H5506 CONGRESSIONAL RECORD — HOUSE July 31, 2012 

I yield back the balance of my time. 

Mr. SMITH of Texas. Mr. Speaker, I 

yield back the balance of my time. 

The SPEAKER pro tempore. The 

question is on the motion offered by 

the gentleman from Texas (Mr. SMITH) 

that the House suspend the rules and 

pass the bill, H.R. 3120, as amended. 

The question was taken. 

The SPEAKER pro tempore. In the 

opinion of the Chair, two-thirds being 

in the affirmative, the ayes have it. 

Mr. SMITH of Texas. Mr. Speaker, I 

object to the vote on the ground that a 

quorum is not present and make the 

point of order that a quorum is not 

present. 

The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further proceedings on this question will be postponed. 

The point of no quorum is considered 

withdrawn. 

f 

FOREIGN AND ECONOMIC ESPIONAGE PENALTY ENHANCEMENT 

ACT OF 2012 

Mr. SMITH of Texas. Mr. Speaker, I 

move to suspend the rules and pass the 

bill (H.R. 6029) to amend title 18, 

United States Code, to provide for increased penalties for foreign and economic espionage, and for other purposes. 

The Clerk read the title of the bill. 

The text of the bill is as follows: 

H.R. 6029 

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 cited as the ‘‘Foreign and 

Economic Espionage Penalty Enhancement 

Act of 2012’’. 

SEC. 2. PROTECTING U.S. BUSINESSES FROM FOREIGN ESPIONAGE. 

(a) FOR OFFENSES COMMITTED BY INDIVIDUALS.—Section 1831(a) of title 18, United 

States Code, is amended, in the matter after 

paragraph (5)— 

(1) by striking ‘‘15 years’’ and inserting ‘‘20 

years’’; and 

(2) by striking ‘‘not more than $500,000’’ 

and inserting ‘‘not more than $5,000,000’’. 

(b) FOR OFFENSES COMMITTED BY ORGANIZATIONS.—Section 1831(b) of such title is 

amended by striking ‘‘not more than 

$10,000,000’’ and inserting ‘‘not more than the 

greater of $10,000,000 or 3 times the value of 

the stolen trade secret to the organization, 

including expenses for research and design 

and other costs of reproducing the trade secret that the organization has thereby avoided’’. 

SEC. 3. REVIEW BY THE UNITED STATES SENTENCING COMMISSION. 

(a) IN GENERAL.—Pursuant to its authority 

under section 994(p) of title 28, United States 

Code, the United States Sentencing Commission shall review and, if appropriate, amend 

the Federal sentencing guidelines and policy 

statements applicable to persons convicted 

of offenses relating to the transmission or 

attempted transmission of a stolen trade secret outside of the United States or economic espionage, in order to reflect the intent of Congress that penalties for such offenses under the Federal sentencing guidelines and policy statements appropriately, 

reflect the seriousness of these offenses, account for the potential and actual harm 

caused by these offenses, and provide adequate deterrence against such offenses. 

(b) REQUIREMENTS.—In carrying out this 

section, the United States Sentencing Commission shall— 

(1) consider the extent to which the Federal sentencing guidelines and policy statements appropriately account for the simple 

misappropriation of a trade secret, including 

the sufficiency of the existing enhancement 

for these offenses to address the seriousness 

of this conduct; 

(2) consider whether additional enhancements in the Federal sentencing guidelines 

and policy statements are appropriate to account for— 

(A) the transmission or attempted transmission of a stolen trade secret outside of 

the United States; and 

(B) the transmission or attempted transmission of a stolen trade secret outside of 

the United States that is committed or attempted to be committed for the benefit of a 

foreign government, foreign instrumentality, or foreign agent; 

(3) ensure the Federal sentencing guidelines and policy statements reflect the seriousness of these offenses and the need to 

deter such conduct; 

(4) ensure reasonable consistency with 

other relevant directives, Federal sentencing 

guidelines and policy statements, and related Federal statutes; 

(5) make any necessary conforming 

changes to the Federal sentencing guidelines 

and policy statements; and 

(6) ensure that the Federal sentencing 

guidelines adequately meet the purposes of 

sentencing as set forth in section 3553(a)(2) of 

title 18, United States Code. 

(c) CONSULTATION.—In carrying out the review required under this section, the Commission shall consult with individuals or 

groups representing law enforcement, owners 

of trade secrets, victims of economic espionage offenses, the United States Department 

of Justice, the United States Department of 

Homeland Security, the United States Department of State and the Office of the 

United States Trade Representative. 

(d) REVIEW.—Not later than 180 days after 

the date of enactment of this Act, the Commission shall complete its consideration and 

review under this section. 

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 

Texas (Mr. SMITH) and the gentleman 

from Virginia (Mr. SCOTT) each will 

control 20 minutes. 

The Chair recognizes the gentleman 

from Texas. 

GENERAL LEAVE

Mr. SMITH of Texas. Mr. Speaker, I 

ask unanimous consent that all Members may have 5 legislative days within 

which to revise and extend their remarks and include extraneous materials on H.R. 6029 currently under consideration. 

The SPEAKER pro tempore. Is there 

objection to the request of the gentleman from Texas? 

There was no objection. 

Mr. SMITH of Texas. Mr. Speaker, I 

yield myself such time as I may consume. 

Mr. Speaker, I thank Ranking Member JOHN CONYERS, IP Subcommittee 

Chairman BOB GOODLATTE, IP Subcommittee Ranking Member MEL

WATT, and the other Members of the 

House from both sides of the aisle who 

joined as original cosponsors of this 

commonsense bill. 

The Foreign and Economic Espionage 

Penalty Enhancement Act of 2012 focuses on one goal: to deter and punish 

criminals who target U.S. economic 

and security interests on behalf of foreign interests. 

In 1975, tangible assets, such as real 

estate and equipment, made up 83 percent of the market value of S&P 500 

companies. Intangible assets, which include trade secrets, proprietary data, 

source code, business processes, and 

marketing plans, constituted only 17 

percent of these companies’ market 

value. 

b 1950 

By 2009, these percentages had nearly 

reversed. Tangible assets accounted for 

only 19 percent of S&P 500 companies’ 

market value while their intangible assets had soared to 81 percent. In a dynamic and globally connected information economy, the protection of intangible assets is vital not only to the success of individual enterprises but also 

to the future of entire industries. 

A global study released last year by 

McAfee, the world’s largest security 

technology company, and Science Applications International Corporation 

concluded that corporate trade secrets 

and other sensitive intellectual capital 

are the newest ‘‘currency’’ of 

cybercriminals. The study found the 

motivation for such crimes in the 

cyber underground is almost always financial. In recent years, 

cybercriminals have shifted from targeting the theft of personal information, such as credit cards and Social 

Security numbers, to the theft of corporate intellectual capital. Corporate 

intellectual capital is vulnerable, of 

great value to competitors and foreign 

governments, and its theft is not always discovered by victims. 

Our intelligence community warns 

that foreign interests place a high priority on acquiring sensitive U.S. economic information and technologies. 

Targets include information and communications technologies, business information, military technologies, and 

rapidly growing civilian and dual-use 

technologies, such as those that relate 

to clean energy, health care, and pharmaceuticals. 

We know that certain actors intentionally seek out U.S. information and 

trade secrets. The most recent report 

from the Office of the National Counterintelligence Executive identified 

Chinese actors as ‘‘the world’s most active and persistent perpetrators of economic espionage.’’ The report also described Russia’s intelligence services 

as responsible for ‘‘conducting a range 

of activities to collect economic information and technology from U.S. targets.’’ Of seven Economic Espionage 

Act cases resolved in fiscal year 2010, 

six involved links to China. Five companies were accused of the theft of 

trade secrets earlier this year. Four are 

Chinese state-owned enterprises or subsidiaries. 

In the U.S., the EEA serves as the 

primary tool the Federal Government 


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July 31, 2012 CONGRESSIONAL RECORD — HOUSE H5507 

uses to protect secret, valuable commercial information from theft. The 

EEA addresses two types of trade secret theft. Section 1831 punishes the 

theft of a trade secret to benefit a foreign entity. Section 1832 punishes the 

commercial theft of trade secrets carried out for economic advantage 

whether or not the theft benefits a foreign entity. 

Since enacting the EEA in 1996, Congress has not adjusted its penalties to 

take into account the increasing importance of intellectual property to the 

economic and national security of the 

U.S. The bill increases the maximum 

penalties for an individual convicted of 

committing espionage on behalf of a 

foreign entity. Currently, the maximum penalty for someone convicted 

under section 1831 of the EEA is 15 

years imprisonment and a fine of up to 

$500,000. This bill increases the maximum penalty to 20 years imprisonment and a fine of up to $5 million. 

Earlier this year, the FBI estimated 

that U.S. companies had lost $13 billion 

to trade secret theft in just over 6 

months. Over the past 6 years, losses to 

individual U.S. companies have ranged 

from $20 million to as much as $1 billion. 

Our intelligence community has recognized a ‘‘significant and growing 

threat to our Nation’s prosperity and 

security’’ posed by criminals, both inside and outside our borders, who commit espionage. Congress should also 

recognize this increasing threat and 

enhance deterrence and more aggressively punish those criminals who 

knowingly target U.S. companies for 

espionage. 

So I urge my colleagues to support 

H.R. 6029, which was unanimously reported by the Judiciary Committee 

this month. 

I reserve the balance of my time. 

Mr. SCOTT of Virginia. Mr. Speaker, 

I yield myself such time as I may consume. 

I rise in support of H.R. 6029, the Foreign and Economic Espionage Penalty 

Enhancement Act of 2012. 

This legislation will help to protect 

the intellectual property and competitive strengths of American businesses 

by increasing the maximum penalties 

for engaging in the Federal offense of 

economic espionage. This crime, which 

has serious repercussions for the victim companies and our economy, consists of knowingly misappropriating 

trade secrets with the intent or knowledge that the offense will benefit a foreign government. 

As reported by the U.S. Intellectual 

Property Enforcement Coordinator, 

economic espionage is a serious threat 

to American businesses by foreign governments. Economic espionage inflicts 

a significant cost on victim companies 

and threatens the economic security of 

the United States. These companies 

incur extensive costs resulting from 

the loss of unique intellectual property, the loss of expenditures related to 

research and development, and the loss 

of future revenues and profits. Many 

companies do not even know when 

their sensitive data has been stolen, 

and those that do find out are often reluctant to report the losses, fearing potential damage to their reputations 

with investors, customers, and employees. 

Unfortunately, the pace of the economic espionage collection of information and industrial espionage activities 

against major United States corporations is accelerating. During fiscal year 

2011, the Department of Justice and the 

FBI saw an increase of 29 percent in 

economic espionage and trade secret 

theft investigations compared to the 

prior year. Foreign competitors of 

United States corporations with ties to 

companies owned by foreign governments are increasing their efforts to 

steal trade secret information and intellectual property by infiltrating our 

computer networks. 

Evidence suggests that economic espionage and trade secret theft on behalf of companies located in China is 

an emerging trend. For example, at 

least 34 companies were reportedly victimized by attacks originating from 

China in 2010. Over the course of these 

attacks, computer viruses were spread 

via emails to corporate employees, allowing the attackers to have access to 

emails and sensitive documents. In response to these growing threats, the 

United States Intellectual Property 

Coordinator, in her 2011 annual report, 

called upon Congress to increase the 

penalties for economic espionage, and 

this bill is consistent with that recommendation. 

I want to commend Members on both 

sides of the aisle for their work on this 

bill, particularly the gentleman from 

Texas, the Judiciary Committee chairman, Mr. SMITH; the gentleman from 

Michigan, the ranking member of the 

committee, Mr. CONYERS; my colleague 

from Virginia (Mr. GOODLATTE); and 

the gentleman from North Carolina 

(Mr. WATT). 

I urge my colleagues to support the 

bill, and I yield back the balance of my 

time. 

Mr. SMITH of Texas. Mr. Speaker, I 

yield back the balance of my time. 

The SPEAKER pro tempore. The 

question is on the motion offered by 

the gentleman from Texas (Mr. SMITH) 

that the House suspend the rules and 

pass the bill, H.R. 6029. 

The question was taken. 

The SPEAKER pro tempore. In the 

opinion of the Chair, two-thirds being 

in the affirmative, the ayes have it. 

Mr. SCOTT of Virginia. Mr. Speaker, 

I object to the vote on the ground that 

a quorum is not present and make the 

point of order that a quorum is not 

present. 

The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further proceedings on this question will be postponed. 

The point of no quorum is considered 

withdrawn. 

CHILD PROTECTION ACT OF 2012 

Mr. SMITH of Texas. Mr. Speaker, I 

move to suspend the rules and pass the 

bill (H.R. 6063) to amend title 18, 

United States Code, with respect to 

child pornography and child exploitation offenses. 

The Clerk read the title of the bill. 

The text of the bill is as follows: 

H.R. 6063 

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 cited as the ‘‘Child Protection Act of 2012’’. 

SEC. 2. ENHANCED PENALTIES FOR POSSESSION 

OF CHILD PORNOGRAPHY. 

(a) CERTAIN ACTIVITIES RELATING TO MATERIAL INVOLVING THE SEXUAL EXPLOITATION OF

MINORS.—Section 2252(b)(2) of title 18, United 

States Code, is amended by inserting after 

‘‘but if’’ the following: ‘‘any visual depiction 

involved in the offense involved a prepubescent minor or a minor who had not attained 

12 years of age, such person shall be fined 

under this title and imprisoned for not more 

than 20 years, or if’’. 

(b) CERTAIN ACTIVITIES RELATING TO MATERIAL CONSTITUTING OR CONTAINING CHILD PORNOGRAPHY.—Section 2252A(b)(2) of title 18, 

United States Code, is amended by inserting 

after ‘‘but, if’’ the following: ‘‘any image of 

child pornography involved in the offense involved a prepubescent minor or a minor who 

had not attained 12 years of age, such person 

shall be fined under this title and imprisoned 

for not more than 20 years, or if’’. 

SEC. 3. PROTECTION OF CHILD WITNESSES. 

(a) CIVIL ACTION TO RESTRAIN HARASSMENT

OF A VICTIM OR WITNESS.—Section 1514 of 

title 18, United States Code, is amended— 

(1) in subsection (b)— 

(A) in paragraph (1)— 

(i) by inserting ‘‘or its own motion,’’ after 

‘‘attorney for the Government,’’; and 

(ii) by inserting ‘‘or investigation’’ after 

‘‘Federal criminal case’’ each place it appears; 

(B) by redesignating paragraphs (2), (3), 

and (4) as paragraphs (3), (4), and (5), respectively; 

(C) by inserting after paragraph (1) the following: 

‘‘(2) In the case of a minor witness or victim, the court shall issue a protective order 

prohibiting harassment or intimidation of 

the minor victim or witness if the court 

finds evidence that the conduct at issue is 

reasonably likely to adversely affect the 

willingness of the minor witness or victim to 

testify or otherwise participate in the Federal criminal case or investigation. Any 

hearing regarding a protective order under 

this paragraph shall be conducted in accordance with paragraphs (1) and (3), except that 

the court may issue an ex parte emergency 

protective order in advance of a hearing if 

exigent circumstances are present. If such an 

ex parte order is applied for or issued, the 

court shall hold a hearing not later than 14 

days after the date such order was applied 

for or is issued.’’; 

(D) in paragraph (4), as so redesignated, by 

striking ‘‘(and not by reference to the complaint or other document)’’; and 

(E) in paragraph (5), as so redesignated, in 

the second sentence, by inserting before the 

period at the end the following: ‘‘, except 

that in the case of a minor victim or witness, 

the court may order that such protective 

order expires on the later of 3 years after the 

date of issuance or the date of the eighteenth 

birthday of that minor victim or witness’’; 

and 


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