CROOK Act

I 116TH CONGRESS 1ST SESSION H. R. 3843 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 JULY 18, 2019 Mr. KEATING (for himself, Mr. FITZPATRICK, Mr. HASTINGS, Mr. WILSON of South Carolina, Mr. COHEN, Mr. ADERHOLT, Ms. JACKSON LEE, Mr. HUDSON, Ms. MOORE, Mr. CURTIS, Mr. SUOZZI, and Mr. MALINOWSKI) introduced the following bill; which was referred to the Committee on Foreign Affairs, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 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 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3843.IH H3843 kjohnson on DSK79L0C42 with BILLS 2 •HR 3843 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Countering Russian 2 and Other Overseas Kleptocracy Act’’ or the ‘‘CROOK 3 Act’’. 4 SEC. 2. FINDINGS. 5 Congress finds the following: 6 (1) Authoritarian leaders in foreign countries 7 abuse their power to steal assets from state institu- 8 tions, enrich themselves at the expense of their coun- 9 tries’ economic development, and use corruption as 10 a strategic tool both to solidify their grip on power 11 and to undermine democratic institutions abroad. 12 (2) Global corruption harms the competitiveness 13 of United States businesses, feeds terrorist recruit- 14 ment and transnational organized crime, enables 15 drug smuggling and human trafficking, and stymies 16 economic growth. 17 (3) Illicit financial flows often inconspicuously 18 penetrate a country through what appears to be le- 19 gitimate financial transactions, as kleptocrats laun- 20 der money, use shell companies, amass offshore 21 wealth, and participate in a global shadow economy. 22 (4) The government of Vladimir Putin in Rus- 23 sia is the leading model of this type of foreign 24 kleptocratic system, using corruption to erode demo- 25 cratic governance from within and discrediting de- 26 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3843.IH H3843 kjohnson on DSK79L0C42 with BILLS 3 •HR 3843 IH mocracy abroad, thereby strengthening his authori- 1 tarian rule. 2 (5) Russia uses stolen money to— 3 (A) purchase key assets in other countries, 4 particularly with a goal of attaining monopo- 5 listic control of a sector; 6 (B) gain access to and influence the poli- 7 cies of democratic countries; and 8 (C) directly fund political parties and orga- 9 nizations that advance Russian interests in 10 other countries, particularly those that under- 11 mine confidence and trust in democratic sys- 12 tems. 13 (6) Thwarting these tactics by Russia and other 14 kleptocratic governments requires the international 15 community to strengthen democratic governance, the 16 rule of law, and international cooperation in com- 17 bating illicit finance, especially by empowering re- 18 formers in foreign countries during historic political 19 openings for the establishment of the rule of law in 20 those countries. 21 (7) New reformers in foreign countries must act 22 quickly to seize political openings for anti-corruption 23 reform, but as these reformers are often outsiders 24 with little government experience, they may need sig- 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3843.IH H3843 kjohnson on DSK79L0C42 with BILLS 4 •HR 3843 IH nificant technical assistance to root out deep-seated 1 corruption. 2 SEC. 3. DEFINITIONS. 3 In this Act: 4 (1) RULE OF LAW.—The term ‘‘rule of law’’ 5 means the principle of governance in which all per- 6 sons, institutions, and entities, whether public or 7 private, including the state itself, are accountable to 8 laws that are publicly promulgated, equally enforced, 9 and independently adjudicated, and which are con- 10 sistent with international human rights norms and 11 standards. 12 (2) FOREIGN STATE.—The term ‘‘foreign state’’ 13 has the meaning given such term in section 1603 of 14 title 28, United States Code. 15 (3) INTELLIGENCE COMMUNITY.—The term 16 ‘‘intelligence community’’ has the meaning given 17 such term in section 3(4) of the National Security 18 Act of 1947 (50 U.S.C. 3003(4)). 19 (4) PUBLIC CORRUPTION.—The term ‘‘public 20 corruption’’ means the unlawful exercise of entrusted 21 public power for private gain, including by bribery, 22 nepotism, fraud, or embezzlement. 23 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3843.IH H3843 kjohnson on DSK79L0C42 with BILLS 5 •HR 3843 IH (5) FOREIGN ASSISTANCE.—The term ‘‘foreign 1 assistance’’ means foreign assistance authorized 2 under the Foreign Assistance Act of 1961. 3 (6) APPROPRIATE CONGRESSIONAL COMMIT- 4 TEES.—The term ‘‘appropriate congressional com- 5 mittees’’ means— 6 (A) the Committee on Foreign Relations, 7 the Committee on Banking, Housing, and 8 Urban Affairs, and the Committee on Finance 9 of the Senate; and 10 (B) the Committee on Foreign Affairs, the 11 Committee on Financial Services, and the Com- 12 mittee on Ways and Means of the House of 13 Representatives. 14 SEC. 4. INTERNATIONAL STANDARDS. 15 It is the sense of Congress that the following inter- 16 national standards should be the foundation for foreign 17 states to combat corruption, kleptocracy, and illicit fi- 18 nance: 19 (1) The United Nations Convention against 20 Corruption. 21 (2) Recommendations of the Financial Action 22 Task Force (FATF) comprising the International 23 Standards on Combating Money Laundering and the 24 Financing of Terrorism & Proliferation. 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3843.IH H3843 kjohnson on DSK79L0C42 with BILLS 6 •HR 3843 IH (3) The Organisation for Economic Co-oper- 1 ation and Development Convention on Combating 2 Bribery of Foreign Public Officials in International 3 Business Transactions (OECD Anti-Bribery Conven- 4 tion), the 2009 Recommendation of the Council for 5 Further Combating Bribery, the 2009 Recommenda- 6 tion on the Tax Deductibility of Bribes to Foreign 7 Public Officials; and other related instruments. 8 (4) Legal instruments adopted by the Council 9 of Europe and monitored by the Group of States 10 against Corruption (GRECO), including the Crimi- 11 nal Law Convention on Corruption, the Civil Law 12 Convention on Corruption, the Additional Protocol 13 to the Criminal Law Convention on Corruption, the 14 Twenty Guiding Principles against Corruption, the 15 Recommendation on Codes of Conduct for Public 16 Officials, and the Recommendation on Common 17 Rules against Corruption in the Funding of Political 18 Parties and Electoral Campaigns. 19 (5) Organization for Security and Cooperation 20 in Europe (OSCE) ‘‘Second Dimension’’ commit- 21 ments on good governance, anti-corruption, anti- 22 money laundering, and related issues. 23 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3843.IH H3843 kjohnson on DSK79L0C42 with BILLS 7 •HR 3843 IH (6) The Inter-American Convention Against 1 Corruption under the Organization of American 2 States. 3 SEC. 5. STATEMENT OF POLICY. 4 It is the policy of the United States to— 5 (1) leverage United States diplomatic engage- 6 ment and foreign assistance to promote the rule of 7 law; 8 (2) promote the international standards identi- 9 fied in section 4, as well as other relevant inter- 10 national standards and best practices as such stand- 11 ards and practices develop, and to seek the universal 12 adoption and implementation of such standards and 13 practices by foreign states; 14 (3) support foreign states in promoting good 15 governance and combating public corruption; 16 (4) encourage and assist foreign partner coun- 17 tries to identify and close loopholes in their legal and 18 financial architecture, including the misuse of anon- 19 ymous shell companies, free trade zones, and other 20 legal structures, that are enabling illicit finance and 21 authoritarian capital to penetrate their financial sys- 22 tems; 23 (5) help foreign partner countries to investigate 24 and combat the use of corruption by authoritarian 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3843.IH H3843 kjohnson on DSK79L0C42 with BILLS 8 •HR 3843 IH governments, particularly that of Vladimir Putin in 1 Russia, as a tool of malign influence worldwide; 2 (6) make use of sanctions authorities, such as 3 the Global Magnitsky Human Rights Accountability 4 Act (enacted as subtitle F of title XII of the Na- 5 tional Defense Authorization Act for Fiscal Year 6 2017 (Public Law 114–328; 22 U.S.C. 2656 note)), 7 to identify and take action against corrupt foreign 8 actors; and 9 (7) ensure coordination between the depart- 10 ments and agencies of the United States Govern- 11 ment with jurisdiction over the advancement of good 12 governance in foreign states. 13 SEC. 6. ANTI-CORRUPTION ACTION FUND. 14 (a) IN GENERAL.—The Secretary of State shall es- 15 tablish in the Department of State a fund to be known 16 as the ‘‘Anti-Corruption Action Fund’’ to aid foreign 17 states to prevent and fight public corruption and develop 18 rule of law-based governance structures, including ac- 19 countable investigative, prosecutorial, and judicial bodies, 20 and supplement existing foreign assistance and diplomacy 21 with respect to such efforts. 22 (b) FUNDING.—An amount equal to five percent of 23 each civil and criminal fine and penalty imposed pursuant 24 to actions brought under the Foreign Corrupt Practices 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3843.IH H3843 kjohnson on DSK79L0C42 with BILLS 9 •HR 3843 IH Act on or after the date of the enactment of this Act that 1 would otherwise be deposited in the Treasury of the 2 United States shall be deposited in the Anti-Corruption 3 Action Fund under subsection (a), to be available without 4 need for subsequent appropriation and without fiscal year 5 limitation. 6 (c) SUPPORT.—The Anti-Corruption Action Fund 7 may support governmental and nongovernmental parties 8 in advancing the goals specified in subsection (a) and shall 9 be allocated in a manner complementary to existing 10 United States foreign assistance, diplomacy, and the anti- 11 corruption activities of other international donors. 12 (d) PREFERENCE.—In programing foreign assistance 13 using the Anti-Corruption Action Fund, the Secretary of 14 State shall give preference to projects that— 15 (1) assist countries that are undergoing historic 16 opportunities for democratic transition, combating 17 corruption, and the establishment of the rule of law; 18 (2) are important to United States national in- 19 terests; and 20 (3) where United States foreign assistance 21 could significantly increase the chance of a success- 22 ful transition described in paragraph (1). 23 (e) PUBLIC DIPLOMACY.—The Secretary of State 24 shall publicize that funds provided to the Anti-Corruption 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3843.IH H3843 kjohnson on DSK79L0C42 with BILLS 10 •HR 3843 IH Action Fund originate from actions brought under the 1 Foreign Corrupt Practices Act so as to demonstrate that 2 monies obtained under such Act are contributing to inter- 3 national anti-corruption work under this section, including 4 by reducing the pressure that United States businesses 5 face to pay bribes overseas, thereby contributing to greater 6 United States competitiveness. 7 SEC. 7. INTERAGENCY TASK FORCE. 8 (a) IN GENERAL.—The Secretary of State shall have 9 primary responsibility for managing a whole-of-govern- 10 ment effort to improve coordination among United States 11 Government departments and agencies, as well as with 12 other donor organizations, that have a role in promoting 13 good governance in foreign states and enhancing the abil- 14 ity of foreign states to combat public corruption. 15 (b) INTERAGENCY TASK FORCE.—Not later than 180 16 days after the date of the enactment of this Act, the Sec- 17 retary of State shall establish and convene an Interagency 18 Task Force composed of— 19 (1) representatives appointed by the President 20 from appropriate departments and agencies, includ- 21 ing the Department of State, the United States 22 Agency for International Development (USAID), the 23 Department of Justice, the Department of the 24 Treasury, the Department of Homeland Security, 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3843.IH H3843 kjohnson on DSK79L0C42 with BILLS 11 •HR 3843 IH the Department of Defense, the Department of 1 Commerce, the Millennium Challenge Corporation, 2 and the intelligence community; and 3 (2) representatives from any other United 4 States Government departments or agencies, as de- 5 termined by the Secretary. 6 (c) ADDITIONAL MEETINGS.—The Interagency Task 7 Force established in subsection (b) shall meet not less 8 than twice per year. 9 (d) DUTIES.—The Interagency Task Force estab- 10 lished in subsection (b) shall— 11 (1) evaluate, on a general basis, the effective- 12 ness of existing foreign assistance programs, includ- 13 ing programs funded by the Anti-Corruption Action 14 Fund under section 6, that have an impact on pro- 15 moting good governance in foreign states and en- 16 hancing the ability of foreign states to combat public 17 corruption; 18 (2) assist the Secretary of State in managing 19 the whole-of-government effort described in sub- 20 section (a); 21 (3) identify general areas in which such whole- 22 of-government effort could be enhanced; and 23 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3843.IH H3843 kjohnson on DSK79L0C42 with BILLS 12 •HR 3843 IH (4) recommend specific programs for foreign 1 states that may be used to enhance such whole-of- 2 government effort. 3 SEC. 8. DESIGNATION OF EMBASSY ANTI-CORRUPTION 4 POINTS OF CONTACT. 5 (a) EMBASSY ANTI-CORRUPTION POINT OF CON- 6 TACT.—The chief [Text truncated for display. Full text available on Congress.gov.]