CROOK Act

II 116TH CONGRESS 1ST SESSION S. 3026 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 SENATE OF THE UNITED STATES DECEMBER 11, 2019 Mr. CARDIN (for himself and Mr. WICKER) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations 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 03:49 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3026.IS S3026 kjohnson on DSK79L0C42 with BILLS 2 •S 3026 IS Sec. 1. Short titles; table of contents. Sec. 2. Findings. Sec. 3. Definitions. Sec. 4. Sense of Congress regarding international standards. Sec. 5. Statement of policy. Sec. 6. Anti-Corruption Action Fund. Sec. 7. Interagency Task Force. Sec. 8. Designation of embassy anti-corruption points of contact. Sec. 9. 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, feeds terrorist recruit- 10 ment and transnational organized crime, enables 11 drug smuggling and human trafficking, and stymies 12 economic growth. 13 (3) Illicit financial flows often inconspicuously 14 penetrate a country through what appears to be le- 15 gitimate financial transactions, as kleptocrats laun- 16 der money, use shell companies, amass offshore 17 wealth, and participate in a global shadow economy. 18 (4) The government of Vladimir Putin in Rus- 19 sia is the leading model of this type of foreign 20 kleptocratic system, using corruption to erode demo- 21 VerDate Sep 11 2014 03:49 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3026.IS S3026 kjohnson on DSK79L0C42 with BILLS 3 •S 3026 IS cratic governance from within and discrediting de- 1 mocracy abroad, thereby strengthening his authori- 2 tarian rule. 3 (5) Russia uses stolen money— 4 (A) to purchase key assets in other coun- 5 tries, particularly with a goal of attaining mo- 6 nopolistic control of a sector; 7 (B) to gain access to and influence the 8 policies of democratic countries; and 9 (C) to directly fund political parties and 10 organizations that advance Russian interests in 11 other countries, particularly those that under- 12 mine confidence and trust in democratic sys- 13 tems. 14 (6) Thwarting these tactics by Russia and other 15 kleptocratic governments requires the international 16 community to strengthen democratic governance, the 17 rule of law, and international cooperation in com- 18 bating illicit finance, especially by empowering re- 19 formers in foreign countries during historic political 20 openings for the establishment of the rule of law in 21 those countries. 22 (7) New reformers in foreign countries must act 23 quickly to seize political openings for anti-corruption 24 reform. Since such reformers are often outsiders 25 VerDate Sep 11 2014 03:49 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3026.IS S3026 kjohnson on DSK79L0C42 with BILLS 4 •S 3026 IS with little government experience, they may need sig- 1 nificant technical assistance to root out deep-seated 2 corruption. 3 SEC. 3. DEFINITIONS. 4 In this Act: 5 (1) APPROPRIATE CONGRESSIONAL COMMIT- 6 TEES.—The term ‘‘appropriate congressional com- 7 mittees’’ means— 8 (A) the Committee on Foreign Relations of 9 the Senate; 10 (B) the Committee on Banking, Housing, 11 and Urban Affairs of the Senate; 12 (C) the Committee on Finance of the Sen- 13 ate; 14 (D) the Committee on Foreign Affairs of 15 the House of Representatives; 16 (E) the Committee on Financial Services 17 of the House of Representatives; and 18 (F) the Committee on Ways and Means of 19 the House of Representatives. 20 (2) FOREIGN ASSISTANCE.—The term ‘‘foreign 21 assistance’’ means foreign assistance authorized 22 under the Foreign Assistance Act of 1961 (22 23 U.S.C. 2251 et seq.). 24 VerDate Sep 11 2014 03:49 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3026.IS S3026 kjohnson on DSK79L0C42 with BILLS 5 •S 3026 IS (3) FOREIGN STATE.—The term ‘‘foreign state’’ 1 has the meaning given such term in section 1603(a) 2 of title 28, United States Code. 3 (4) INTELLIGENCE COMMUNITY.—The term 4 ‘‘intelligence community’’ has the meaning given 5 such term in section 3(4) of the National Security 6 Act of 1947 (50 U.S.C. 3003(4)). 7 (5) PUBLIC CORRUPTION.—The term ‘‘public 8 corruption’’ means the unlawful exercise of entrusted 9 public power for private gain, including by bribery, 10 nepotism, fraud, or embezzlement. 11 (6) RULE OF LAW.—The term ‘‘rule of law’’ 12 means the principle of governance in which all per- 13 sons, institutions, and entities, whether public or 14 private, including the state, are accountable to laws 15 that are— 16 (A) publicly promulgated; 17 (B) equally enforced; 18 (C) independently adjudicated; and 19 (D) consistent with international human 20 rights norms and standards. 21 VerDate Sep 11 2014 03:49 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3026.IS S3026 kjohnson on DSK79L0C42 with BILLS 6 •S 3026 IS SEC. 4. SENSE OF CONGRESS REGARDING INTERNATIONAL 1 STANDARDS. 2 It is the sense of Congress that the foundation for 3 foreign states to fight corruption, kleptocracy, and illicit 4 finance includes— 5 (1) the United Nations Convention against Cor- 6 ruption, done at New York October 31, 2003; 7 (2) recommendations of the Financial Action 8 Task Force comprising the International Standards 9 on Combating Money Laundering and the Financing 10 of Terrorism & Proliferation; 11 (3)(A) the Convention on Combating Bribery of 12 Foreign Public Officials in International Business 13 Transactions of the Organisation for Economic Co- 14 operation and Development, done at Paris December 15 17, 1997 (commonly referred to as the ‘‘Anti-Brib- 16 ery Convention’’); 17 (B) the Recommendation of the Council for 18 Further Combating Bribery of Foreign Public Offi- 19 cials in International Business Transactions, adopt- 20 ed November 26, 2009; 21 (C) the Recommendation of the Council on the 22 Tax Deductibility of Bribes to Foreign Public Offi- 23 cials, adopted on April 11, 1996; and 24 (D) other related instruments; 25 VerDate Sep 11 2014 03:49 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3026.IS S3026 kjohnson on DSK79L0C42 with BILLS 7 •S 3026 IS (4) legal instruments adopted by the Council of 1 Europe and monitored by the Group of States 2 against Corruption, including— 3 (A) the Criminal Law Convention on Cor- 4 ruption, done at Strasbourg January 27, 1999; 5 (B) the Civil Law Convention on Corrup- 6 tion, done at Strasbourg, November 4, 1999; 7 (C) the Additional Protocol to the Criminal 8 Law Convention on Corruption, done at 9 Strasbourg May 15, 2003; 10 (D) the Twenty Guiding Principles for the 11 Fight against Corruption, done at Strasbourg 12 November 6, 1997; 13 (E) the Recommendation on Codes of Con- 14 duct for Public Officials, done at Strasbourg 15 May 11, 2000; and 16 (F) the Recommendation on Common 17 Rules against Corruption in the Funding of Po- 18 litical Parties and Electoral Campaigns, done at 19 Strasbourg April 8, 2003; 20 (5) Second Dimension commitments of the Or- 21 ganization for Security and Cooperation in Europe 22 regarding good governance, anti-corruption, anti- 23 money laundering, and related issues; and 24 VerDate Sep 11 2014 03:49 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3026.IS S3026 kjohnson on DSK79L0C42 with BILLS 8 •S 3026 IS (6) the Inter-American Convention Against Cor- 1 ruption of the Organization of American States, 2 done at Caracas March 29, 1996. 3 SEC. 5. 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 the international standards 9 referred to in section 4 and other relevant inter- 10 national standards and best practices, as such stand- 11 ards and practices develop; and 12 (B) to seek the universal adoption and imple- 13 mentation of such standards and practices by for- 14 eign states; 15 (3) to support foreign states in promoting good 16 governance and combating public corruption; 17 (4) to encourage and assist foreign partner 18 countries to identify and close loopholes in their 19 legal and financial architecture, including the misuse 20 of anonymous shell companies, free trade zones, and 21 other legal structures, that are enabling illicit fi- 22 nance and authoritarian capital to penetrate their fi- 23 nancial systems; 24 VerDate Sep 11 2014 03:49 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S3026.IS S3026 kjohnson on DSK79L0C42 with BILLS 9 •S 3026 IS (5) to help foreign partner countries to inves- 1 tigate and combat the use of corruption by authori- 2 tarian governments, particularly the government of 3 Vladimir Putin in Russia, as a tool of malign influ- 4 ence worldwide; 5 (6) to assist in the recovery of kleptocracy-re- 6 lated stolen assets for victims, including through the 7 use of appropriate bilateral arrangements and inter- 8 national agreements, such as the United Nations 9 Convention against Corruption, done at New York 10 October 31, 2003; 11 (7) to use sanctions authorities, such as the 12 Global Magnitsky Human Rights Accountability Act 13 (subtitle F of title XII of the National Defense Au- 14 thorization Act for Fiscal Year 2017 (Public Law 15 114–328; 22 U.S.C. 2656 note)), to identify and 16 take action against corrupt foreign actors; 17 (8) to ensure coordination between departments 18 and agencies of the United States Government with 19 jurisdiction over the advancement of good govern- 20 ance in foreign states; and 21 (9) to lead the creation of a formal grouping of 22 like-minded states— 23 (A) to coordinate efforts to counter corrup- 24 tion, kleptocracy, and illicit finance; and 25 VerDate Sep 11 2014 03:49 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S3026.IS S3026 kjohnson on DSK79L0C42 with BILLS 10 •S 3026 IS (B) to strengthen collective financial de- 1 fense. 2 SEC. 6. ANTI-CORRUPTION ACTION FUND. 3 (a) ESTABLISHMENT.—There is established in the 4 United States Treasury a trust fund, to be known as the 5 ‘‘Anti-Corruption Action Fund’’, for the purpose of aiding 6 foreign states— 7 (1) to prevent and fight public corruption; 8 (2) to develop rule of law-based governance 9 structures, including accountable investigation, pros- 10 ecutorial, and judicial bodies; and 11 (3) to supplement existing foreign assistance 12 and diplomacy with respect to efforts described in 13 paragraphs (1) and (2). 14 (b) FUNDING.— 15 (1) TRANSFERS.—Beginning on or after the 16 date of the enactment of this Act, if total criminal 17 fines and penalties in excess of $50,000,000 are im- 18 posed against a person under the Foreign Corrupt 19 Practices Act of 1977 (Public Law 95–213) or sec- 20 tion 13, 30A, or 32 of the Securities Exchange Act 21 of 1934 (15 U.S.C. 78m, 78dd–1, and 78ff), wheth- 22 er pursuant to a criminal prosecution, enforcement 23 proceeding, deferred prosecution agreement, non- 24 prosecution agreement, a declination to prosecute or 25 VerDate Sep 11 2014 03:49 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3026.IS S3026 kjohnson on DSK79L0C42 with BILLS 11 •S 3026 IS enforce, or any other resolution, the court (in the 1 case of a conviction) or the Attorney General shall 2 impose an additional prevention payment equal to 3 $5,000,000 against such person, which shall be de- 4 posited in the Anti-Corruption Action Fund estab- 5 lished under subsection (a). 6 (2) AVAILABILITY OF FUNDS.—Amounts depos- 7 ited into the Anti-Corruption Action Fund pursuant 8 to paragraph (1) shall be available to the Secretary 9 of State, without fiscal year limitation or need for 10 subsequent appropriation, for the purposes set forth 11 in this section. 12 (c) SUPPORT.—The Anti-Corruption Action Fund— 13 (1) may support governmental and nongovern- 14 mental parties in advancing the purposes described 15 in subsection (a); and 16 (2) shall be allocated in a manner complemen- 17 tary to existing United States foreign assistance, di- 18 plomacy, and the anti-corruption activities of other 19 international donors. 20 (d) PREFERENCE.—In deciding how funding from 21 the Anti-Corruption Action Fund will be allocated, the 22 Secretary of State shall give preference to projects that— 23 VerDate Sep 11 2014 03:49 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S3026.IS S3026 kjohnson on DSK79L0C42 with BILLS 12 •S 3026 IS (1) assist countries that are undergoing historic 1 opportunities for democratic transition, combating 2 corruption, and the establishment of the rule of law; 3 (2) are important to United States national in- 4 terests; and 5 (3) could significantly increase the chance of a 6 successful transition described in paragraph (1). 7 (e) PUBLIC DIPLOMACY.—The Secretary of State 8 shall announce that funds deposited in the Anti-Corrup- 9 tion Action Fund are derived from actions brought under 10 the Foreign Corrupt Practices Act to demonstrate that the 11 use of such funds are— 12 (1) contributing to international anti-corruption 13 work; and 14 (2) reducing the pressure that United States 15 businesses face to pay bribes overseas, thereby con- 16 tributing to greater competitiveness of United States 17 companies. 18 SEC. 7. INTERAGENCY TASK FORCE. 19 (a) IN GENERAL.—The Secretary of State, in co- 20 operation with the Interagency Task Force established 21 pursuant to subsection (b), shall manage a whole-of-gov- 22 ernment effort to [Text truncated for display. Full text available on Congress.gov.]