I 
110TH CONGRESS 
2D SESSION 
H. R. 7193 
To require a report on business and investment climates in foreign countries, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 27, 2008 
Mr. SHERMAN (for himself and Mr. ROYCE) introduced the following bill; 
which was referred to the Committee on Foreign Affairs 
A BILL 
To require a report on business and investment climates 
in foreign countries, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. ANNUAL COUNTRY REPORTS ON BUSINESS AND 
INVESTMENT CLIMATES. 
(a) ANNUAL COUNTRY REPORTS ON BUSINESS AND 
INVESTMENT CLIMATES.—Not later than September 1 of 
each year, the Secretary of State, in consultation with the 
Assistant Secretary of State for Economic, Energy and 
Business Affairs, as well as the Assistant Secretary of 
Commerce for Trade Promotion and the Director General 
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of the Foreign Commercial Service, shall submit to the 
Committee on Foreign Affairs of the House of Representa-
tives and the Committee on Foreign Relations of the Sen-
ate a report providing— 
(1) detailed assessments with respect to each 
foreign country— 
(A) in which acts of unfair business and 
investment practices or other acts that have re-
sulted in poor business and investment climates 
were, in the opinion of the Secretary, of major 
significance; and 
(B) which the Secretary determines should 
be the subject of such a report; 
(2) all relevant information about such unfair 
business and investment practices or other actions 
during the preceding year by members of the busi-
ness community, the judiciary, and the government 
of such country which may have impeded United 
States business or investment in such country, in-
cluding the capacity for United States citizens to op-
erate their businesses without fear of reprisals; and 
(3) with respect to each foreign country from 
which the United States Government has sought co-
operation to assemble the annual country-specific in-
vestment climate reports required under this section 
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and address issues of unfair business and investment 
practices, information on— 
(A) the extent to which the government of 
each such foreign country is working to prevent 
unfair business and investment practices; and 
(B) the extent of United States Govern-
ment action to prevent unfair business and in-
vestment practices or other actions that harm 
United States business or investment interests 
in relevant cases. 
(b) PROVISIONS TO BE INCLUDED
IN
THE RE-
PORT.—The report under subsection (a) should, to the ex-
tent feasible, include— 
(1) with respect to subsection (a)(1)(A)— 
(A) a review of the efforts undertaken by 
foreign countries to promote a healthy business 
and investment climate that is also conducive to 
the United States business community and 
United States investors, including, as appro-
priate, steps taken in international fora; 
(B) the response of the judicial and local 
arbitration systems of each foreign country that 
is the subject of such report with respect to 
matters relating to the business and investment 
climates affecting United States citizens and 
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entities, or that have, in the opinion of the Sec-
retary, and in consultation with the Director 
General of the Foreign Commercial Service, a 
significant impact on United States business 
and investment efforts; and 
(C) each foreign country’s access to the 
United States market; 
(2) with respect to subsection (a)(2), any— 
(A) actions undertaken by governments of 
foreign countries that prevent United States 
citizens and businesses from receiving equitable 
treatment; 
(B) actions taken by private businesses 
and citizens of foreign countries against mem-
bers of the United States business community 
and United States investors; 
(C) unfair decisions rendered by the legal 
systems of foreign countries that clearly benefit 
state and local corporations and industries; and 
(D) unfair decisions rendered by local arbi-
tration panels of foreign countries that do not 
exemplify objectivity and do not provide an eq-
uitable ground for United States citizens and 
businesses to address their disputes; and 
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(3) with respect to subsection (a)(3)(A), actions 
taken by the United States Government to— 
(A) promote the rule of law, in general; 
(B) prevent discriminatory treatment of 
United States citizens and businesses engaged 
in business or investment activities; 
(C) allow United States goods to enter for-
eign countries without requiring a co-production 
agreement.; and 
(D) protect United States intellectual 
property rights. 
(c) PREPARATION OF REPORTS REGARDING BUSI-
NESS AND INVESTMENT CLIMATES.— 
(1) STANDARDS
AND
INVESTIGATIONS.—The 
Secretary of State shall ensure that the United 
States diplomatic and consular missions abroad 
maintain a consistent reporting standard and thor-
oughly investigate reports of unfair business and in-
vestment practices or any other actions that impede 
a strong business or investment climate in the coun-
tries in which such missions are located. 
(2) UPDATING INFORMATION BASED ON FOR-
EIGN COUNTRY MEDIA.—In compiling data and as-
sessing the business and investment climates abroad 
for each report required under subsection (a), 
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United States foreign service officers shall, as appro-
priate and with respect to the foreign country in 
which such officers are posted, research such coun-
try’s media sources, including newspaper, radio, tele-
vision, to document any cases with evidence of un-
fair business or investment practices or any occur-
rences that may destabilize the business or invest-
ment climate in such country. 
(3) CONTACTS WITH BUSINESS LEADERS.—In 
compiling data and assessing the business and in-
vestment climates abroad for each report required 
under subsection (a), United States foreign service 
officers shall, as appropriate and with respect to the 
foreign country in which such officers are posted, 
seek out and maintain contacts with corporate lead-
ers in all sectors of the market of such country to 
discuss issues of foreign direct investment and the 
challenges United States citizens or businesses may 
face in making investments or earning returns on in-
vestments. 
(4) CONTACTS WITH UNION LEADERS.—In com-
piling data and assessing the business and invest-
ment climates abroad for each report required under 
subsection (a), United States foreign service officers 
shall, as appropriate and with respect to the foreign 
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country in which such officers are posted, seek out 
and maintain contacts with leaders of local and na-
tional unions of such country to assess the political 
stability of such country as measured through social 
cohesion and the rights of workers. 
(5) CONTACTS WITH THE JUDICIARY.—In com-
piling data and assessing the business and invest-
ment climates abroad for each report required under 
subsection (a), United States foreign service officers 
shall, as appropriate and with respect to the foreign 
country in which such officers are posted, seek out 
and maintain contacts with members of the judiciary 
system of such country to evaluate the capacity of 
the legal institutions to address discrepancies and 
disputes that may arise, including corruption and 
nationalization. Such officers shall also research the 
capacity for arbitration locally to address concerns if 
such country’s legal system is unable to provide suit-
able or satisfactory recourse in a matter relating to 
an unfair business or investment practice involving 
a United States citizen or business. 
(6) CONTACTS WITH NONGOVERNMENTAL OR-
GANIZATIONS.—In compiling data and assessing the 
business and investment climates abroad for each re-
port required under subsection (a), United States 
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foreign service officers shall, as appropriate and with 
respect to the foreign country in which such officers 
are posted, seek out and maintain contacts with 
member of nongovernmental organizations in such 
country that address the concerns of the business 
community, with the consent of those organizations, 
including receiving reports and updates from such 
organizations and, when appropriate, investigating 
such reports. 
(d) CLASSIFICATION OF REPORT.— 
(1) IN GENERAL.—A report required under sub-
section (a) of this section shall, to the extent prac-
ticable, be submitted in an unclassified form but 
may be accompanied by a classified appendix if the 
Secretary of State determines that such is appro-
priate. 
(2) COOPERATION.—If the Secretary of State 
determines that the submission of any information 
with respect to a foreign country under paragraph 
(3) of subsection (a) of this section in classified form 
would make more likely the cooperation of the gov-
ernment of such foreign country, the Secretary may 
submit such information in classified form. 
(3) SUMMARIZATION.—If the Secretary of State 
determines that it is in the national security inter-
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ests of the United States or is necessary for the 
safety of individuals or entities to be identified in a 
report required under subsection (a) or is necessary 
to further the purposes of this Act, any information 
required by subsection (a), including measures taken 
by the United States, may be summarized in such 
report and submitted in more detail in a classified 
addendum. 
SEC. 2. BUSINESS AND INVESTMENT CLIMATE WARNINGS. 
(a) IN GENERAL.—The Secretary of State, with the 
assistance of the Assistant Secretary of State for Eco-
nomic, Energy and Business Affairs, as well as the Assist-
ant Secretary of Commerce for Trade Promotion and the 
Director General of the Foreign Commercial Service, shall 
establish a system that informs members of the United 
States business community and United States investors 
prior to their entry into a foreign country of the business 
and investment conditions in such country. 
(b) WARNINGS.—The system established under sub-
section (a) shall, if appropriate, issue investment warn-
ings— 
(1) to describe long-term, protracted conditions 
that make a country’s business or investment cli-
mate risky or potentially dangerous to members of 
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the United States business community and United 
States investors; or 
(2) when the ability of the United States Gov-
ernment to assist such members and investors is 
constrained due to the closure of a United States 
diplomatic or consular mission in such country. 
(c) FOUR-TIER SYSTEM.— 
(1) IN GENERAL.—The Secretary of State and 
the Secretary of Commerce shall develop a four-tier 
system to grade the business and investment climate 
of each country that receives over $5,000,000,000 in 
exports, aid, and remittances from the United 
States, based on the following criteria: 
(A) Political stability. 
(B) Macroeconomic stability. 
(C) Rule of law. 
(D) Corruption and transparency. 
(E) Regulatory quality. 
(F) Good governance. 
(G) Civil society engagement. 
(2) ADDITIONAL CRITERIA.—The grading with-
in the four-tier system referred to in paragraph (1) 
shall also address unfair business and investment 
practices with respect to each country identified and 
graded under such paragraph: 
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(A) Discriminatory treatment of United 
States citizens and businesses engaged in busi-
ness or investment activities. 
(B) The status of allowing United States 
goods to enter each such country without re-
quiring a co-production agreement. 
(C) Protection of United States intellectual 
property rights. 
(d) PUBLIC ACCESSIBILITY.—The Secretary of State 
shall publish on the website of the Department of State 
information on countries under this section. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) CIVIL
SOCIETY
ENGAGEMENT.—The term 
‘‘civil society engagement’’ means the extent to 
which individuals exercise peacefully their rights of 
expression, association, and assembly, including 
through their establishing and participating in non-
governmental organizations, unions, and other civil 
society organizations. 
(2) CORRUPTION
AND
TRANSPARENCY.—The 
term ‘‘corruption and transparency’’ means the ex-
tent to which public officials seek illegitimate per-
sonal gain, including through to bribery, extortion, 
graft, nepotism, or embezzlement. 
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(3) CO-PRODUCTION
AGREEMENT.—The term 
‘‘co-production agreement’’ means a United States 
Government or United States business working with 
a foreign government, foreign company, or an inter-
national organization to produce or manufacture an 
item. 
(4) GOOD GOVERNANCE.—The term ‘‘good gov-
ernance’’ means the extent which institutions are 
sustainable and democratic, with responsive, profes-
sional civil services providing high quality public 
services. 
(5) MACROECONOMIC
STABILITY.—The term 
‘‘macroeconomic stability’’ means the extent to 
which the economy of a foreign country is vulnerable 
to internal and external shocks. 
(6) POLITICAL STABILITY.—The term ‘‘political 
stability’’ means the likelihood that the government 
of a foreign country will be destabilized or over-
thrown by unconstitutional or violent means. 
(7) REGULATORY QUALITY.—The term ‘‘regu-
latory quality’’ means the extent to which the gov-
ernment of a foreign country is able to formulate 
and implement sound policies and regulations that 
permit and promote private sector development. 
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(8) RULE OF LAW.—The term ‘‘rule of law’’ 
means the extent to which laws of a foreign country 
are publicly promulgated, equally enforced, inde-
pendently adjudicated, and are consistent with inter-
national norms and standards. 
(9) UNFAIR BUSINESS AND INVESTMENT PRAC-
TICES.—The term ‘‘unfair business and investment 
practices’’ includes any of the following: 
(A) Unlawful actions under international 
law or the law of the foreign country taken by 
the government of such country or by busi-
nesses, citizens, or other entities of such coun-
try that have resulted in lost assets, contracts, 
or otherwise contributed to an inhospitable 
business or investment climate. 
(B) Discriminatory treatment of United 
States businesses, whether wholly- or partially- 
owned. 
(C) Failure to protect intellectual property 
rights. 
(D) Requiring a co-production agreement 
in order for goods from the United States to 
enter a foreign country. 
Æ 
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