance to the Commission; 

(B) whether compliance with the request would prejudice the public interest of the United States; and 

(C) whether the requesting agency’s investigation or enforcement proceeding concerns acts or practices that cause 

or are likely to cause injury to a significant number of persons. 

(4) INTERNATIONAL AGREEMENTS.—If a foreign law enforcement agency has set forth a legal basis for requiring execution 

of an international agreement as a condition for reciprocal assistance, or as a condition for provision of materials or information to the Commission, the Commission, with prior approval 

and ongoing oversight of the Secretary of State, and with final 

approval of the agreement by the Secretary of State, may negotiate and conclude an international agreement, in the name of 

either the United States or the Commission, for the purpose of 

obtaining such assistance, materials, or information. The Commission may undertake in such an international agreement to— 

(A) provide assistance using the powers set forth in this 

subsection; 

(B) disclose materials and information in accordance 

with subsection (f) and section 21(b); and 

(C) engage in further cooperation, and protect materials and information received from disclosure, as authorized by this Act. 

(5) ADDITIONAL AUTHORITY.—The authority provided by 

this subsection is in addition to, and not in lieu of, any other 

authority vested in the Commission or any other officer of the 

United States. 

22 

(6) LIMITATION.—The authority granted by this subsection 

shall not authorize the Commission to take any action or exercise any power with respect to a bank, a savings and loan institution described in section 18(f)(3) (15 U.S.C. 57a(f)(3)), a Federal credit union described in section 18(f)(4) (15 U.S.C. 

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

commerce, except in accordance with the proviso following the 

last designated subsection of section 6 (15 U.S.C. 46). 

(7) ASSISTANCE TO CERTAIN COUNTRIES.—The Commission 

may not provide investigative assistance under this subsection 

to a foreign law enforcement agency from a foreign state that 

the Secretary of State has determined, in accordance with section 6(j) of the Export Administration Act of 1979 (50 U.S.C. 

App. 2405(j)), has repeatedly provided support for acts of international terrorism, unless and until such determination is rescinded pursuant to section 6(j)(4) of that Act (50 U.S.C. App. 

2405(j)(4)). 

(k) REFERRAL OF EVIDENCE FOR CRIMINAL PROCEEDINGS.— (1) IN GENERAL.—Whenever the Commission obtains evidence that any person, partnership, or corporation, either domestic or foreign, has engaged in conduct that may constitute 

a violation of Federal criminal law, the Commission may transmit such evidence to the Attorney General, who may institute 

criminal proceedings under appropriate statutes. Nothing in 

this paragraph affects any other authority of the Commission to 

disclose information. 

(2) INTERNATIONAL INFORMATION.—The Commission shall 

endeavor to ensure, with respect to memoranda of understanding and international agreements it may conclude, that 

material it has obtained from foreign law enforcement agencies 

acting to investigate or pursue the enforcement of foreign criminal laws may be used for the purpose of investigation, prosecution, or prevention of violations of United States criminal laws. 

(l) EXPENDITURES FOR COOPERATIVE ARRANGEMENTS.—The 

Commission may expend appropriated funds for— 

(1) operating expenses and other costs of bilateral and multilateral cooperative law enforcement groups conducting activities of interest to the Commission and in which the Commission 

participates; and 

(2) expenses for consultations and meetings hosted by the 

Commission with foreign government agency officials, members 

of their delegations, appropriate representatives and staff to exchange views concerning developments relating to the Commission’s mission, development and implementation of cooperation 

agreements, and provision of technical assistance for the development of foreign consumer protection or competition regimes, 

such expenses to include necessary administrative and logistic 

expenses and the expenses of Commission staff and foreign 

invitees in attendance at such consultations and meetings including— 

(A) such incidental expenses as meals taken in the 

course of such attendance; 

(B) any travel and transportation to or from such meetings; and 

(C) any other related lodging or subsistence. 

23 

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 

construed to limit the Commission’s authority to gather and compile information to investigate, or to require reports or answers 

from, any person, partnership, or corporation to the extent that 

such action is necessary to the investigation of any person, partnership, or corporation, group of persons, partnerships, or corporations, or industry which is not engaged, or is engaged only incidentally in banking, in business as a savings and loan institution, in 

business as a Federal credit union, or in business as a common carrier subject to the Act to regulate commerce. 

The Commission shall establish a plan designed to substantially reduce burdens imposed upon small businesses as a result of 

requirements established by the Commission under clause (b) relating to the filing of quarterly financial reports. Such plan shall (1) 

be established after consultation with small businesses and persons 

who use the information contained in such quarterly financial reports; (2) provide for a reduction of the number of small businesses 

required to file such quarterly financial reports; and (3) make revisions in the forms used for such quarterly financial reports for the 

purpose of reducing the complexity of such forms. The Commission, 

not later than December 31, 1980, shall submit such plan to the 

Committee on Commerce, Science, and Transportation of the Senate and to the Committee on Energy and Commerce of the House 

of Representatives. Such plan shall take effect not later than October 31, 1981. 

No officer or employee of the Commission or any Commissioner 

may publish or disclose information to the public, or to any Federal 

agency, whereby any line-of-business data furnished by a particular 

establishment or individual can be identified. No one other than 

designated sworn officers and employees of the Commission may 

examine the line-of-business reports from individual firms, and information provided in the line-of-business program administered by 

the Commission shall be used only for statistical purposes. Information for carrying out specific law enforcement responsibilities of 

the Commission shall be obtained under practices and procedures 

in effect on the date of the enactment of the Federal Trade Commission Improvements Act of 1980, or as changed by law. 

Nothing in this section (other than the provisions of clause (c) 

and clause (d)) shall apply to the business of insurance, except that 

the Commission shall have authority to conduct studies and prepare reports relating to the business of insurance. The Commission 

may exercise such authority only upon receiving a request which 

is agreed to by a majority of the members of the Committee on 

Commerce, Science, and Transportation of the Senate or the Committee on Energy and Commerce of the House of Representatives. 

The authority to conduct any such study shall expire at the end of 

the Congress during which the request for such study was made. 

* * * * * * * 

SEC. 16. (a)(1) * * * 

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

action— 

24 

(A) * * * 

* * * * * * * 

(C) to obtain judicial review of a rule prescribed by the 

Commission, or a cease and desist order issued under section 

5 of this Act; 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 compliance with section 6 of 

this Act); or 

(E) under section 21A of this Act; 

* * * * * * * 

(c) FOREIGN LITIGATION.— (1) COMMISSION ATTORNEYS.—With the concurrence of the 

Attorney General, the Commission may designate Commission 

attorneys to assist the Attorney General in connection with litigation in foreign courts on particular matters in which the 

Commission has an interest. 

(2) REIMBURSEMENT FOR FOREIGN COUNSEL.—The Commission is authorized to expend appropriated funds, upon agreement with the Attorney General, to reimburse the Attorney General for the retention of foreign counsel for litigation in foreign 

courts, and for expenses related to litigation in foreign courts in 

which the Commission has an interest. 

(3) LIMITATION ON USE OF FUNDS.—Nothing in this subsection authorizes the payment of claims or judgments from any 

source other than the permanent and indefinite appropriation 

authorized by section 1304 of title 31, United States Code. 

(4) OTHER AUTHORITY.—The authority provided by this 

subsection is in addition to any other authority of the Commission or the Attorney General. 

* * * * * * * 

SEC. 21. (a) * * * 

(b)(1) * * * 

* * * * * * * 

(6) The custodian of any documentary material, written reports 

or answers to questions, and transcripts of oral testimony may deliver to any officers or employees of appropriate Federal law enforcement agencies, in response to a written request, copies of such 

material for use in connection with an investigation or proceeding 

under the jurisdiction of any such agency. The custodian of any 

tangible things may make such things available for inspection to 

such persons on the same basis. Such materials shall not be made 

available to any such agency until the custodian receives certification of any officer of such agency that such information will be 

maintained in confidence and will be used only for official law enforcement purposes. Such documentary material, results of inspections of tangible things, written reports or answers to questions, 

and transcripts of oral testimony may be used by any officer or employee of such agency only in such manner and subject to such conditions as apply to the Commission under this section. The custodian may make such materials available to any State law enforcement agency upon the prior certification of any officer of such agency that such information will be maintained in confidence and will 

25 

be used only for official law enforcement purposes. The custodian 

may make such material available to any foreign law enforcement 

agency upon the prior certification of an appropriate official of any 

such foreign law enforcement agency, either by a prior agreement or 

memorandum of understanding with the Commission or by other 

written certification, that such material will be maintained in confidence and will be used only for official law enforcement purposes, 

if— 

(A) the foreign law enforcement agency has set forth a bona 

fide legal basis for its authority to maintain the material in 

confidence; 

(B) the materials are to be used for purposes of investigating, or engaging in enforcement proceedings related to, possible violations of— 

(i) foreign laws prohibiting fraudulent or deceptive 

commercial practices or other practices substantially similar to practices prohibited by any law administered by the 

Commission; 

(ii) a law administered by the Commission, if disclosure of the material would further a Commission investigation or enforcement proceeding; or 

(iii) with the approval of the Attorney General, other 

foreign criminal laws, if such foreign criminal laws are offenses defined in or covered by a criminal mutual legal assistance treaty in force between the government of the 

United States and the foreign law enforcement agency’s 

government; 

(C) the appropriate Federal banking agency (as defined in 

section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 

1813(q))) or, in the case of a Federal credit union, the National 

Credit Union Administration, has given its prior approval if the 

materials to be provided under subparagraph (B) are requested 

by the foreign law enforcement agency for the purpose of investigating, or engaging in enforcement proceedings based on, possible violations of law by a bank, a savings and loan institution 

described in section 18(f)(3) of the Federal Trade Commission 

Act (15 U.S.C. 57a(f)(3)), or a Federal credit union described in 

section 18(f)(4) of the Federal Trade Commission Act (15 U.S.C. 

57a(f)(4)); and 

(D) the foreign law enforcement agency is not from a country that the Secretary of State has determined, in accordance 

with section 6(j) of the Export Administration Act of 1979 (50 

U.S.C. App. 2405(j)), has repeatedly provided support for acts 

of international terrorism, unless and until such determination 

is rescinded pursuant to section 6(j)(4) of that Act (50 U.S.C. 

App. 2405(j)(4)). 

Nothing in the preceding sentence authorizes the disclosure of material obtained in connection with the administration of the Federal 

antitrust laws or foreign antitrust laws (as defined in paragraphs 

(5) and (7), respectively, of section 12 of the International Antitrust 

Enforcement Assistance Act of 1994 (15 U.S.C. 6211)) to any officer 

or employee of a foreign law enforcement agency. 

* * * * * * * 

ø(f) Any material which is received by the Commission in any 

investigation, a purpose of which is to determine whether any perVerDate Aug 04 2004 20:54 Nov 16, 2004 Jkt 039006 PO 00000 Frm 00025 Fmt 6659 Sfmt 6601 E:\HR\OC\HR635P2.108 HR635P2
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son may have violated any provision of the laws administered by 

the Commission, and which is provided pursuant to any compulsory process under this Act or which is provided voluntarily in 

place of such compulsory process shall be exempt from disclosure 

under section 552 of title 5, United States Code.¿ 

(f) EXEMPTION FROM PUBLIC DISCLOSURE.— (1) IN GENERAL.—Any material which is received by the 

Commission in any investigation, a purpose of which is to determine whether any person may have violated any provision of 

the laws administered by the Commission, and which is provided pursuant to any compulsory process under this Act or 

which is provided voluntarily in place of such compulsory process shall not be required to be disclosed under section 552 of 

title 5, United States Code, or any other provision of law, except 

as provided in paragraph (2)(B) of this section. 

(2) MATERIAL OBTAINED FROM A FOREIGN SOURCE.— (A) Except as provided in subparagraph (B) of this 

paragraph, the Commission shall not be required to disclose under section 552 of title 5, United States Code, or 

any other provision of law— 

(i) any material obtained from a foreign law enforcement agency or other foreign government agency, if 

the foreign law enforcement agency or other foreign 

government agency has requested confidential treatment, or has precluded such disclosure under other use 

limitations, as a condition of providing the material; 

(ii) any material reflecting a consumer complaint 

obtained from any other foreign source, if that foreign 

source supplying the material has requested confidential treatment as a condition of providing the material; 

or 

(iii) any material reflecting a consumer complaint 

submitted to a Commission reporting mechanism sponsored in part by foreign law enforcement agencies or 

other foreign government agencies. 

(B) Nothing in this subsection shall authorize the Commission to withhold information from the Congress or prevent the Commission from complying with an order of a 

court of the United States in an action commenced by the 

United States or the Commission. 

SEC. 21A. CONFIDENTIALITY AND DELAYED NOTICE OF COMPULSORY 

PROCESS FOR CERTAIN THIRD PARTIES. 

(a) APPLICATION WITH OTHER LAWS.—The Right to Financial 

Privacy Act (12 U.S.C. 3401 et seq.) and chapter 121 of title 18, 

United States Code, shall apply with respect to the Commission, except as otherwise provided in this section. 

(b) PROCEDURES FOR DELAY OF NOTIFICATION OR PROHIBITION

OF DISCLOSURE.—The procedures for delay of notification or prohibition of disclosure under the Right to Financial Privacy Act (12 

U.S.C. 3401 et seq.) and chapter 121 of title 18, United States Code, 

including procedures for extensions of such delays or prohibitions, 

shall be available to the Commission, provided that, notwithstanding any provision therein— 

(1) a court may issue an order delaying notification or prohibiting disclosure (including extending such an order) in acVerDate Aug 04 2004 20:54 Nov 16, 2004 Jkt 039006 PO 00000 Frm 00026 Fmt 6659 Sfmt 6603 E:\HR\OC\HR635P2.108 HR635P2
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cordance with the procedures of section 1109 of the Right to Financial Privacy Act (12 U.S.C. 3409) (if notification would otherwise be required under that Act), or section 2705 of title 18, 

United States Code, (if notification would otherwise be required 

under chapter 121 of that title), if the presiding judge or magistrate judge finds that there is reason to believe that such notification or disclosure may cause an adverse result, as defined 

in subsection (g); and 

(2) if notification would otherwise be required under chapter 121 of title 18, United States Code, the Commission may 

delay notification (including extending such a delay) upon the 

execution of a written certification in accordance with the procedures of section 2705 of that title if the Commission finds that 

there is reason to believe that notification may cause an adverse 

result, as defined in subsection (g). 

(c) EX PARTE APPLICATION BY COMMISSION.— 

(1) IN GENERAL.—If neither notification nor delayed notification by the Commission is required under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.) or chapter 121 of title 

18, United States Code, the Commission may apply ex parte to 

a presiding judge or magistrate judge for an order prohibiting 

the recipient of compulsory process issued by the Commission 

from disclosing to any other person the existence of the process, 

notwithstanding any law or regulation of the United States, or 

under the constitution, or any law or regulation, of any State, 

political subdivision of a State, territory of the United States, 

or the District of Columbia. The presiding judge or magistrate 

judge may enter such an order granting the requested prohibition of disclosure for a period not to exceed 60 days if there is 

reason to believe that disclosure may cause an adverse result, 

as defined in subsection (g). The presiding judge or magistrate 

judge may grant extensions of this order of up to 30 days each 

in accordance with this subsection, except that in no event shall 

the prohibition continue in force for more than a total of 9 

months. 

(2) APPLICATION.—This subsection shall apply only in connection with compulsory process issued by the Commission 

where the recipient of such process is not a subject of the investigation or proceeding at the time such process is issued. 

(3) LIMITATION.—No order issued under this subsection 

shall prohibit any recipient from disclosing to a Federal agency 

that the recipient has received compulsory process from the 

Commission. 

(d) NO LIABILITY FOR FAILURE TO NOTIFY.—If neither notification nor delayed notification by the Commission is required under 

the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.) or chapter 121 of title 18, United States Code, the recipient of compulsory 

process issued by the Commission under this Act shall not be liable 

under any law or regulation of the United States, or under the constitution, or any law or regulation, of any State, political subdivision of a State, territory of the United States, or the District of Columbia, or under any contract or other legally enforceable agreement, for failure to provide notice to any person that such process 

has been issued or that the recipient has provided information in 

28 

response to such process. The preceding sentence does not exempt 

any recipient from liability for— 

(1) the underlying conduct reported; 

(2) a failure to comply with the record retention requirements under section 1104(c) of the Right to Financial Privacy 

Act (12 U.S.C. 3404), where applicable; or 

(3) any failure to comply with any obligation the recipient 

may have to disclose to a Federal agency that the recipient has 

received compulsory process from the Commission or intends to 

provide or has provided information to the Commission in response to such process. 

(e) VENUE AND PROCEDURE.— (1) IN GENERAL.—All judicial proceedings initiated by the 

Commission under the Right to Financial Privacy Act (12 

U.S.C. 3401 et seq.), chapter 121 of title 18, United States Code, 

or this section may be brought in the United States District 

Court for the District of Columbia or any other appropriate 

United States District Court. All ex parte applications by the 

Commission under this section related to a single investigation 

may be brought in a single proceeding. 

(2) IN CAMERA PROCEEDINGS.—Upon application by the 

Commission, all judicial proceedings pursuant to this section 

shall be held in camera and the records thereof sealed until expiration of the period of delay or such other date as the presiding judge or magistrate judge may permit. 

(f) SECTION NOT TO APPLY TO ANTITRUST INVESTIGATIONS OR

PROCEEDINGS.—This section shall not apply to an investigation or 

proceeding related to the administration of Federal antitrust laws 

or foreign antitrust laws as defined in paragraphs (5) and (7), respectively, of section 12 of the International Antitrust Enforcement 

Assistance Act of 1994 (15 U.S.C. 6211). 

(g) ADVERSE RESULT DEFINED.—For purposes of this section the 

term ‘‘adverse result’’ means— 

(1) endangering the life or physical safety of an individual; 

(2) flight from prosecution; 

(3) the destruction of, or tampering with, evidence; 

(4) the intimidation of potential witnesses; or 

(5) otherwise seriously jeopardizing an investigation or proceeding related to fraudulent or deceptive commercial practices 

or persons involved in such practices, or unduly delaying a trial 

related to such practices or persons involved in such practices, 

including, but not limited to, by— 

(A) the transfer outside the territorial limits of the 

United States of assets or records related to fraudulent or 

deceptive commercial practices or related to persons involved in such practices; 

(B) impeding the ability of the Commission to identify 

persons involved in fraudulent or deceptive commercial 

practices, or to trace the source or disposition of funds related to such practices; or 

(C) the dissipation, fraudulent transfer, or concealment 

of assets subject to recovery by the Commission. 

SEC. 21B. PROTECTION FOR VOLUNTARY PROVISION OF INFORMATION. 

(a) IN GENERAL.— 

29 

(1) NO LIABILITY FOR PROVIDING CERTAIN MATERIAL.—An 

entity described in paragraphs (2) or (3) of subsection (d) that 

voluntarily provides material to the Commission that such entity reasonably believes is relevant to— 

(A) a possible unfair or deceptive act or practice, as defined in section 5(a) of this Act; or 

(B) assets subject to recovery by the Commission, including assets located in foreign jurisdictions; 

shall not be liable to any person under any law or regulation 

of the United States, or under the constitution, or any law or 

regulation, of any State, political subdivision of a State, territory of the United States, or the District of Columbia, for such 

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

provision of material or of intention to provide material. 

(2) LIMITATIONS.—Nothing in this subsection shall be construed to exempt any such entity from liability— 

(A) for the underlying conduct reported; or 

(B) to any Federal agency for providing such material 

or for any failure to comply with any obligation the entity 

may have to notify a Federal agency prior to providing 

such material to the Commission. 

(b) CERTAIN FINANCIAL INSTITUTIONS.—An entity described in 

paragraph (1) of subsection (d) shall, in accordance with section 

5318(g)(3) of title 31, United States Code, be exempt from liability 

for making a voluntary disclosure to the Commission of any possible 

violation of law or regulation, including— 

(1) a disclosure regarding assets, including assets located 

in foreign jurisdictions— 

(A) related to possibly fraudulent or deceptive commercial practices; 

(B) related to persons involved in such practices; or 

(C) otherwise subject to recovery by the Commission; or 

(2) a disclosure regarding suspicious chargeback rates related to possibly fraudulent or deceptive commercial practices. 

(c) CONSUMER COMPLAINTS.—Any entity described in subsection 

(d) that voluntarily provides consumer complaints sent to it, or information contained therein, to the Commission shall not be liable 

to any person under any law or regulation of the United States, or 

under the constitution, or any law or regulation, of any State, political subdivision of a State, territory of the United States, or the District of Columbia, for such provision of material or for any failure 

to provide notice of such provision of material or of intention to so 

provide material. This subsection shall not provide any exemption 

from liability for the underlying conduct. 

(d) APPLICATION.—This section applies to the following entities, 

whether foreign or domestic: 

(1) A financial institution as defined in section 5312 of title 

31, United States Code. 

(2) To the extent not included in paragraph (1) a bank or 

thrift institution, a commercial bank or trust company, an investment company, a credit card issuer, an operator of a credit 

card system, and an issuer, redeemer, or cashier of travelers’ 

checks, money orders, or similar instruments. 

(3) A courier service, a commercial mail receiving agency, 

an industry membership organization, a payment system proVerDate Aug 04 2004 20:54 Nov 16, 2004 Jkt 039006 PO 00000 Frm 00029 Fmt 6659 Sfmt 6603 E:\HR\OC\HR635P2.108 HR635P2
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vider, a consumer reporting agency, a domain name registrar or 

registry acting as such, and a provider of alternative dispute 

resolution services. 

(4) An Internet service provider or provider of telephone 

services. 

* * * * * * * 

SEC. 25A. STAFF EXCHANGES. 

(a) IN GENERAL.—The Commission may— 

(1) retain or employ officers or employees of foreign government agencies on a temporary basis as employees of the Commission pursuant to section 2 of this Act, or section 3101 or section 3109 of title 5, United States Code; and 

(2) detail officers or employees of the Commission to work 

on a temporary basis for appropriate foreign government agencies. 

(b) RECIPROCITY AND REIMBURSEMENT.—The staff arrangements described in subsections (a) need not be reciprocal. The Commission may accept payment or reimbursement, in cash or in kind, 

from a foreign government agency to which this section is applicable, or payment or reimbursement made on behalf of such agency, 

for expenses incurred by the Commission, its members, and employees in carrying out such arrangements. 

(c) STANDARDS OF CONDUCT.—A person appointed under subsection (a)(1) shall be subject to the provisions of law relating to ethics, conflicts of interest, corruption, and any other criminal or civil 

statute or regulation governing the standards of conduct for Federal 

employees that are applicable to the type of appointment. 

* * * * * * * 

SECTION 1112 OF THE RIGHT TO FINANCIAL PRIVACY 

ACT OF 1978 

USE OF INFORMATION

SEC. 1112. (a) * * * 

* * * * * * * 

(e) Notwithstanding section 1101(6) or any other provision of 

law, the exchange of financial records, examination reports or other 

information with respect to a financial institution, holding company, or a subsidiary of a depository institution or holding company, among and between the five member supervisory agencies of 

the Federal Financial Institutions Examination Council, the Securities and Exchange Commission, the Federal Trade Commission, 

and the Commodity Futures Trading Commission is permitted. 

* * * * * * * 

31 

COMMITTEE JURISDICTION LETTER


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MARKUP TRANSCRIPT

BUSINESS MEETING 

THURSDAY, SEPTEMBER 30, 2004 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:05 a.m., in Room 

2141, Rayburn House Office Building, Hon. F. James Sensenbrenner, Jr. [Chairman of the Committee] presiding. 

[Intervening business.] 

Chairman SENSENBRENNER. Pursuant to notice, I now call up the 

bill, H.R. 3143, the ‘‘International Consumer Protection Act of 

2003’’ for purposes of markup and move its favorable recommendation to the House. Without objection, the bill will be considered as 

read and open for amendment at any point, and the Chair recognizes himself for 5 minutes to explain the bill. I urge my colleagues 

to join me in favorably reporting this bill with the amendment in 

the nature of a substitute that I will offer. 

The legislation provides advanced powers to the Federal Trade 

Commission that will improve cooperation and information sharing 

with foreign counterparts, provide additional investigative and enforcement tools and ultimately better protect American consumers. 

The bill was ordered reported by the Energy and Commerce Committee last year and subsequently sequentially referred to us. 

There have been interagency negotiations on this legislation, and 

the product of these negotiations is in the amendment in the nature of a substitute that I will offer. 

I ask unanimous consent that my complete statement be put in 

the record at this point and am happy to yield to one of the minority party Members should they wish to say anything. Gentleman 

from Virginia. 

[The prepared statement of Mr. Sensenbrenner follows:] 

PREPARED STATEMENT OF THE HONORABLE F. JAMES SENSENBRENNER, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN, AND CHAIRMAN, COMMITTEE ON THE JUDICIARY

I urge my colleagues to join me in favorably reporting the bill H.R. 3143 with an 

amendment in the nature of a substitute that I will offer. This legislation provides 

enhanced powers to the Federal Trade Commission that will improve cooperation 

and information sharing with foreign counterparts, provide additional investigative 

and enforcement tools, and ultimately better protect American consumers. 

H.R. 3143 was the bill ordered reported by the Committee on Energy & Commerce 

last year and sequentially referred to the Committee on the Judiciary. However, 

months of interagency negotiations between the Department of Justice, the FTC, the 

State Department and OMB produced modifications that have been introduced as 

a new consensus bill, H.R. 4996. 

H.R. 4996 is a notable improvement that addresses concerns raised about the 

original bill by the other executive branch agencies and by outside parties during 

Congressional hearings. I understand that H.R. 4996 is now the working text of legislation that could come to the House floor, and it matches companion legislation 

in the Senate. Furthermore, I understand that there are no plans to advance the 

older version, H.R. 3143 any further, but the Committee on Energy & Commerce 

will instead discharge H.R. 4996. Therefore, I will be offering an amendment in the 

nature of a substitute that replaces the text of H.R. 3143 with the text of H.R. 4996. 

The advent of the Internet, improved telecommunications, and the globalization 

of the economy have created incredible opportunities by shrinking distances and 

blurring traditional boundaries and barriers. However, some of the international opVerDate Aug 04 2004 20:54 Nov 16, 2004 Jkt 039006 PO 00000 Frm 00034 Fmt 6659 Sfmt 6621 E:\HR\OC\HR635P2.108 HR635P2
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portunities being created today are not for entrepreneurs and consumers, but for 

criminals who seek to deceive and defraud. 

What might be called ‘‘Cross-border fraud’’ is a burgeoning problem involving 

those who establish operations in one country, and use communications that may 

cross multiple national borders to deceive or defraud consumers in other countries. 

The FTC reports an increasing number of cases brought by the Commission involve foreign consumers, foreign businesses or individuals, or assets or evidence located outside the United States. In 2002, 14% of the complaints in the Consumer 

Sentinel database (excluding identity theft complaints) were cross-border complaints, up from 11% in 2000. 

Increasingly, the FTC’s fraud-related cases have some cross-border component. 

For instance a typical spam related case may involve a foreign sender or an email 

message that crosses several national boundaries en route to its destination. To better enforce existing fraud and consumer protection laws—like CAN-SPAM—and 

meet the enforcement expectations of Congress, the FTC believes better international cooperation and additional tools are critical. 

The additional authority provided to the FTC in this legislation mirrors the existing authority given to the Securities and Exchange Commission. 

Concerns have been raised throughout the process of crafting the International 

Consumer Protection Act about the scope of the powers sought, the FTC’s need for 

them, and the existence of adequate due process and privacy safeguards. 

I believe the version before us today is much improved and the FTC has addressed many of these concerns. Therefore, I support advancing the bill from Judiciary Committee at this time. However, Congress and the Executive branch should 

closely monitor the Commission’s use of these new powers and the level of cooperation they receive from their foreign counterparts—and most importantly monitor for 

any abuses of information shared about U.S. entities or persons with foreign consumer protection authorities. 

The reporting requirements of this legislation are serious, and the FTC is on notice that these new authorities can easily be revoked if they are not used properly 

or if Congress does not receive adequate information. 

With that cautionary note, I urge my colleagues to favorably report the bill with 

the substitute amendment and help protect American consumers from cross-border 

fraud and deceptive practices. 

Mr. SCOTT. Mr. Chairman, I am not familiar with this bill. It apparently went through the Energy and Commerce Committee, and 

there appear to be some—they appear to approve the bill, but I am 

just getting information that there is some opposition and I am not 

exactly clairvoyant about what the opposition is. So I just wanted 

to express that this apparently is not noncontroversial, and I yield 

back. 

[Letter from the American Civil Liberties Union submitted by 

Mr. Scott.] 

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Chairman SENSENBRENNER. Without objection, all Members’ 

opening statements will appear in the record at this point. 

Are there amendments? And I have an amendment in the nature 

of a substitute at the desk which the Clerk will report. 

The CLERK. Amendment in the nature of a substitute to H.R. 

3143 as reported, offered by Mr. Sensenbrenner of Wisconsin. 

Strike all after the enacting clause and insert the following. 

[The amendment in the nature of a substitute follows:] 


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Chairman SENSENBRENNER. Without objection, the amendment is 

considered as read and the Chair recognizes himself for 5 minutes. 

As previously noted in my opening statement, this amendment in 

the nature of a substitute reflects an interagency consensus emanating from negotiations between the Justice Department, the 

FTC, the State Department, and the OMB, and I urge Members to 

support its adoption and yield back the balance of my time. 

Are there any second degree amendments to the amendment in 

the nature of a substitute? If there are none, the question is on 

agreeing to the amendment in the nature of a substitute offered by 

the Chair. Those in favor will say aye. Opposed, no. The ayes appear to have it. The ayes have it, and the amendment in the nature 

of a substitute is agreed to. 

A reporting quorum is not present. Without objection, the previous question is ordered on favorably reporting the bill to the 

House. 

[Intervening business.] 

Chairman SENSENBRENNER. The unfinished business is the motion to report favorably the bill, H.R. 3143, as amended. A reporting quorum is present. All those in favor of reporting the bill favorably as amended will say aye. Opposed, no. The ayes appear to 

have it. The ayes have it. The motion to report favorably is agreed 

to. 

Without objection, the bill will be reported favorably to the 

House in the form of a single amendment in the nature of a substitute, incorporating the amendments adopted here today. Without 

objection, the Chairman is authorized to move to go to conference 

pursuant to House rules. Without objection, the staff is directed to 

make any technical and conforming changes, and all Members will 

be given 2 days as provided by House rules in which to submit additional, dissenting, supplemental, or minority views. 

Æ