```

[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3143 Introduced in House (IH)]

<DOC>

108th CONGRESS
  1st Session
                                H. R. 3143

 To enhance Federal Trade Commission enforcement against cross-border 
                          fraud and deception.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 23, 2003

 Mr. Stearns (for himself and Ms. Schakowsky) introduced the following 
    bill; which was referred to the Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL

 
 To enhance Federal Trade Commission enforcement against cross-border 
                          fraud and deception.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be referred to as the ``International Consumer 
Protection Act of 2003''.

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 new paragraph:
    `` `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; or
            ``(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 new paragraph:
    ``(4)(A) Unfair or deceptive acts or practices for purposes of this 
subsection 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)(6).''.
    (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) the following new subsections:
    ``(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 interest of consumers in 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, 
        after consultation with the Secretary of State, may negotiate 
        and conclude an international agreement, in the name of either 
        the United States or the Commission, and with final approval of 
        the agreement by the Secretary of State, 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)(6); 
                and
                    ``(C) engage in further cooperation, and protect 
                materials and information received from disclosure, as 
                authorized by this Act.
            ``(5) The authority in 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.
    ``(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 amended by this Act), including 
operating expenses and other costs of the following bilateral and 
multilateral cooperative law enforcement agencies and organizations:
            (1) The International Consumer Protection and Enforcement 
        Network.
            (2) The International Competition Network.
            (3) The Mexico-U.S.-Canada Health Fraud Task Force.
            (4) Project Emptor.
            (5) The Toronto Strategic Partnership and other regional 
        partnerships with a nexus in a Canadian province.

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 subsection:
    ``(c) Foreign Litigation.--
            ``(1) Commission attorneys.--The Commission may designate 
        Commission attorneys to assist the Attorney General in 
        connection with litigation in foreign courts in which the 
        Commission has an interest, pursuant to the terms of a 
        memorandum of understanding to be negotiated by the Commission 
        and the Attorney General. The preceding sentence is in addition 
        to, and not in lieu of any other authority vested in the 
        Commission.
            ``(2) Foreign counsel.--The Commission is authorized to 
        expend appropriated funds for the retention of foreign counsel 
        for consultation and for litigation in foreign courts, and for 
        expenses related to consultation and litigation in foreign 
        courts in which the Commission has an interest.
            ``(3) Payment of claims.--Nothing in this section 
        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.''.

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. 57b092(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--
            ``(1) the foreign law enforcement agency has set forth a 
        bona fide legal basis for its authority to maintain the 
        material in confidence; and
            ``(2) the materials are to be used for purposes of 
        investigating, or engaging in enforcement proceedings related 
        to, possible violations of--
                    ``(A) foreign laws prohibiting fraudulent or 
                deceptive commercial practices or other practices 
                substantially similar to practices prohibited by any 
                law administered by the Commission;
                    ``(B) a law administered by the Commission, if 
                disclosure of the material would further a Commission 
                investigation or enforcement proceeding; or
                    ``(C) 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 authority's government.
        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. 57b092(f)) is 
amended to read as follows--
    ``(f) Exemption From 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 
        be exempt from disclosure under section 552 of title 5, United 
        States Code.
            ``(2) Material obtained from a foreign source.--
                    ``(A) Except as provided in subparagraph (C) of 
                this paragraph, the Commission shall not be compelled 
                to disclose--
                            ``(i) 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) material reflecting consumer 
                        complaints 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) 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) For purposes of section 552 of title 5, United States 
        Code, this subsection shall be considered a statute described 
        in subsection (b)(3)(B) of such section.
            ``(C) 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) Confidentiality, Delayed Notice of Compulsory Process.--The 
Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended by 
inserting after section 21 the following new section:

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

    ``(a) Intersection With Other Statutes.--The Right to Financial 
Privacy Act (12 U.S.C. 3401 et seq.) and the Electronic Communications 
Privacy Act (18 U.S.C. 2701 et seq.) shall apply with respect to the 
Commission, except as otherwise provided in this section.
    ``(b) In General.--The procedures for delay or prohibition of 
notice under the Right to Financial Privacy Act (12 U.S.C. 3401 et 
seq.) and the Electronic Communications Privacy Act (18 U.S.C. 2701 et 
seq.) shall be available to the Commission--
            ``(1) where notification is delayed pursuant to section 
        1109(a) of the Right to Financial Privacy Act (12 U.S.C. 
        3409(a)) pursuant to an ex parte application by the Commission 
        that there is reason to believe that notification may cause an 
        adverse result; or
            ``(2) where notification is delayed pursuant to section 
        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.
    ``(c) Ex Parte Application by Commission.--If the procedures for 
delay or prohibition of notice described in subsection (b) do not 
apply, 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 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 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 notice 
be delayed for more than a total of 9 months.
    ``(d) No Liability for Failure to Notify.--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 that such process has been 
issued or that the recipient has provided information in response to 
such process. The preceding sentence does not provide any exemption 
from liability for--
            ``(1) the underlying conduct reported;
            ``(2) noncompliance 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) noncompliance with any requirement of a Federal 
        agency to disclose information to that agency.
    ``(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.), the Electronic Communications Privacy Act 
        (18 U.S.C. 2701 et seq.), 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 (within the meaning of section 6211 of this 
title).
    ``(g) Adverse Result Defined.--For purposes of this section the 
term `adverse result' means--
            ``(1) 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;
            ``(2) 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;
            ``(3) endangering the life or physical safety of an 
        individual;
            ``(4) flight from prosecution;
            ``(5) the destruction of, or tampering with, evidence;
            ``(6) the intimidation of potential witnesses;
            ``(7) the dissipation, fraudulent transfer, or concealment 
        of assets subject to recovery by the Commission; or
            ``(8) 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.''.
    (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'' and inserting 
        a semicolon;
            (2) in subparagraph (D) by inserting ``and'' after the 
        semicolon; and
            (3) by inserting after subparagraph (D) the following new 
        subparagraph:
                    ``(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 8 of this Act) 
the following new section:

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

    ``(a) In General.--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--
            ``(1) a possible unfair or deceptive act or practice, as 
        defined in section 5(a) of this Act; or
            ``(2) 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. 
Nothing in this subsection shall be construed to provide any exemption 
from liability for the underlying conduct reported.
    ``(b) Certain Financial Institutions.--An entity described in 
subsection (d)(1) that voluntarily provides to the Commission material 
relevant to the subjects described in paragraphs (1) or (2) of 
subsection (a) shall be exempt from liability in accordance with the 
provisions of section 5318(g)(3) of title 31, United States Code.
    ``(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. The preceding sentence 
does 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 no 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, and a provider of alternative dispute resolution 
        services.
            ``(4) An Internet service provider or provider of telephone 
        services.''.

SEC. 9. STAFF EXCHANGES.

    The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended 
by adding after section 25 the following new section:

``SEC. 25A. STAFF EXCHANGES.

    ``(a) In General.--The Commission may--
            ``(1) retain or employ officers or employees of foreign 
        government agencies on a temporary basis pursuant to section 2 
        of this Act, section 3109 of title 5, or section 202 of title 
        18, 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.''.

SEC. 10. INFORMATION SHARING WITH FINANCIAL REGULATORS.

    Section 1112(e) of the Right to Financial Privacy Act (12 U.S.C. 
3412(e)) is amended by adding ``the Federal Trade Commission,'' after 
``the Securities and Exchange Commission,''.

SEC. 11. 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 5 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 pursuant to section 8 of this Act;
            (6) a description of the types of information private 
        entities have provided voluntarily pursuant to section 9 of 
        this Act;
            (7) a description of the results of cooperation with 
        foreign law enforcement agencies under this Act; and
            (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.
```