II 

Calendar No. 372 

109TH CONGRESS 

2D SESSION S. 1608 

[Report No. 109–219] 

To enhance Federal Trade Commission enforcement against illegal spam, 

spyware, and cross-border fraud and deception, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 29, 2005 

Mr. SMITH (for himself, Mr. MCCAIN, Mr. INOUYE, and Mr. NELSON of Florida, Mr. DORGAN, Mr. BURNS, and Mr. PRYOR) introduced the following 

bill; which was read twice and referred to the Committee on Commerce, 

Science, and Transportation 

MARCH 14, 2006 

Reported by Mr. STEVENS, without amendment 

A BILL 

To enhance Federal Trade Commission enforcement against 

illegal spam, spyware, and cross-border fraud and deception, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; FINDINGS; PURPOSE. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Undertaking Spam, Spyware, And Fraud Enforcement 


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1 With Enforcers beyond Borders Act of 2005’’ or the ‘‘U.S. 

2 SAFE WEB Act of 2005’’. 

3 (b) FINDINGS.—The Congress finds the following: 

4 (1) The Federal Trade Commission protects 

5 consumers from fraud and deception. Cross-border 

6 fraud and deception are growing international prob7 lems that affect American consumers and busi8 nesses. 

9 (2) The development of the Internet and im10 provements in telecommunications technologies have 

11 brought significant benefits to consumers. At the 

12 same time, they have also provided unprecedented 

13 opportunities for those engaged in fraud and decep14 tion to establish operations in one country and vic15 timize a large number of consumers in other coun16 tries. 

17 (3) An increasing number of consumer com18 plaints collected in the Consumer Sentinel database 

19 maintained by the Commission, and an increasing 

20 number of cases brought by the Commission, involve 

21 foreign consumers, foreign businesses or individuals, 

22 or assets or evidence located outside the United 

23 States. 

24 (4) The Commission has legal authority to rem25 edy law violations involving domestic and foreign 


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1 wrongdoers, pursuant to the Federal Trade Commis2 sion Act. The Commission’s ability to obtain effec3 tive relief using this authority, however, may face 

4 practical impediments when wrongdoers, victims, 

5 other witnesses, documents, money and third parties 

6 involved in the transaction are widely dispersed in 

7 many different jurisdictions. Such circumstances 

8 make it difficult for the Commission to gather all 

9 the information necessary to detect injurious prac10 tices, to recover offshore assets for consumer re11 dress, and to reach conduct occurring outside the 

12 United States that affects United States consumers. 

13 (5) Improving the ability of the Commission 

14 and its foreign counterparts to share information 

15 about cross-border fraud and deception, to conduct 

16 joint and parallel investigations, and to assist each 

17 other is critical to achieve more timely and effective 

18 enforcement in cross-border cases. 

19 (c) PURPOSE.—The purpose of this Act is to enhance 

20 the ability of the Federal Trade Commission to protect 

21 consumers from illegal spam, spyware, and cross-border 

22 fraud and deception and other consumer protection law 

23 violations. 


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1 SEC. 2. FOREIGN LAW ENFORCEMENT AGENCY DEFINED. 

2 Section 4 of the Federal Trade Commission Act (15 

3 U.S.C. 44) is amended by adding at the end the following: 

4 ‘‘ ‘Foreign law enforcement agency’ means— 

5 ‘‘(1) any agency or judicial authority of a for6 eign government, including a foreign state, a polit7 ical subdivision of a foreign state, or a multinational 

8 organization constituted by and comprised of foreign 

9 states, that is vested with law enforcement or inves10 tigative authority in civil, criminal, or administrative 

11 matters; and 

12 ‘‘(2) any multinational organization, to the ex13 tent that it is acting on behalf of an entity described 

14 in paragraph (1).’’. 

15 SEC. 3. AVAILABILITY OF REMEDIES. 

16 Section 5(a) of the Federal Trade Commission Act 

17 (15 U.S.C. 45(a)) is amended by adding at the end the 

18 following: 

19 ‘‘(4)(A) For purposes of subsection (a), the 

20 term ‘unfair or deceptive acts or practices’ includes 

21 such acts or practices involving foreign commerce 

22 that— 

23 ‘‘(i) cause or are likely to cause reasonably 

24 foreseeable injury within the United States; or 

25 ‘‘(ii) involve material conduct occurring 

26 within the United States. 


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1 ‘‘(B) All remedies available to the Commission 

2 with respect to unfair and deceptive acts or practices 

3 shall be available for acts and practices described in 

4 this paragraph, including restitution to domestic or 

5 foreign victims.’’. 

6 SEC. 4. POWERS OF THE COMMISSION. 

7 (a) PUBLICATION OF INFORMATION; REPORTS.—Sec8 tion 6(f) of the Federal Trade Commission Act (15 U.S.C. 

9 46(f)) is amended— 

10 (1) by inserting ‘‘(1)’’ after ‘‘such information’’ 

11 the first place it appears; and 

12 (2) by striking ‘‘purposes.’’ and inserting ‘‘pur13 poses, and (2) to any officer or employee of any for14 eign law enforcement agency under the same cir15 cumstances that making material available to foreign 

16 law enforcement agencies is permitted under section 

17 21(b).’’. 

18 (b) OTHER POWERS OF THE COMMISSION.—Section 

19 6 of the Federal Trade Commission Act (15 U.S.C. 46) 

20 is further amended by inserting after subsection (i) and 

21 before the proviso the following: 

22 ‘‘(j) INVESTIGATIVE ASSISTANCE FOR FOREIGN LAW

23 ENFORCEMENT AGENCIES.— 

24 ‘‘(1) IN GENERAL.—Upon a written request 

25 from a foreign law enforcement agency to provide 


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1 assistance in accordance with this subsection, if the 

2 requesting agency states that it is investigating, or 

3 engaging in enforcement proceedings against, pos4 sible violations of laws prohibiting fraudulent or de5 ceptive commercial practices, or other practices sub6 stantially similar to practices prohibited by any pro7 vision of the laws administered by the Commission, 

8 other than Federal antitrust laws (as defined in sec9 tion 12(5) of the International Antitrust Enforce10 ment Assistance Act of 1994 (15 U.S.C. 6211(5))), 

11 to provide the assistance described in paragraph (2) 

12 without requiring that the conduct identified in the 

13 request constitute a violation of the laws of the 

14 United States. 

15 ‘‘(2) TYPE OF ASSISTANCE.—In providing as16 sistance to a foreign law enforcement agency under 

17 this subsection, the Commission may— 

18 ‘‘(A) conduct such investigation as the 

19 Commission deems necessary to collect informa20 tion and evidence pertinent to the request for 

21 assistance, using all investigative powers au22 thorized by this Act; and 

23 ‘‘(B) when the request is from an agency 

24 acting to investigate or pursue the enforcement 

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1 fers a request to the Commission from an agen2 cy acting to investigate or pursue the enforce3 ment of criminal laws, seek and accept appoint4 ment by a United States district court of Com5 mission attorneys to provide assistance to for6 eign and international tribunals and to litigants 

7 before such tribunals on behalf of a foreign law 

8 enforcement agency pursuant to section 1782 of 

9 title 28, United States Code. 

10 ‘‘(3) CRITERIA FOR DETERMINATION.—In de11 ciding whether to provide such assistance, the Com12 mission shall consider all relevant factors, includ13 ing— 

14 ‘‘(A) whether the requesting agency has 

15 agreed to provide or will provide reciprocal as16 sistance to the Commission; 

17 ‘‘(B) whether compliance with the request 

18 would prejudice the public interest of the 

19 United States; and 

20 ‘‘(C) whether the requesting agency’s in21 vestigation or enforcement proceeding concerns 

22 acts or practices that cause or are likely to 

23 cause injury to a significant number of persons. 

24 ‘‘(4) INTERNATIONAL AGREEMENTS.—If a for25 eign law enforcement agency has set forth a legal 


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1 basis for requiring execution of an international 

2 agreement as a condition for reciprocal assistance, 

3 or as a condition for provision of materials or infor4 mation to the Commission, the Commission, with 

5 prior approval and ongoing oversight of the Sec6 retary of State, and with final approval of the agree7 ment by the Secretary of State, may negotiate and 

8 conclude an international agreement, in the name of 

9 either the United States or the Commission, for the 

10 purpose of obtaining such assistance, materials, or 

11 information. The Commission may undertake in 

12 such an international agreement to— 

13 ‘‘(A) provide assistance using the powers 

14 set forth in this subsection; 

15 ‘‘(B) disclose materials and information in 

16 accordance with subsection (f) and section 

17 21(b); and 

18 ‘‘(C) engage in further cooperation, and 

19 protect materials and information received from 

20 disclosure, as authorized by this Act. 

21 ‘‘(5) ADDITIONAL AUTHORITY.—The authority 

22 provided by this subsection is in addition to, and not 

23 in lieu of, any other authority vested in the Commis24 sion or any other officer of the United States. 


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1 ‘‘(6) LIMITATION.—The authority granted by 

2 this subsection shall not authorize the Commission 

3 to take any action or exercise any power with re4 spect to a bank, a savings and loan institution de5 scribed in section 18(f)(3) (15 U.S.C. 57a(f)(3)), a 

6 Federal credit union described in section 18(f)(4) 

7 (15 U.S.C. 57a(f)(4)), or a common carrier subject 

8 to the Act to regulate commerce, except in accord9 ance with the undesignated proviso following the last 

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

11 ‘‘(7) ASSISTANCE TO CERTAIN COUNTRIES.— 

12 The Commission may not provide investigative as13 sistance under this subsection to a foreign law en14 forcement agency from a foreign state that the Sec15 retary of State has determined, in accordance with 

16 section 6(j) of the Export Administration Act of 

17 1979 (50 U.S.C. App. 2405(j)), has repeatedly pro18 vided support for acts of international terrorism, un19 less and until such determination is rescinded pursu20 ant to section 6(j)(4) of that Act (50 U.S.C. App. 

21 2405(j)(4)). 

22 ‘‘(k) REFERRAL OF EVIDENCE FOR CRIMINAL PRO23 CEEDINGS.— 

24 ‘‘(1) IN GENERAL.—Whenever the Commission 

25 obtains evidence that any person, partnership, or 


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1 corporation, either domestic or foreign, has engaged 

2 in conduct that may constitute a violation of Federal 

3 criminal law, to transmit such evidence to the Attor4 ney General, who may institute criminal proceedings 

5 under appropriate statutes. Nothing in this para6 graph affects any other authority of the Commission 

7 to disclose information. 

8 ‘‘(2) INTERNATIONAL INFORMATION.—The 

9 Commission shall endeavor to ensure, with respect to 

10 memoranda of understanding and international 

11 agreements it may conclude, that material it has ob12 tained from foreign law enforcement agencies acting 

13 to investigate or pursue the enforcement of foreign 

14 criminal laws may be used for the purpose of inves15 tigation, prosecution, or prevention of violations of 

16 United States criminal laws. 

17 ‘‘(l) EXPENDITURES FOR COOPERATIVE ARRANGE18 MENTS.—To expend appropriated funds for— 

19 ‘‘(1) operating expenses and other costs of bi20 lateral and multilateral cooperative law enforcement 

21 groups conducting activities of interest to the Com22 mission and in which the Commission participates; 

23 and 

24 ‘‘(2) expenses for consultations and meetings 

25 hosted by the Commission with foreign government 


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1 agency officials, members of their delegations, ap2 propriate representatives and staff to exchange views 

3 concerning developments relating to the Commis4 sion’s mission, development and implementation of 

5 cooperation agreements, and provision of technical 

6 assistance for the development of foreign consumer 

7 protection or competition regimes, such expenses to 

8 include necessary administrative and logistic ex9 penses and the expenses of Commission staff and 

10 foreign invitees in attendance at such consultations 

11 and meetings including— 

12 ‘‘(A) such incidental expenses as meals 

13 taken in the course of such attendance; 

14 ‘‘(B) any travel and transportation to or 

15 from such meetings; and 

16 ‘‘(C) any other related lodging or subsist17 ence.’’. 

18 (c) AUTHORIZATION OF APPROPRIATIONS.—The 

19 Federal Trade Commission is authorized to expend appro20 priated funds not to exceed $100,000 per fiscal year for 

21 purposes of section 6(l) of the Federal Trade Commission 

22 Act (15 U.S.C. 46(l)) (as added by subsection (b) of this 

23 section), including operating expenses and other costs of 

24 the following bilateral and multilateral cooperative law en25 forcement agencies and organizations: 


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1 (1) The International Consumer Protection and 

2 Enforcement Network. 

3 (2) The International Competition Network. 

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

5 Task Force. 

6 (4) Project Emptor. 

7 (5) The Toronto Strategic Partnership and 

8 other regional partnerships with a nexus in a Cana9 dian province. 

10 (d) CONFORMING AMENDMENT.—Section 6 of the 

11 Federal Trade Commission Act (15 U.S.C. 46) is amended 

12 by striking ‘‘clauses (a) and (b)’’ in the proviso following 

13 subsection (l) (as added by subsection (b) of this section) 

14 and inserting ‘‘subsections (a), (b), and (j)’’. 

15 SEC. 5. REPRESENTATION IN FOREIGN LITIGATION. 

16 Section 16 of the Federal Trade Commission Act (15 

17 U.S.C. 56) is amended by adding at the end the following: 

18 ‘‘(c) FOREIGN LITIGATION.— 

19 ‘‘(1) COMMISSION ATTORNEYS.—With the con20 currence of the Attorney General, the Commission 

21 may designate Commission attorneys to assist the 

22 Attorney General in connection with litigation in for23 eign courts on particular matters in which the Com24 mission has an interest. 


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1 ‘‘(2) REIMBURSEMENT FOR FOREIGN COUN2 SEL.—The Commission is authorized to expend ap3 propriated funds, upon agreement with the Attorney 

4 General, to reimburse the Attorney General for the 

5 retention of foreign counsel for litigation in foreign 

6 courts and for expenses related to litigation in for7 eign courts in which the Commission has an interest. 

8 ‘‘(3) LIMITATION ON USE OF FUNDS.—Nothing 

9 in this subsection authorizes the payment of claims 

10 or judgments from any source other than the perma11 nent and indefinite appropriation authorized by sec12 tion 1304 of title 31, United States Code. 

13 ‘‘(4) OTHER AUTHORITY.—The authority pro14 vided by this subsection is in addition to any other 

15 authority of the Commission or the Attorney Gen16 eral.’’. 

17 SEC. 6. SHARING INFORMATION WITH FOREIGN LAW EN18 FORCEMENT AGENCIES. 

19 (a) MATERIAL OBTAINED PURSUANT TO COMPUL20 SORY PROCESS.—Section 21(b)(6) of the Federal Trade 

21 Commission Act (15 U.S.C. 57b–2(b)(6)) is amended by 

22 adding at the end ‘‘The custodian may make such material 

23 available to any foreign law enforcement agency upon the 

24 prior certification of an appropriate official of any such 

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1 ment or memorandum of understanding with the Commis2 sion or by other written certification, that such material 

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

4 official law enforcement purposes, if— 

5 ‘‘(A) the foreign law enforcement agency has 

6 set forth a bona fide legal basis for its authority to 

7 maintain the material in confidence; 

8 ‘‘(B) the materials are to be used for purposes 

9 of investigating, or engaging in enforcement pro10 ceedings related to, possible violations of— 

11 ‘‘(i) foreign laws prohibiting fraudulent or 

12 deceptive commercial practices, or other prac13 tices substantially similar to practices prohib14 ited by any law administered by the Commis15 sion; 

16 ‘‘(ii) a law administered by the Commis17 sion, if disclosure of the material would further 

18 a Commission investigation or enforcement pro19 ceeding; or 

20 ‘‘(iii) with the approval of the Attorney 

21 General, other foreign criminal laws, if such 

22 foreign criminal laws are offenses defined in or 

23 covered by a criminal mutual legal assistance 

24 treaty in force between the government of the 


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1 United States and the foreign law enforcement 

2 agency’s government; 

3 ‘‘(C) the appropriate Federal banking agency 

4 (as defined in section 3(q) of the Federal Deposit 

5 Insurance Act (12 U.S.C. 1813(q)) or, in the case 

6 of a Federal credit union, the National Credit Union 

7 Administration, has given its prior approval if the 

8 materials to be provided under subparagraph (B) 

9 are requested by the foreign law enforcement agency 

10 for the purpose of investigating, or engaging in en11 forcement proceedings based on, possible violations 

12 of law by a bank, a savings and loan institution de13 scribed in section 18(f)(3) of the Federal Trade 

14 Commission Act (15 U.S.C. 57a(f)(3)), or a Federal 

15 credit union described in section 18(f)(4) of the Fed16 eral Trade Commission Act (15 U.S.C. 57a(f)(4)); 

17 and 

18 ‘‘(D) the foreign law enforcement agency is not 

19 from a foreign state that the Secretary of State has 

20 determined, in accordance with section 6(j) of the 

21 Export Administration Act of 1979 (50 U.S.C. App. 

22 2405(j)), has repeatedly provided support for acts of 

23 international terrorism, unless and until such deter24 mination is rescinded pursuant to section 6(j)(4) of 

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


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1 Nothing in the preceding sentence authorizes the disclo2 sure of material obtained in connection with the adminis3 tration of the Federal antitrust laws or foreign antitrust 

4 laws (as defined in paragraphs (5) and (7), respectively, 

5 of section 12 of the International Antitrust Enforcement 

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

7 or employee of a foreign law enforcement agency.’’. 

8 (b) INFORMATION SUPPLIED BY AND ABOUT FOR9 EIGN SOURCES.—Section 21(f) of the Federal Trade Com10 mission Act (15 U.S.C. 57b–2(f)) is amended to read as 

11 follows: 

12 ‘‘(f) EXEMPTION FROM PUBLIC DISCLOSURE.— 

13 ‘‘(1) IN GENERAL.—Any material which is re14 ceived by the Commission in any investigation, a 

15 purpose of which is to determine whether any person 

16 may have violated any provision of the laws adminis17 tered by the Commission, and which is provided pur18 suant to any compulsory process under this Act or 

19 which is provided voluntarily in place of such com20 pulsory process shall not be required to be disclosed 

21 under section 552 of title 5, United States Code, or 

22 any other provision of law, except as provided in 

23 paragraph (2)(B) of this section. 

24 ‘‘(2) MATERIAL OBTAINED FROM A FOREIGN

25 SOURCE.— 


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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B) of this paragraph, the Com3 mission shall not be required to disclose under 

4 section 552 of title 5, United States Code, or 

5 any other provision of law— 

6 ‘‘(i) any material obtained from a for7 eign law enforcement agency or other for8 eign government agency, if the foreign law 

9 enforcement agency or other foreign gov10 ernment agency has requested confidential 

11 treatment, or has precluded such disclosure 

12 under other use limitations, as a condition 

13 of providing the material; 

14 ‘‘(ii) any material reflecting a con15 sumer complaint obtained from any other 

16 foreign source, if that foreign source sup17 plying the material has requested confiden18 tial treatment as a condition of providing 

19 the material; or 

20 ‘‘(iii) any material reflecting a con21 sumer complaint submitted to a Commis22 sion reporting mechanism sponsored in 

23 part by foreign law enforcement agencies 

24 or other foreign government agencies. 


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1 ‘‘(B) SAVINGS PROVISION.—Nothing in 

2 this subsection shall authorize the Commission 

3 to withhold information from the Congress or 

4 prevent the Commission from complying with 

5 an order of a court of the United States in an 

6 action commenced by the United States or the 

7 Commission.’’. 

8 SEC. 7. CONFIDENTIALITY; DELAYED NOTICE OF PROCESS. 

9 (a) IN GENERAL.—The Federal Trade Commission 

10 Act (15 U.S.C. 41 et seq.) is amended by inserting after 

11 section 21 the following: 

12 ‘‘SEC. 21A. CONFIDENTIALITY AND DELAYED NOTICE OF 

13 COMPULSORY PROCESS FOR CERTAIN THIRD 

14 PARTIES. 

15 ‘‘(a) APPLICATION WITH OTHER LAWS.—The Right 

16 to Financial Privacy Act (12 U.S.C. 3401 et seq.) and 

17 chapter 121 of title 18, United States Code, shall apply 

18 with respect to the Commission, except as otherwise pro19 vided in this section. 

20 ‘‘(b) PROCEDURES FOR DELAY OF NOTIFICATION OR

21 PROHIBITION OF DISCLOSURE.—The procedures for delay 

22 of notification or prohibition of disclosure under the Right 

23 to Financial Privacy Act (12 U.S.C. 3401 et seq.) and 

24 chapter 121 of title 18, United States Code, including pro25 cedures for extensions of such delays or prohibitions, shall 


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1 be available to the Commission, provided that, notwith2 standing any provision therein— 

3 ‘‘(1) a court may issue an order delaying notifi4 cation or prohibiting disclosure (including extending 

5 such an order) in accordance with the procedures of 

6 section 1109 of the Right to Financial Privacy Act 

7 (12 U.S.C. 3409) (if notification would otherwise be 

8 required under that Act), or section 2705 of title 18, 

9 United States Code, (if notification would otherwise 

10 be required under chapter 121 of that title), if the 

11 presiding judge or magistrate judge finds that there 

12 is reason to believe that such notification or disclo13 sure may cause an adverse result as defined in sub14 section (g) of this section; and 

15 ‘‘(2) if notification would otherwise be required 

16 under chapter 121 of title 18, United States Code, 

17 the Commission may delay notification (including ex18 tending such a delay) upon the execution of a writ19 ten certification in accordance with the procedures 

20 of section 2705 of that title if the Commission finds 

21 that there is reason to believe that notification may 

22 cause an adverse result as defined in subsection (g) 

23 of this section. 

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


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

2 delayed notification by the Commission is required 

3 under the Right to Financial Privacy Act (12 U.S.C. 

4 3401 et seq.) or chapter 121 of title 18, United 

5 States Code, the Commission may apply ex parte to 

6 a presiding judge or magistrate judge for an order 

7 prohibiting the recipient of compulsory process 

8 issued by the Commission from disclosing to any 

9 other person the existence of the process, notwith10 standing any law or regulation of the United States, 

11 or under the constitution, or any law or regulation, 

12 of any State, political subdivision of a State, terri13 tory of the United States, or the District of Colum14 bia. The presiding judge or magistrate judge may 

15 enter such an order granting the requested prohibi16 tion of disclosure for a period not to exceed 60 days 

17 if there is reason to believe that disclosure may 

18 cause an adverse result as defined in subsection (g). 

19 The presiding judge or magistrate judge may grant 

20 extensions of this order of up to 30 days each in ac21 cordance with this subsection, except that in no 

22 event shall the prohibition continue in force for more 

23 than a total of 9 months. 

24 ‘‘(2) APPLICATION.—This subsection shall 

25 apply only in connection with compulsory process 


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1 issued by the Commission where the recipient of 

2 such process is not a subject of the investigation or 

3 proceeding at the time such process is issued. 

4 ‘‘(3) LIMITATION.—No order issued under this 

5 subsection shall prohibit any recipient from dis6 closing to a Federal agency that the recipient has re7 ceived compulsory process from the Commission. 

8 ‘‘(d) NO LIABILITY FOR FAILURE TO NOTIFY.—If 

9 neither notification nor delayed notification by the Com10 mission is required under the Right to Financial Privacy 

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

12 United States Code, the recipient of compulsory process 

13 issued by the Commission under this Act shall not be lia14 ble under any law or regulation of the United States, or 

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

16 State, political subdivision of a State, territory of the 

17 United States, or the District of Columbia, or under any 

18 contract or other legally enforceable agreement, for failure 

19 to provide notice to any person that such process has been 

20 issued or that the recipient has provided information in 

21 response to such process. The preceding sentence does not 

22 exempt any recipient from liability for— 

23 ‘‘(1) the underlying conduct reported; 

24 ‘‘(2) a failure to comply with the record reten25 tion requirements under section 1104(c) of the 


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1 Right to Financial Privacy Act (12 U.S.C. 3404), 

2 where applicable; or 

3 ‘‘(3) any failure to comply with any obligation 

4 the recipient may have to disclose to a Federal agen5 cy that the recipient has received compulsory process 

6 from the Commission or intends to provide or has 

7 provided information to the Commission in response 

8 to such process. 

9 ‘‘(e) VENUE AND PROCEDURE.— 

10 ‘‘(1) IN GENERAL.—All judicial proceedings ini11 tiated by the Commission under the Right to Finan12 cial Privacy Act (12 U.S.C. 3401 et seq.), chapter 

13 121 of title 18, United States Code, or this section 

14 may be brought in the United States District Court 

15 for the District of Columbia or any other appro16 priate United States District Court. All ex parte ap17 plications by the Commission under this section re18 lated to a single investigation may be brought in a 

19 single proceeding. 

20 ‘‘(2) IN CAMERA PROCEEDINGS.—Upon applica21 tion by the Commission, all judicial proceedings pur22 suant to this section shall be held in camera and the 

23 records thereof sealed until expiration of the period 

24 of delay or such other date as the presiding judge 

25 or magistrate judge may permit. 


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1 ‘‘(f) SECTION NOT TO APPLY TO ANTITRUST INVES2 TIGATIONS OR PROCEEDINGS.—This section shall not 

3 apply to an investigation or proceeding related to the ad4 ministration of Federal antitrust laws or foreign antitrust 

5 laws (as defined in paragraphs (5) and (7), respectively, 

6 of section 12 of the International Antitrust Enforcement 

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

8 ‘‘(g) ADVERSE RESULT DEFINED.—For purposes of 

9 this section the term ‘adverse result’ means— 

10 ‘‘(1) endangering the life or physical safety of 

11 an individual; 

12 ‘‘(2) flight from prosecution; 

13 ‘‘(3) the destruction of, or tampering with, evi14 dence; 

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

16 ‘‘(5) otherwise seriously jeopardizing an inves17 tigation or proceeding related to fraudulent or de18 ceptive commercial practices or persons involved in 

19 such practices, or unduly delaying a trial related to 

20 such practices or persons involved in such practices, 

21 including, but not limited to, by— 

22 ‘‘(A) the transfer outside the territorial 

23 limits of the United States of assets or records 

24 related to fraudulent or deceptive commercial 


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1 practices or related to persons involved in such 

2 practices; 

3 ‘‘(B) impeding the ability of the Commis4 sion to identify persons involved in fraudulent 

5 or deceptive commercial practices, or to trace 

6 the source or disposition of funds related to 

7 such practices; or 

8 ‘‘(C) the dissipation, fraudulent transfer, 

9 or concealment of assets subject to recovery by 

10 the Commission.’’. 

11 (b) CONFORMING AMENDMENT.—Section 16(a)(2) of 

12 the Federal Trade Commission Act (15 U.S.C. 56(a)(2)) 

13 is amended— 

14 (1) in subparagraph (C) by striking ‘‘or’’ after 

15 the semicolon; 

16 (2) in subparagraph (D) by inserting ‘‘or’’ after 

17 the semicolon; and 

18 (3) by inserting after subparagraph (D) the fol19 lowing: 

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

21 SEC. 8. PROTECTION FOR VOLUNTARY PROVISION OF IN22 FORMATION. 

23 The Federal Trade Commission Act (15 U.S.C. 41 

24 et seq.) is further amended by adding after section 21A 

25 (as added by section 7 of this Act) the following: 


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

2 INFORMATION. 

3 ‘‘(a) IN GENERAL.— 

4 ‘‘(1) NO LIABILITY FOR PROVIDING CERTAIN

5 MATERIAL.—An entity described in paragraphs (2) 

6 or (3) of subsection (d) that voluntarily provides ma7 terial to the Commission that such entity reasonably 

8 believes is relevant to— 

9 ‘‘(A) a possible unfair or deceptive act or 

10 practice, as defined in section 5(a) of this Act; 

11 or 

12 ‘‘(B) assets subject to recovery by the 

13 Commission, including assets located in foreign 

14 jurisdictions; 

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

16 regulation of the United States, or under the con17 stitution, or any law or regulation, of any State, po18 litical subdivision of a State, territory of the United 

19 States, or the District of Columbia, for such provi20 sion of material or for any failure to provide notice 

21 of such provision of material or of intention to so 

22 provide material. 

23 ‘‘(2) LIMITATIONS.—Nothing in this subsection 

24 shall be construed to exempt any such entity from 

25 liability— 


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

2 or 

3 ‘‘(B) to any Federal agency for providing 

4 such material or for any failure to comply with 

5 any obligation the entity may have to notify a 

6 Federal agency prior to providing such material 

7 to the Commission. 

8 ‘‘(b) CERTAIN FINANCIAL INSTITUTIONS.—An entity 

9 described in paragraph (1) of subsection (d) shall, in ac10 cordance with section 5318(g)(3) of title 31, United States 

11 Code, be exempt from liability for making a voluntary dis12 closure to the Commission of any possible violation of law 

13 or regulation, including— 

14 ‘‘(1) a disclosure regarding assets, including as15 sets located in foreign jurisdictions— 

16 ‘‘(A) related to possibly fraudulent or de17 ceptive commercial practices; 

18 ‘‘(B) related to persons involved in such 

19 practices; or 

20 ‘‘(C) otherwise subject to recovery by the 

21 Commission; or 

22 ‘‘(2) a disclosure regarding suspicious 

23 chargeback rates related to possibly fraudulent or 

24 deceptive commercial practices. 


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1 ‘‘(c) CONSUMER COMPLAINTS.—Any entity described 

2 in subsection (d) that voluntarily provides consumer com3 plaints sent to it, or information contained therein, to the 

4 Commission shall not be liable to any person under any 

5 law or regulation of the United States, or under the con6 stitution, or any law or regulation, of any State, political 

7 subdivision of a State, territory of the United States, or 

8 the District of Columbia, for such provision of material 

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

10 material or of intention to so provide material. This sub11 section shall not provide any exemption from liability for 

12 the underlying conduct. 

13 ‘‘(d) APPLICATION.—This section applies to the fol14 lowing entities, whether foreign or domestic: 

15 ‘‘(1) A financial institution as defined in section 

16 5312 of title 31, United States Code. 

17 ‘‘(2) To the extent not included in paragraph 

18 (1), a bank or thrift institution, a commercial bank 

19 or trust company, an investment company, a credit 

20 card issuer, an operator of a credit card system, and 

21 an issuer, redeemer, or cashier of travelers’ checks, 

22 money orders, or similar instruments. 

23 ‘‘(3) A courier service, a commercial mail re24 ceiving agency, an industry membership organiza25 tion, a payment system provider, a consumer reportVerDate Aug 31 2005 23:17 Mar 14, 2006 Jkt 049200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.RS S1608

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1 ing agency, a domain name registrar or registry act2 ing as such, and a provider of alternative dispute 

3 resolution services. 

4 ‘‘(4) An Internet service provider or provider of 

5 telephone services.’’. 

6 SEC. 9. STAFF EXCHANGES. 

7 The Federal Trade Commission Act (15 U.S.C. 41 

8 et seq.) is amended by adding after section 25 the fol9 lowing new section: 

10 ‘‘SEC. 25A. STAFF EXCHANGES. 

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

12 ‘‘(1) retain or employ officers or employees of 

13 foreign government agencies on a temporary basis as 

14 employees of the Commission pursuant to section 2 

15 of this Act or section 3101 or section 3109 of title 

16 5, United States Code; and 

17 ‘‘(2) detail officers or employees of the Commis18 sion to work on a temporary basis for appropriate 

19 foreign government agencies. 

20 ‘‘(b) RECIPROCITY AND REIMBURSEMENT.—The 

21 staff arrangements described in subsection (a) need not 

22 be reciprocal. The Commission may accept payment or re23 imbursement, in cash or in kind, from a foreign govern24 ment agency to which this section is applicable, or pay25 ment or reimbursement made on behalf of such agency, 


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1 for expenses incurred by the Commission, its members, 

2 and employees in carrying out such arrangements. 

3 ‘‘(c) STANDARDS OF CONDUCT.—A person appointed 

4 under subsection (a)(1) shall be subject to the provisions 

5 of law relating to ethics, conflicts of interest, corruption, 

6 and any other criminal or civil statute or regulation gov7 erning the standards of conduct for Federal employees 

8 that are applicable to the type of appointment.’’. 

9 SEC. 10. INFORMATION SHARING WITH FINANCIAL REGU10 LATORS. 

11 Section 1112(e) of the Right to Financial Privacy Act 

12 of 1978 (12 U.S.C. 3412(e)) is amended by inserting ‘‘the 

13 Federal Trade Commission,’’ after ‘‘the Securities and Ex14 change Commission,’’. 

15 SEC. 11. AUTHORITY TO ACCEPT REIMBURSEMENTS, GIFTS, 

16 AND VOLUNTARY AND UNCOMPENSA TED 

17 SERVICES. 

18 The Federal Trade Commission Act (15 U.S.C. 41 

19 et seq.) is amended— 

20 (1) by redesignating section 26 as section 28; 

21 and 

22 (2) by inserting after section 25A, as added by 

23 section 9 of this Act, the following: 


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1 ‘‘SEC. 26. REIMBURSEMENT OF EXPENSES. 

2 ‘‘The Commission may accept payment or reimburse3 ment, in cash or in kind, from a domestic or foreign law 

4 enforcement agency, or payment or reimbursement made 

5 on behalf of such agency, for expenses incurred by the 

6 Commission, its members, or employees in carrying out 

7 any activity pursuant to a statute administered by the 

8 Commission without regard to any other provision of law. 

9 Any such payments or reimbursements shall be considered 

10 a reimbursement to the appropriated funds of the Com11 mission. 

12 ‘‘SEC. 27. GIFTS AND VOLUNTARY AND UNCOMPENSATED 

13 SERVICES. 

14 ‘‘(a) IN GENERAL.—In furtherance of its functions 

15 the Commission may accept, hold, administer, and use un16 conditional gifts, donations, and bequests of real, personal, 

17 and other property and, notwithstanding section 1342 of 

18 10 title 31, United States Code, accept voluntary and un19 compensated services. 

20 ‘‘(b) LIMITATIONS.— 

21 ‘‘(1) CONFLICTS OF INTEREST.—The Commis22 sion shall establish written guidelines setting forth 

23 criteria to be used in determining whether the ac24 ceptance, holding, administration, or use of a gift, 

25 donation, or bequest pursuant to subsection (a) 

26 would reflect unfavorably upon the ability of the 


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1 Commission or any employee to carry out its respon2 sibilities or official duties in a fair and objective 

3 manner, or would compromise the integrity or the 

4 appearance of the integrity of its programs or any 

5 official involved in those programs. 

6 ‘‘(2) VOLUNTARY SERVICES.—A person who 

7 provides voluntary and uncompensated service under 

8 subsection (a) shall be considered a Federal em9 ployee for purposes of— 

10 ‘‘(A) chapter 81 of title 5, United States 

11 Code, (relating to compensation for injury); and 

12 ‘‘(B) the provisions of law relating to eth13 ics, conflicts of interest, corruption, and any 

14 other criminal or civil statute or regulation gov15 erning the standards of conduct for Federal 

16 employees. 

17 ‘‘(3) TORT LIABILITY OF VOLUNTEERS.—A per18 son who provides voluntary and uncompensated serv19 ice under subsection (a), while assigned to duty, 

20 shall be deemed a volunteer of a nonprofit organiza21 tion or governmental entity for purposes of the Vol22 unteer Protection Act of 1997 (42 U.S.C. 14501 et 

23 seq.). Subsection (d) of section 4 of such Act (42 

24 U.S.C. 14503(d)) shall not apply for purposes of any 

25 claim against such volunteer.’’. 


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1 SEC. 12. PRESERVATION OF EXISTING AUTHORITY. 

2 The authority provided by this Act, and by the Fed3 eral Trade Commission Act (15 U.S.C. 41 et seq.) and 

4 the Right to Financial Privacy Act (12 U.S.C. 3401 et 

5 seq.), as such Acts are amended by this Act, is in addition 

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

7 Federal Trade Commission or any other officer of the 

8 United States. 

9 SEC. 13. REPORT. 

10 Not later than 3 years after the date of enactment 

11 of this Act, the Federal Trade Commission shall transmit 

12 to Congress a report describing its use of and experience 

13 with the authority granted by this Act, along with any rec14 ommendations for additional legislation. The report shall 

15 include— 

16 (1) the number of cross-border complaints re17 ceived by the Commission; 

18 (2) identification of the foreign agencies to 

19 which the Commission has provided nonpublic inves20 tigative information under this Act; 

21 (3) the number of times the Commission has 

22 used compulsory process on behalf of foreign law en23 forcement agencies pursuant to section 6 of the Fed24 eral Trade Commission Act (15 U.S.C. 46), as 

25 amended by section 4 of this Act; 


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1 (4) a list of international agreements and 

2 memoranda of understanding executed by the Com3 mission that relate to this Act; 

4 (5) the number of times the Commission has 

5 sought delay of notice pursuant to section 21A of 

6 the Federal Trade Commission Act, as added by sec7 tion 7 of this Act, and the number of times a court 

8 has granted a delay; 

9 (6) a description of the types of information 

10 private entities have provided voluntarily pursuant to 

11 section 21B of the Federal Trade Commission Act, 

12 as added by section 8 of this Act; 

13 (7) a description of the results of cooperation 

14 with foreign law enforcement agencies under section 

15 21 of the Federal Trade Commission Act (15 U.S.C. 

16 57–2) as amended by section 6 of this Act; 

17 (8) an analysis of whether the lack of an ex18 emption from the disclosure requirements of section 

19 552 of title 5, United States Code, with regard to 

20 information or material voluntarily provided relevant 

21 to possible unfair or deceptive acts or practices, has 

22 hindered the Commission in investigating or engag23 ing in enforcement proceedings against such prac24 tices; and 


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1 (9) a description of Commission litigation 

2 brought in foreign courts. 


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Calendar No. 372 

109TH CONGRESS 

2D SESSION S. 1608 

[Report No. 109

–219] 

A BILL 

To enhance Federal Trade Commission enforceposes. border fraud and deception, and for other pur- ment against illegal spam, spyware, and crossMARCH 14, 2006 

Reported without amendment 


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