Economic Security Act of 1996
S 1557 IS
104th CONGRESS
2d Session
To prohibit economic espionage, to provide for the protection of United
States vital proprietary economic information, and for other purposes. IN
THE SENATE OF THE UNITED STATES
February 1, 1996
Mr. SPECTER (for himself and Mr. KOHL) introduced the following bill; which
was read twice and referred to the Select Committee on Intelligence A BILL
To prohibit economic espionage, to provide for the protection of United
States vital proprietary economic information, 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 `Economic Security Act of 1996'.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS- Congress finds that--
(1) economic security is an integral part of national security;
(2) the development of new ideas and technical innovation is critical to
sustaining a healthy and competitive national economy;
(3) encouraging innovation and creativity requires adequate protection of
vital economic proprietary information, both tangible and intangible;
(4) over 50 countries have covertly tried to obtain advanced technologies
from United States industries;
(5) the theft, wrongful destruction or alteration, misappropriation, or
wrongful conversion by foreign governments or their agents of vital economic
proprietary information belonging to United States owners directly and substantially
threatens the health and competitiveness of critical segments of the United
States economy and, consequently, the Nation's security; and
(6) current laws are inadequate to protect against economic espionage by
foreign governments or those acting on their behalf.
(b) PURPOSE- The purpose of this Act is to protect the national security
by preventing economic espionage and furthering the development and lawful
utilization of United States vital proprietary economic information by protecting
it from theft, wrongful destruction or alteration, misappropriation, and
conversion by foreign governments and their agents or instrumentalities.
This Act is intended to protect the vital proprietary economic information
of the United States Government and United States firms, businesses, industries,
and individuals both domestically and abroad by punishing individuals, corporations,
and institutions that engage in economic espionage with the intent or purpose
of aiding foreign nations or governments and their instrumentalities and
agents.
SEC. 3. PREVENTION OF ECONOMIC ESPIONAGE AND PROTECTION OF VITAL PROPRIETARY
ECONOMIC INFORMATION.
(a) IN GENERAL- The National Security Act of 1947 (50 U.S.C. 421 et seq.)
is amended by adding at the end the following new title:
`TITLE IX--ECONOMIC ESPIONAGE AND PROTECTION OF VITAL PROPRIETARY
ECONOMIC INFORMATION
`SEC. 901. DEFINITIONS.
As used in this title:
`(1) The term `foreign corporation, institution, or instrumentality' means
any corporation, agency, component, institution, association, instrumentality,
or legal, commercial, or business entity that is substantially owned, controlled,
sponsored, commanded, managed, or dominated by a foreign government or subdivision
of a foreign government.
`(2) The term `foreign agent' means any officer, employee, proxy, servant,
delegate, or representative of a foreign nation or government.
`(3) The term `person' means a natural person, corporation, agency, association,
institution, or any other legal, commercial, or business entity.
`(4) The term `vital proprietary economic information' means all forms and
types of financial, business, scientific, technical, economic, or engineering
information, including data, plans, tools, mechanisms, compounds, formulas,
designs, prototypes, processes, procedures, programs, codes, or commercial
strategies, whether tangible or intangible, and however stored, compiled,
or memorialized, if--
`(A) the owner has taken reasonable measures to keep such information confidential;
and
`(B) the information derives independent economic value, actual or potential,
from not being generally known to, and not being readily ascertainable,
acquired, or developed by legal means by the public.
`(5) The term `owner' means the United States person or persons in whom,
or United States Government component, department, or agency in which, rightful
legal, beneficial, or equitable title to, or license in, vital proprietary
economic information is reposed.
`(6) The term `United States person' means--
`(A) in the case of a natural person, a United States citizen or permanent
resident alien; and
`(B) in the case of a non natural person, an entity substantially owned
or controlled by the United States Government or by United States citizens
or permanent resident aliens, or incorporated in the United States.
`SEC. 902. ENGAGING IN ECONOMIC ESPIONAGE TO AID FOREIGN NATIONS,
GOVERNMENTS, CORPORATIONS, INSTITUTIONS, INSTRUMENTALITIES, OR AGENTS.
`(a) IN GENERAL- Any person who, with intent to, or reason to believe that
it will, injure any owner and benefit any foreign nation, government, corporation,
institution, instrumentality, or agent--
`(1) steals, wrongfully appropriates, takes, carries away, or conceals,
or by fraud, artifice, or deception obtains vital proprietary economic information;
`(2) wrongfully copies, duplicates, sketches, draws, photographs, downloads,
uploads, alters, destroys, photocopies, replicates, transmits, delivers,
sends, mails, communicates, or conveys vital proprietary economic information;
`(3) receives, buys, or possesses vital proprietary economic information,
knowing the vital proprietary economic information to have been obtained
by any of the means described in paragraph (1) or (2);
`(4) attempts to commit any offense described in paragraphs (1) through
(3);
`(5) wrongfully solicits another to commit any offense described in paragraphs
(1) through (3); or
`(6) conspires with one or more other persons to commit any offense described
in paragraphs (1) through (3), and one or more of such persons do any act
to effect the object of the conspiracy, shall, except as provided in subsection
(b), be fined not more than $500,000 or imprisoned not more than 25 years,
or both.
`(b) CORPORATIONS- Any corporation that commits any offense described in
subsection (a) shall be fined not more than $10,000,000.
`SEC. 903. CRIMINAL FORFEITURE.
`(a) IN GENERAL- Notwithstanding any provision of State law, any person
convicted of a violation under this title shall forfeit to the United States--
`(1) any property constituting or derived from, any proceeds the person
obtained, directly or indirectly, as the result of such violation; and
`(2) any of the person's property used, or intended to be used, in any manner
or part to commit or facilitate the commission of such violation.
`(b) COURT ORDER- The court, in imposing a sentence on such person, shall
order, in addition to any other sentence imposed pursuant to this title,
that the person forfeit to the United States all property described in this
section.
`(c) APPLICABLE LAW- Property subject to forfeiture under this section,
any seizure and disposition thereof, and any administrative or judicial
proceeding in relation thereto, shall be governed by section 413 of the
Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 853),
except for subsection 413(d) which shall not apply to forfeitures under
this section.
`(d) CRIME VICTIMS FUND- Notwithstanding section 524(c) of title 28, United
States Code, there shall be deposited in the Crime Victims Fund established
under section 1402 of the Victims of Crime Act of 1984 (42 U.S.C. 10601)
all amounts from the forfeiture of property under this section remaining
after the payment of the expenses for forfeiture and sale authorized by
law.
`SEC. 904. IMPORT AND EXPORT SANCTIONS. `(a) IN GENERAL- The President may
prohibit, for a period of up to 5 years, the importation into, or exportation
from, the United States of any product produced, made, assembled, or manufactured
by a person convicted of any offense described in section 902.
`(b) CIVIL PENALTIES- The Attorney General may impose a civil penalty not
to exceed 5 times the value of the exports or imports involved or $100,000,
whichever is greater, against any person who knowingly violates any order
of the President issued under the authority of this title. Such penalty
may be imposed only after notice and opportunity for a hearing on the record
in accordance with sections 554 through 557 of title 5.
`SEC. 905. EXTRA TERRITORIALITY.
`(a) CONDUCT OCCURRING IN THE UNITED STATES- This title applies to conduct
occurring within the territorial and special maritime jurisdiction of the
United States.
`(b) CONDUCT OCCURRING OUTSIDE THE UNITED STATES- This title applies to
conduct occurring outside the United States if--
`(1) the offender is a United States person; or
`(2) the victim of the offense is an owner, as defined in section 901, and
the offense was intended to have or had a substantial or direct effect on
the United States.
`SEC. 906. CONSTRUCTION WITH OTHER LAWS.
`This title shall not be construed to preempt or displace any other Federal
or State remedies, whether civil or criminal, for the misappropriation of
vital proprietary economic information, or to affect the otherwise lawful
disclosure of information by any government employee under section 552 of
title 5 (commonly known as the Freedom of Information Act).
`SEC. 907. PRESERVATION OF CONFIDENTIALITY.
`In any prosecution under this title, the court may enter such orders and
take such other action as may be necessary and appropriate to preserve the
confidentiality of vital proprietary economic information, consistent with
rule 16 of the Federal Rules of Criminal Procedure, the Federal Rules of
Evidence, and other applicable laws. An interlocutory appeal by the United
States shall lie from a decision or order of a district court authorizing
the disclosure of vital proprietary economic information.
`SEC. 908. LAW ENFORCEMENT AND INTELLIGENCE ACTIVITIES.
`This title does not prohibit any lawfully authorized investigative, protective,
or intelligence activity of a law enforcement agency of the United States,
a State, or a political subdivision of a State, or an intelligence agency
of the United States.'.
(b) TECHNICAL AMENDMENT- The table of contents of the National Security
Act of 1947 is amended by adding at the end the following:
`TITLE IX--ECONOMIC ESPIONAGE AND PROTECTION OF VITAL PROPRIETARY ECONOMIC
INFORMATION
`Sec. 901. Definitions.
`Sec. 902. Engaging in economic espionage to aid foreign nations, governments,
corporations, institutions, instrumentalities, or agents.
`Sec. 903. Criminal forfeiture.
`Sec. 904. Import and export sanctions.
`Sec. 905. Extra territoriality.
`Sec. 906. Construction with other laws.
`Sec. 907. Preservation of confidentiality.
`Sec. 908. Law enforcement and intelligence activities.'.
SEC. 4. WIRE AND ELECTRONIC COMMUNICATIONS INTERCEPTION AND INTERCEPTION
OF ORAL COMMUNICATIONS.
Section 2516(1)(a) of title 18, United States Code, is amended by inserting
`title IX of the National Security Act of 1947 (relating to economic espionage
and protection of vital proprietary economic information in interstate and
foreign commerce),' after `fuel),'.
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