[Senate Report 109-219]
[From the U.S. Government Publishing Office]
109th Congress Report
SENATE
2d Session 109-219
_______________________________________________________________________
Calendar No. 372
UNDERTAKING SPAM, SPYWARE, AND FRAUD ENFORCEMENT WITH ENFORCERS BEYOND
BORDERS ACT OF 2005
__________
R E P O R T
OF THE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 1608
DATE deg.March 14, 2006.--Ordered to be printed
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred ninth congress
second session
TED STEVENS, Alaska, Chairman
DANIEL K. INOUYE, Hawaii, Co-Chairman
JOHN McCAIN, Arizona JOHN D. ROCKEFELLER IV, West
CONRAD BURNS, Montana Virginia
TRENT LOTT, Mississippi JOHN F. KERRY, Massachusetts
KAY BAILEY HUTCHISON, Texas BYRON L. DORGAN, North Dakota
OLYMPIA J. SNOWE, Maine BARBARA BOXER, California
GORDON H. SMITH, Oregon BILL NELSON, Florida
JOHN ENSIGN, Nevada MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia FRANK LAUTENBERG, New Jersey
JOHN E. SUNUNU, New Hampshire E. BENJAMIN NELSON, Nebraska
JIM DeMINT, South Carolina MARK PRYOR, Arkansas
DAVID VITTER, Louisiana
Lisa Sutherland, Staff Director
Christine Drager Kurth, Deputy Staff Director
Ken Nahigian, Chief Counsel
Margaret Cummisky, Democratic Staff Director and Chief Counsel
Samuel Whitehorn, Democratic Deputy Staff Director and General Counsel
Calendar No. 372
109th Congress Report
SENATE
2d Session 109-219
======================================================================
UNDERTAKING SPAM, SPYWARE, AND FRAUD ENFORCEMENT WITH ENFORCERS BEYOND
BORDERS ACT OF 2005
_______
March 14, 2006.--Ordered to be printed
_______
Mr. Stevens, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
[To accompany S. 1608]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill joint resolution deg. (S.
1608) TITLE deg. to enhance Federal Trade Commission
enforcement against illegal spam, spyware, cross-border fraud
and deception, and for other purposes, having considered the
same, reports favorably thereon without amendment with
amendments with an amendment (in the nature of a
substitute) deg. and recommends that the bill joint
resolution (as amended) deg. do pass.
Purpose of the Bill
S. 1608 would amend the Federal Trade Commission Act (FTCA)
(15 U.S.C. 41 et seq.) to improve the Federal Trade
Commission's (FTC or Commission) ability to provide more timely
and effective international consumer protection. The bill also
includes a provision authorizing the FTC to accept gifts and
services under certain circumstances.
Background and Needs
The FTC is an independent Federal agency established by
statute in 1914 to protect American consumers. The Commission's
mandate has two distinct provisions: first, to protect
consumers from unfair or deceptive acts or practices in or
affecting commerce, and second, to protect consumers from
unfair methods of competition. The agency enforces at least 50
statutes and is the only Federal agency with both consumer
protection and competition jurisdiction in broad sectors of the
economy.
The Commission has proposed legislative changes to the FTCA
seeking authorization to expand its authority under section 5
of the FTCA to protect consumers from fraudulent and deceptive
trade practices perpetrated outside the United States.
The FTC reports that cross-border consumer complaints
registered in the Consumer Sentinel consumer complaint database
have risen from 11 percent of all complaints received in 2000,
to 16 percent in 2004. The Commission attributes this increase
primarily to the global proliferation of the Internet and
improvements in telecommunications technologies. S. 1608 would
improve the Commission's ability to protect consumers from
illegal spyware, spam, cross-border fraud and deception, and
other consumer protection law violations. \1\
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\1\ See FTC testimony from Chairman Majoras to United States Senate
Committee on Commerce, Science, and Transportation, Subcommittee on
Trade, Tourism, and Economic Development, October 5, 2005--in which the
FTC states: ``The FTC's ability to pursue distributors of spyware,
spam, and other Internet threats to consumers would be significantly
improved if the Congress were to pass the U.S. SAFE WEB Act, introduced
by Chairman Smith in the Senate as S. 1608. The Act makes it easier for
the FTC to share information and otherwise cooperate with foreign law
enforcement officials. The Internet knows no boundaries, and it is
critical to improve the FTC's ability to work with the officials of
other countries to prevent online conduct that undermines consumer
confidence in the Internet as a medium of communication and commerce.''
---------------------------------------------------------------------------
According to the FTC, the Commission's cross-border fraud
language, which is contained in S. 1608, is the product of
negotiations between the FTC and various other governmental
entities including, among others, the Department of Justice
(DOJ), the Department of State, the Federal Deposit Insurance
Corporation (FDIC), and the Federal Reserve. These negotiations
were designed to properly define the scope of the FTC's
jurisdiction vis-a-vis the functions of those agencies.
The bill also would allow the FTC to accept reimbursement for
services undertaken on behalf of any domestic or foreign law
enforcement agency. FTC staff members occasionally provide
investigative or other services to a requesting law enforcement
agency with no expectation that the Commission will be
reimbursed for any expenses incurred. The FTC also may work in
conjunction with staff of other law enforcement agencies to
investigate or prosecute a matter. Thus, the Commission has
requested authority to accept reimbursement if offered. Such
authority would be useful in instances where expense-sharing
arrangements have not been resolved in advance. The Securities
Exchange Act of 1934 provides similar authority to the
Securities and Exchange Commission.
The bill also would authorize the FTC to accept gifts and
services under certain circumstances. Occasionally, the
Commission is offered gifts, donations, bequests, and volunteer
services, but such receipt is prohibited by law. For example,
volunteer services are prohibited, as is the acceptance of even
a trade regulation publication that might be useful in the
Commission's library. In order to legally accept such gifts or
other items, the Commission would need to receive statutory
authority. The Federal Communications Commission (FCC) and the
Consumer Product Safety Commission (CPSC) have similar
authority to accept gifts and services.
Summary of Provisions
S. 1608 would amend the FTCA to authorize the FTC to: (1)
share information involving cross-border fraud with foreign
consumer protection agencies; (2) secure confidential
information from those foreign consumer protection agencies;
(3) take fraud-based legal action in foreign jurisdictions; (4)
seek redress on behalf of foreign consumers victimized by
United States-based wrongdoers; (5) make criminal referrals for
cross-border criminal activity; (5) strengthen its relationship
with foreign consumer protection agencies; (6) provide
investigative and other services to a requesting law
enforcement agency and accept payment of reimbursement from
that agency for the Commission's involvement; and (7) receive
gifts or other items that would be useful to the Commission as
long as a conflict of interest is not created by such receipt.
Legislative History
During the 108th Congress, the Competition, Foreign Commerce,
and Infrastructure Subcommittee held a hearing on June 11,
2003, to examine possible changes to the FTCA and discuss key
issues before the FTC. Subsequent to the hearing, Senators
McCain and Smith introduced the Federal Trade Commission
Reauthorization Act of 2003 (S. 1234). On June 19, 2003, the
Committee met in open Executive Session to consider an
amendment in the nature of a substitute to S. 1234 offered by
Senators McCain and Smith. The substitute amendment was
adopted, and the bill was ordered by voice vote to be reported
as amended.
S. 1234 was placed on the Senate legislative calendar on
August 26, 2003. On September 15, 2004, the Senate amended and
passed S. 1234 by unanimous consent.
On July 29, 2005, Senators Smith, McCain, Inouye, and Nelson
of Florida introduced S. 1608, the Undertaking Spam, Spyware,
and Fraud Enforcement With Enforcers Beyond Borders Act of
2005. S. 1608 is virtually identical to S. 1234. The Trade,
Tourism, and Economic Development Subcommittee held a hearing
on October 5, 2005, to discuss the Commission's efforts to
combat spyware, including its views on S. 1608.
On December 15, 2005, the Committee met in open Executive
Session and, by voice vote, ordered S. 1608 reported without
amendment.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
January 31, 2006.
Hon. Ted Stevens,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1608, the
Undertaking Spam, Spyware, and Fraud Enforcement With Enforcers
Beyond Borders Act of 2005.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Melissa Z.
Petersen.
Sincerely,
Donald B. Marron,
Acting Director.
Enclosure.
S. 1608--Undertaking Spam, Spyware, and Fraud Enforcement With
Enforcers Beyond Borders Act of 2005
Summary: S. 1608 would provide new administrative tools to
the Federal Trade Commission (FTC) to support enforcement of
federal laws related to unfair and deceptive trade practices.
The bill would enhance the FTC's ability to pursue violations
that affect domestic commerce but are committed outside the
United States--such as the use of computer software (known as
spyware) to collect personal information without a user's
consent and the use of unsolicited email (known as spam) that
is deceptive.
CBO estimates that implementing S. 1608 would cost $1
million in 2006 and $9 million over the 2006-2011 period,
assuming appropriation of the amounts specified and estimated
to be necessary. Enacting the bill would not have a significant
effect on direct spending or revenues.
S. 1608 contains intergovernmental mandates as defined in
the Unfunded Mandates Reform Act (UMRA), but CBO estimates that
costs, if any, would be small and would not exceed the
threshold established by UMRA for intergovernmental mandates
($64 million in 2006, adjusted annually for inflation).
S. 1608 would impose a private-sector mandate, as defined
in UMRA, by limiting the ability of certain third parties to
sue. CBO expects that the direct cost of the mandate would fall
well below the annual threshold established by UMRA for
private-sector mandates ($128 million in 2006, adjusted
annually for inflation).
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 1608 is shown in the following table.
The cost of this legislation falls within budget function 370
(commerce and housing credit).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------
2006 2007 2008 2009 2010 2011
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CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level............................. 1 1 1 2 2 2
Estimated Outlays......................................... 1 1 1 2 2 2
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Basis of Estimate: For this estimate, CBO assumes that the
specified and estimated amounts needed to implement S. 1608
will be appropriated for each year and that outlays will follow
historical patterns for similar programs.
Spending subject to appropriation
Implementing S. 1608 would increase spending by the FTC for
enforcing laws related to unfair and deceptive trade practices,
subject to the availability of appropriated funds. S. 1608 also
would authorize the appropriation of $100,000 a year for
collaborating with foreign governments and participating in
multinational organizations related to law enforcement. Based
on information provided by the FTC, CBO estimates that
implementing the bill would cost about $1 million in 2006 and
about $9 million over the 2006-2011 period, assuming
appropriation of the amounts specified and estimated to be
necessary.
The bill would allow the FTC to accept reimbursements for
expenses made on behalf of foreign or domestic law enforcement
agencies. Such reimbursements would be recorded as an offset to
the agency's discretionary spending. Based on information
provided by the FTC, CBO estimates that any reimbursements
would be minimal and would not have a significant effect on
spending subject to appropriation.
Revenues and direct spending
Enacting S. 1608 could increase federal revenues and direct
spending as a result of additional civil and criminal penalties
assessed for violations of laws relating to unfair and
deceptive practices in commerce. Collections of civil penalties
are recorded in the budget as revenues. Collections of criminal
penalties are recorded in the budget as revenues, deposited in
the Crime Victims Fund, and later spent. CBO estimates,
however, that any additional revenues and direct spending that
would result from enacting the bill would not be significant
because of the relatively small number of cases likely to be
involved.
Finally, a provision in S. 1608 would authorize the FTC to
accept and use donations of cash, property, and other gifts.
Monetary gifts are classified in the budget as revenues, and
spending of such sums would constitute direct spending. Based
on information provided by the FTC, CBO estimates that any
collections and subsequent spending would be minimal, and that
enacting this provision would not have a significant effect on
revenues or direct spending.
Estimated impact on state, local, and tribal governments:
Sections 7 and 8 of S. 1608 would authorize the FTC to request
that a judge order the recipient of a summons, subpoena, or
other compulsory process to delay giving notice to anyone that
they have been required to appear as a witness before, or to
produce documents in, an FTC proceeding. The order could be
issued, notwithstanding any state or local laws or regulations,
if there is reason to believe that notification would cause
certain adverse results. Further, the recipient would not be
liable under any state or local laws or regulations for
disclosing information or for failure to provide notice. The
bill also would protect certain entities that voluntarily
provide specified material to the FTC from liability under any
state or local law or regulation that precludes disclosure of
information or requires notification to the interested third
party.
To the extent that state and local governments have laws
that contradict these provisions, the legislation would preempt
those laws and thereby impose mandates under UMRA. CBO
estimates that the cost of complying with these mandates would
be minimal and would not exceed the threshold established in
UMRA ($64 million in 2006, adjusted for inflation).
Estimated impact on the private sector: S. 1608 would
impose a private-sector mandate, as defined in UMRA, by
limiting the ability of certain third parties to sue. CBO
expects that the direct cost of the mandate would fall well
below the annual threshold established by UMRA for private-
sector mandates ($128 million in 2006, adjusted annually for
inflation).
By exempting from liability entities that voluntarily
provide information about third parties to the Federal Trade
Commission, S. 1608 would limit the ability of those third
parties to sue for the disclosure or for failure to provide
notice of disclosure. Such a limitation would constitute a
private-sector mandate under UMRA. The direct cost of the
mandate would be the forgone net value of settlements and
damage awards. According to the FTC, no such third-party
lawsuits have been filed, and they expect that it is unlikely
there will be any new cases filed under current law.
Consequently, CBO expects that costs to the private sector
would be small relative to UMRA's threshold.
Estimate prepared by: Federal Costs: Melissa Z. Petersen.
Impact on State, Local, and Tribal Governments: Sarah Puro.
Impact on the Private Sector: Paige Piper/Bach.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Regulatory Impact Statement
In compliance with subsection (b)(2) of paragraph 11
of rule XXVI of the Standing Rules of the Senate, the Committee
states that, in its opinion, it is necessary to dispense with
the requirements of paragraph (1) of that subsection in order
to expedite the business of the Senate. deg.
Because S. 1608 does not create any new programs, the
legislation will have no additional regulatory impact, and will
result in no additional reporting requirements. The legislation
will have no further effect on the number or types of
individuals and businesses regulated, the economic impact of
such regulation, the personal privacy of affected individuals,
or the paperwork required from such individuals and businesses.
Section-by-Section Analysis
Section 1. Short title; findings; purpose
This section describes Congress' findings that cross-border
fraud is a growing international problem that affects American
consumers and businesses. The proliferation of Internet and
telecommunications technologies has accentuated the problem of
such fraud. Increasingly, foreign consumers are affected. The
Commission's ability to obtain effective consumer fraud relief
is impeded by its limited authority. Improving the Commission's
ability to share information with its foreign counterparts is
expected to allow for more timely and effective consumer fraud
relief.
Section 2. Foreign law enforcement agency defined
This section would amend section 4 of the FTCA to include the
definition of ``foreign law enforcement agency.''
Section 3. Availability of remedies
This section would amend section 5(a) of the FTCA by adding
to the term ``unfair or deceptive acts or practices'' involving
foreign commerce to include those that cause or are likely to
cause injury within the United States or involve material
conduct within the United States.
This section also would make all remedies available to the
Commission with respect to unfair and deceptive acts involving
foreign commerce that may cause injury within the United
States.
Section 4. Powers of the Commission
This section would amend Section 6(f) of the FTCA by
inserting Subsection (j) that would add investigative
assistance for foreign law enforcement agencies, including the
criteria for international agreements determining such
assistance. This new subsection also would provide that the
FTC, with approval from the Secretary of State, may negotiate
and conclude an international agreement in order to obtain
foreign assistance. The authority granted to the FTC in this
subsection would not apply to financial institutions, such as
banks, savings and loan institutions, or federal credit unions.
When the Commission receives a request for assistance from a
foreign law enforcement agency, the Commission would be
required to ensure that it agrees to such a request only when
the request relates to a provision of foreign law that
prohibits a fraudulent or deceptive commercial practice or
other practice that is ``substantially similar'' to a practice
that is prohibited by a law administered by the Commission.
Examples of foreign laws that do not meet the ``substantially
similar'' requirement include a foreign restriction against
non-misleading and substantiated comparative advertising, or a
restriction on freedom of expression in a foreign law that
would be protected expression under the First Amendment of the
U.S. Constitution.
This section also would prohibit the Commission from
providing investigative assistance to a foreign law enforcement
agency from a foreign state that has supported acts of
international terrorism.
Subsection (k) relates to the referral of evidence for
criminal proceedings, specifying that the FTC would be required
to share domestic and foreign evidence with the Attorney
General that may be relevant to a violation of Federal criminal
law.
Subsection (l) would allow for expenditures for cooperative
arrangements for operating expenses and other costs of
bilateral and multilateral law enforcement groups conducting
activities of interest to the FTC.
This section would authorize $100,000 per fiscal year to the
FTC for operating costs and other costs of bilateral and
multilateral cooperative law enforcement agencies.
Section 5. Representation in foreign litigation
This section would amend section 16 of the FTCA to authorize
the FTC to retain foreign counsel to assist the Department of
Justice's Office of Foreign Litigation in pursuing cases in
foreign jurisdictions.
Section 6. Sharing information with foreign law enforcement agencies
This section would amend section 21(b)(6) of the FTCA to
allow the FTC to share information with other agencies and
expand existing authority to share compelled or confidential
information with foreign law enforcers in consumer protection
cases. Currently, information that is confidential or that has
been compelled cannot be shared with foreign law enforcement
agencies without the consent of the entity submitting the
information. This section exempts the FTC from public
disclosure of material received in the course of an
investigation obtained from either domestic or foreign sources.
The Committee expects that the Commission will use discretion
when determining whether, when, and how to agree to a foreign
law enforcement agency's request for assistance. In particular,
the Committee underscores its belief that requests to
investigate consumer protection-related violations affecting
U.S. residents are the most appropriate types of requests for
providing assistance to foreign law enforcement agencies.
Before granting a request to provide investigative assistance
to a foreign law enforcement agency, the FTC would need to be
satisfied that the requesting entity is a legitimate law
enforcement agency as defined in the Act, and that the request
relates to an appropriate investigation or enforcement
proceeding of that agency. Before the FTC can provide
assistance, the foreign law enforcement agency must make a
written request for assistance and must include a statement
that it is investigating or enforcing against possible
fraudulent or deceptive commercial practices or violations of a
law substantially similar to a consumer protection law enforced
by the Commission. The Committee believes that the Commission
should require that the foreign law enforcement agency provide
more information when the Commission has not worked with the
foreign law enforcement agency before or when the foreign legal
prohibition at issue is complex.
Section 7. Confidentiality; delayed notice of process
This section would create a new section 21A in the FTCA to
authorize the FTC to provide delayed notice to suspected
perpetrators of fraud (currently entitled to such notice under
the Right to Financial Privacy Act (RFPA) (12 U.S. C. 3401 et
seq.)) that the FTC is requesting information about them from
financial institutions.
Under this section, the FTC would be able to apply for an ex
parte application in the event neither notification nor delayed
notification is required under the RFPA. All judicial
proceedings initiated by the FTC under the RFPA may be brought
to the United States District Court and be held in camera. This
section would not apply to antitrust investigations or
proceedings.
Section 8. Protection for voluntary provision of information
This section would create a new section 21B in the FTCA to
authorize the FTC to delay notice to individuals being
investigated by allowing third parties to keep Civil
Investigative Demands (CIDs) confidential notwithstanding
Federal or State law. The FTC often obtains information when
investigating fraud by issuing CIDs to third parties. This
section also protects entities from liability under applicable
Federal and State laws for voluntary disclosures they make to
the FTC concerning consumer fraud, or concerning recovery of
assets for consumer redress.
Section 9. Staff exchanges
This section would create a new section 25A of the FTCA to
authorize the FTC to participate in foreign staff exchange
programs, and to make and accept full or partial reimbursement
in such exchanges.
Section 10. Information sharing with financial regulators
This section amends Section 1112(e) of the RFPA to allow the
FTC to share appropriate information with financial and market
regulators.
Section 11. Authority to accept reimbursements, gifts, and voluntary
and uncompensated services
This section would amend the FTCA by redesignating section 26
as section 28 and by creating a new section 26 and 27 that
would authorize the FTC to accept reimbursement from other
agencies for assistance provided in investigations or
otherwise, and accept gifts, donations and voluntary services
consistent with ethical guidelines, respectively.
Section 12. Preservation of existing authority
This section states that the authority provided in this Act
would add to the authority currently vested in the FTC, and
would not replace any existing authorities.
Section 13. Report
This section would require that, within three years of the
enactment date, the FTC shall transmit a report to Congress
describing its experience with the authority granted by this
Act, along with any recommendations for additional legislation.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new material is printed
in italic, existing law in which no change is proposed is shown
in roman):
FINANCIAL PRIVACY ACT OF 1978
SEC. 1112. USE OF INFORMATION.
[12 U.S.C. 3412]
(a) Transfer of Financial Records to Other Agencies or
Departments; Certification.--Financial records originally
obtained pursuant to this title shall not be transferred to
another agency or department unless the transferring agency or
department certifies in writing that there is reason to believe
that the records are relevant to a legitimate law enforcement
inquiry, or intelligence or counterintelligence activity,
investigation or analysis related to international terrorism
within the jurisdiction of the receiving agency or department.
(b) Mailing of Copy of Certification and Notice to
Customer.--When financial records subject to this title are
transferred pursuant to subsection (a), the transferring agency
or department shall, within fourteen days, send to the customer
a copy of the certification made pursuant to subsection (a) and
the following notice, which shall state the nature of the law
enforcement inquiry with reasonable specificity: ``Copies of,
or information contained in, your financial records lawfully in
possession of ---------- have been furnished to ----------
pursuant to the Right of Financial Privacy Act of 1978 for the
following purpose: ----------. If you believe that this
transfer has not been made to further a legitimate law
enforcement inquiry, you may have legal rights under the
Financial Privacy Act of 1978 or the Privacy Act of 1974.''.
(c) Court-ordered Delays in Mailing.--Notwithstanding
subsection (b), notice to the customer may be delayed if the
transferring agency or department has obtained a court order
delaying notice pursuant to section 1109(a) and (b) and that
order is still in effect, or if the receiving agency or
department obtains a court order authorizing a delay in notice
pursuant to section 1109(a) and (b). Upon the expiration of any
such period of delay, the transferring agency or department
shall serve to the customer the notice specified in subsection
(b) above and the agency or department that obtained the court
order authorizing a delay in notice pursuant to section 1109(a)
and (b) shall serve to the customer the notice specified in
section 1109(b).
(d) Exchanges of Examination Reports by Supervisory Agencies;
Transfer of Financial Records to Defend Customer
Action;Withholding of Information.--Nothing in this title
prohibits any supervisory agency from exchanging examination reports or
other information with another supervisory agency. Nothing in this
title prohibits the transfer of a customer's financial records needed
by counsel for a Government authority to defend an action brought by
the customer. Nothing in this title shall authorize the withholding of
information by any officer or employee of a supervisory agency from a
duly authorized committee or subcommittee of the Congress.
(e) Federal Financial Institutions Examination Council
Supervisory Agencies; Authorization of Exchange of Financial
Records or Other Information.--Notwithstanding section 1101(6)
or any other provision of law, the exchange of financial
records, examination reports or other information with respect
to a financial institution, holding company, or any subsidiary
of a depository institution or holding company, among and
between the five member supervisory agencies of the Federal
Financial Institutions Examination Council, the Securities and
Exchange Commission, the Federal Trade Commission, and the
Commodity Futures Trading Commission is permitted.
(f) Transfer to Attorney General.--
(1) In general.--Nothing in this title shall apply
when financial records obtained by an agency or
department of the United States are disclosed or
transferred to the Attorney General or the Secretary of
the Treasury upon the certification by a supervisory
level official of the transferring agency or department
that--
(A) there is reason to believe that the
records may be relevant to a violation of
Federal criminal law; and
(B) the records were obtained in the exercise
of the agency's or department's supervisory or
regulatory functions.
(2) Limitation on use.--Records so transferred shall
be used only for criminal investigative or prosecutive
purposes, for civil actions under section 951 of the
Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, or for forfeiture under
sections 981 or 982 of title 18, United States Code, by
the Department of Justice and only for criminal
investigative purposes relating to money laundering and
other financial crimes by the Department of the
Treasury and shall, upon completion of the
investigation or prosecution (including any appeal), be
returned only to the transferring agency or department.
No agency or department so transferring such records
shall be deemed to have waived any privilege applicable
to those records under law.
FEDERAL TRADE COMMISSION ACT
SEC. 4. DEFINITIONS.
[15 U.S.C. 44]
The words defined in this section shall have the following
meaning when found in this Act, to wit: ``Commerce'' means
commerce among the several States or with foreign nations, or
in any Territory of the United States or in the District of
Columbia, or between any such Territory and another, or between
any such Territory and any State or foreign nation, or between
the District of Columbia and any State or Territory or foreign
nation. ``Corporation'' shall be deemed to include any company,
trust, so-called Massachusetts trust, or association,
incorporated or unincorporated, which is organized to carry on
business for its own profit or that of its members, and has
shares of capital or capital stock or certificates of interest,
and any company, trust, so-called Massachusetts trust, or
association, incorporated or unincorporated, without shares of
capital or capital stock or certificates of interest, except
partnerships, which is organized to carry on business for its
own profit or that of its members. ``Documentary evidence''
includes all documents, papers, correspondence, books of
account, and financial and corporate records. ``Acts to
regulate commerce'' means the Act entitled ``An Act to regulate
commerce,'' approved February 14, 1887, and all Acts amendatory
thereof and supplementary thereto and the Communications Act of
1934 and all Acts amendatory thereof and supplementary thereto.
``Antitrust Acts'' means the Act entitled ``An Act to protect
trade and commerce against unlawful restraints and
monopolies,'' approved July 2, 1890; also sections 73 to 76
inclusive, of an Act entitled ``An Act to reduce taxation, to
provide revenue for the Government, and for other purposes,''
approved August 27, 1894; also the Act entitled ``An Act to
amend sections 73 and 76, of the Act of August 27, 1894,
entitled 'An Act to reduce taxation, to provide revenue for the
Government, and for other purposes,''' approved February 12,
1913; and also the Act entitled ``An Act to supplement existing
laws against unlawful restraints and monopolies, and for other
purposes,'' approved October 15, 1914. ``Banks'' means the
types of banks and other financial institutions referred to in
section 18(f)(2).
``Foreign law enforcement agency'' means--
(1) any agency or judicial authority of a foreign
government, including a foreign state, a political
subdivision of a foreign state, or a multinational
organization constituted by and comprised of foreign
states, that is vested with law enforcement or
investigative authority in civil, criminal, or
administrative matters; and
(2) any multinational organization, to the extent
that it is acting on behalf of an entity described in
paragraph (1).
SEC. 5. UNFAIR METHODS OF COMPETITION UNLAWFUL; PREVENTION BY
COMMISSION.
[15 U.S.C. 45]
(a) Declaration of Unlawfulness; Power to Prohibit Unfair
Practices; Inapplicability to Foreign Trade.--
(1) Unfair methods of competition in or affecting
commerce, and unfair or deceptive acts or practices in
or affecting commerce, are hereby declared unlawful.
(2) The Commission is hereby empowered and directed
to prevent persons, partnerships, or corporations,
except banks, savings and loan institutions described
in section 18(f)(3), Federal credit unions described in
section 18(f)(4), common carriers subject to the Acts
to regulate commerce, air carriers and foreign air
carriers subject to the Federal Aviation Act of 1958,
and persons, partnerships, or corporations insofar as
they are subject to the Packers and Stockyards Act,
1921, as amended,except as provided in section 406(b)
of said Act, from using unfair methods of competition in or affecting
commerce and unfair or deceptive acts or practices in or affecting
commerce.
(3) This subsection shall not apply to unfair methods
of competition involving commerce with foreign nations
(other than import commerce) unless--
(A) such methods of competition have a
direct, substantial, and reasonably foreseeable
effect--
(i) on commerce which is not commerce
with foreign nations, or on import
commerce with foreign nations; or
(ii) on export commerce with foreign
nations, of a person engaged in such
commerce in the United States; and
(B) such effect gives rise to a claim under
the provisions of this subsection, other than
this paragraph. If this subsection applies to
such methods of competition only because of the
operation of subparagraph (A)(ii), this
subsection shall apply to such conduct only for
injury to export business in the United States.
(4)(A) For purposes of subsection (a), the term
``unfair or deceptive acts or practices'' includes such
acts or practices involving foreign commerce that--
(i) cause or are likely to cause reasonably
foreseeable injury within the United States; or
(ii) involve material conduct occurring
within the United States.
(B) All remedies available to the Commission with
respect to unfair and deceptive acts or practices shall
be available for acts and practices described in this
paragraph, including restitution to domestic or foreign
victims.
(b) Proceeding by Commission; Modifying and Setting Aside
Orders.--Whenever the Commission shall have reason to believe
that any such person, partnership, or corporation has been or
is using any unfair method of competition or unfair or
deceptive act or practice in or affecting commerce, and if it
shall appear to the Commission that a proceeding by it in
respect thereof would be to the interest of the public, it
shall issue and serve upon such person, partnership, or
corporation a complaint stating its charges in that respect and
containing a notice of a hearing upon a day and at a place
therein fixed at least thirty days after the service of said
complaint. The person, partnership, or corporation so
complained of shall have the right to appear at the place and
time so fixed and show cause why an order should not be entered
by the Commission requiring such person, partnership, or
corporation to cease and desist from the violation of the law
so charged in said complaint. Any person, partnership, or
corporation may make application, and upon good cause shown may
be allowed by the Commission to intervene and appear in said
proceeding by counsel or in person. The testimony in any such
proceeding shall be reduced to writing and filed in the office
of the Commission. If upon such hearing the Commission shall be
of the opinion that the method of competition or the act or
practice in question is prohibited by this Act, it shall make a
report in writing in which it shall state its findings as to
the facts and shall issue and cause to be served on such
person, partnership, or corporation an order requiring such
person, partnership, or corporation to cease and desist from
using such method of competition or such act or practice. Until
the expiration of the time allowed for filing a petition for
review, if no such petition has been duly filed within such
time, or, if a petition for review has been filed within such
time then until the record in the proceeding has been filed in
a court of appeals of the United States, as hereinafter
provided, the Commission may at any time, upon such notice and
in such manner as it shall deem proper, modify or set aside, in
whole or in part, any report or any order made or issued by it
under this section. After the expiration of the time allowed
for filing a petition for review, if no such petition has been
duly filed within such time, the Commission may at any time,
after notice and opportunity for hearing, reopen and alter,
modify, or set aside, in whole or in part, any report or order
made or issued by it under this section, whenever in the
opinion of the Commission conditions of fact or of law have so
changed as to require such action or if the public interest
shall so require, except that (1) the said person, partnership,
or corporation may, within sixty days after the service upon
him or it of said report or order entered after such a
reopening, obtain a review thereof in the appropriate court of
appeals of the United States, in the manner provided in
subsection (c) of this section; and (2) in the case of an
order, the Commission shall reopen any such order to consider
whether such order (including any affirmative relief provision
contained in such order) should be altered, modified, or set
aside, in whole or in part, if the person, partnership, or
corporation involved files a request with the Commission which
makes a satisfactory showing that changed conditions of law or
fact require such order to be altered, modified, or set aside,
in whole or in part. The Commission shall determine whether to
alter, modify, or set aside any order of the Commission in
response to a request made by a person, partnership, or
corporation under paragraph (2) not later than 120 days after
the date of the filing of such request.
(c) Review of Order; Rehearing.--Any person, partnership, or
corporation required by an order of the Commission to cease and
desist from using any method of competition or act or practice
may obtain a review of such order in the court of appeals of
the United States, within any circuit where the method of
competition or the act or practice in question was used or
where such person, partnership, or corporation resides or
carries on business, by filing in the court, within sixty days
from the date of the service of such order, a written petition
praying that the order of the Commission be set aside. A copy
of such petition shall be forthwith transmitted by the clerk of
the court to the Commission, and thereupon the Commission shall
file in the court the record in the proceeding, as provided in
section 2112 of title 28, United States Code. Upon such filing
of the petition the court shall have jurisdiction of the
proceeding and of the question determined therein concurrently
with the Commission until the filing of the record and shall
have power to make and enter a decree affirming, modifying, or
setting aside the order of the Commission, and enforcing the
same to the extent that such order is affirmed and to issue
such writs as are ancillary to its
jurisdiction or are necessary in its judgment to prevent injury
to the public or to competitors pendente lite. The findings of
the Commission as to the facts, if supported by evidence, shall
be conclusive. To the extent that the order of the Commission
is affirmed, the court shall thereupon issue its own order
commanding obedience to the terms of such order of the
Commission. If either party shall apply to the court for leave
to adduce additional evidence, and shall show to the
satisfaction of the court that such additional evidence is
material and that there were reasonable grounds for the failure
to adduce such evidence in the proceeding before the
Commission, the court may order such additional evidence to be
taken before the Commission and to be adduced upon the hearing
in such manner and upon such terms and conditions as to the
court may seem proper. The Commission may modify its findings
as to the facts, or make new findings, by reason of the
additional evidence so taken, and it shall file such modified
or new findings, which, if supported by evidence, shall be
conclusive, and its recommendation, if any, for the
modification or setting aside of its original order, with the
return of such additional evidence. The judgment and decree of
the court shall be final, except that the same shall be subject
to review by the Supreme Court upon certiorari, as provided in
section 240 of the Judicial Code.
(d) Jurisdiction of Court.--Upon the filing of the record
with it the jurisdiction of the court of appeals of the United
States to affirm, enforce, modify, or set aside orders of the
Commission shall be exclusive.
(e) Extension from Liability.--No order of the Commission or
judgment of court to enforce the same shall in anywise relieve
or absolve any person, partnership, or corporation from any
liability under the Antitrust Acts.
(f) Service of Complaints, Orders and Other Processes;
return.--Complaints, orders, and other processes of the
Commission under this section may be served by anyone duly
authorized by the Commission, either (a) by delivering a copy
thereof to the person to be served, or to a member of the
partnership to be served, or the president, secretary, or other
executive officer or a director of the corporation to be
served; or (b) by leaving a copy thereof at the residence or
the principal office or place of business of such person,
partnership, or corporation; or (c) by mailing a copy thereof
by registered mail or by certified mail addressed to such
person, partnership, or corporation at his or its residence or
principal office or place of business. The verified return by
the person so serving said complaint, order, or other process
setting forth the manner of said service shall be proof of the
same, and the return post office receipt for said complaint,
order, or other process mailed by registered mail or by
certified mail as aforesaid shall be proof of the service of
the same.
(g) Finality of Order.--An order of the Commission to cease
and desist shall become final--
(1) Upon the expiration of the time allowed for
filing a petition for review, if no such petition has
been duly filed within such time; but the Commission
may thereafter modify or set aside its order to the
extent provided in the last sentence of subsection (b).
(2) Except as to any order provision subject to
paragraph (4), upon the sixtieth day after such order
is served, if a petition for review has been duly
filed; except that any such order may be stayed, in
whole or in part and subject to such conditions as may
be appropriate, by--
(A) the Commission;
(B) an appropriate court of appeals of the
United States, if (i) a petition for review of
such order is pending in such court, and (ii)
an application for such a stay was previously
submitted to the Commission and the Commission,
within the 30-day period beginning on the date
the application was received by the Commission,
either denied the application or did not grant
or deny the application; or
(C) the Supreme Court, if an applicable
petition for certiorari is pending.
(3) For purposes of subsection (m)(1)(B) and of
section 19(a)(2), if a petition for review of the order
of the Commission has been filed--
(A) upon the expiration of the time allowed
for filing a petition for certiorari, if the
order of the Commission has been affirmed or
the petition for review has been dismissed by
the court of appeals and no petition for
certiorari has been duly filed;
(B) upon the denial of a petition for
certiorari, if the order of the Commission has
been affirmed or the petition for review has
been dismissed by the court of appeals; or
(C) upon the expiration of 30 days from the
date of issuance of a mandate of the Supreme
Court directing that the order of the
Commission be affirmed or the petition for
review be dismissed.
(4) In the case of an order provision requiring a
person, partnership, or corporation to divest itself of
stock, other share capital, or assets, if a petition
for review of such order of the Commission has been
filed--
(A) upon the expiration of the time allowed
for filing a petition for certiorari, if the
order of the Commission has been affirmed or
the petition for review has been dismissed by
the court of appeals and no petition for
certiorari has been duly filed;
(B) upon the denial of a petition for
certiorari, if the order of the Commission has
been affirmed or the petition for review has
been dismissed by the court of appeals; or
(C) upon the expiration of 30 days from the
date of issuance of a mandate of the Supreme
Court directing that the order of the
Commission be affirmed or the petition for
review be dismissed.
(h) Modification or Setting Aside of Order by Supreme
Court.--If the Supreme Court directs that the order of the
Commission be modified or set aside, the order of the
Commission rendered in accordance with the mandate of the
Supreme Court shall become final upon the expiration of thirty
days from the time it was rendered, unless within such thirty
days either party has instituted proceedings to have such order
corrected to accord with themandate, in which event the order
of the Commission shall become final when so corrected.
(i) Modification or Setting Aside of Order by Court of
Appeals.--If the order of the Commission is modified or set
aside by the court of appeals, and if (1) the time allowed for
filing a petition for certiorari has expired and no such
petition has been duly filed, or (2) the petition for
certiorari has been denied, or (3) the decision of the court
has been affirmed by the Supreme Court, then the order of the
Commission rendered in accordance with the mandate of the court
of appeals shall become final on the expiration of thirty days
from the time such order of the Commission was rendered, unless
within such thirty days either party has instituted proceedings
to have such order corrected so that it will accord with the
mandate, in which event the order of the Commission shall
become final when so corrected.
(j) Rehearing Upon Order or Remand.--If the Supreme Court
orders a rehearing; or if the case is remanded by the court of
appeals to the Commission for a rehearing, and if (1) the time
allowed for filing a petition for certiorari has expired, and
no such petition has been duly filed, or (2) the petition for
certiorari has been denied, or (3) the decision of the court
has been affirmed by the Supreme Court, then the order of the
Commission rendered upon such rehearing shall become final in
the same manner as though no prior order of the Commission had
been rendered.
(k) ``Mandate'' Defined.--As used in this section the term
``mandate,'' in case a mandate has been recalled prior to the
expiration of thirty days from the date of issuance thereof,
means the final mandate.
(l) Penalty for Violation of Order; Injunctions and Other
Appropriate Equitable Relief.--Any person, partnership, or
corporation who violates an order of the Commission after it
has become final, and while such order is in effect, shall
forfeit and pay to the United States a civil penalty of not
more than $10,000 for each violation, which shall accrue to the
United States and may be recovered in a civil action brought by
the Attorney General of the United States. Each separate
violation of such an order shall be a separate offense, except
that in the case of a violation through continuing failure to
obey or neglect to obey a final order of the Commission, each
day of continuance of such failure or neglect shall be deemed a
separate offense. In such actions, the United States district
courts are empowered to grant mandatory injunctions and such
other and further equitable relief as they deem appropriate in
the enforcement of such final orders of the Commission.
(m) Civil Actions for Recovery of Penalties for Knowing
Violations of Rules and Cease and Desist Orders Respecting
Unfair or Deceptive Acts or Practices; Jurisdiction; Maximum
Amount of Penalties; Continuing Violations; De Novo
Determinations; Compromise or Settlement Procedure.--
(1)(A) The Commission may commence a civil action to
recover a civil penalty in a district court of the
United States against any person, partnership, or
corporation which violates any rule under this Act
respecting unfair or deceptive acts or practices (other
than an interpretive rule or a rule violation of which
the Commission has provided is not an unfair or
deceptive act or practice in violation of subsection
(a)(1)) with actual knowledge or knowledge fairly
implied on the basis of objective circumstances that
such act is unfair or deceptive and is prohibited by
such rule. In such action, such person, partnership, or
corporation shall be liable for a civil penalty of not
more than $10,000 for each violation.
(B) If the Commission determines in a proceeding
under subsection (b) that any act or practice is unfair
or deceptive, and issues a final cease and desist
order, other than a consent order, with respect to such
act or practice, then the Commission may commence a
civil action to obtain a civil penalty in a district
court of the United States against any person,
partnership, or corporation which engages in such act
or practice--
(1) after such cease and desist order becomes
final (whether or not such person, partnership,
or corporation was subject to such cease and
desist order), and
(2) with actual knowledge that such act or
practice is unfair or deceptive and is unlawful
under subsection (a)(1) of this section. In
such action, such person, partnership, or
corporation shall be liable for a civil penalty
of not more than $10,000 for each violation.
(C) In the case of a violation through continuing
failure to comply with a rule or with section 5(a)(1),
each day of continuance of such failure shall be
treated as a separate violation, for purposes of
subparagraphs (A) and (B). In determining the amount of
such a civil penalty, the court shall take into account
the degree of culpability, any history of prior such
conduct, ability to pay, effect on ability to continue
to do business, and such other matters as justice may
require.
(2) If the cease and desist order establishing that
the act or practice is unfair or deceptive was not
issued against the defendant in a civil penalty action
under paragraph (1)(B) the issues of fact in such
action against such defendant shall be tried de novo.
Upon request of any party to such an action against
such defendant, the court shall also review the
determination of law made by the Commission in the
proceeding under subsection (b) that the act or
practice which was the subject of such proceeding
constituted an unfair or deceptive act or practice in
violation of subsection (a).
(3) The Commission may compromise or settle any
action for a civil penalty if such compromise or
settlement is accompanied by a public statement of its
reasons and is approved by the court.
(n) Definition of Unfair Acts or Practices.--The Commission
shall have no authority under this section or section 18 to
declare unlawful an act or practice on the grounds that such
act or practice is unfair unless the act or practice causes or
is likely to cause substantial injury to consumers which is not
reasonably avoidable by consumers themselves and not outweighed
by countervailing benefits to consumers or to competition. In
determining whether an act or practice is unfair, the
Commission may consider establishedpublic policies as evidence
to be considered with all other evidence. Such public policy
considerations may not serve as a primary basis for such determination.
SEC. 6. ADDITIONAL POWERS OF COMMISSION.
[15 U.S.C 46]
The commission shall also have power--
(a) Investigation of Persons, Partnerships, or
Corporations.--To gather and compile information concerning,
and to investigate from time to time the organization,
business, conduct, practices, and management of any person,
partnership, or corporation engaged in or whose business
affects commerce, excepting banks, savings and loan
institutions described in section 18(f)(3), Federal credit
unions described in section 18(f)(4), and common carriers
subject to the Act to regulate commerce, and its relation to
other persons, partnerships, and corporations.
(b) Reports of Persons, Partnerships, and Corporations.--To
require, by general or special orders, persons, partnerships,
and corporations engaged in or whose business affects commerce,
excepting banks, savings and loan institutions described in
section 18(f)(3), Federal credit unions described in section
18(f)(4), and common carriers subject to the Act to regulate
commerce, or any class of them, or any of them, respectively,
to file with the commission in such form as the commission may
prescribe annual or special, or both annual and special,
reports, or answers in writing to specific questions,
furnishing to the commission such information as it may require
as to the organization, business, conduct, practices,
management, and relation to other corporations, partnerships,
and individuals of the respective persons, partnerships, and
corporations filing such reports or answers in writing. Such
reports and answers shall be made under oath, or otherwise, as
the commission may prescribe, and shall be filed with the
commission within such reasonable period as the commission may
prescribe, unless additional time be granted in any case by the
commission.
(c) Investigation of Compliance with Antitrust Decrees.--
Whenever a final decree has been entered against any defendant
corporation in any suit brought by the United States to prevent
and restrain any violation of the antitrust Acts, to make
investigation, upon its own initiative, of the manner in which
the decree has been or is being carried out, and upon the
application of the Attorney General it shall be its duty to
make such investigation. It shall transmit to the Attorney
General a report embodying its findings and recommendations as
a result of any such investigation, and the report shall be
made public in the discretion of the commission.
(d) Investigations of Violations of Antitrust Statutes.--Upon
the direction of the President or either House of Congress to
investigate and report the facts relating to any alleged
violations of the antitrust Acts by any corporation.
(e) Readjustment of Business of Corporations Violating
Antitrust Statutes.--Upon the application of the Attorney
General to investigate and make recommendations for the
readjustment of the business of any corporation alleged to be
violating the antitrust Acts in order that the corporation may
thereafter maintain its organization, management, and conduct
of business in accordance with law.
(f) Publication of Information; Reports.--To make public from
time to time such portions of the information obtained by it
hereunder as are in the public interest; and to make annual and
special reports to the Congress and to submit therewith
recommendations for additional legislation; and to provide for
the publication of its reports and decisions in such form and
manner as may be best adapted for public information and use:
Provided, That the Commission shall not have any authority to
make public any trade secret or any commercial or financial
information which is obtained from any person and which is
privileged or confidential, except that the Commission may
disclose such information (1) to officers and employees of
appropriate Federal law enforcement agencies or to any officer
or employee of any State law enforcement agency upon the prior
certification of an officer of any such Federal or State law
enforcement agency that such information will be maintained in
confidence and will be used only for official law enforcement
[purposes.] purposes, and (2) to any officer or employee of any
foreign law enforcement agency under the same circumstances
that making material available to foreign law enforcement
agencies is permitted under section 21(b).
(g) Classification of Corporations; Regulations.--From time
to time to classify corporations and (except as provided in
section 18(a)(2) of this Act) to make rules and regulations for
the purpose of carrying out the provisions of this Act.
(h) Investigations of Foreign Trade Conditions; Reports.--To
investigate, from time to time, trade conditions in and with
foreign countries where associations, combinations, or
practices of manufacturers, merchants, or traders, or other
conditions, may affect the foreign trade of the United States,
and to report to Congress thereon, with such recommendations as
it deems advisable.
(i) With respect to the International Antitrust Enforcement
Assistance Act of 1994, to conduct investigations of possible
violations of foreign antitrust laws (as defined in section 12
of such Act).
(j) Investigative Assistance for Foreign Law Enforcement
Agencies.--
(1) In general.--Upon a written request from a
foreign law enforcement agency to provide assistance in
accordance with this subsection, if the requesting
agency states that it is investigating, or engaging in
enforcement proceedings against, possible violations of
laws prohibiting fraudulent or deceptive commercial
practices, or other practices substantially similar to
practices prohibited by any provision of the laws
administered by the Commission, other than Federal
antitrust laws (as defined in section 12(5) of the
International Antitrust Enforcement Assistance Act of
1994 (15 U.S.C. 6211(5))), to provide the assistance
described in paragraph (2) without requiring that the
conduct identified in the request constitute a
violation of the laws of the United States.
(2) Type of assistance.--In providing assistance to a
foreign law enforcement agency under this subsection,
the Commission may--
(A) conduct such investigation as the
Commission deems necessary to collect
information and evidence pertinent tothe
request for assistance, using all investigative powers authorized by
this Act; and
(B) when the request is from an agency acting
to investigate or pursue the enforcement of
civil laws, or when the Attorney General refers
a request to the Commission from an agency
acting to investigate or pursue the enforcement
of criminal laws, seek and accept appointment
by a United States district court of Commission
attorneys to provide assistance to foreign and
international tribunals and to litigants before
such tribunals on behalf of a foreign law
enforcement agency pursuant to section 1782 of
title 28, United States Code.
(3) Criteria for determination.--In deciding whether
to provide such assistance, the Commission shall
consider all relevant factors, including--
(A) whether the requesting agency has agreed
to provide or will provide reciprocal
assistance to the Commission;
(B) whether compliance with the request would
prejudice the public interest of the United
States; and
(C) whether the requesting agency's
investigation or enforcement proceeding
concerns acts or practices that cause or are
likely to cause injury to a significant number
of persons.
(4) International agreements.--If a foreign law
enforcement agency has set forth a legal basis for
requiring execution of an international agreement as a
condition for reciprocal assistance, or as a condition
for provision of materials or information to the
Commission, the Commission, with prior approval and
ongoing oversight of the Secretary of State, and with
final approval of the agreement by the Secretary of
State, may negotiate and conclude an international
agreement, in the name of either the United States or
the Commission, for the purpose of obtaining such
assistance, materials, or information. The Commission
may undertake in such an international agreement to--
(A) provide assistance using the powers set
forth in this subsection;
(B) disclose materials and information in
accordance with subsection (f) and section
21(b); and
(C) engage in further cooperation, and
protect materials and information received from
disclosure, as authorized by this Act.
(5) Additional authority.--The authority provided by
this subsection is in addition to, and not in lieu of,
any other authority vested in the Commission or any
other officer of the United States.
(6) Limitation.--The authority granted by this
subsection shall not authorize the Commission to take
any action or exercise any power with respect to a
bank, a savings and loan institution described in
section 18(f)(3) (15 U.S.C. 57a(f)(3)), a Federal
credit union described in section 18(f)(4) (15 U.S.C.
57a(f)(4)), or a common carrier subject to the Act to
regulate commerce, except in accordance with the
undesignated proviso following the last designated
subsection of section 6 (15 U.S.C. 46).
(7) Assistance to certain countries.--The Commission
may not provide investigative assistance under this
subsection to a foreign law enforcement agency from a
foreign state that the Secretary of State has
determined, in accordance with section 6(j) of the
Export Administration Act of 1979 (50 U.S.C. App.
2405(j)), has repeatedly provided support for acts of
international terrorism, unless and until such
determination is rescinded pursuant to section 6(j)(4)
of that Act (50 U.S.C. App. 2405(j)(4)).
(k) Referral of Evidence for Criminal Proceedings.--
(1) In general.--Whenever the Commission obtains
evidence that any person, partnership, or corporation,
either domestic or foreign, has engaged in conduct that
may constitute a violation of Federal criminal law, to
transmit such evidence to the Attorney General, who may
institute criminal proceedings under appropriate
statutes. Nothing in this paragraph affects any other
authority of the Commission to disclose information.
(2) International information.--The Commission shall
endeavor to ensure, with respect to memoranda of
understanding and international agreements it may
conclude, that material it has obtained from foreign
law enforcement agencies acting to investigate or
pursue the enforcement of foreign criminal laws may be
used for the purpose of investigation, prosecution, or
prevention of violations of United States criminal
laws.
(l) Expenditures for Cooperative Arrangements.--To expend
appropriated funds for--
(1) operating expenses and other costs of bilateral
and multilateral cooperative law enforcement groups
conducting activities of interest to the Commission and
in which the Commission participates; and
(2) expenses for consultations and meetings hosted by
the Commission with foreign government agency
officials, members of their delegations, appropriate
representatives and staff to exchange views concerning
developments relating to the Commission's mission,
development and implementation of cooperation
agreements, and provision of technical assistance for
the development of foreign consumer protection or
competition regimes, such expenses to include necessary
administrative and logistic expenses and the expenses
of Commission staff and foreign invitees in attendance
at such consultations and meetings including--
(A) such incidental expenses as meals taken
in the course of such attendance;
(B) any travel and transportation to or from
such meetings; and
(C) any other related lodging or subsistence.
Provided, That the exception of ``banks, savings and loan
institutions described in section 18(f)(3), Federal credit
unions described in section 18(f)(4), and common carriers
subject to the Act to regulate commerce'' from the Commission's
powers defined in [clauses (a) and (b)] subsections (a), (b),
and (j) of this section, shall not be construed to limit the
Commission's authority to gather and compile information, to
investigate, or to require reports or answers from, any person,
partnership, or corporation to the extent thatsuch action is
necessary to the investigation of any person, partnership, or
corporation, group of persons, partnerships, or corporations, or
industry which is not engaged or is engaged only incidentally in
banking, in business as a savings and loan institution, in business as
a Federal credit union, or in business as a common carrier subject to
the Act to regulate commerce.
The Commission shall establish a plan designed to
substantially reduce burdens imposed upon small businesses as a
result of requirements established by the Commission under
clause (b) relating to the filing of quarterly financial
reports. Such plan shall (1) be established after consultation
with small businesses and persons who use the information
contained in such quarterly financial reports; (2) provide for
a reduction of the number of small businesses required to file
such quarterly financial reports; and (3) make revisions in the
forms used for such quarterly financial reports for the purpose
of reducing the complexity of such forms. The Commission, not
later than December 31, 1980, shall submit such plan to the
Committee on Commerce, Science, and Transportation of the
Senate and to the Committee on Energy and Commerce of the House
of Representatives. Such plan shall take effect not later than
October 31, 1981.
No officer or employee of the Commission or any Commissioner
may publish or disclose information to the public, or to any
Federal agency, whereby any line-of-business data furnished by
a particular establishment or individual can be identified. No
one other than designated sworn officers and employees of the
Commission may examine the line-of-business reports from
individual firms, and information provided in the line-of-
business program administered by the Commission shall be used
only for statistical purposes. Information for carrying out
specific law enforcement responsibilities of the Commission
shall be obtained under practices and procedures in effect on
the date of the enactment of the Federal Trade Commission
Improvements Act of 1980, or as changed by law.
Nothing in this section (other than the provisions of clause
(c) and clause (d)) shall apply to the business of insurance,
except that the Commission shall have authority to conduct
studies and prepare reports relating to the business of
insurance. The Commission may exercise such authority only upon
receiving a request which is agreed to by a majority of the
members of the Committee on Commerce, Science, and
Transportation of the Senate or the Committee on Energy and
Commerce of the House of Representatives. The authority to
conduct any such study shall expire at the end of the Congress
during which the request for such study was made. Section 16 of
the Federal Trade Commission Act
* * * * * * *
SEC. 16. COMMENCEMENT, DEFENSE, INTERVENTION AND SUPERVISION OF
LITIGATION AND APPEAL BY COMMISSION OR ATTORNEY
GENERAL.
[15 U.S.C. 56]
(a) Procedure for Exercise of Authority to Litigate or
Appeal.--
(1) Except as otherwise provided in paragraph (2) or
(3), if--
(A) before commencing, defending, or
intervening in, any civil action involving this
Act (including an action to collect a civil
penalty) which the Commission, or the Attorney
General on behalf of the Commission, is
authorized to commence, defend, or intervene
in, the Commission gives written notification
and undertakes to consult with the Attorney
General with respect to such action; and
(B) the Attorney General fails within 45 days
after receipt of such notification to commence,
defend, or intervene in, such action; the
Commission may commence, defend, or intervene
in, and supervise the litigation of, such
action and any appeal of such action in its own
name by any of its attorneys designated by it
for such purpose.
(2) Except as otherwise provided in paragraph (3), in
any civil action--
(A) under section 13 of this Act (relating to
injunctive relief);
(B) under section 19 of this Act (relating to
consumer redress);
(C) to obtain judicial review of a rule
prescribed by the Commission, or a cease and
desist order issued under section 5 of this
Act; [or]
(D) under the second paragraph of section 9
of this Act (relating to enforcement of a
subpena) and under the fourth paragraph of such
section (relating to a compliance with section
6 of this Act); or
(E) under section 21A of this Act;
the Commission shall have exclusive authority to
commence or defend, and supervise the litigation of,
such action and any appeal of such action in its own
name by any of its attorneys designated by it for such
purpose, unless the Commission authorizes the Attorney
General to do so. The Commission shall inform the
Attorney General of the exercise of such authority and
such exercise shall not preclude the Attorney General
from intervening on behalf of the United States in such
action and any appeal of such action as may be
otherwise provided by law.
(3)(A) If the Commission makes a written request to
the Attorney General, within the 10-day period which
begins on the date of the entry of the judgment in any
civil action in which the Commission represented itself
pursuant to paragraph (1) or (2), to represent itself
through any of its attorneys designated by it for such
purpose before the Supreme Court in such action, it may
do so, if--
(i) the Attorney General concurs with such
request; or
(ii) the Attorney General, within the 60-day
period which begins on the date of the entry of
such judgment--
(a) refuses to appeal or file a
petition for writ of certiorari with
respect to such civil action, in which
case he shall give written notification
to the Commission of the reasons for
such refusal within such 60-day period;
or
(b) the Attorney General fails to
take any action with respect to the
Commission's request.
(B) In any case where the Attorney General represents
the Commission before the Supreme Court in any civil
action in which the Commission represented itself
pursuant to paragraph (1) or (2), the Attorney General
may not agree to any settlement, compromise, or
dismissal of such action, or confess error in the
Supreme Court with respect to such action, unless the
Commission concurs.
(C) For purposes of this paragraph (with respect to
representation before the Supreme Court), the term
``Attorney General'' includes the Solicitor General.
(4) If, prior to the expiration of the 45-day period
specified in paragraph (1) of this section or a 60-day
period specified in paragraph (3), any right of the
Commission to commence, defend, or intervene in, any
such action or appeal may be extinguished due to any
procedural requirement of any court with respect to the
time in which any pleadings, notice of appeal, or other
acts pertaining to such action or appeal may be taken,
the Attorney General shall have one-half of the time
required to comply with any such procedural requirement
of the court (including any extension of such time
granted by the court) for the purpose of commencing,
defending, or intervening in the civil action pursuant
to paragraph (1) or for the purpose of refusing to
appeal or file a petition for writ of certiorari and
the written notification or failing to take any action
pursuant to paragraph 3(A)(ii).
(5) The provisions of this subsection shall apply
notwithstanding chapter 31 of title 28, United States
Code, or any other provision of law.
(b) Certification by Commission to Attorney General for
Criminal Proceedings.--Whenever the Commission has reason to
believe that any person, partnership, or corporation is liable
for a criminal penalty under this Act, the Commission shall
certify the facts to the Attorney General, whose duty it shall
be to cause appropriate criminal proceedings to be brought.
(c) Foreign Litigation.--
(1) Commission attorneys.--With the concurrence of
the Attorney General, the Commission may designate
Commission attorneys to assist the Attorney General in
connection with litigation in foreign courts on
particular matters in which the Commission has an
interest.
(2) Reimbursement for foreign counsel.--The
Commission is authorized to expend appropriated funds,
upon agreement with the Attorney General, to reimburse
the Attorney General for the retention of foreign
counsel for litigation in foreign courts and for
expenses related to litigation in foreign courts in
which the Commission has an interest.
(3) Limitation on use of funds.--Nothing in this
subsection authorizes the payment of claims or
judgments from any source other than the permanent and
indefinite appropriation authorized by section 1304 of
title 31, United States Code.
(4) Other authority.--The authority provided by this
subsection is in addition to any other authority of the
Commission or the Attorney General.''.
* * * * * * *
SEC. 21. CONFIDENTIALITY.
[15 U.S.C. 57b-2]
(a) Definitions.--For purposes of this section:
(1) The term ``material'' means documentary material,
tangible things, written reports or answers to
questions, and transcripts of oral testimony.
(2) The term ``Federal agency'' has the meaning given
it in section 552(e) of title 5, United States Code.
(b) Procedures Respecting Documents, Tangible Things, or
Transcripts of Oral Testimony Received Pursuant to Compulsory
Process in Investigation.--
(1) With respect to any document, tangible thing, or
transcript of oral testimony received by the Commission
pursuant to compulsory process in an investigation, a
purpose of which is to determine whether any person may
have violated any provision of the laws administered by
the Commission, the procedures established in paragraph
(2) through paragraph (7) shall apply.
(2)(A) The Commission shall designate a duly
authorized agent to serve as custodian of documentary
material, tangible things, or written reports or
answers to questions, and transcripts of oral
testimony, and such additional duly authorized agents
as the Commission shall determine from time to time to
be necessary to serve as deputies to the custodian.
(B) Any person upon whom any demand for the
production of documentary material has been duly served
shall make such material available for inspection and
copying or reproduction to the custodian designated in
such demand at the principal place of business of such
person (or at such other place as such custodian and
such person thereafter may agree and prescribe in
writing or as the court may direct pursuant to section
20(h)) on the return date specified in such demand (or
on such later date as such custodian may prescribe in
writing). Such person may upon written agreement
between such person and the custodian substitute copies
for originals of all or any part of such material.
(3)(A) The custodian to whom any documentary
material, tangible things, written reports or answers
to questions, and transcripts of oral testimony are
delivered shall take physical possession of such
material, reports or answers, and transcripts, and
shall be responsible for the use made of such material,
reports or answers, and transcripts, and for the return
of material, pursuant to the requirements of this
section.
(B) The custodian may prepare such copies of the
documentary material, written reports or answers to
questions, and transcripts of oral testimony, and may
make tangible things available, as may be required for
official use by any duly authorized officer or employee
of the Commissionunder regulations which shall be
promulgated by the Commission. Notwithstanding subparagraph (C), such
material, things, and transcripts may be used by any such officer or
employee in connection with the taking of oral testimony under this
section.
(C) Except as otherwise provided in this section,
while in the possession of the custodian, no
documentary material, tangible things, reports or
answers to questions, and transcripts of oral testimony
shall be available for examination by any individual
other than a duly authorized officer or employee of the
Commission without the consent of the person who
produced the material, things, or transcripts. Nothing
in this section is intended to prevent disclosure to
either House of the Congress or to any committee or
subcommittee of the Congress, except that the
Commission immediately shall notify the owner or
provider of any such information of a request for
information designated as confidential by the owner or
provider.
(D) While in the possession of the custodian and
under such reasonable terms and conditions as the
Commission shall prescribe--
(i) documentary material, tangible things, or
written reports shall be available for
examination by the person who produced the
material, or by any duly authorized
representative of such person; and
(ii) answers to questions in writing and
transcripts of oral testimony shall be
available for examination by the person who
produced the testimony or by his attorney.
(4) Whenever the Commission has instituted a
proceeding against a person, partnership, or
corporation, the custodian may deliver to any officer
or employee of the Commission documentary material,
tangible things, written reports or answers to
questions, and transcripts of oral testimony for
official use in connection with such proceeding. Upon
the completion of the proceeding, the officer or
employee shall return to the custodian any such
material so delivered which has not been received into
the record of the proceeding.
(5) If any documentary material, tangible things,
written reports or answers to questions, and
transcripts of oral testimony have been produced in the
course of any investigation by any person pursuant to
compulsory process and--
(A) any proceeding arising out of the
investigation has been completed; or
(B) no proceeding in which the material may
be used has been commenced within a reasonable
time after completion of the examination and
analysis of all such material and other
information assembled in the course of the
investigation; then the custodian shall, upon
written request of the person who produced the
material, return to the person any such
material which has not been received into the
record of any such proceeding (other than
copies of such material made by the custodian
pursuant to paragraph (3)(B)).
(6) The custodian of any documentary material,
written reports or answers to questions, and
transcripts of oral testimony may deliver to any
officers or employees of appropriate Federal law
enforcement agencies, in response to a written request,
copies of such material for use in connection with an
investigation or proceeding under the jurisdiction of
any such agency. The custodian of any tangible things
may make such things available for inspection to such
persons on the same basis. Such materials shall not be
made available to any such agency until the custodian
receives certification of any officer of such agency
that such information will be maintained in confidence
and will be used only for official law enforcement
purposes. Such documentary material, results of
inspections of tangible things, written reports or
answers to questions, and transcripts of oral testimony
may be used by any officer or employee of such agency
only in such manner and subject to such conditions as
apply to the Commission under this section. The
custodian may make such materials available to any
State law enforcement agency upon the prior
certification of any officer of such agency that such
information will be maintained in confidence and will
be used only for official law enforcement purposes. The
custodian may make such material available to any
foreign law enforcement agency upon the prior
certification of an appropriate official of any such
foreign law enforcement agency, either by a prior
agreement or memorandum of understanding with the
Commission or by other written certification, that such
material will be maintained in confidence and will be
used only for official law enforcement purposes, if--
(A) the foreign law enforcement agency has
set forth a bona fide legal basis for its
authority to maintain the material in
confidence;
(B) the materials are to be used for purposes
of investigating, or engaging in enforcement
proceedings related to, possible violations
of--
(i) foreign laws prohibiting
fraudulent or deceptive commercial
practices, or other practices
substantially similar to practices
prohibited by any law administered by
the Commission;
(ii) a law administered by the
Commission, if disclosure of the
material would further a Commission
investigation or enforcement
proceeding; or
(iii) with the approval of the
Attorney General, other foreign
criminal laws, if such foreign criminal
laws are offenses defined in or covered
by a criminal mutual legal assistance
treaty in force between the government
of the United States and the foreign
law enforcement agency's government;
(C) the appropriate Federal banking agency
(as defined in section 3(q) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(q)) or,
in the case of a Federal credit union, the
National Credit Union Administration, has given
its prior approval if the materials to be
provided under subparagraph (B) are requested
by the foreign law enforcement agency for the
purpose of investigating, or engaging in
enforcement proceedings based on, possible
violations of law by a bank, a savings and loan
institution described in section 18(f)(3) of
the Federal Trade Commission Act (15 U.S.C.
57a(f)(3)), or a Federal credit union described
in section 18(f)(4) of the Federal Trade
Commission Act (15 U.S.C. 57a(f)(4)); and
(D) the foreign law enforcement agency is not
from a foreign state that the Secretary of
State has determined, in accordance with
section 6(j) of the Export Administration Act
of 1979 (50 U.S.C. App. 2405(j)), has
repeatedly provided support for acts of
international terrorism, unless and until such
determination is rescinded pursuant to section
6(j)(4) of that Act (50 U.S.C. App.
2405(j)(4)).
Nothing in the preceding sentence authorizes the disclosure of
material obtained in connection with the administration of the
Federal antitrust laws or foreign antitrust laws (as defined in
paragraphs (5) and (7), respectively, of section 12 of the
International Antitrust Enforcement Assistance Act of 1994 (15
U.S.C. 6211)) to any officer or employee of a foreign law
enforcement agency.
(7) In the event of the death, disability, or
separation from service in the Commission of the
custodian of any documentary material, tangible things,
written reports or answers to questions, and
transcripts of oral testimony produced under any demand
issued under this Act, or the official relief of the
custodian from responsibility for the custody and
control of such material, the Commission promptly
shall--
(A) designate under paragraph (2)(A) another
duly authorized agent to serve as custodian of
such material; and
(B) transmit in writing to the person who
produced the material or testimony notice as to
the identity and address of the successor so
designated. Any successor designated under
paragraph (2)(A) as a result of the
requirements of this paragraph shall have (with
regard to the material involved) all duties and
responsibilities imposed by this section upon
his predecessor in office with regard to such
material, except that he shall not be held
responsible for any default or dereliction
which occurred before his designation.
(c) Information Considered Confidential.--
(1) All information reported to or otherwise obtained
by the Commission which is not subject to the
requirements of subsection (b) shall be considered
confidential when so marked by the person supplying the
information and shall not be disclosed, except in
accordance with the procedures established in paragraph
(2) and paragraph (3).
(2) If the Commission determines that a document
marked confidential by the person supplying it may be
disclosed because it is not a trade secret or
commercial or financial information which is obtained
from any person and which is privileged or
confidential, within the meaning of section 6(f), then
the Commission shall notify such person in writing that
the Commission intends to disclose the document at a
date not less than 10 days after the date of receipt of
notification.
(3) Any person receiving such notification may, if he
believes disclosure of the document would cause
disclosure of a trade secret, or commercial or
financial information which is obtained from any person
and which is privileged or confidential, within the
meaning of section 6(f), before the date set for
release of the document, bring an action in the
district court of the United States for the district
within which the documents are located or in the United
States District Court for the District of Columbia to
restrain disclosure of the document. Any person
receiving such notification may file with the
appropriate district court or court of appeals of the
United States, as appropriate, an application for a
stay of disclosure. The documents shall not be
disclosed until the court has ruled on the application
for a stay.
(d) Particular Disclosures Allowed.--
(1) The provisions of subsection (c) shall not be
construed to prohibit--
(A) the disclosure of information to either
House of the Congress or to any committee or
subcommittee of the Congress, except that the
Commission immediately shall notify the owner
or provider of any such information of a
request for information designated as
confidential by the owner or provider;
(B) the disclosure of the results of any
investigation or study carried out or prepared
by the Commission, except that no information
shall be identified nor shall information be
disclosed in such a manner as to disclose a
trade secret of any person supplying the trade
secret, or to disclose any commercial or
financial information which is obtained from
any person and which is privileged or
confidential;
(C) the disclosure of relevant and material
information in Commission adjudicative
proceedings or in judicial proceedings to which
the Commission is a party; or
(D) the disclosure to a Federal agency of
disaggregated information obtained in
accordance with section 3512 of title 44,
United States Code, except that the recipient
agency shall use such disaggregated information
for economic, statistical, or policymaking
purposes only, and shall not disclose such
information in an individually identifiable
form.
(2) Any disclosure of relevant and material
information in Commission adjudicative proceedings or
in judicial proceedings to which the Commission is a
party shall be governed by the rules of the Commission
for adjudicative proceedings or by court rules or
orders, except that the rules of the Commission shall
not be amended in a manner inconsistent with the
purposes of this section.
(e) Effect on Other Statutory Provisions Limiting
Disclosure.--Nothing in this section shall supersede any
statutory provision which expressly prohibits or limits
particular disclosures by the Commission, or which authorizes
disclosures to any other Federal agency.
[(f) Exemption from Disclosure.--Any material which is
received by the Commission in any investigation, a purpose of
which is to determine whether any person may have violated any
provisionof the laws administered by the Commission, and which
is provided pursuant to any compulsory process under this Act or which
is provided voluntarily in place of such compulsory process shall be
exempt from disclosure under section 552 of title 5, United States
Code.]
(f) Exemption from Public Disclosure.--
(1) In general.--Any material which is received by
the Commission in any investigation, a purpose of which
is to determine whether any person may have violated
any provision of the laws administered by the
Commission, and which is provided pursuant to any
compulsory process under this Act or which is provided
voluntarily in place of such compulsory process shall
not be required to be disclosed under section 552 of
title 5, United States Code, or any other provision of
law, except as provided in paragraph (2)(B) of this
section.
(2) Material obtained from a foreign source.--
(A) In general.--Except as provided in
subparagraph (B) of this paragraph, the
Commission shall not be required to disclose
under section 552 of title 5, United States
Code, or any other provision of law--
(i) any material obtained from a
foreign law enforcement agency or other
foreign government agency, if the
foreign law enforcement agency or other
foreign government agency has requested
confidential treatment, or has
precluded such disclosure under other
use limitations, as a condition of
providing the material;
(ii) any material reflecting a
consumer complaint obtained from any
other foreign source, if that foreign
source supplying the material has
requested confidential treatment as a
condition of providing the material; or
(iii) any material reflecting a
consumer complaint submitted to a
Commission reporting mechanism
sponsored in part by foreign law
enforcement agencies or other foreign
government agencies.
(B) Savings provision.--Nothing in this
subsection shall authorize the Commission to
withhold information from the Congress or
prevent the Commission from complying with an
order of a court of the United States in an
action commenced by the United States or the
Commission.
SEC. 21A. CONFIDENTIALITY AND DELAYED NOTICE OF COMPULSORY PROCESS FOR
CERTAIN THIRD PARTIES.
(a) Application with Other Laws.--The Right to Financial
Privacy Act (12 U.S.C. 3401 et seq.) and chapter 121 of title
18, United States Code, shall apply with respect to the
Commission, except as otherwise provided in this section.
(b) Procedures for Delay of Notification or Prohibition of
Disclosure.--The procedures for delay of notification or
prohibition of disclosure under the Right to Financial Privacy
Act (12 U.S.C. 3401 et seq.) and chapter 121 of title 18,
United States Code, including procedures for extensions of such
delays or prohibitions, shall be available to the Commission,
provided that, notwithstanding any provision therein--
(1) a court may issue an order delaying notification
or prohibiting disclosure (including extending such an
order) in accordance with the procedures of section
1109 of the Right to Financial Privacy Act (12 U.S.C.
3409) (if notification would otherwise be required
under that Act), or section 2705 of title 18, United
States Code, (if notification would otherwise be
required under chapter 121 of that title), if the
presiding judge or magistrate judge finds that there is
reason to believe that such notification or disclosure
may cause an adverse result as defined in subsection
(g) of this section; and
(2) if notification would otherwise be required under
chapter 121 of title 18, United States Code, the
Commission may delay notification (including extending
such a delay) upon the execution of a written
certification in accordance with the procedures of
section 2705 of that title if the Commission finds that
there is reason to believe that notification may cause
an adverse result as defined in subsection (g) of this
section.
(c) Ex Parte Application by Commission.--
(1) In general.--If neither notification nor delayed
notification by the Commission is required under the
Right to Financial Privacy Act (12 U.S.C. 3401 et seq.)
or chapter 121 of title 18, United States Code, the
Commission may apply ex parte to a presiding judge or
magistrate judge for an order prohibiting the recipient
of compulsory process issued by the Commission from
disclosing to any other person the existence of the
process, notwithstanding any law or regulation of the
United States, or under the constitution, or any law or
regulation, of any State, political subdivision of a
State, territory of the United States, or the District
of Columbia. The presiding judge or magistrate judge
may enter such an order granting the requested
prohibition of disclosure for a period not to exceed 60
days if there is reason to believe that disclosure may
cause an adverse result as defined in subsection (g).
The presiding judge or magistrate judge may grant
extensions of this order of up to 30 days each in
accordance with this subsection, except that in no
event shall the prohibition continue in force for more
than a total of 9 months.
(2) Application.--This subsection shall apply only in
connection with compulsory process issued by the
Commission where the recipient of such process is not a
subject of the investigation or proceeding at the time
such process is issued.
(3) Limitation.--No order issued under this
subsection shall prohibit any recipient from disclosing
to a Federal agency that the recipient has received
compulsory process from the Commission.
(d) No Liability for Failure to Notify.--If neither
notification nor delayed notification by the Commission is
required under the Right to Financial Privacy Act (12 U.S.C.
3401 et seq.) or chapter 121 of title 18, United States Code,
the recipient of compulsory process issued by the Commission
under this Act shall not be liable under any law or regulation
of the United States, or under the constitution, or any law or
regulation, of any State, political subdivision of a State,
territory of the United States, or the District of Columbia, or
under any contract or other legally enforceable
agreement, for failure to provide notice to any person that
such process has been issued or that the recipient has provided
information in response to such process. The preceding sentence
does not exempt any recipient from liability for--
(1) the underlying conduct reported;
(2) a failure to comply with the record retention
requirements under section 1104(c) of the Right to
Financial Privacy Act (12 U.S.C. 3404), where
applicable; or
(3) any failure to comply with any obligation the
recipient may have to disclose to a Federal agency that
the recipient has received compulsory process from the
Commission or intends to provide or has provided
information to the Commission in response to such
process.
(e) Venue and Procedure.--
(1) In general.--All judicial proceedings initiated
by the Commission under the Right to Financial Privacy
Act (12 U.S.C. 3401 et seq.), chapter 121 of title 18,
United States Code, or this section may be brought in
the United States District Court for the District of
Columbia or any other appropriate United States
District Court. All ex parte applications by the
Commission under this section related to a single
investigation may be brought in a single proceeding.
(2) In camera proceedings.--Upon application by the
Commission, all judicial proceedings pursuant to this
section shall be held in camera and the records thereof
sealed until expiration of the period of delay or such
other date as the presiding judge or magistrate judge
may permit.
(f) Section Not To Apply to Antitrust Investigations or
Proceedings.--This section shall not apply to an investigation
or proceeding related to the administration of Federal
antitrust laws or foreign antitrust laws (as defined in
paragraphs (5) and (7), respectively, of section 12 of the
International Antitrust Enforcement Assistance Act of 1994 (15
U.S.C. 6211).
(g) Adverse Result Defined.--For purposes of this section the
term ``adverse result'' means--
(1) endangering the life or physical safety of an
individual;
(2) flight from prosecution;
(3) the destruction of, or tampering with, evidence;
(4) the intimidation of potential witnesses; or
(5) otherwise seriously jeopardizing an investigation
or proceeding related to fraudulent or deceptive
commercial practices or persons involved in such
practices, or unduly delaying a trial related to such
practices or persons involved in such practices,
including, but not limited to, by--
(A) the transfer outside the territorial
limits of the United States of assets or
records related to fraudulent or deceptive
commercial practices or related to persons
involved in such practices;
(B) impeding the ability of the Commission to
identify persons involved in fraudulent or
deceptive commercial practices, or to trace the
source or disposition of funds related to such
practices; or
(C) the dissipation, fraudulent transfer, or
concealment of assets subject to recovery by
the Commission.
SEC. 21B. PROTECTION FOR VOLUNTARY PROVISION OF INFORMATION.
(a) In General.--
(1) No liability for providing certain material.--An
entity described in paragraphs (2) or (3) of subsection
(d) that voluntarily provides material to the
Commission that such entity reasonably believes is
relevant to--
(A) a possible unfair or deceptive act or
practice, as defined in section 5(a) of this
Act; or
(B) assets subject to recovery by the
Commission, including assets located in foreign
jurisdictions;
shall not be liable to any person under any law or
regulation of the United States, or under the
constitution, or any law or regulation, of any State,
political subdivision of a State, territory of the
United States, or the District of Columbia, for such
provision of material or for any failure to provide
notice of such provision of material or of intention to
so provide material.
(2) Limitations.--Nothing in this subsection shall be
construed to exempt any such entity from liability--
(A) for the underlying conduct reported; or
(B) to any Federal agency for providing such
material or for any failure to comply with any
obligation the entity may have to notify a
Federal agency prior to providing such material
to the Commission.
(b) Certain Financial Institutions.--An entity described in
paragraph (1) of subsection (d) shall, in accordance with
section 5318(g)(3) of title 31, United States Code, be exempt
from liability for making a voluntary disclosure to the
Commission of any possible violation of law or regulation,
including--
(1) a disclosure regarding assets, including assets
located in foreign jurisdictions--
(A) related to possibly fraudulent or
deceptive commercial practices;
(B) related to persons involved in such
practices; or
(C) otherwise subject to recovery by the
Commission; or
(2) a disclosure regarding suspicious chargeback
rates related to possibly fraudulent or deceptive
commercial practices.
(c) Consumer Complaints.--Any entity described in subsection
(d) that voluntarily provides consumer complaints sent to it,
or information contained therein, to the Commission shall not
be liable to any person under any law or regulation of the
United States, or under the constitution, or any law or
regulation, of any State, political subdivision of a State,
territory of the United States, or the District of Columbia,
for such provision of material or for any failure to provide
notice of such provision of material or of intention to so
provide material. This subsection shall not provide any
exemption from liability for the underlying conduct.
(d) Application.--This section applies to the following
entities, whether foreign or domestic:
(1) A financial institution as defined in section
5312 of title 31, United States Code.
(2) To the extent not included in paragraph (1), a
bank or thrift institution, a commercial bank or trust
company, an investment company, a credit card issuer,
an operator of a creditcard system, and an issuer,
redeemer, or cashier of travelers' checks, money orders, or similar
instruments.
(3) A courier service, a commercial mail receiving
agency, an industry membership organization, a payment
system provider, a consumer reporting agency, a domain
name registrar or registry acting as such, and a
provider of alternative dispute resolution services.
(4) An Internet service provider or provider of
telephone services.
* * * * * * *
SEC. 25A. STAFF EXCHANGES.
(a) In General.--The Commission may--
(1) retain or employ officers or employees of foreign
government agencies on a temporary basis as employees
of the Commission pursuant to section 2 of this Act or
section 3101 or section 3109 of title 5, United States
Code; and
(2) detail officers or employees of the Commission to
work on a temporary basis for appropriate foreign
government agencies.
(b) Reciprocity and Reimbursement.--The staff arrangements
described in subsection (a) need not be reciprocal. The
Commission may accept payment or reimbursement, in cash or in
kind, from a foreign government agency to which this section is
applicable, or payment or reimbursement made on behalf of such
agency, for expenses incurred by the Commission, its members,
and employees in carrying out such arrangements.
(c) Standards of Conduct.--A person appointed under
subsection (a)(1) shall be subject to the provisions of law
relating to ethics, conflicts of interest, corruption, and any
other criminal or civil statute or regulation governing the
standards of conduct for Federal employees that are applicable
to the type of appointment.
SEC. 26. REIMBURSEMENT OF EXPENSES.
The Commission may accept payment or reimbursement, in cash
or in kind, from a domestic or foreign law enforcement agency,
or payment or reimbursement made on behalf of such agency, for
expenses incurred by the Commission, its members, or employees
in carrying out any activity pursuant to a statute administered
by the Commission without regard to any other provision of law.
Any such payments or reimbursements shall be considered a
reimbursement to the appropriated funds of the Commission.
SEC. 27. GIFTS AND VOLUNTARY AND UNCOMPENSATED SERVICES.
(a) In General.--In furtherance of its functions the
Commission may accept, hold, administer, and use unconditional
gifts, donations, and bequests of real, personal, and other
property and, notwithstanding section 1342 of 10 title 31,
United States Code, accept voluntary and uncompensated
services.
(b) Limitations.--
(1) Conflicts of interest.--The Commission shall
establish written guidelines setting forth criteria to
be used in determining whether the acceptance, holding,
administration, or use of a gift, donation, or bequest
pursuant to subsection (a) would reflect unfavorably
upon the ability of the Commission or any employee to
carry out its responsibilities or official duties in a
fair and objective manner, or would compromise the
integrity or the appearance of the integrity of its
programs or any official involved in those programs.
(2) Voluntary services.--A person who provides
voluntary and uncompensated service under subsection
(a) shall be considered a Federal employee for purposes
of--
(A) chapter 81 of title 5, United States
Code, (relating to compensation for injury);
and
(B) the provisions of law relating to ethics,
conflicts of interest, corruption, and any
other criminal or civil statute or regulation
governing the standards of conduct for Federal
employees.
(3) Tort liability of volunteers.--A person who
provides voluntary and uncompensated service under
subsection (a), while assigned to duty, shall be deemed
a volunteer of a nonprofit organization or governmental
entity for purposes of the Volunteer Protection Act of
1997 (42 U.S.C. 14501 et seq.). Subsection (d) of
section 4 of such Act (42 U.S.C. 14503(d)) shall not
apply for purposes of any claim against such volunteer.
SEC. [26] 28. SHORT TITLE.
This Act may be cited as the ``Federal Trade Commission
Act.''