I
104TH CONGRESS
1ST SESSION
H. R. 19
To encourage foreign countries to accord national treatment to United States
banking, securities, and insurance organizations that operate or seek
to operate in those countries.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 4, 1995
Mr. LEACH and Mr. SCHUMER (for themselves, Mr. FRANK of Massachusetts,
and Mr. BEREUTER) introduced the following bill; which was referred to
the Committee on Banking and Financial Services and, in addition, to
the Committees on Commerce and Ways and Means, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee con-
cerned
A BILL
To encourage foreign countries to accord national treatment
to United States banking, securities, and insurance orga-
nizations that operate or seek to operate in those coun-
tries.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Fair Trade in Finan-
cial Services Act of 1995’’.
SEC. 2. PURPOSE; DEFINITIONS.
(a) PURPOSE.—The purpose of this Act is to encour-
age foreign countries to accord national treatment to Unit-
ed States banking, securities, and insurance organizations
that operate or seek to operate in those countries.
(b) DEFINITIONS.—For purposes of this Act, the fol-
lowing definitions shall apply:
(1) NATIONAL
TREATMENT.—The term ‘‘na-
tional treatment’’ means, with respect to any foreign
country, treatment that offers United States bank-
ing, securities, or insurance organizations, as the
case may be, the same competitive opportunities (in-
cluding effective market access) in such country as
are available to the foreign country’s domestic bank-
ing, securities, or insurance organizations in like cir-
cumstances.
(6) PERSON OF A FOREIGN COUNTRY.—
(A) IN GENERAL.—The term ‘‘person of a
foreign country’’ means—
(i) any entity that—
(I) is organized under the laws of
the foreign country, or
(II) has the entity’s principal
place of business in the foreign coun-
try;
(ii) an individual who—
(I) is a citizen of the foreign
country; or
(II) is permanently domiciled in
the foreign country; and
(iii) any person that is, directly or in-
directly, under the control of any entity or
individual described in clause (i) or (ii).
(B) CONTROL.—For purposes of subpara-
graph (A), the term ‘‘control’’—
(i) in the case of a banking organiza-
tion, has the same meaning as in section 2
of the Bank Holding Company Act of
1956;
(ii) in the case of a securities organi-
zation, has the meaning which the Sec-
retary shall prescribe, by regulation, in
consultation with the Commission; and
(iii) in the case of an insurance orga-
nization, has the meaning which the Presi-
dent shall prescribe.
(3) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of the Treasury.
(4) 
TRADE
REPRESENTATIVE.—The 
term
‘‘Trade Representative’’ means the United States
Trade Representative.
SEC. 3. EFFECTUATING THE PRINCIPLE OF NATIONAL
TREATMENT FOR BANKING ORGANIZATIONS.
(a) IDENTIFYING COUNTRIES THAT MAY BE DENY-
ING NATIONAL TREATMENT TO UNITED STATES BANK-
ING ORGANIZATIONS.—The Secretary shall identify, after
consultation in accordance with subsection (i), the extent
to which foreign countries may be denying national treat-
ment to United States banking organizations—
(1) according to the most recent report under
section 3602 of the Omnibus Trade and Competi-
tiveness Act of 1988 (or the most recent update of
such report); or
(2) based on more recent information that the
Secretary considers appropriate.
(b) DETERMINING WHETHER POSSIBLE DENIAL OF
NATIONAL TREATMENT MAY BE HAVING A SIGNIFICANT
ADVERSE EFFECT.—
(1) IN GENERAL.—The Secretary shall deter-
mine, after consultation in accordance with sub-
section (i), whether the possible denial of national
treatment to United States banking organizations by
a foreign country identified under subsection (a)
may be having a significant adverse effect on such
organizations.
(2) FACTORS TO BE CONSIDERED.—In making
any determination under paragraph (1), the Sec-
retary shall consider appropriate factors, including
the following:
(A) The extent of United States trade with
and investment in the foreign country, the size
of the foreign country’s markets for the finan-
cial services involved, and the extent to which
United States banking organizations operate or
seek to operate in those markets.
(B) The importance of operations by Unit-
ed States banking organizations in the foreign
country to the export of goods and services by
United States firms to such country.
(C) The extent to which the foreign coun-
try provides in advance to United States bank-
ing organizations a written draft of any meas-
ure of general application that the country pro-
poses to adopt, such as regulations, guidelines,
or other policies regarding new products and
services, in order to allow an opportunity for
such organizations to comment on the measure
and for such comments to be taken into account
by the foreign country.
(D) The extent to which the foreign coun-
try—
(i) makes available, in writing, to
United States banking organizations the
foreign country’s requirements for complet-
ing any application relating to the provi-
sion of financial services by any such orga-
nization;
(ii) applies published, objective stand-
ards and criteria in evaluating any such
application from any United States bank-
ing organization; and
(iii) renders administrative decisions
relating to any such application within a
reasonable period of time.
(3) 
SOLICITATION
OF
COMMENTS.—Before
making any determination under paragraph (1), the
Secretary shall solicit comments concerning the ef-
fect of the possible denial of national treatment on
United States banking organizations from interested
parties.
(c) NEGOTIATIONS.—
(1) MANDATORY INITIATION OF NEGOTIATIONS
IN
CERTAIN
CASES.—If the Secretary determines
under subsection (b) that the possible denial of na-
tional treatment to United States banking organiza-
tions by a foreign country identified under sub-
section (a) may be having a significant adverse ef-
fect on such organizations, the Secretary shall initi-
ate negotiations with such foreign country to ensure
that such country accords national treatment to
United States banking organizations.
(2) EXCEPTIONS.—Paragraph (1) shall not
apply with respect to any foreign country if the Sec-
retary—
(A) determines that negotiations with such
country in accordance with paragraph (1)—
(i) would be unlikely to result in
progress toward according national treat-
ment to United States banking organiza-
tions; or
(ii) would impair the economic inter-
ests of the United States; and
(B) gives written notice of that determina-
tion to the Congress.
(d) PUBLICATION
OF POSTNEGOTIATION DETER-
MINATION; DISPUTE RESOLUTION PROCEEDING.—
(1) PUBLICATION.—If, after making a deter-
mination under subsection (b) that the possible de-
nial of national treatment to United States banking
organizations by a foreign country may be having a
significant adverse effect on such organizations, the
Secretary determines, after consultation in accord-
ance with subsection (i), that—
(A) any negotiations under subsection (c)
have not resulted in, or are not likely to result
in, progress toward according national treat-
ment to United States banking organizations;
and
(B) effective relief is not available under
any bilateral or multilateral agreement de-
scribed in paragraph (2)(A);
the Secretary may publish, in the Federal Register,
a final determination in accordance with subsections
(a) and (b) that such country is denying national
treatment to United States banking organizations
and the denial is having a significant adverse effect
on any such organizations.
(2) DISPUTE RESOLUTION UNDER APPLICABLE
AGREEMENTS.—If, after making a determination
under subsection (b) that the possible denial of na-
tional treatment to United States banking organiza-
tions by a foreign country may be having a signifi-
cant adverse effect on such organizations—
(A) the Secretary determines that the acts,
policies, or practices of the foreign country
which give rise to such determination are sub-
ject to any bilateral or multilateral agreement
that governs financial services that has been en-
tered into by the President and approved by the
Senate and House of Representatives; and
(B) the agreement provides for a formal
process for resolving disputes regarding obliga-
tions under the agreement;
the United States shall initiate a proceeding under
the agreement to enforce the rights of the United
States under the agreement.
(3) ANNUAL REVIEW OF DETERMINATIONS.—
The Secretary shall, not less frequently than annu-
ally and after consultation in accordance with sub-
section (i), review each determination published pur-
suant to paragraph (1) to determine whether the de-
termination should be rescinded.
(4) NOTIFICATION OF APPROPRIATE STATE OF-
FICIALS OF PUBLICATION OF DETERMINATION.—The
Secretary shall inform State bank supervisors (as
defined in section 3(r) of the Federal Deposit Insur-
ance Act) of the publication of any determination
under paragraph (1).
(e) DISCRETIONARY SANCTIONS.—
(1) ACTION BY THE SECRETARY.—
(A) IN
GENERAL.—Subject to subpara-
graph (B) and paragraph (2), the Secretary
may, after consultation in accordance with sub-
section (i), recommend to the appropriate Fed-
eral banking agency that such agency suspend
consideration of or deny a request for author-
ization that is filed—
(i) by a person of a foreign country
listed in a determination published under
subsection (d)(1); and
(ii) after the date of the publication of
such determination.
(B) CONDITIONS
FOR
EXERCISE
OF
AU-
THORITY.—The Secretary may make a rec-
ommendation under subparagraph (A), if the
Secretary determines that—
(i) such action would assist the Unit-
ed States in negotiations to eliminate deni-
als of national treatment against United
States banking organizations; or
(ii) the country has not adhered ade-
quately to an agreement reached as a re-
sult of negotiations undertaken pursuant
to subsection (c).