CROOK Act

I 117TH CONGRESS 1ST SESSION H. R. 402 To promote international efforts in combating corruption, kleptocracy, and illicit finance by foreign officials and other foreign persons, including through a new anti-corruption action fund, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JANUARY 21, 2021 Mr. KEATING (for himself and Mr. FITZPATRICK) introduced the following bill; which was referred to the Committee on Foreign Affairs A BILL To promote international efforts in combating corruption, kleptocracy, and illicit finance by foreign officials and other foreign persons, including through a new anti- corruption action fund, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLES; TABLE OF CONTENTS. 3 (a) SHORT TITLES.—This Act may be cited as the 4 ‘‘Countering Russian and Other Overseas Kleptocracy 5 Act’’ or the ‘‘CROOK Act’’. 6 (b) TABLE OF CONTENTS.—The table of contents for 7 this Act is as follows: 8 VerDate Sep 11 2014 22:18 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H402.IH H402 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 402 IH Sec. 1. Short titles; table of contents. Sec. 2. Findings. Sec. 3. Definitions. Sec. 4. Statement of policy. Sec. 5. Anti-Corruption Action Fund. Sec. 6. Interagency Anti-Corruption Task Force. Sec. 7. Designation of embassy anti-corruption points of contact. Sec. 8. Reporting requirements. SEC. 2. FINDINGS. 1 Congress finds the following: 2 (1) Authoritarian leaders in foreign countries 3 abuse their power to steal assets from state institu- 4 tions, enrich themselves at the expense of their coun- 5 tries’ economic development, and use corruption as 6 a strategic tool both to solidify their grip on power 7 and to undermine democratic institutions abroad. 8 (2) Global corruption harms the competitiveness 9 of United States businesses, weakens democratic 10 governance, feeds terrorist recruitment and 11 transnational organized crime, enables drug smug- 12 gling and human trafficking, and stymies economic 13 growth. 14 (3) Illicit financial flows often penetrate coun- 15 tries through what appear to be legitimate financial 16 transactions, as kleptocrats launder money, use shell 17 companies, amass offshore wealth, and participate in 18 a global shadow economy. 19 (4) The Government of the Russian Federation 20 is a leading model of this type of kleptocratic sys- 21 VerDate Sep 11 2014 22:18 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H402.IH H402 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 402 IH tem, using state-sanctioned corruption to both erode 1 democratic governance from within and discredit de- 2 mocracy abroad, thereby strengthening the authori- 3 tarian rule of Vladimir Putin. 4 (5) Corrupt individuals and entities in the Rus- 5 sian Federation, often with the backing and encour- 6 agement of political leadership, use stolen money— 7 (A) to purchase key assets in other coun- 8 tries, often with a goal of attaining monopolistic 9 control of a sector; 10 (B) to gain access to and influence the 11 policies of other countries; and 12 (C) to advance Russian interests in other 13 countries, particularly those that undermine 14 confidence and trust in democratic systems. 15 (6) Systemic corruption in the People’s Repub- 16 lic of China, often tied to, directed by, or backed by 17 the leadership of the Chinese Communist Party and 18 the Chinese Government is used— 19 (A) to provide unfair advantage to certain 20 People’s Republic of China economic entities; 21 (B) to increase other countries’ economic 22 dependence on the People’s Republic of China 23 to secure greater deference to the People’s Re- 24 VerDate Sep 11 2014 22:18 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H402.IH H402 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 402 IH public of China’s diplomatic and strategic goals; 1 and 2 (C) to exploit corruption in foreign govern- 3 ments and among other political elites to enable 4 People’s Republic of China state-backed firms 5 to pursue predatory and exploitative economic 6 practices. 7 (7) Thwarting these tactics by Russian, Chi- 8 nese, and other kleptocratic actors requires the 9 international community to strengthen democratic 10 governance and the rule of law. International co- 11 operation in combating corruption and illicit finance 12 is vital to such efforts, especially by empowering re- 13 formers in foreign countries during historic political 14 openings for the establishment of the rule of law in 15 those countries. 16 (8) Technical assistance programs that combat 17 corruption and strengthen the rule of law, including 18 through assistance provided by the Department of 19 State’s Bureau of International Narcotics and Law 20 Enforcement Affairs and the United States Agency 21 for International Development, and through pro- 22 grams like the Department of Justice’s Office of 23 Overseas Prosecutorial Development, Assistance and 24 Training and the International Criminal Investiga- 25 VerDate Sep 11 2014 22:18 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H402.IH H402 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 402 IH tive Training Assistance Program, can have lasting 1 and significant impacts for both foreign and United 2 States interests. 3 (9) There currently exist numerous inter- 4 national instruments to combat corruption, 5 kleptocracy, and illicit finance, including— 6 (A) the Inter-American Convention against 7 Corruption of the Organization of American 8 States, done at Caracas March 29, 1996; 9 (B) the Convention on Combating Bribery 10 of Foreign Public Officials in International 11 Business Transactions of the Organisation of 12 Economic Co-operation and Development, done 13 at Paris December 21, 1997 (commonly re- 14 ferred to as the ‘‘Anti-Bribery Convention’’); 15 (C) the United Nations Convention against 16 Transnational Organized Crime, done at New 17 York November 15, 2000; 18 (D) the United Nations Convention against 19 Corruption, done at New York October 31, 20 2003; 21 (E) Recommendation of the Council for 22 Further Combating Bribery of Foreign Public 23 Officials in International Business Trans- 24 actions, adopted November 26, 2009; and 25 VerDate Sep 11 2014 22:18 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H402.IH H402 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 402 IH (F) recommendations of the Financial Ac- 1 tion Task Force comprising the International 2 Standards on Combating Money Laundering 3 and the Financing of Terrorism and Prolifera- 4 tion. 5 SEC. 3. DEFINITIONS. 6 In this Act: 7 (1) APPROPRIATE CONGRESSIONAL COMMIT- 8 TEES.—The term ‘‘appropriate congressional com- 9 mittees’’ means— 10 (A) the Committee on Foreign Relations of 11 the Senate; 12 (B) the Committee on Banking, Housing, 13 and Urban Affairs of the Senate; 14 (C) the Committee on Finance of the Sen- 15 ate; 16 (D) the Committee on the Judiciary of the 17 Senate; 18 (E) the Committee on Foreign Affairs of 19 the House of Representatives; 20 (F) the Committee on Financial Services 21 of the House of Representatives; 22 (G) the Committee on Ways and Means of 23 the House of Representatives; and 24 VerDate Sep 11 2014 22:18 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H402.IH H402 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 402 IH (H) the Committee on the Judiciary of the 1 House of Representatives. 2 (2) FOREIGN ASSISTANCE.—The term ‘‘foreign 3 assistance’’ means foreign assistance authorized 4 under the Foreign Assistance Act of 1961 (22 5 U.S.C. 2251 et seq.). 6 (3) FOREIGN STATE.—The term ‘‘foreign state’’ 7 has the meaning given such term in section 1603(a) 8 of title 28, United States Code. 9 (4) INTELLIGENCE COMMUNITY.—The term 10 ‘‘intelligence community’’ has the meaning given 11 such term in section 3(4) of the National Security 12 Act of 1947 (50 U.S.C. 3003(4)). 13 (5) PUBLIC CORRUPTION.—The term ‘‘public 14 corruption’’ includes the unlawful exercise of en- 15 trusted public power for private gain, such as 16 through bribery, nepotism, fraud, extortion, or em- 17 bezzlement. 18 (6) RULE OF LAW.—The term ‘‘rule of law’’ 19 means the principle of governance in which all per- 20 sons, institutions, and entities, whether public or 21 private, including the state, are accountable to laws 22 that are— 23 (A) publicly promulgated; 24 (B) equally enforced; 25 VerDate Sep 11 2014 22:18 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H402.IH H402 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 402 IH (C) independently adjudicated; and 1 (D) consistent with international human 2 rights norms and standards. 3 SEC. 4. STATEMENT OF POLICY. 4 It is the policy of the United States— 5 (1) to leverage United States diplomatic en- 6 gagement and foreign assistance to promote the rule 7 of law; 8 (2)(A) to promote international instruments to 9 combat corruption, kleptocracy, and illicit finance, 10 including instruments referred to in section 2(9), 11 and other relevant international standards and best 12 practices, as such standards and practices develop; 13 and 14 (B) to promote the adoption and implementa- 15 tion of such laws, standards, and practices by for- 16 eign states; 17 (3) to support foreign states in promoting good 18 governance and combating public corruption; 19 (4) to encourage and assist foreign partner 20 countries to identify and close loopholes in their 21 legal and financial architecture, including the misuse 22 of anonymous shell companies, free trade zones, and 23 other legal structures, that are enabling illicit fi- 24 nance to penetrate their financial systems; 25 VerDate Sep 11 2014 22:18 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H402.IH H402 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 402 IH (5) to help foreign partner countries to inves- 1 tigate, prosecute, adjudicate, and more generally 2 combat the use of corruption by malign actors, in- 3 cluding authoritarian governments, particularly the 4 Government of the Russian Federation and the Gov- 5 ernment of the People’s Republic of China, as a tool 6 of malign influence worldwide; 7 (6) to assist in the recovery of kleptocracy-re- 8 lated stolen assets for victims, including through the 9 use of appropriate bilateral arrangements and inter- 10 national agreements, such as the United Nations 11 Convention against Corruption, done at New York 12 October 31, 2003, and the United Nations Conven- 13 tion against Transnational Organized Crime, done at 14 New York November 15, 2000; 15 (7) to use sanctions authorities, such as the 16 Global Magnitsky Human Rights Accountability Act 17 (subtitle F of title XII of the National Defense Au- 18 thorization Act for Fiscal Year 2017 (Public Law 19 114–328; 22 U.S.C. 2656 note)) and section 20 7031(c) of the Department of State, Foreign Oper- 21 ations, and Related Programs Appropriations Act, 22 2020 (division G of Public Law 116–94), to identify 23 and take action against corrupt foreign actors; 24 VerDate Sep 11 2014 22:18 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H402.IH H402 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 402 IH (8) to ensure coordination between relevant 1 Federal departments and agencies with jurisdiction 2 over the advancement of good governance in foreign 3 states; and 4 (9) to lead the creation of a formal grouping of 5 like-minded states— 6 (A) to coordinate efforts to counter corrup- 7 tion, kleptocracy, and illicit finance; and 8 (B) to strengthen collective financial de- 9 fense. 10 SEC. 5. ANTI-CORRUPTION ACTION FUND. 11 (a) ESTABLISHMENT.—There is established in the 12 United States Treasury a fund, to be known as the ‘‘Anti- 13 Corruption Action Fund’’, only for the purposes of— 14 (1) strengthening the capacity of foreign states 15 to prevent and fight public corruption; 16 (2) assisting foreign states to develop rule of 17 law-based governance structures, including account- 18 able civilian police, prosecutorial, and judicial insti- 19 tutions; 20 (3) supporting foreign states to strengthen do- 21 mestic legal and regulatory frameworks to combat 22 public corruption, including the adoption of best 23 practices under international law; and 24 VerDate Sep 11 2014 22:18 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H402.IH H402 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 402 IH (4) supplementing existing foreign assistance 1 and diplomacy with respect to efforts described in 2 paragraphs (1), (2), and (3). 3 (b) FUNDING.— 4 (1) TRANSFERS.—Beginning on or after the 5 date of the enactment of this Act, if total criminal 6 fines and penalties in excess of $50,000,000 are im- 7 posed against a person under the Foreign Corrupt 8 Practices Act of 1977 (Public Law 95–213) or sec- 9 tion 13, 30A, or 32 of the Securities Exchange Act 10 of 1934 (15 U.S.C. 78m, 78dd–1, and 78ff), wheth- 11 er pursuant to a criminal prosecution, enforcement 12 proceeding, deferred prosecution agreement, non- 13 prosecution agreement, a declination to prosecute or 14 enforce, or any other resolution, the court (in the 15 case of a conviction) or the Attorney General shall 16 impose an additional prevention payment equal to 17 $5,000,000 against such person, which shall be de- 18 posited in the Anti-Corruption Action Fund estab- 19 lished under subsection (a). 20 (2) AVAILABILITY OF FUNDS.—Amounts depos- 21 ited into the Anti-Corruption Action Fund pursuant 22 to paragraph (1) shall be available to the Secretary 23 of State only for the purposes described in sub- 24 VerDate Sep 11 2014 22:18 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H402.IH H402 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 402 IH section (a), without fiscal year limitation or need for 1 subsequent appropriation. 2 (3) LIMITATION.—None of the amounts made 3 available to the Secretary of State from the Anti- 4 Corruption Action Fund may be used inside the 5 United States, except for administrative costs re- 6 lated to overseas program implementation pursuant 7 to subsection (a). 8 (c) SUPPORT.—The Anti-Corruption Action Fund— 9 (1) may support governmental and nongovern- 10 mental parties in advancing the purposes described 11 in subsection (a); and 12 (2) shall be allocated in a manner complemen- 13 tary to existing United States foreign assistance, di- 14 plomacy, and anti-corruption activities. 15 (d) ALLOCATION AND PRIORITIZATION.—In pro- 16 gramming foreign assistance made available through the 17 Anti-Corruption Action Fund, the Secret [Text truncated for display. 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