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[110th Congress Public Law 174]
[From the U.S. Government Printing Office]

[DOCID: f:publ174.110]

[[Page 2515]]

             SUDAN ACCOUNTABILITY AND DIVESTMENT ACT OF 2007

[[Page 121 STAT. 2516]]

Public Law 110-174
110th Congress

                                 An Act

 
 To authorize State and local governments to divest assets in companies 
  that conduct business operations in Sudan, to prohibit United States 
Government contracts with such companies, and for other <<NOTE: Dec. 31, 
                      2007 -  [S. 2271]>> purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress <<NOTE: Sudan Accountability and 
Divestment Act of 2007. 50 USC 1701 note.>> assembled,
SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Sudan Accountability and Divestment 
Act of 2007''.
SEC. 2. DEFINITIONS.

    In this Act:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Banking, Housing, and Urban 
                Affairs, the Committee on Foreign Relations, and the 
                Select Committee on Intelligence of the Senate; and
                    (B) the Committee on Financial Services, the 
                Committee on Foreign Affairs, and the Permanent Select 
                Committee on Intelligence of the House of 
                Representatives.
            (2) Business operations.--The term ``business operations'' 
        means engaging in commerce in any form in Sudan, including by 
        acquiring, developing, maintaining, owning, selling, possessing, 
        leasing, or operating equipment, facilities, personnel, 
        products, services, personal property, real property, or any 
        other apparatus of business or commerce.
            (3) Executive agency.--The term ``executive agency'' has the 
        meaning given the term in section 4 of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 403).
            (4) Government of sudan.--The term ``Government of Sudan''--
                    (A) means the government in Khartoum, Sudan, which 
                is led by the National Congress Party (formerly known as 
                the National Islamic Front) or any successor government 
                formed on or after October 13, 2006 (including the 
                coalition National Unity Government agreed upon in the 
                Comprehensive Peace Agreement for Sudan); and
                    (B) does not include the regional government of 
                southern Sudan.
            (5) Marginalized populations of sudan.--The term 
        ``marginalized populations of Sudan'' refers to--
                    (A) adversely affected groups in regions authorized 
                to receive assistance under section 8(c) of the Darfur 
                Peace

[[Page 121 STAT. 2517]]

                and Accountability Act (Public Law 109-344; 50 U.S.C. 
                1701 note); and
                    (B) marginalized areas in Northern Sudan described 
                in section 4(9) of such Act.
            (6) Military equipment.--The term ``military equipment'' 
        means--
                    (A) weapons, arms, military supplies, and equipment 
                that readily may be used for military purposes, 
                including radar systems or military-grade transport 
                vehicles; or
                    (B) supplies or services sold or provided directly 
                or indirectly to any force actively participating in 
                armed conflict in Sudan.
            (7) Mineral extraction activities.--The term ``mineral 
        extraction activities'' means exploring, extracting, processing, 
        transporting, or wholesale selling or trading of elemental 
        minerals or associated metal alloys or oxides (ore), including 
        gold, copper, chromium, chromite, diamonds, iron, iron ore, 
        silver, tungsten, uranium, and zinc.
            (8) Oil-related activities.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``oil-related activities'' means--
                          (i) exporting, extracting, producing, 
                      refining, processing, exploring for, transporting, 
                      selling, or trading oil; and
                          (ii) constructing, maintaining, or operating a 
                      pipeline, refinery, or other oilfield 
                      infrastructure.
                    (B) Exclusions.--A person shall not be considered to 
                be involved in an oil-related activity if--
                          (i) the person is involved in the retail sale 
                      of gasoline or related consumer products in Sudan 
                      but is not involved in any other activity 
                      described in subparagraph (A); or
                          (ii) the person is involved in leasing, or 
                      owns, rights to an oil block in Sudan but is not 
                      involved in any other activity described in 
                      subparagraph (A).
            (9) Person.--The term ``person'' means--
                    (A) a natural person, corporation, company, business 
                association, partnership, society, trust, any other 
                nongovernmental entity, organization, or group;
                    (B) any governmental entity or instrumentality of a 
                government, including a multilateral development 
                institution (as defined in section 1701(c)(3) of the 
                International Financial Institutions Act (22 U.S.C. 
                262r(c)(3))); and
                    (C) any successor, subunit, parent company or 
                subsidiary of any entity described in subparagraph (A) 
                or (B).
            (10) Power production activities.--The term ``power 
        production activities'' means any business operation that 
        involves a project commissioned by the National Electricity 
        Corporation of Sudan or other similar entity of the Government 
        of Sudan whose purpose is to facilitate power generation and 
        delivery, including establishing power-generating plants or 
        hydroelectric dams, selling or installing components for the 
        project, or providing service contracts related to the 
        installation or maintenance of the project.
            (11) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto

[[Page 121 STAT. 2518]]

        Rico, the United States Virgin Islands, Guam, American Samoa, 
        and the Commonwealth of the Northern Mariana Islands.
            (12) State or local government.--The term ``State or local 
        government'' includes--
                    (A) any State and any agency or instrumentality 
                thereof;
                    (B) any local government within a State, and any 
                agency or instrumentality thereof;
                    (C) any other governmental instrumentality; and
                    (D) any public institution of higher education 
                within the meaning of the Higher Education Act of 1965 
                (20 U.S.C. 1001 et seq.).
SEC. 3. AUTHORITY OF STATE AND LOCAL GOVERNMENTS TO DIVEST FROM 
                    CERTAIN COMPANIES DIRECTLY INVESTED IN CERTAIN 
                    SUDANESE SECTORS.

    (a) Sense of Congress.--It is the sense of Congress that the United 
States Government should support the decision of any State or local 
government to divest from, or to prohibit the investment of assets of 
the State or local government in, a person that the State or local 
government determines poses a financial or reputational risk.
    (b) Authority To Divest.--Notwithstanding any other provision of 
law, a State or local government may adopt and enforce measures that 
meet the requirements of subsection (e) to divest the assets of the 
State or local government from, or prohibit investment of the assets of 
the State or local government in, persons that the State or local 
government determines, using credible information available to the 
public, are conducting or have direct investments in business operations 
described in subsection (d).
    (c) Notice to <<NOTE: Deadline.>> Department of Justice.--Not later 
than 30 days after adopting a measure pursuant to subsection (b), a 
State or local government shall submit written notice to the Attorney 
General describing the measure.

    (d) Business Operations Described.--
            (1) In general.--Business operations described in this 
        subsection are business operations in Sudan that include power 
        production activities, mineral extraction activities, oil-
        related activities, or the production of military equipment.
            (2) Exceptions.--Business operations described in this 
        subsection do not include business operations that the person 
        conducting the business operations can demonstrate--
                    (A) are conducted under contract directly and 
                exclusively with the regional government of southern 
                Sudan;
                    (B) are conducted under a license from the Office of 
                Foreign Assets Control, or are expressly exempted under 
                Federal law from the requirement to be conducted under 
                such a license;
                    (C) consist of providing goods or services to 
                marginalized populations of Sudan;
                    (D) consist of providing goods or services to an 
                internationally recognized peacekeeping force or 
                humanitarian organization;
                    (E) consist of providing goods or services that are 
                used only to promote health or education; or
                    (F) have been voluntarily suspended.

[[Page 121 STAT. 2519]]

    (e) Requirements.--Any measure taken by a State or local government 
under subsection (b) shall meet the following requirements:
            (1) Notice.--The State or local government shall provide 
        written notice and an opportunity to comment in writing to each 
        person to whom a measure is to be applied.
            (2) Timing.--The <<NOTE: Applicability. Deadline.>> measure 
        shall apply to a person not earlier than the date that is 90 
        days after the date on which written notice is provided to the 
        person under paragraph (1).
            (3) Applicability.--The measure shall not apply to a person 
        that demonstrates to the State or local government that the 
        person does not conduct or have direct investments in business 
        operations described in subsection (d).
            (4) Sense of congress on avoiding erroneous targeting.--It 
        is the sense of Congress that a State or local government should 
        not adopt a measure under subsection (b) with respect to a 
        person unless the State or local government has made every 
        effort to avoid erroneously targeting the person and has 
        verified that the person conducts or has direct investments in 
        business operations described in subsection (d).

    (f) Definitions.--In this section:
            (1) Investment.--The ``investment'' of assets, with respect 
        to a State or local government, includes--
                    (A) a commitment or contribution of assets;
                    (B) a loan or other extension of credit of assets; 
                and
                    (C) the entry into or renewal of a contract for 
                goods or services.
            (2) Assets.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``assets'' refers to public monies and 
                includes any pension, retirement, annuity, or endowment 
                fund, or similar instrument, that is controlled by a 
                State or local government.
                    (B) Exception.--The term ``assets'' does not include 
                employee benefit plans covered by title I of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1001 et seq.).

    (g) Nonpreemption.--A measure of a State or local government 
authorized under subsection (b) is not preempted by any Federal law or 
regulation.
    (h) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), this 
        section applies to measures adopted by a State or local 
        government before, on, or after the date of the enactment of 
        this Act.
            (2) Notice <<NOTE: Applicability.>> requirements.--
        Subsections (c) and (e) apply to measures adopted by a State or 
        local government on or after the date of the enactment of this 
        Act.
SEC. 4. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY ASSET 
                    MANAGERS.

    (a) In General.--Section 13 of the Investment Company Act of 1940 
(15 U.S.C. 80a-13) is amended by adding at the end the following:
    ``(c) Limitation on Actions.--
            ``(1) In general.--Notwithstanding any other provision of 
        Federal or State law, no person may bring any civil, criminal,

[[Page 121 STAT. 2520]]

        or administrative action against any registered investment 
        company, or any employee, officer, director, or investment 
        adviser thereof, based solely upon the investment company 
        divesting from, or avoiding investing in, securities issued by 
        persons that the investment company determines, using credible 
        information that is available to the public, conduct or have 
        direct investments in business operations in Sudan described in 
        section 3(d) of the Sudan Accountability and Divestment Act of 
        2007.
            ``(2) Applicability.--
                    ``(A) Actions for breaches of fiduciary duties.--
                Paragraph (1) does not prevent a person from bringing an 
                action based on a breach of a fiduciary duty owed to 
                that person with respect to a divestment or non-
                investment decision, other than as described in 
                paragraph (1).
                    ``(B) Disclosures.--Paragraph (1) shall not apply to 
                a registered investment company, or any employee, 
                officer, director, or investment adviser thereof, unless 
                the investment company makes disclosures in accordance 
                with regulations prescribed by the Commission.
            ``(3) Person defined.--For purposes of this subsection the 
        term `person' includes the Federal Government and any State or 
        political subdivision of a State.''.

    (b) SEC <<NOTE: Deadline.>> Regulations.--Not later than 120 days 
after the date of the enactment of this Act, the Securities and Exchange 
Commission shall prescribe regulations, in the public interest and for 
the protection of investors, to require disclosure by each registered 
investment company that divests itself of securities in accordance with 
section 13(c) of the Investment Company Act of 1940. Such rules shall 
require the disclosure to be included in the next periodic report filed 
with the Commission under section 30 of such Act (15 U.S.C. 80a-29) 
following such divestiture.
SEC. 5. SENSE OF CONGRESS REGARDING CERTAIN ERISA PLAN 
                    INVESTMENTS.

    It is the sense of Congress that a fiduciary of an employee benefit 
plan, as defined in section 3(3) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002(3)), may divest plan assets from, 
or avoid investing plan assets in, any person the fiduciary determines 
is conducting or has direct investments in business operations in Sudan 
described in section 3(d) of this Act, without breaching the 
responsibilities, obligations, or duties imposed upon the fiduciary by 
section 404 of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1104), if--
            (1) the fiduciary makes such determination using credible 
        information that is available to the public; and
            (2) such divestment or avoidance of investment is conducted 
        in accordance with section 2509.94-1 of title 29, Code of 
        Federal Regulations (as in effect on the day before the date of 
        the enactment of this Act).
SEC. 6. PROHIBITION ON UNITED STATES GOVERNMENT CONTRACTS.

    (a) Certification Requirement.--The head of each executive agency 
shall ensure that each contract entered into by such executive agency 
for the procurement of goods or services includes a clause that requires 
the contractor to certify to the contracting officer that the contractor 
does not conduct business operations in Sudan described in section 3(d).

[[Page 121 STAT. 2521]]

    (b) Remedies.--
            (1) In general.--The head of an executive agency may impose 
        remedies as provided in this subsection if the head of the 
        executive agency determines that the contractor has submitted a 
        false certification under subsection (a) after the date the 
        Federal Acquisition Regulation is amended under subsection (e) 
        to implement the requirements of this section.
            (2) Termination.--The head of an executive agency may 
        terminate a covered contract upon the determination of a false 
        certification under paragraph (1).
            (3) Suspension and debarment.--The head of an executive 
        agency may debar or suspend a contractor from eligibility for 
        Federal contracts upon the determination of a false 
        certification under paragraph (1). The debarment period may not 
        exceed 3 years.
            (4) Inclusion on list of parties excluded from federal 
        procurement and nonprocurement programs.--The Administrator of 
        General Services shall include on the List of Parties Excluded 
        from Federal Procurement and Nonprocurement Programs maintained 
        by the Administrator under part 9 of the Federal Acquisition 
        Regulation issued under section 25 of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 421) each contractor that is 
        debarred, suspended, proposed for debarment or suspension, or 
        declared ineligible by the head of an executive agency on the 
        basis of a determination of a false certification under 
        paragraph (1).
            (5) Rule of construction.--This section shall not be 
        construed to limit the use of other remedies available to the 
        head of an executive agency or any other official of the Federal 
        Government on the basis of a determination of a false 
        certification under paragraph (1).

    (c) Waiver.--
            (1) In <<NOTE: Certification.>> general.--The President may 
        waive the requirement of subsection (a) on a case-by-case basis 
        if the President determines and certifies in writing to the 
        appropriate congressional committees that it is in the national 
        interest to do so.
            (2) Reporting requirement.--Not later than April 15, 2008, 
        and semi-annually thereafter, the Administrator for Federal 
        Procurement Policy shall submit to the appropriate congressional 
        committees a report on waivers granted under paragraph (1).

    (d) Implementation <<NOTE: Deadline.>> Through the Federal 
Acquisition Regulation.--Not later than 120 days after the date of the 
enactment of this Act, the Federal Acquisition Regulatory Council shall 
amend the Federal Acquisition Regulation issued pursuant to section 25 
of the Office of Federal Procurement Policy Act (41 U.S.C. 421) to 
provide for the implementation of the requirements of this section.

    (e) Report.--Not later than one year after the date the Federal 
Acquisition Regulation is amended under subsection (e) to implement the 
requirements of this section, the Administrator of General Services, 
with the assistance of other executive agencies, shall submit to the 
Office of Management and Budget and the appropriate congressional 
committees a report on the actions taken under this section.

[[Page 121 STAT. 2522]]

SEC. 7. SENSE OF CONGRESS ON EFFORTS BY OTHER COUNTRIES.

    It is the sense of Congress that the governments of all other 
countries should adopt measures, similar to those contained in this Act, 
to publicize the activities of all persons that, through their financial 
dealings, knowingly or unknowingly enable the Government of Sudan to 
continue to oppress and commit genocide against people in the Darfur 
region and other regions of Sudan, and to authorize divestment from, and 
the avoidance of further investment in, such persons.
SEC. 8. SENSE OF CONGRESS ON PEACEKEEPING EFFORTS IN SUDAN.

    It is the sense of Congress that the President should--
            (1) continue to work with other members of the international 
        community, including the Permanent Members of the United Nations 
        Security Council, the African Union, the European Union, the 
        Arab League, and the Government of Sudan to facilitate the 
        urgent deployment of a peacekeeping force to Sudan; and
            (2) bring before the United Nations Security Council, and 
        call for a vote on, a resolution requiring meaningful 
        multilateral sanctions against the Government of Sudan in 
        response to its acts of genocide against the people of Darfur 
        and its continued refusal to allow the implementation of a 
        peacekeeping force in Sudan.
SEC. 9. SENSE OF CONGRESS ON THE INTERNATIONAL OBLIGATIONS OF THE 
                    UNITED STATES.

    It is the sense of Congress that nothing in this Act--
            (1) conflicts with the international obligations or 
        commitments of the United States; or
            (2) affects article VI, clause 2, of the Constitution of the 
        United States.
SEC. 10. REPORTS ON SANCTIONS IN SUPPORT OF PEACE IN DARFUR.

    (a) In General.--The Secretary of State and the Secretary of the 
Treasury shall submit to the appropriate congressional committees a 
report assessing the effectiveness of sanctions imposed with respect to 
Sudan at the time the Secretary of State and the Secretary of the 
Treasury submits reports required under--
            (1) the Sudan Peace Act (Public Law 107-245; 50 U.S.C. 1701 
        note);
            (2) the Comprehensive Peace in Sudan Act of 2004 (Public Law 
        108-497; 50 U.S.C. 1701 note); and
            (3) the Darfur Peace and Accountability Act of 2006 (Public 
        Law 109-344; 50 U.S.C. 1701 note).

    (b) Additional Report by the Secretary of the Treasury.--The 
Secretary of the Treasury shall submit to the appropriate congressional 
committees a report assessing the effectiveness of sanctions imposed 
with respect to Sudan under the International Emergency Economic Powers 
Act (50 U.S.C. 1701 et seq.) at the time the President submits the 
reports required by section 204(c) of such Act (50 U.S.C. 1703(c)) with 
respect to Executive Order 13,067 (50 U.S.C. 1701 note; relating to 
blocking property of persons in connection with the conflict in Sudan's 
region of Darfur).
    (c) Contents.--The reports required by subsections (a) and (b) shall 
include--
            (1) a description of each sanction imposed under a law or 
        executive order described in subsection (a) or (b);

[[Page 121 STAT. 2523]]

            (2) the name of the person subject to the sanction, if any; 
        and
            (3) whether or not the person subject to the sanction is 
        also subject to sanctions imposed by the United Nations.
SEC. 11. REPEAL OF REPORTING REQUIREMENT.

    Section 6305 of the U.S. Troop Readiness, Veterans' Care, Katrina 
Recovery, and Iraq Accountability Appropriations Act, 2007 (Public Law 
110-28; 121 Stat. 172) is repealed.
SEC. 12. <<NOTE: President. Certification.>> TERMINATION.

    The provisions of sections 3, 4, 5, 6, and 10 shall terminate 30 
days after the date on which the President has certified to Congress 
that the Government of Sudan has honored its commitments to--
            (1) abide by United Nations Security Council Resolution 1769 
        (2007);
            (2) cease attacks on civilians;
            (3) demobilize and demilitarize the Janjaweed and associated 
        militias;
            (4) grant free and unfettered access for delivery of 
        humanitarian assistance; and
            (5) allow for the safe and voluntary return of refugees and 
        internally displaced persons.

    Approved December 31, 2007.

LEGISLATIVE HISTORY--S. 2271:
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SENATE REPORTS: No. 110-213 (Comm. on Banking, Housing, and Urban 
Affairs).
CONGRESSIONAL RECORD, Vol. 153 (2007):
            Dec. 12, considered and passed Senate.
            Dec. 18, considered and passed House.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 43 (2007):
            Dec. 31, Presidential statement.

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