To reauthorize the Federal Trade Commission, and for other purposes.

June 11, 2003

Mr. MCCAIN (for himself and Mr. SMITH) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation

To reauthorize the Federal Trade Commission, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Federal Trade Commission Reauthorization Act of 2003'.

TITLE I--REAUTHORIZATION

SEC. 101. REAUTHORIZATION.

The text of section 25 of the Federal Trade Commission Act (15 U.S.C. 57c) is amended to read as follows:

`There are authorized to be appropriated to carry out the functions, powers, and duties of the Commission not to exceed $194,742,000 for fiscal year 2004, $224,695,000 for fiscal year 2005, and $235,457,000 for fiscal year 2006.'.

SEC. 102. AUTHORITY TO ACCEPT REIMBURSEMENTS, GIFTS, AND VOLUNTARY AND UNCOMPENSATED SERVICES.

The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended--

(1) by redesignating section 26 as section 28; and

(2) by inserting after section 25 the following:

`SEC. 26. REIMBURSEMENT OF EXPENSES.

`The Commission may accept payment or reimbursement, in cash or in kind, from a domestic or foreign law enforcement authority, or payment or reimbursement made on behalf of such authority, 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 title 31, United States Code, accept voluntary and uncompensated services.

`(b) Limitations-

`(1) CONFLICTS OF INTEREST- Notwithstanding subsection (a), the Commission may not accept, hold, administer, or use a gift, donation, or bequest if the acceptance, holding, administration, or use would create a conflict of interest or the appearance of a conflict of interest.

`(2) VOLUNTARY SERVICES- A person who provides voluntary and uncompensated service under subsection (a) shall not be considered a Federal employee for any purpose other than for purposes of chapter 81 of title 5, United States Code, (relating to compensation for injury) and section 2671 through 2680 of title 28, United States Code, (relating to tort claims).'.

TITLE II--INTERNATIONAL CONSUMER PROTECTION

SEC. 201. FINDINGS.

The Congress finds the following:

(1) The Federal Trade Commission protects consumers from fraud and deception. Cross-border fraud and deception are growing international problems that affect American consumers and businesses.

(2) The development of the Internet and improvements in telecommunications technologies have brought significant benefits to consumers. At the same time, they have also provided unprecedented opportunities for those engaged in fraud and deception to establish operations in one country and victimize a large number of consumers in other countries.

(3) An increasing number of consumer complaints collected in the Consumer Sentinel database maintained by the Commission, and an increasing number of cases brought by the Commission, involve foreign consumers, foreign businesses or individuals, or assets or evidence located outside the United States.

(4) The Commission has legal authority to remedy law violations involving domestic and foreign wrongdoers, pursuant to the Federal Trade Commission Act. The Commission's ability to obtain effective relief using this authority, however, may face practical impediments when wrongdoers, victims, other witnesses, documents, money and third parties involved in the transaction are widely dispersed in many different jurisdictions. Such circumstances make it difficult for the Commission to gather all the information necessary to detect injurious practices, to recover offshore assets for consumer redress, and to reach conduct occurring outside the United States that affects United States consumers.

(5) Improving the ability of the Commission and its foreign counterparts to share information about cross-border fraud and deception, to conduct joint and parallel investigations, and to assist each other is critical to achieve more timely and effective enforcement in cross-border cases.

(6) Consequently, Congress should enact legislation to provide the Commission with more tools to protect consumers across borders.

SEC. 202. FOREIGN LAW ENFORCEMENT AGENCY DEFINED.

Section 4 of the Federal Trade Commission Act (15 U.S.C. 44) is amended by adding at the end the following:

`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;

`(2) any multinational organization, to the extent that it is acting on behalf of an entity described in paragraph (1); or

`(3) any organization that is vested with authority, as a principal mission, to enforce laws against fraudulent, deceptive, misleading, or unfair commercial practices affecting consumers, in accordance with criteria laid down by law, by a foreign state or a political subdivision of a foreign state.'.

SEC. 203. SHARING INFORMATION WITH FOREIGN LAW ENFORCEMENT AGENCIES.

(a) IN GENERAL- Section 21(b)(6) of the Federal Trade Commission Act (15 U.S.C. 57b-2(b)(6)) is amended by adding at the end `The custodian may make such material available to any foreign law enforcement agency upon the prior certification of any officer of any such foreign law enforcement agency that such material will be maintained in confidence and will be used only for official law enforcement purposes, provided that the foreign law enforcement agency has set forth a legal basis for its authority to maintain the material in confidence. Nothing in the preceding sentence authorizes disclosure of material obtained in connection with the administration of Federal antitrust laws or foreign antitrust laws (within the meaning 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.'.

(b) PUBLICATION OF INFORMATION; REPORTS- Section 6(f) of the Federal Trade Commission Act (15 U.S.C. 46(f)) is amended--

(1) by striking `agencies or to any officer or employee of any State law enforcement agency' and inserting `agencies, to any officer or employee of any State law enforcement agency, or to any officer or employee of any foreign law enforcement agency';

(2) by striking `Federal or State law enforcement agency' and inserting `Federal, State, or foreign law enforcement agency'; and

(3) by adding at the end `Such information shall be disclosed to an officer or employee of a foreign law enforcement agency only if the foreign law enforcement agency has set forth a legal basis for its authority to maintain the information in confidence. Nothing in the preceding sentence authorizes the disclosure of material obtained in connection with the administration of Federal antitrust laws or foreign antitrust laws (within the meaning 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.'.

SEC. 204. OBTAINING INFORMATION FOR FOREIGN LAW ENFORCEMENT AGENCIES.

Section 6 of the Federal Trade Commission Act (15 U.S.C. 46) is amended by adding at the end the following:

`(j)(1) Upon 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, deceptive, misleading, or unfair commercial conduct, or other conduct that may be similar to conduct prohibited by any provision of the laws administered by the Commission, other than Federal antitrust laws (within the meaning of section 12 of the International Antitrust Enforcement Assistance Act of 1994 (15 U.S.C. 6211)), the Commission may, in its discretion--

`(A) conduct such investigation as the Commission deems necessary to collect information and evidence pertinent to the request for assistance, using all investigative powers authorized by this Act; and

`(B) 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.

`(2) The Commission may provide assistance under paragraph (1) without regard to whether the conduct identified in the request would also constitute a violation of the laws of the United States.

`(3) In deciding whether to provide such assistance, the Commission shall consider--

`(A) whether the requesting agency has agreed to provide or will provide reciprocal assistance to the Commission; and

`(B) whether compliance with the request would prejudice the public interest of the United States.

`(4) 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 disclosure of materials or information to the Commission, the Commission, after consultation with the Secretary of State, may negotiate and conclude an international agreement, in the name of either the United States or the Commission and with the final approval of the agreement by the Secretary of State, for the purpose of obtaining such assistance or disclosure. The Commission may undertake in such an international agreement--

`(A) to provide assistance using the powers set forth in this subsection;

`(B) to disclose materials and information in accordance with subsection (f) of this section and section 21(b)(6) of this Act; and

`(C) to engage in further cooperation, and protect materials and information received from disclosure, as authorized by this Act.

`(5) The authority in 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.'.

SEC. 205. INFORMATION SUPPLIED BY AND ABOUT FOREIGN SOURCES.

Section 21(f) of the Federal Trade Commission Act (15 U.S.C. 57b-2(f)) is amended--

(1) by inserting `(1)' before `Any'; and adding at the end the following:

`(2)(A) Except as provided in subparagraph (C) of this paragraph, the Commission shall not be compelled to disclose--

`(i) 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 as a condition of disclosing the material;

`(ii) material reflecting consumer complaints obtained from any other foreign source, if that foreign source supplying the material has requested confidential treatment as a condition of disclosing the material; or

`(iii) 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) For purposes of section 552 of title 5, this paragraph shall be considered a statute described in subsection (b)(3)(B) of such section 552.

`(C) Nothing in this paragraph 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. 206. CONFIDENTIALITY AND DELAYED NOTICE OF PROCESS.

(a) The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended by inserting after section 21 (15 U.S.C. 57b-2) the following:

`SEC. 21A. CONFIDENTIALITY AND DELAYED NOTICE OF COMPULSORY PROCESS FOR CERTAIN THIRD PARTIES.

`(a) Confidentiality of Compulsory Process Issued by the Commission-

`(1) 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.

`(2) Notwithstanding any law or regulation of the United States, any constitution, law or regulation of any State or political subdivision of any State or any Territory or the District of Columbia, or any contract or other legally enforceable agreement, the Commission may seek an order requiring the recipient of compulsory process described in paragraph (1) to keep such process confidential, upon an ex parte showing to an appropriate United States district court that there is a reason to believe that disclosure may--

`(A) result in the transfer of assets or records outside the territorial limits of the United States;

`(B) impede the ability of the Commission to identify or trace funds;

`(C) endanger the life or physical safety of an individual;

`(D) result in flight from prosecution;

`(E) result in destruction of or tampering with evidence;

`(F) result in intimidation of potential witnesses;

`(G) result in the dissipation or concealment of assets; or

`(H) otherwise seriously jeopardize an investigation or unduly delay a trial.

`(3) Upon a showing described in paragraph (2), the presiding judge or magistrate judge shall enter an ex parte order prohibiting the recipient of process from disclosing that information has been submitted or that a request for information has been made, for such period as the court deems appropriate.

`(b) Materials Subject to Government Notification Under the Right to Financial Privacy Act-

`(1) When section 1105 or 1107 of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3405 or 3407) would otherwise require notice, notwithstanding such requirements, the Commission may obtain from a financial institution access to or copies of financial records of a customer, as these terms are defined in section 1101 of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401), through compulsory process described in subsection (a)(1) or through a judicial subpoena, without prior notice to the customer, upon an ex parte showing to an appropriate United States district court that there is reason to believe that the required notice may cause an adverse result described in subsection (a)(2).

`(2) Upon such showing, the presiding judge or magistrate judge shall enter an ex parte order granting a delay of notice for a period not to exceed 90 days and an order prohibiting the financial institution from disclosing that records have been submitted or that a request for records has been made.

`(3) The court may grant extensions of the period of delay of notice provided in paragraph (2) of up to 90 days, upon a showing that the requirements for delayed notice under subsection (a)(2) continue to apply.

`(4) Upon expiration of the periods of delay of notice ordered under paragraphs (2) and (3), the Commission shall serve upon, or deliver by registered or first-class mail, or as otherwise authorized by the court to, the customer a copy of the process together with notice that states with reasonable specificity the nature of the law enforcement inquiry, informs the customer or subscriber when the process was served, and states that notification of the process was delayed under this subsection.

`(c) Materials Subject to Government Notification Under the Electronic Communications Privacy Act-

`(1) When section 2703(b)(1)(B) of title 18 would otherwise require notice, notwithstanding such requirements, the Commission may obtain, through compulsory process described in subsection (a)(1) or through judicial subpoena,

`(A) from a provider of remote computing services, access to or copies of the contents of a wire or electronic communication described in section 2703(b)(1) of title 18, and as those terms are defined in section 2510 of title 18, or

`(B) from a provider of electronic communications services, access to or copies of the contents of a wire or electronic communication that has been in electronic storage in an electronic communications system for more than 180 days, as those terms are defined in section 2510 of title 18,

without prior notice to the customer or subscriber, upon an ex parte showing to an appropriate United States district court by a Commission official that there is reason to believe that notification of the existence of the process may cause an adverse result described in subsection (a)(2). Upon such a showing, the presiding judge or magistrate judge shall issue an exparte order granting a delay of notice for a period not to exceed 90 days. A court may grant extensions of the period of delay of notice of up to 90 days, upon application by the Commission and a showing that the requirements for delayed notice under subsection (b)(2) continue to apply.

`(2) The Commission may apply to a court for an order prohibiting a provider of electronic communications service or remote computing service to whom process has been issued under this subsection, for such period as the court deems appropriate, from disclosing that information has been submitted or that a request for information has been made. The court shall enter such an order if it has reason to believe that such disclosure may cause an adverse result described in subsection (b)(2).

`(3) Upon expiration of the periods of delay of notice ordered under subparagraph (1), the Commission shall serve upon, or deliver by registered or first-class mail, or as otherwise authorized by the court to, the customer or subscriber a copy of the process together with notice that states with reasonable specificity the nature of the law enforcement inquiry, informs the customer or subscriber when the process was served, and states that notification of the process was delayed under this subsection.

`(4) Nothing in the Electronic Communications Privacy Act shall prohibit a provider of electronic communications services or remote computing services from disclosing complaints received by it from a customer or subscriber or information reflecting such complaints to the Commission.

`(d) LIABILITY LIMITATION- The recipient of compulsory process under subsections (a), (b), or (c) shall not be liable to any person under any law or regulation of the United States, any constitution, law, or regulation of any State or political subdivision of any State or any Territory or the District of Columbia, or under any contract or other legally enforceable agreement, for failure to provide notice that such process has been issued or that the recipient has provided information in response to such process. The preceding sentence does not provide any exemption from liability for the underlying conduct reported.

`(e) 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) PROCEDURE INAPPLICABLE TO CERTAIN PROCEEDINGS- This section shall not apply to compulsory process issued in an investigation or proceeding related to the administration of Federal antitrust laws or foreign antitrust laws (within the meaning of section 12 of the International Antitrust Enforcement Assistance Act of 1994 (15 U.S.C. 6211)).'.

(b) Section 16(a)(2) of the Federal Trade Commission Act (15 U.S.C. 56(a)(2)) is amended--

(1) by striking `or' after the semicolon in subparagraph (C);

(2) by striking `Act;' in subparagraph (D) and inserting `Act; or'; and

(3) by inserting after subparagraph (D) the following:

`(E) under section 21a of this Act;'.

SEC. 207. PROTECTION FOR VOLUNTARY PROVISION OF INFORMATION.

The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended by inserting after section 21a, as added by section 206 of this title, the following:

`SEC. 21B. PROTECTION FOR VOLUNTARY PROVISION OF INFORMATION.

`(a) IN GENERAL- An entity described in subsection (d)(1) that voluntarily provides material to the Commission that it reasonably believes is relevant to--

`(1) a possible unfair or deceptive act or practice, as defined in section 5(a) of this Act, or

`(2) 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 any constitution, law, or regulation of any State or political subdivision of any State or any Territory or the District of Columbia, for such disclosure or for any failure to provide notice of such disclosure. The preceding sentence does not provide any exemption from liability for the underlying conduct reported.

`(b) LIABILITY LIMITATION- An entity described in subsection (d)(2) that makes a voluntary disclosure to the Commission regarding the subjects described in subsection (a)(1) and (2) shall be exempt from liability in accordance with the provisions of section 5318(g)(3) of title 31, United States Code.

`(c) FOIA EXEMPTION- Material submitted pursuant to this section with a request for confidential treatment shall be exempt from disclosure under section 552 of title 5, United States Code.

`(d) ENTITIES TO WHICH SECTION APPLIES- This section applies to the following entities, whether foreign or domestic:

`(1) A courier service, a commercial mail receiving agency, an industry membership organization, a payment system provider, a consumer reporting agency, a domain name registrar and registry, a provider of remote computing services or electronic communication services, to the limited extent such a provider is disclosing consumer complaints received by it from a customer or subscriber, or information reflecting such complaints; and

`(2) a bank or thrift institution, a commercial bank or trust company, an investment company, a credit card issuer, an operator of a credit card system, and an issuer, redeemer, or cashier of travelers' checks, checks, money orders, or similar instruments.'.

SEC. 208. INFORMATION SHARING WITH FINANCIAL REGULATORS.

Section 1112(e) of the Right to Financial Privacy Act (12 U.S.C. 3412(e)) is amended by inserting `the Federal Trade Commission,' after `the Securities and Exchange Commission,'.

SEC. 209. REPRESENTATION IN FOREIGN LITIGATION.

Section 16 of the Federal Trade Commission Act (15 U.S.C. 56) is amended by adding at the end the following:

`(c)(1) The Commission may designate Commission attorneys to assist the Department of Justice in connection with litigation in foreign courts in which the Commission has an interest, pursuant to the terms of a memorandum of understanding to be negotiated by the Commission and the Department of Justice.

`(2) The Commission is authorized to expend appropriated funds for the retention of foreign counsel for consultation and for litigation in foreign courts, and for expenses related to consultation and to litigation in foreign courts in which the Commission has an interest.'.

SEC. 210. AVAILABILITY OF REMEDIES.

Section 5 of the Federal Trade Commission Act (15 U.S.C. 45) is amended by adding at the end the following:

`(o) Unfair or Deceptive Acts or Practices Involving Foreign Commerce-

`(1) IN GENERAL- For purposes of subsection (a), the term `unfair or deceptive acts or practices' includes such acts or practices involving foreign commerce that--

`(A) cause or are likely to cause reasonably foreseeable injury within the United States; or

`(B) involve material conduct occurring within the United States.

`(2) APPLICATION OF REMEDIES TO SUCH ACTS OR PRACTICES- All remedies available to the Commission with respect to unfair and deceptive acts or practices shall be available for acts and practices described in paragraph (1), including restitution to domestic or foreign victims.'.

SEC. 211. CRIMINAL REFERRALS.

Section 6 of the Federal Trade Commission Act (15 U.S.C. 46), as amended by section 204 of this title, is amended by adding at the end the following:

`(k) REFERRAL OF EVIDENCE FOR CRIMINAL PROCEEDINGS- Whenever the Commission obtains evidence that any person, partnership or corporation, either domestic or foreign, may have engaged in conduct that could give rise to criminal proceedings, to transmit such evidence to the Attorney General who may, in his discretion, institute criminal proceedings under appropriate statutes. Provided that nothing in this subsection affects any other authority of the Commission to disclose information.'.

SEC. 212. STAFF EXCHANGES.

The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended by inserting after section 25 (15 U.S.C. 57c) the following:

`SEC. 25A. STAFF EXCHANGES.

`(a) IN GENERAL- The Congress consents to--

`(1) the retention or employment of officers or employees of foreign government agencies on a temporary basis by the Commission under section 3109 of title 5, United States Code, section 202 of title 18, United States Code, or section 2 of this Act (15 U.S.C. 42); and

`(2) the retention or employment of officers or employees of the Commission on a temporary basis by such foreign government agencies.

`(b) FORM OF ARRANGEMENTS- Staff arrangements under 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.'.

SEC. 213. EXPENDITURES FOR COOPERATIVE ARRANGEMENTS.

(a) IN GENERAL- Section 6 of the Federal Trade Commission Act (15 U.S.C. 46) as amended by section 211 of this title, is further amended by adding at the end the following:

`(p) 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

`(3) any other related lodging or subsistence.'.

(b) AUTHORIZATION OF APPROPRIATIONS- The Federal Trade Commission is authorized to expend appropriated funds not to exceed $100,000 per fiscal year for purposes of section 6(p) of the Federal Trade Commission Act (15 U.S.C. 46(p)), including operating expenses and other costs of the following bilateral and multilateral cooperative law enforcement groups:

(1) The International Consumer Protection and Enforcement Network.

(2) The International Competition Network.

(3) The Mexico-U.S.-Canada Health Fraud Task Force.

(4) Project Emptor.

(5) The Toronto Strategic Partnership and other regional partnerships with a nexus in a Canadian province.

END