II Calendar No. 144 116th CONGRESS 1st Session S. 1309 IN THE SENATE OF THE UNITED STATES May 2, 2019 Mr. Cardin (for himself, Mr. Young , Mr. Leahy , Mr. Rubio , Mr. Blumenthal , Mr. Merkley , and Mr. Coons ) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations July 11, 2019 Reported by Mr. Risch , with an amendment Strike out all after the enacting clause and insert the part printed in italic A BILL To identify and combat corruption in countries, to establish a tiered system of countries with respect to levels of corruption by their governments and their efforts to combat such corruption, and to assess United States assistance to designated countries in order to advance anti-corruption efforts in those countries and better serve United States taxpayers.

1. Short title This Act may be cited as the Combating Global Corruption Act of 2019 . 2. Definitions In this Act: (1) Appropriate congressional committees The term appropriate congressional committees means— (A) the Committee on Foreign Relations of the Senate ; (B) the Committee on Armed Services of the Senate ; (C) the Committee on Appropriations of the Senate ; (D) the Committee on Foreign Affairs of the House of Representatives ; (E) the Committee on Armed Services of the House of Representatives ; and (F) the Committee on Appropriations of the House of Representatives . (2) Corrupt actor The term corrupt actor means— (A) any foreign person or entity that is a government official or government entity responsible for, or complicit in, an act of corruption; and (B) any company, in which a person or entity described in subparagraph (A) has a significant stake, which is responsible for, or complicit in, an act of corruption. (3) Corruption The term corruption means the exercise of public power for private gain, including by bribery, nepotism, fraud, or embezzlement. (4) Foreign assistance The term foreign assistance means assistance made available under— (A) the Foreign Assistance Act of 1961 ( 22 U.S.C. 2151 et seq.); (B) the Arms Export Control Act ( 22 U.S.C. 2751 et seq.); or (C) title 10, United States Code. (5) Grand corruption The term grand corruption means corruption committed at a high level of government that— (A) distorts policies or the central functioning of the country; and (B) enables leaders to benefit at the expense of the public good. (6) Petty corruption The term petty corruption means the abuse of entrusted power by low- or mid-level public officials in their interactions with ordinary citizens. 3. Publication of tiered ranking list (a) In general The Secretary of State shall annually publish, on a publicly accessible website, a tiered ranking of all foreign countries. (b) Tier 1 countries A country shall be ranked as a tier 1 country in the ranking published under subsection (a) if the government of such country is complying with the minimum standards set forth in section 4. (c) Tier 2 countries A country shall be ranked as a tier 2 country in the ranking published under subsection (a) if the government of such country is making efforts to comply with the minimum standards set forth in section 4, but is not achieving the requisite level of compliance to be ranked as a tier 1 country. (d) Tier 3 countries A country shall be ranked as a tier 3 country in the ranking published under subsection (a) if the government of such country is making de minimis or no efforts to comply with the minimum standards set forth in section 4. 4. Minimum standards for the elimination of corruption and assessment of efforts to combat corruption (a) In general The government of a country is complying with the minimum standards for the elimination of corruption if the government— (1) has enacted laws and established government structures, policies, and practices that prohibit corruption, including grand corruption and petty corruption; (2) enforces the laws described in paragraph (1) by punishing any person who is found, through a fair judicial process, to have violated such laws; (3) prescribes punishment for grand corruption that is commensurate with the punishment prescribed for serious crimes; (4) prescribes punishment for petty corruption that— (A) provides a sufficiently stringent deterrent; and (B) adequately reflects the nature of the offense; and (5) is making serious and sustained efforts to eliminate corruption. (b) Factors for assessing government efforts To combat corruption In determining whether a government is making serious and sustained efforts to eliminate corruption, the Secretary of State shall consider— (1) whether the government of the country vigorously investigates and prosecutes acts of corruption and convicts and sentences persons responsible for such acts that take place wholly or partly within such country, including, as appropriate, requiring incarceration of individuals convicted of such acts; (2) whether the government of the country vigorously investigates, prosecutes, convicts, and sentences public officials who participate in or facilitate corruption, including nationals of the country who are deployed in foreign military assignments, trade delegations abroad, or other similar missions, who engage in or facilitate severe forms of corruption; (3) whether the government of the country has adopted measures to prevent corruption, such as measures to inform and educate the public, including potential victims, about the causes and consequences of corruption; (4) what steps the government of the country has taken to prohibit government officials from participating in, facilitating, or condoning corruption, including the investigation, prosecution, and conviction of such officials; (5) the extent to which the country provides access, or, as appropriate, makes adequate resources available, to civil society organizations and other institutions to combat corruption, including reporting, investigating, and monitoring; (6) whether an independent judiciary or judicial body in the country responsible for, and effectively capable of, deciding corruption cases impartially, on the basis of facts and in accordance with the law, without any restrictions, improper influences, inducements, pressures, threats, or interferences (direct or indirect) from any quarter or for any reason; (7) whether the government of the country is assisting in international investigations of transnational corruption networks and in other cooperative efforts to combat grand corruption, including cooperating with the governments of other countries to extradite corrupt actors; (8) whether the government of the country recognizes the rights of victims of corruption, ensures their access to justice, and takes steps to prevent victims from being further victimized or persecuted by corrupt actors, government officials, or others; (9) whether the government of the country refrains from prosecuting victims of corruption or whistleblowers due to such persons having assisted in exposing corruption, and refrains from other discriminatory treatment of such persons; and (10) such other information relating to corruption as the Secretary of State considers appropriate. 5. Transparency and accountability (a) In general Not later than 60 days after publishing the report required under section 3(a), and prior to obligation by any United States agency of foreign assistance to the government of a country ranked as a tier 3 country under section 3(d), the Secretary of State, in coordination with the Administrator of the United States Agency for International Development (referred to in this Act as the USAID Administrator ) and the Secretary of Defense, as appropriate, shall— (1) conduct a corruption risk assessment and create a corruption mitigation strategy for all United States foreign assistance programs to that country; (2) require the inclusion of anti-corruption clauses for all foreign assistance contracts, grants, and cooperative agreements, which allow for the termination of the contract, grant, or cooperative agreement without penalty if credible indicators of corruption are discovered; (3) require the inclusion of appropriate clawback clauses for all foreign assistance contracts, grants, and cooperative agreements to recover United States taxpayer funds that have been misappropriated from the prime contractor, grantee, or cooperative agreement participant through corruption; (4) require the disclosure of the beneficial ownership of all contractors, subcontractors, grantees, cooperative agreement participants, and other organizations receiving funding from the United States Government for foreign assistance programs; and (5) establish a mechanism for investigating allegations of misappropriated foreign assistance funds or equipment. (b) Exceptions and waiver (1) Exceptions Subsection (a) shall not apply to humanitarian assistance, disaster assistance, or assistance to combat corruption. (2) Waiver The Secretary of State, on a program-by-program basis, may waive the requirement to delay foreign assistance under subsection (a) if the Secretary of State certifies to the appropriate congressional committees that such waiver is important to the national security interests of the United States. 6. Resources and reporting requirements (a) Annual report (1) In general The Secretary of State shall submit an annual report to the appropriate congressional committees that outlines the resources needed to meet the objectives and reports under sections 3 through 5, including— (A) intelligence data collection needs; (B) personnel needs; (C) information technology requirements; and (D) a description of the bureaucratic structure of the offices within the Department of State and the United States Agency for International Development ( USAID ) that are engaged in anti-corruption activities. (2) Form The report submitted under paragraph (1) shall be submitted in unclassified form, but may include a classified annex. (b) Online platform The Secretary of State and the USAID Administrator shall consolidate existing reports with anti-corruption components into one online, public platform, which shall— (1) include— (A) the Human Rights Report; (B) the Fiscal Transparency Report; (C) the Investment Climate Statement reports; (D) the International Narcotics Control Strategy Report; and (E) any other relevant public reports; and (2) link to third-party indicators used by the United States Government to inform policy and programming, such as— (A) the World Bank’s Control of Corruption Indicator; (B) the World Bank’s Actionable Governance Index Data Portal; (C) the International Finance Corporation’s Doing Business surveys; (D) the International Budget Partnership’s Open Budget Index; (E) the Global Integrity Index; and (F) multilateral peer review anti-corruption compliance mechanisms, such as the Organisation for Economic Co-operation and Development’s Working Group on Bribery in International Business Transactions and the United Nations Convention Against Corruption, done at New York October 31, 2003, to further highlight expert international views on country challenges and country efforts. (c) Training To increase the ability of Department of State and USAID personnel to support anti-corruption as a foreign policy and development priority, and strengthen their ability to design, implement, and evaluate more effective anti-corruption programming around the world, including enhancing skills to better evaluate and mitigate corruption risks in assistance programs, the Secretary of State and the USAID Administrator shall incorporate anti-corruption components into existing Foreign Service and Civil Service training courses.

1. Definitions In this Act: (1) Corrupt actor The term corrupt actor means— (A) any foreign person or entity that is a government official or government entity responsible for, or complicit in, an act of public corruption; and (B) any company, in which a person or entity described in subparagraph (A) has a significant stake, which is responsible for, or complicit in, an act of public corruption. (2) Foreign assistance The term foreign assistance means assistance made available under— (A) the Foreign Assistance Act of 1961 ( 22 U.S.C. 2151 et seq.); or (B) the Arms Export Control Act ( 22 U.S.C. 2751 et seq.). (3) Grand corruption The term grand corruption means public corruption committed at a high level of government that— (A) distorts policies or the central functioning of the country; and (B) enables leaders to benefit at the expense of the public good. (4) Petty corruption The term petty corruption means the unlawful exercise of entrusted public power for private gain by low- or mid-level public officials in their interactions with ordinary citizens, including by bribery, nepotism, fraud, or embezzlement. (5) Public corruption The term public corruption means the unlawful exercise of entrusted public power for private gain, including by bribery, nepotism, fraud, or embezzlement. 2. Sense of Congress It is the sense of Congress that— (1) it is in the foreign policy interest of the United States to help other countries promote good governance and combat public corruption, particularly grand corruption; (2) multiple departments and agencies across the United States Government operate programs that promote good governance in foreign countries and enhance foreign countries’ ability to combat public corruption; (3) the Department of State should promote coordination among programs described in paragraph (2) to improve their effectiveness and efficiency; and (4) the Department of State should identify areas in which United States efforts to help other countries promote good governance and combat public corruption could be enhanced. 3. Annual report The Secretary shall annually submit to the appropriate congressional committees and publish, on a publicly accessible website, a report that— (1) groups foreign countries, by quintile, based on— (A) the World Bank Worldwide Governance Indicator on Control of Corruption; and (B) the World Bank Worldwide Governance Indicator on Voice and Accountability; (2) adds context and commentary, as appropriate, to the World Bank Worldwide Governance Indicator on Control of Corruption and the World Bank Worldwide Governance Indicator on Voice and Accountability groupings under paragraph (1), as appropriate, based on the factors outlined in section 4; (3) describes, based on the World Bank Worldwide Governance Indicators and the factors outlined in section 4, the status of foreign governments’ efforts to combat public corruption; and (4) describes the status of each foreign country’s active membership in voluntary multi-sectoral global governance initiatives as evidence of the country’s government-led efforts to combat public corruption. 4. Additional factors for assessing government efforts to combat public corruption (a) Factors for assessing government efforts To combat public corruption In assessing a government’s efforts to combat public corruption, the Secretary of State should consider, to the extent reliable information is available— (1) whether the country— (A) has enacted laws and established government structures, policies, and practices that prohibit public corruption, including grand corruption and petty corruption; and (B) enforces such laws through a fair judicial process; (2) whether the country prescribes appropriate punishment for grand corruption that is commensurate with the punishment prescribed for serious crimes; (3) whether the country prescribes appropriate punishment for petty corruption that provides a sufficiently stringent deterrent and adequately reflects the nature of the offense; (4) the extent to which the government of the country— (A) vigorously investigates and prosecutes acts of public corruption; and (B) convicts and sentences persons responsible for such acts that take place wholly or partly within such country, including, as appropriate, requiring the incarceration of individuals convicted of such acts; (5) the extent to which the government of the country vigorously investigates, prosecutes, convicts, and sentences public officials who participate in or facilitate public corruption, including nationals of the country who are deployed in foreign military assignments, trade delegations abroad, or other similar missions who engage in or facilitate severe forms of public corruption; (6) the extent to which the government of the country has adopted measures to prevent public corruption, such as measures to inform and educate the public, including potential victims, about the causes and consequences of public corruption; (7) steps taken by the government of the country to prohibit government officials from participating in, facilitating, or condoning public corruption, including the investigation, prosecution, and conviction of such officials; (8) the extent to which the country government provides access, or, as appropriate, makes adequate resources available, to civil society organizations and other institutions to combat public corruption, including reporting, investigating, and monitoring; (9) the extent to which an independent judiciary or judicial body in the country is responsible for, and effectively capable of, deciding public corruption cases impartially, on the basis of facts and in accordance with the law, without any improper restrictions, influences, inducements, pressures, threats, or interferences (direct or indirect) from any source or for any reason; (10) the extent to which the government of the country is assisting in international investigations of transnational public corruption networks and in other cooperative efforts to combat grand corruption, including cooperating with the governments of other countries to extradite corrupt actors; (11) the extent to which the government of the country recognizes the rights of victims of public corruption, ensures their access to justice, and takes steps to prevent victims from being further victimized or persecuted by corrupt actors, government officials, or others; (12) the extent to which the government of the country refrains from prosecuting legitimate victims of public corruption or whistleblowers due to such persons having assisted in exposing public corruption, and refrains from other discriminatory treatment of such persons; and (13) such other information relating to public corruption as the Secretary of State considers appropriate. 5. Designation of embassy anti-corruption points of contact (a) Designated countries The Secretary of State shall annually designate an anti-corruption point of contact at the United States Mission to each country that he or she determines is in need of such a point of contact. (b) Points of contact duties Each designated anti-corruption point of contact shall be responsible for coordinating a whole-of-government approach to combating public corruption in his or her posted country among relevant United States Government departments or agencies with a presence in that country, including, as applicable, the Department of State, the Department of Justice, the Department of the Treasury, the Department of Homeland Security, and the United States Agency for International Development. (c) Training The Secretary of State shall develop and implement appropriate training for designated anti-corruption points of contact. (d) Internal reporting Each anti-corruption point of contact shall submit an annual report to the Secretary regarding anti-corruption activities within his or her posted country that— (1) evaluates the effectiveness of current programs that promote good governance and have an effect of combating public corruption; and (2) identifies areas in which the United States Government’s approach could be enhanced, including specific programs that could be used to enhance the whole-of-government approach. 6. Interagency working group (a) In general The Secretary of State shall have primary responsibility for managing a whole-of-government effort to improve coordination among United States Government departments and agencies that have a role in promoting good governance in foreign countries and enhancing foreign countries’ ability to combat public corruption. (b) Task force (1) Initial meeting Not later than 180 days after the date of the enactment of this Act, the Secretary of State shall establish and convene an initial meeting of an interagency task force, which shall be composed of— (A) representatives appointed by the President from the departments and agency listed in section 5(b); and (B) representatives from any other United States Government departments or agencies, as determined by the Secretary. (2) Additional meetings The task force described in paragraph (1) shall meet not less frequently than twice per year. (c) Task force duties The task force established pursuant to subsection (b) shall— (1) assist the Secretary of State in managing the whole-of-government effort described in subsection (a); (2) evaluate, on a general basis, the effectiveness of current programs that have an effect of combating public corruption; (3) identify general areas in which the United States Government’s approach could be enhanced; and (4) identify specific programs for specific countries that could be used to enhance the whole-of-government approach. 7. Transparency and accountability (a) In general Not later than 60 days after publishing the report required under section 3, and prior to obligation by any United States agency of foreign assistance to the government of a country ranked in the lowest 2 quintiles in the World Bank Worldwide Governance Indicator on Control of Corruption grouping described in section 3(1), the Secretary, in coordination with the Administrator of USAID, as appropriate, shall— (1) conduct a corruption risk assessment and create a corruption mitigation strategy for all United States foreign assistance programs in that country; (2) require the inclusion of anti-corruption clauses for all foreign assistance contracts, grants, and cooperative agreements, which allow for the termination of the contract, grant, or cooperative agreement without penalty if credible indicators of public corruption are discovered; (3) require the inclusion of appropriate clawback clauses for all foreign assistance that has been misappropriated through corruption; (4) require the appropriate disclosure to the United States Government, in confidential form, if necessary, of the beneficial ownership of contractors, subcontractors, grantees, cooperative agreement participants, and other organizations receiving funding from the United States Government for foreign assistance programs; and (5) establish a mechanism for investigating allegations of misappropriated foreign assistance funds or equipment. (b) Exceptions and waiver (1) Exceptions Subsection (a) shall not apply to humanitarian assistance, disaster assistance, or assistance to combat corruption. (2) Waiver The Secretary of State may waive the requirement to delay foreign assistance under subsection (a) if the Secretary certifies to the appropriate congressional committees that such waiver is important to the national security interests of the United States. 8. Resources and reporting requirements (a) Annual report (1) In general Not later than one year after the date of the enactment of this Act, and annually thereafter, the Secretary of State shall submit a report to the appropriate congressional committees that outlines the resources needed to meet the objectives of this Act, including— (A) personnel needs; and (B) a description of the bureaucratic structure of the offices within the Department of State and USAID that are engaged in anti-corruption activities. (b) Annual briefing (1) In general Not later than one year after the date of the enactment of this Act, and annually thereafter, the Secretary shall brief the appropriate congressional committees on the implementation of this Act, including— (A) the designation of anti-corruption points of contact for countries under section 5(a); (B) the training implemented under section 5(c); (C) the reports received from anti-corruption points of contact under section 5(d); (D) the management of the whole-of-government effort to improve coordination under section 6(a); (E) the establishment of the task force under section 6(b); and (F) the activities of the task force under section 6(c). (2) Form of briefing The briefings under subsection (b) shall be conducted on an in-person basis to members or staff of the appropriate congressional committees. Portions of the briefings may be conducted in a classified setting, as needed. (c) Online platform The Secretary of State and the USAID Administrator shall consolidate existing reports with anti-corruption components into one online, public platform, which shall— (1) include— (A) the Human Rights Report; (B) the Fiscal Transparency Report; (C) the Investment Climate Statement reports; (D) the International Narcotics Control Strategy Report; and (E) any other relevant public reports; (2) link to third-party indicators and compliance mechanisms used by the United States Government to inform policy and programming, such as— (A) the International Finance Corporation’s Doing Business surveys; (B) the International Budget Partnership’s Open Budget Index; and (C) multilateral peer review anti-corruption compliance mechanisms, such as the Organisation for Economic Co-operation and Development’s Working Group on Bribery in International Business Transactions and the United Nations Convention Against Corruption, done at New York October 31, 2003, to further highlight expert international views on country challenges and country efforts. (d) Training The Secretary of State and the USAID Administrator shall incorporate anti-corruption components into existing Foreign Service and Civil Service training courses— (1) to increase the ability of Department of State and USAID personnel to support anti-corruption as a foreign policy and development priority; and (2) to strengthen their ability to design, implement, and evaluate more effective anti-corruption programming around the world, including enhancing skills to better evaluate and mitigate public corruption risks in assistance programs.

July 11, 2019 Reported with an amendment