I
104TH CONGRESS
2D SESSION
H. R. 3723
To amend title 18, United States Code, to protect proprietary economic
information, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 26, 1996
Mr. MCCOLLUM (for himself and Mr. SCHUMER) introduced the following bill;
which was referred to the Committee on the Judiciary
A BILL
To amend title 18, United States Code, to protect proprietary
economic information, 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. SHORT TITLE.
This Act may be cited as the ‘‘Economic Espionage
Act of 1996’’.
SEC. 2. PROTECTION OF PROPRIETARY ECONOMIC INFOR-
MATION.
(a) IN GENERAL.—Chapter 31 of title 18, United
States Code, is amended by adding at the end the follow-
ing:
‘‘§ 669. Protection of proprietary economic informa-
tion
‘‘(a) OFFENSE.—Whoever—
‘‘(1) with the intent to, or with reason to be-
lieve that the offense will, benefit any foreign gov-
ernment, foreign instrumentality, or foreign agent;
or
‘‘(2) with the intent to divert that information
to the use or benefit of anyone other than the owner
thereof, and with the intent to, or with reason to be-
lieve that the offense will, disadvantage any owner of
proprietary economic information that is related to
or is included in a product that is produced for or
placed in interstate or foreign commerce;
wrongfully copies or otherwise controls any economic pro-
prietary information, or attempts or conspires to do so
shall be punished as provided in subsection (b).
‘‘(b) PUNISHMENT.—
‘‘(1) GENERALLY.—The punishment for an of-
fense under this section is—
‘‘(A) in the case of an offense under sub-
section (a)(1), a fine under this title or impris-
onment for not more than 25 years, or both;
and
‘‘(B) in the case of an offense under sub-
section (a)(2), a fine under this title or impris-
onment for not more than 15 years.
‘‘(2) INCREASED MAXIMUM FINE FOR ORGANI-
ZATIONS.—If an organization commits an offense—
‘‘(A) under subsection (a)(1), the maxi-
mum fine, if not otherwise larger, that may be
imposed is $10,000,000; and
‘‘(B) under subsection (a)(2), the maxi-
mum fine, if not otherwise larger, that may be
imposed is $5,000,000.
‘‘(c) DEFINITIONS.—As used in this section—
‘‘(1) the term ‘foreign instrumentality’ means
any agency, bureau, ministry, component, institu-
tion, association, or any legal, commercial, or busi-
ness organization, corporation, firm, or entity that is
substantially owned, controlled, sponsored, com-
manded, managed, or dominated by a foreign gov-
ernment or subdivision thereof;
‘‘(2) the term ‘foreign agent’ means any officer,
employee, proxy, servant, delegate, or representative
of a foreign nation or government;
‘‘(3) the term ‘proprietary economic informa-
tion’ means all forms and types of financial, busi-
ness, scientific, technical, economic, or engineering
information including data, plans, tools, mecha-
nisms, compounds, formulas, designs, prototypes,
processes, procedures, programs, codes, or commer-
cial strategies, whether tangible or intangible, and
whether stored, compiled, or memorialized phys-
ically, electronically, graphically, photographically, or
in writing if—
‘‘(A) the owner thereof has taken reason-
able measures to keep such information con-
fidential; and
‘‘(B) the information derives independent
economic value, actual or potential, from not
being generally known to, and not being readily
ascertainable through proper means by, the
public;
‘‘(4) the term ‘owner’ means the person in
whom, or United States Government component, de-
partment, or agency in which, rightful legal, bene-
ficial, or equitable title to, or license in, proprietary
economic information is reposed; and
‘‘(5) the term ‘United States person’ means—
‘‘(A) in the case of a natural person, a
United States citizen or permanent resident
alien; and
‘‘(B) in the case of an organization, an en-
tity substantially owned or controlled by United
States citizens or permanent resident aliens, or
incorporated in the United States.
‘‘(d) CRIMINAL FORFEITURE.—
‘‘(1) Notwithstanding any other provision of
State law, any person convicted of a violation under
this chapter shall forfeit to the United States—
‘‘(A) any property constituting, or derived
from, any proceeds the person obtained, directly
or indirectly, as the result of such violation; and
‘‘(B) any of the person’s property used, or
intended to be used, in any manner or part, to
commit or facilitate the commission of such vio-
lation, if the court in its discretion so deter-
mines, taking into consideration the nature,
scope, and proportionality of the use of the
property in the offense.
‘‘(2) The court, in imposing sentence on such
person, shall order, in addition to any other sentence
imposed pursuant to this section, that the person
forfeit to the United States all property described in
this section.
‘‘(3) Property subject to forfeiture under this
section, any seizure and disposition thereof, and any
administrative or judicial proceeding in relation
thereto, shall be governed by the provisions of sec-
tion 413 of the Comprehensive Drug Abuse Preven-
tion and Control Act of 1970 (21 U.S.C. 853), ex-
cept for subsection 413(d) which shall not apply to
forfeitures under this section.
‘‘(e) TERRITORIAL APPLICATION.—
‘‘(1) This section applies to conduct occurring
within the United States.
‘‘(2) This section also applies to conduct occur-
ring outside the United States if—
‘‘(A) the offender is a United States per-
son; or
‘‘(B) an act in furtherance of the offense
was committed in the United States.
‘‘(f) NONPREEMPTION OF OTHER REMEDIES.—This
section shall not be construed to preempt or displace any
other remedies, whether civil or criminal, provided by
United States Federal, State, commonwealth, possession,
or territory law for the misappropriation of proprietary
economic information.
‘‘(g) ORDERS TO PRESERVE CONFIDENTIALITY.—In
any prosecution or other proceeding under this section, the
court shall enter such orders and take such other action
as may be necessary and appropriate to preserve the con-
fidentiality of proprietary economic information, consist-
ent with the requirements of the Federal Rules of Crimi-
nal and Civil Procedure, the Federal Rules of Evidence,
and all other applicable laws. An interlocutory appeal by
the United States shall lie from a decision or order of a
district court authorizing or directing the disclosure of
proprietary economic information.
‘‘(h) EXCEPTIONS TO PROHIBITION.—
‘‘(1) This section does not prohibit and shall
not impair any otherwise lawful activity conducted
by an agency or instrumentality of the United
States, a State, or a political subdivision of a State.
‘‘(2) This section does not prohibit the report-
ing of any suspected criminal activity to any law en-
forcement agency or instrumentality of the United
States, a State, or a political subdivision of a State,
to any intelligence agency of the United States, or
to Congress.’’.
SEC. 3. WIRE AND ELECTRONIC COMMUNICATIONS INTER-
CEPTION AND INTERCEPTION OF ORAL COM-
MUNICATIONS.
Section 2516(1)(c) of title 18, United States Code,
is amended by inserting ‘‘section 669 (relating to economic
espionage),’’ after ‘‘(bribery in sporting contests),’’.
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