Fair Trade in Financial Services Act of 1995 - Directs the Secretary of the Treasury (the President in the case of insurance organizations) to identify foreign countries that may be denying national treatment to U.S. banking and securities organizations and determine whether such possible denial may be having a significant adverse effect on them. Requires the Secretary and the President, when making such determinations, to: (1) consider specified factors; and (2) initiate negotiations (through the U.S. Trade Representative, in the President's case) with such foreign country to ensure that it accords national treatment to such U.S. organizations upon the determination of such possible denial.
Authorizes the Secretary to recommend to the appropriate Federal regulatory agency that it suspend consideration of, or deny a request for, authorization filed by a person of a foreign country determined to have denied such national treatment. Authorizes the President to recommend similar action to the Secretary with respect to the registration of alien insurance organizations. Prohibits such sanctions with respect to any request for authorization filed by specified U.S. depository institutions, securities organizations, or alien insurance organizations which do business in the United States as of a specified date (reciprocal grandfather exemptions).
Requires the Secretary (the President with respect to insurance organizations) to report annually to the Congress on foreign countries that deny national treatment to such U.S. organizations.
Prohibits alien insurance organizations from engaging in insurance activities within the United States unless certain registration and related State requirements have been met.
[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 19 Introduced in House (IH)]
104th CONGRESS
1st Session
H. R. 19
To encourage foreign countries to accord national treatment to United
States banking, securities, and insurance organizations that operate or
seek to operate in those countries.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 4, 1995
Mr. Leach and Mr. Schumer (for themselves, Mr. Frank of Massachusetts,
and Mr. Bereuter) introduced the following bill; which was referred to
the Committee on Banking and Financial Services and, in addition, to
the Committees on Commerce and Ways and Means, 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 encourage foreign countries to accord national treatment to United
States banking, securities, and insurance organizations that operate or
seek to operate in those countries.
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 ``Fair Trade in Financial Services Act
of 1995''.
SEC. 2. PURPOSE; DEFINITIONS.
(a) Purpose.--The purpose of this Act is to encourage foreign
countries to accord national treatment to United States banking,
securities, and insurance organizations that operate or seek to operate
in those countries.
(b) Definitions.--For purposes of this Act, the following
definitions shall apply:
(1) National treatment.--The term ``national treatment''
means, with respect to any foreign country, treatment that
offers United States banking, securities, or insurance
organizations, as the case may be, the same competitive
opportunities (including effective market access) in such
country as are available to the foreign country's domestic
banking, securities, or insurance organizations in like
circumstances.
(6) Person of a foreign country.--
(A) In general.--The term ``person of a foreign
country'' means--
(i) any entity that--
(I) is organized under the laws of
the foreign country, or
(II) has the entity's principal
place of business in the foreign
country;
(ii) an individual who--
(I) is a citizen of the foreign
country; or
(II) is permanently domiciled in
the foreign country; and
(iii) any person that is, directly or
indirectly, under the control of any entity or
individual described in clause (i) or (ii).
(B) Control.--For purposes of subparagraph (A), the
term ``control''--
(i) in the case of a banking organization,
has the same meaning as in section 2 of the
Bank Holding Company Act of 1956;
(ii) in the case of a securities
organization, has the meaning which the
Secretary shall prescribe, by regulation, in
consultation with the Commission; and
(iii) in the case of an insurance
organization, has the meaning which the
President shall prescribe.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(4) Trade Representative.--The term ``Trade
Representative'' means the United States Trade Representative.
SEC. 3. EFFECTUATING THE PRINCIPLE OF NATIONAL TREATMENT FOR BANKING
ORGANIZATIONS.
(a) Identifying Countries That May Be Denying National Treatment to
United States Banking Organizations.--The Secretary shall identify,
after consultation in accordance with subsection (i), the extent to
which foreign countries may be denying national treatment to United
States banking organizations--
(1) according to the most recent report under section 3602
of the Omnibus Trade and Competitiveness Act of 1988 (or the
most recent update of such report); or
(2) based on more recent information that the Secretary
considers appropriate.
(b) Determining Whether Possible Denial of National Treatment May
Be Having a Significant Adverse Effect.--
(1) In general.--The Secretary shall determine, after
consultation in accordance with subsection (i), whether the
possible denial of national treatment to United States banking
organizations by a foreign country identified under subsection
(a) may be having a significant adverse effect on such
organizations.
(2) Factors to be considered.--In making any determination
under paragraph (1), the Secretary shall consider appropriate
factors, including the following:
(A) The extent of United States trade with and
investment in the foreign country, the size of the
foreign country's markets for the financial services
involved, and the extent to which United States banking
organizations operate or seek to operate in those
markets.
(B) The importance of operations by United States
banking organizations in the foreign country to the
export of goods and services by United States firms to
such country.
(C) The extent to which the foreign country
provides in advance to United States banking
organizations a written draft of any measure of general
application that the country proposes to adopt, such as
regulations, guidelines, or other policies regarding
new products and services, in order to allow an
opportunity for such organizations to comment on the
measure and for such comments to be taken into account
by the foreign country.
(D) The extent to which the foreign country--
(i) makes available, in writing, to United
States banking organizations the foreign
country's requirements for completing any
application relating to the provision of
financial services by any such organization;
(ii) applies published, objective standards
and criteria in evaluating any such application
from any United States banking organization;
and
(iii) renders administrative decisions
relating to any such application within a
reasonable period of time.
(3) Solicitation of comments.--Before making any
determination under paragraph (1), the Secretary shall solicit
comments concerning the effect of the possible denial of
national treatment on United States banking organizations from
interested parties.
(c) Negotiations.--
(1) Mandatory initiation of negotiations in certain
cases.--If the Secretary determines under subsection (b) that
the possible denial of national treatment to United States
banking organizations by a foreign country identified under
subsection (a) may be having a significant adverse effect on
such organizations, the Secretary shall initiate negotiations
with such foreign country to ensure that such country accords
national treatment to United States banking organizations.
(2) Exceptions.--Paragraph (1) shall not apply with respect
to any foreign country if the Secretary--
(A) determines that negotiations with such country
in accordance with paragraph (1)--
(i) would be unlikely to result in progress
toward according national treatment to United
States banking organizations; or
(ii) would impair the economic interests of
the United States; and
(B) gives written notice of that determination to
the Congress.
(d) Publication of Postnegotiation Determination; Dispute
Resolution Proceeding.--
(1) Publication.--If, after making a determination under
subsection (b) that the possible denial of national treatment
to United States banking organizations by a foreign country may
be having a significant adverse effect on such organizations,
the Secretary determines, after consultation in accordance with
subsection (i), that--
(A) any negotiations under subsection (c) have not
resulted in, or are not likely to result in, progress
toward according national treatment to United States
banking organizations; and
(B) effective relief is not available under any
bilateral or multilateral agreement described in
paragraph (2)(A);
the Secretary may publish, in the Federal Register, a final
determination in accordance with subsections (a) and (b) that
such country is denying national treatment to United States
banking organizations and the denial is having a significant
adverse effect on any such organizations.
(2) Dispute resolution under applicable agreements.--If,
after making a determination under subsection (b) that the
possible denial of national treatment to United States banking
organizations by a foreign country may be having a significant
adverse effect on such organizations--
(A) the Secretary determines that the acts,
policies, or practices of the foreign country which
give rise to such determination are subject to any
bilateral or multilateral agreement that governs
financial services that has been entered into by the
President and approved by the Senate and House of
Representatives; and
(B) the agreement provides for a formal process for
resolving disputes regarding obligations under the
agreement;
the United States shall initiate a proceeding under the
agreement to enforce the rights of the United States under the
agreement.
(3) Annual review of determinations.--The Secretary shall,
not less frequently than annually and after consultation in
accordance with subsection (i), review each determination
published pursuant to paragraph (1) to determine whether the
determination should be rescinded.
(4) Notification of appropriate state officials of
publication of determination.--The Secretary shall inform State
bank supervisors (as defined in section 3(r) of the Federal
Deposit Insurance Act) of the publication of any determination
under paragraph (1).
(e) Discretionary Sanctions.--
(1) Action by the secretary.--
(A) In general.--Subject to subparagraph (B) and
paragraph (2), the Secretary may, after consultation in
accordance with subsection (i), recommend to the
appropriate Federal banking agency that such agency
suspend consideration of or deny a request for
authorization that is filed--
(i) by a person of a foreign country listed
in a determination published under subsection
(d)(1); and
(ii) after the date of the publication of
such determination.
(B) Conditions for exercise of authority.--The
Secretary may make a recommendation under subparagraph
(A), if the Secretary determines that--
(i) such action would assist the United
States in negotiations to eliminate denials of
national treatment against United States
banking organizations; or
(ii) the country has not adhered adequately
to an agreement reached as a result of
negotiations undertaken pursuant to subsection
(c).
(2) Consistency with bilateral and multilateral
agreements.--The authority of the Secretary under paragraph (1)
may not be used to take actions with respect to a foreign
country which are inconsistent with any bilateral or
multilateral agreement that governs financial services in which
such country is obligated to provide national treatment for
United States banking organizations.
(3) Direction of president.--The exercise of any authority
of the Secretary under paragraph (1) shall be subject to the
specific direction (if any) of the President.
(4) Suspensions of requests.--
(A) In general.--Notwithstanding any other
provision of law, but subject to paragraph (5), if,
pursuant to paragraph (1), the Secretary recommends to
the appropriate Federal banking agency that the agency
suspend the agency's consideration of a request for
authorization by a person of a foreign country, the
agency shall--
(i) suspend the agency's consideration of
the request for a period of 180 days; and
(ii) at the recommendation of the
Secretary, extend any such suspension for an
additional period of 180 days.
(B) Termination of suspension.--The appropriate
Federal banking agency shall, at any time, terminate a
suspension under subparagraph (A) at the recommendation
of the Secretary.
(5) Exceptions.--
(A) In general.--The appropriate Federal banking
agency shall act in accordance with any recommendation
of the Secretary made under paragraph (1) unless the
agency determines, in writing, and transmits such
determination to the Secretary and the Congress, that
action in accordance with such recommendation--
(i) would have a serious adverse effect
on--
(I) the stability of the United
States financial system; or
(II) the safe and sound operation
of the payments system; or
(ii) would adversely affect the ability of
the appropriate Federal banking agencies to act
on a request for authorization made in
connection with the resolution of an insured
depository institution described in section
13(c)(2)(B) of the Federal Deposit Insurance
Act because the foreign bank represents the
only bona fide reasonable offer available with
respect to such resolution.
(B) Determination of reasonableness of offer.--In
determining whether the offer of a foreign bank
represents the only bona fide reasonable offer
available for purposes of subparagraph (A)(ii), the
appropriate Federal banking agency shall consider,
among such other factors as the agency may consider to
be appropriate, whether the offer represents the least
cost to the respective deposit insurance fund relative
to all other possible means for meeting the
requirements of section 13(c)(4) of the Federal Deposit
Insurance Act.
(f) Reciprocal Grandfather Exemption From Sanctions.--The authority
of subsection (e) may not be used to suspend or deny a request for
authorization by any United States depository institution (other than a
branch of a foreign bank (as defined in section 1(b) of the
International Banking Act of 1978)) or any company established pursuant
to section 4(c)(8) of the Bank Holding Company Act of 1956 if--
(1) such institution or company was controlled as of
December 31, 1994, by a person of a foreign country and such
control has been maintained continuously since that date; and
(2) such person's foreign country, by law or regulation
(which took effect on or before December 31, 1994, and remains
in effect) and in practice, explicitly provides national
treatment to--
(A) banks which were established or acquired in
such country by United States banking organizations
before the effective date of such law or regulation of
the foreign country; and
(B) subsidiaries (of such banks) which were
established or acquired in such country by United
States banking organizations before such effective
date.
(g) Report.--
(1) Contents of report.--Not later than December 1, 1996,
and annually after such date, the Secretary shall submit to the
Speaker of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate a report
that--
(A) specifies the foreign countries identified
under subsection (a);
(B) if a determination has been published under
subsection (d)(1) with respect to a foreign country,
provides the reasons for such determination;
(C) if the Secretary has not made or has rescinded
such a determination with respect to a foreign country,
provides the reasons for the failure to make the
determination or for the rescission;
(D) describes the results of any negotiations
conducted under subsection (c)(1) with a foreign
country; and
(E) discusses the effectiveness of the
administration of this section in achieving the
purposes of the section.
(2) Submission of report.--The report required by paragraph
(1) may be submitted as part of a report or update submitted
under section 3602 of the Omnibus Trade and Competitiveness Act
of 1988.
(h) Definitions.--The following definitions shall apply for
purposes of this section:
(1) Appropriate federal banking agency.--The term
``appropriate Federal banking agency''--
(A) has the same meaning as in section 3(q) of the
Federal Deposit Insurance Act; and
(B) includes the Board of Governors of the Federal
Reserve System (in addition to any other agency which
may be an appropriate Federal banking agency under such
section 3(q)) in the case of any request for
authorization to--
(i) establish a United States
representative office, agency, or branch of a
foreign bank (as such terms are defined in
section 1(b) of the International Banking Act
of 1978);
(ii) establish or acquire an interest in a
commercial lending company (as defined in
section 1(b) of the International Banking Act
of 1978) or a corporation organized or
operating under section 25 or 25A of the
Federal Reserve Act; or
(iii) acquire an interest in a bank or bank
holding company, or any company that is not a
bank, under the Bank Holding Company Act of
1956 or this Act.
(2) Banking organization.--
(A) In general.--The term ``banking organization''
means any bank, any bank holding company (including any
company required to file reports pursuant to section
4(f)(6) of the Bank Holding Company Act of 1956), any
savings and loan holding company (as such term is
defined in section 10(a)(1)(D) of the Home Owners''
Loan Act), any nonbank financial entity the primary
purpose of which is to provide credit or financing
(regardless of whether such entity accepts deposits),
and any subsidiary of any such bank, company, or
entity.
(B) Banking terms.--For purposes of this paragraph
and paragraph (1)(B)(iii), the terms ``bank'', ``bank
holding company'', ``company'', and ``subsidiary'' have
the same meaning as in section 2 of the Bank Holding
Company Act of 1956.
(4) Definitions relating to depository institutions.--The
terms ``depository institution'' and ``depository institution
holding company'' have the same meaning as in section 3 of the
Federal Deposit Insurance Act.
(5) Request for authorization.--The term ``request for
authorization'' means any application, notice, registration, or
other request for authorization that is required under Federal
banking law or regulation--
(A) to establish facilities or engage in activities
at a new geographic location;
(B) to engage in additional activities or expand
existing activities; or
(C) involving a change in control of any depository
institution or depository institution holding company.
(i) Consultation.--In the case of any consultation pursuant to this
section which is required to be made in accordance with this
subsection, the Secretary of the Treasury shall consult with the
Secretary of State, the Trade Representative, the Secretary of
Commerce, and any appropriate Federal banking agency.
SEC. 4. EFFECTUATING THE PRINCIPLE OF NATIONAL TREATMENT FOR SECURITIES
ORGANIZATIONS.
(a) Identifying Countries That May Be Denying National Treatment to
United States Securities Organizations.--The Secretary shall identify,
after consultation in accordance with subsection (i), the extent to
which foreign countries may be denying national treatment to United
States securities organizations--
(1) according to the most recent report under section 3602
of the Omnibus Trade and Competitiveness Act of 1988 (or the
most recent update of such report); or
(2) based on more recent information that the Secretary
considers appropriate.
(b) Determining Whether Possible Denial of National Treatment May
Be Having a Significant Adverse Effect.--
(1) In general.--The Secretary shall determine, after
consultation in accordance with subsection (i), whether the
possible denial of national treatment to United States
securities organizations by a foreign country identified under
subsection (a) may be having a significant adverse effect on
such organizations.
(2) Factors to be considered.--In making any determination
under paragraph (1), the Secretary shall consider appropriate
factors, including the following:
(A) The extent of United States trade with and
investment in the foreign country, the size of the
foreign country's markets for the financial services
involved, and the extent to which United States
securities organizations operate or seek to operate in
those markets.
(B) The importance of operations by United States
securities organizations in the foreign country to the
export of goods and services by United States firms to
such country.
(C) The extent to which the foreign country
provides in advance to United States securities
organizations a written draft of any measure of general
application that the country proposes to adopt, such as
regulations, guidelines, or other policies regarding
new products and services, in order to allow an
opportunity for such organizations to comment on the
measure and for such comments to be taken into account
by the foreign country.
(D) The extent to which the foreign country--
(i) makes available, in writing, to United
States securities organizations the foreign
country's requirements for completing any
application relating to the provision of
financial services by any such organization;
(ii) applies published, objective standards
and criteria in evaluating any such application
from any United States securities organization;
and
(iii) renders administrative decisions
relating to any such application within a
reasonable period of time.
(3) Solicitation of comments.--Before making any
determination under paragraph (1), the Secretary shall solicit
comments concerning the effect of the possible denial of
national treatment on United States securities organizations
from interested parties.
(c) Negotiations.--
(1) Mandatory initiation of negotiations in certain
cases.--If the Secretary determines under subsection (b) that
the possible denial of national treatment to United States
securities organizations by a foreign country identified under
subsection (a) may be having a significant adverse effect on
such organizations, the Secretary shall initiate negotiations
with such foreign country to ensure that such country accords
national treatment to United States securities organizations.
(2) Exceptions.--Paragraph (1) shall not apply with respect
to any foreign country if the Secretary--
(A) determines that negotiations with such country
in accordance with paragraph (1)--
(i) would be unlikely to result in progress
toward according national treatment to United
States securities organizations; or
(ii) would impair the economic interests of
the United States; and
(B) gives written notice of that determination to
the Congress.
(d) Publication of Postnegotiation Determination; Dispute
Resolution Proceeding.--
(1) Publication.--If, after making a determination under
subsection (b) that the possible denial of national treatment
to United States securities organizations by a foreign country
may be having a significant adverse effect on such
organizations, the Secretary determines, after consultation in
accordance with subsection (i), that--
(A) any negotiations under subsection (c) have not
resulted in, or are not likely to result in, progress
toward according national treatment to United States
securities organizations; and
(B) effective relief is not available under any
bilateral or multilateral agreement described in
paragraph (2)(A);
the Secretary may publish, in the Federal Register, a final
determination in accordance with subsections (a) and (b) that
such country is denying national treatment to United States
securities organizations and the denial is having a significant
adverse effect on any such organizations.
(2) Dispute resolution under applicable agreements.--If,
after making a determination under subsection (b) that the
possible denial of national treatment to United States
securities organizations by a foreign country may be having a
significant adverse effect on such organizations--
(A) the Secretary determines that the acts,
policies, or practices of the foreign country which
give rise to such determination are subject to any
bilateral or multilateral agreement that governs
financial services that has been entered into by the
President and approved by the Senate and House of
Representatives; and
(B) the agreement provides for a formal process for
resolving disputes regarding obligations under the
agreement;
the United States shall initiate a proceeding under the
agreement to enforce the rights of the United States under the
agreement.
(3) Annual review of determinations.--The Secretary shall,
not less frequently than annually and after consultation in
accordance with subsection (i), review each determination
published pursuant to paragraph (1) to determine whether the
determination should be rescinded.
(4) Notification of appropriate state officials of
publication of determination.--The Secretary shall inform
appropriate State securities regulatory agencies of the
publication of any determination under paragraph (1).
(e) Discretionary Sanctions.--
(1) Action by the secretary.--
(A) In general.--Subject to subparagraph (B) and
paragraph (2), the Secretary may, after consultation in
accordance with subsection (i), recommend to the
Commission that the Commission suspend consideration of
or deny a request for authorization that is filed--
(i) by a person of a foreign country listed
in a determination published under subsection
(d)(1); and
(ii) after the date of the publication of
such determination.
(B) Conditions for exercise of authority.--The
Secretary may make a recommendation under subparagraph
(A), if the Secretary determines that--
(i) such action would assist the United
States in negotiations to eliminate denials of
national treatment against United States
securities organizations; or
(ii) the country has not adhered adequately
to an agreement reached as a result of
negotiations undertaken pursuant to subsection
(c).
(2) Consistency with bilateral and multilateral
agreements.--The authority of the Secretary under paragraph (1)
may not be used to take actions with respect to a foreign
country which are inconsistent with any bilateral or
multilateral agreement that governs financial services in which
such country is obligated to provide national treatment for
United States securities organizations.
(3) Direction of president.--The exercise of any authority
of the Secretary under paragraph (1) shall be subject to the
specific direction (if any) of the President.
(4) Additional provisions applicable to requests for
authorization.--
(A) Authority upon denial of authorization.--
(i) In general.--In connection with a
recommendation under paragraph (1)(A) to deny a
request for authorization described in
subsection (h)(2), the Commission may order--
(I) the disposition of any
controlling interest referred to in
clause (ii)(I) of such subsection;
(II) the closure of any office
referred to in subsection clause
(ii)(II) of such subsection; or
(III) the termination of any
advisory relationship referred to in
clause (iii) or (iv) of such
subsection.
(ii) Enforcement.--The Commission may
enforce an order under clause (i) through
appropriate action under the securities laws,
including, if necessary, revocation of the
underlying registration of any person who fails
to comply with such an order.
(B) Notice required to file requests for
authorization.--
(i) In general.--If a determination is
published under subsection (d)(1) with respect
to a foreign country on the basis of the
adverse effect the denial of national treatment
by such country is having on securities
organizations, no person of that foreign
country may file a request for authorization
described in subsection (h)(2) unless such
person files notice of such request
simultaneously with the Commission and the
Secretary, not less than 90 days in advance of
the action that is the subject of the request,
in such form and containing such information as
the Commission may prescribe by rule.
(ii) Extending 90-day period.--The
Commission may, by order, extend for an
additional 180 days the period during which the
Commission may consider a request for
authorization described in subsection (h)(2)
that is the subject of a notice received under
clause (i).
(5) Suspensions of requests.--
(A) In general.--Notwithstanding any other
provision of law, but subject to paragraph (6), if,
pursuant to paragraph (1), the Secretary recommends to
the Commission that the Commission suspend the
Commission's consideration of a request for
authorization by a person of a foreign country, the
Commission shall--
(i) suspend the Commission's consideration
of the request for a period of 180 days; and
(ii) at the recommendation of the
Secretary, extend any such suspension for an
additional period of 180 days.
(B) Termination of suspension.--The Commission, as
the case may be, shall, at any time, terminate a
suspension under subparagraph (A) at the recommendation
of the Secretary.
(6) Exceptions.--The Commission shall act in accordance
with any recommendation of the Secretary made under paragraph
(1) unless the Commission determines, in writing, and transmits
such determination to the Secretary and the Congress, that
action in accordance with such recommendation would have a
serious adverse effect on--
(A) the maintenance of fair and orderly securities
markets; or
(B) the protection of investors.
(f) Reciprocal Grandfather Exemption From Sanctions.--
(1) In general.--The authority of subsection (e) may not be
used to suspend or deny a request for authorization by any
securities organization which is organized under the laws of
the United States, any State, or the District of Columbia, if--
(A) organization was controlled as of December 31,
1994, by a person of a foreign country and such control
has been maintained continuously since that date; and
(B) such person's foreign country, by law or
regulation (which took effect on or before December 31,
1994, and remains in effect) and in practice,
explicitly provides national treatment to--
(i) securities companies which were
established or acquired in such country by
United States securities organizations before
the effective date of such law or regulation of
the foreign country; and
(ii) subsidiaries (of such securities
companies) which were established or acquired
in such country by United States securities
organizations before such effective date.
(2) Securities company defined.--For purposes of paragraph
(1)(B), the term ``securities company'' means any company
engaged, under the laws or regulations of a foreign country, in
the business of--
(A) buying, selling, or underwriting securities,
including municipal and government securities and
instruments which are similar to securities; or
(B) acting as an investment adviser, fiduciary,
transfer agent, or any similar function involving the
provision of investment services.
(3) Treatment of european community directive during period
of implementation by member states.--During the period
beginning on the date of the enactment of the Fair Trade in
Financial Services Act of 1995 and ending on December 31, 1995,
any directive of the European Community which--
(A) was adopted before December 31, 1994; and
(B) requires the implementation in national law by
the Member States of the European Community of national
treatment for securities companies and subsidiaries
described in paragraph (1)(B);
may be treated as a law in effect in each such Member State for
purposes of paragraph (1).
(g) Report.--
(1) Contents of report.--Not later than December 1, 1996,
and annually after such date, the Secretary shall submit to the
Speaker of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate a report
that--
(A) specifies the foreign countries identified
under subsection (a);
(B) if a determination has been published under
subsection (d)(1) with respect to a foreign country,
provides the reasons for such determination;
(C) if the Secretary has not made or has rescinded
such a determination with respect to a foreign country,
provides the reasons for the failure to make the
determination or for the rescission;
(D) describes the results of any negotiations
conducted under subsection (c)(1) with a foreign
country; and
(E) discusses the effectiveness of the
administration of this section in achieving the
purposes of the section.
(2) Submission of report.--The report required by paragraph
(1) may be submitted as part of a report or update submitted
under section 3602 of the Omnibus Trade and Competitiveness Act
of 1988.
(h) Definitions.--The following definitions shall apply for
purposes of this section:
(1) Commission.--The term ``Commission'' means the
Securities and Exchange Commission.
(2) Request for authorization.--The term ``request for
authorization'' means--
(A) an application to register under section 15(b),
15B, or 15C of the Securities Exchange Act of 1934, or
section 203(c) of the Investment Advisers Act of 1940,
including an application to succeed to the business of
a registered entity;
(B) an amendment to a registration referred to in
clause (i) that reflects--
(i) the acquisition of control of the
registered entity; or
(ii) the addition of a United States office
by the registered entity;
(C) a registration statement filed by an investment
company under section 8 of the Investment Company Act
of 1940, if a person of a foreign country will serve as
an investment adviser to the investment company; and
(D) an amendment to an investment company
registration statement filed under section 8 of the
Investment Company Act of 1940 that reflects the
retention of a person of a foreign country as an
investment adviser.
(3) Securities organization.--The term ``securities
organization'' means--
(A) any broker or dealer (as such terms are defined
in paragraphs (4) and (5), respectively, of section
3(a) of the Securities Exchange Act of 1934);
(B) any investment adviser (as defined in section
202(a)(11) of the Investment Advisers Act of 1940); and
(C) any investment company (as defined in section 3
of the Investment Company Act of 1940).
(i) Consultation.--In the case of any consultation pursuant to this
section which is required to be made in accordance with this
subsection, the Secretary of the Treasury shall consult with the
Secretary of State, the Secretary of Commerce, the Trade
Representative, and the Commission.
SEC. 5. EFFECTUATING THE PRINCIPLE OF NATIONAL TREATMENT FOR INSURANCE
ORGANIZATIONS.
(a) Identifying Countries That May Be Denying National Treatment to
United States Insurance Organizations.--The President shall identify
the extent to which foreign countries may be denying national treatment
to United States insurance organizations--
(1) according to the most recent report under section 3602
of the Omnibus Trade and Competitiveness Act of 1988 (or the
most recent update of such report); or
(2) based on other or more recent information that the
President considers appropriate.
(b) Determining Whether Possible Denial of National Treatment May
Be Having a Significant Adverse Effect.--
(1) In general.--The President shall determine whether the
possible denial of national treatment to United States
insurance organizations by a foreign country identified under
subsection (a) may be having a significant adverse effect on
such organizations.
(2) Factors to be considered.--In making any determination
under paragraph (1), the President shall consider appropriate
factors, including the following:
(A) The extent of United States trade with and
investment in the foreign country, the size of the
foreign country's markets for the financial services
involved, and the extent to which United States
insurance organizations operate or seek to operate in
those markets.
(B) The importance of operations by United States
insurance organizations in the foreign country to the
export of goods and services by United States firms to
such country.
(C) The extent to which the foreign country
provides in advance to United States insurance
organizations a written draft of any measure of general
application that the country proposes to adopt, such as
regulations, guidelines, or other policies regarding
new products and services, in order to allow an
opportunity for such organizations to comment on the
measure and for such comments to be taken into account
by the foreign country.
(D) The extent to which the foreign country--
(i) makes available, in writing, to United
States insurance organizations the foreign
country's requirements for completing any
application relating to the provision of
financial services by any such organization;
(ii) applies published, objective standards
and criteria in evaluating any such application
from any United States insurance organization;
and
(iii) renders administrative decisions
relating to any such application within a
reasonable period of time.
(3) Solicitation of comments.--Before making any
determination under paragraph (1), the President shall solicit
comments concerning the effect of the possible denial of
national treatment on United States insurance organizations
from interested parties.
(c) Negotiations.--
(1) Mandatory initiation of negotiations in certain
cases.--If the President determines under subsection (b) that
the possible denial of national treatment to United States
insurance organizations by a foreign country identified under
subsection (a) may be having a significant adverse effect on
such organizations, the Trade Representative shall initiate
negotiations with such foreign country to ensure that such
country accords national treatment to United States insurance
organizations.
(2) Exceptions.--Paragraph (1) shall not apply with respect
to any foreign country if the President--
(A) determines that negotiations with such country
in accordance with paragraph (1)--
(i) would be unlikely to result in progress
toward according national treatment to United
States insurance organizations; or
(ii) would impair the economic interests of
the United States; and
(B) gives written notice of that determination to
the Congress.
(d) Publication of Postnegotiation Determination; Dispute
Resolution Proceeding.--
(1) Publication.--If, after making a determination under
subsection (b) that the possible denial of national treatment
to United States insurance organizations by a foreign country
may be having a significant adverse effect on such
organizations, the President determines that--
(A) any negotiations under subsection (c) have not
resulted in, or are not likely to result in, progress
toward according national treatment to United States
insurance organizations; and
(B) effective relief is not available under any
bilateral or multilateral agreement described in
paragraph (2)(A);
the President may publish, in the Federal Register, a final
determination in accordance with subsections (a) and (b) that
such country is denying national treatment to United States
insurance organizations and the denial is having a significant
adverse effect on any such organizations.
(2) Dispute resolution under applicable agreements.--If,
after making a determination under subsection (b) that the
possible denial of national treatment to United States
insurance organizations by a foreign country may be having a
significant adverse effect on such organizations--
(A) the President determines that the acts,
policies, or practices of the foreign country which
give rise to such determination are subject to any
bilateral or multilateral agreement that governs
financial services that has been entered into by the
President and approved by the Senate and House of
Representatives; and
(B) the agreement provides for a formal process for
resolving disputes regarding obligations under the
agreement;
the United States shall initiate a proceeding under the
agreement to enforce the rights of the United States under the
agreement.
(3) Annual review of determinations.--The President shall,
not less frequently than annually, review each determination
published pursuant to paragraph (1) to determine whether the
determination should be rescinded.
(4) Notification of appropriate state officials of
publication of determination.--The President shall inform
appropriate State insurance regulatory agencies of the
publication of any determination under paragraph (1).
(e) Discretionary Sanctions.--
(1) Action by the president.--Subject to paragraph (2), the
President may recommend to the Secretary of the Treasury that
the Secretary suspend the acceptance of, or not accept, a
registration statement that is filed pursuant to subsection (j)
after the date of publication of a determination under
subsection (d)(1) by a person of a foreign country listed in
such publication if the President determines that--
(i) such action would assist the United
States in negotiations to eliminate denials of
national treatment against United States
insurance organizations;
(ii) the country has not adequately adhered
to an agreement reached as a result of
negotiations undertaken pursuant to subsection
(c).
(2) Consistency with bilateral and multilateral
agreements.--The authority of the President under paragraph (1)
may not be used to take actions with respect to a foreign
country which are inconsistent with any bilateral or
multilateral agreement that governs financial services in which
such country is obligated to provide national treatment for
United States insurance organizations.
(3) Suspensions of filings of registrations.--
(A) In general.--Notwithstanding any other
provision of law, if the President recommends, pursuant
to paragraph (1), that the Secretary suspend the
acceptance of any registration of an alien insurance
company under subsection (j), the Secretary shall--
(i) suspend the Secretary's acceptance of
such registration for a period of 180 days; and
(ii) at the recommendation of the
President, extend such suspension for an
additional period of 180 days.
(B) Termination of suspension.--The Secretary
shall, on the recommendation of the President,
terminate any suspension in effect under clause (i).
(C) Alternative action.--If the President
determines that the procedure outlined in subparagraph
(A) is either inappropriate or impractical to achieve
the purpose of this section, the President may take
such action under other provisions of law as the
President considers necessary and appropriate to
encourage foreign countries to accord national
treatment to United States insurance organizations that
operate or seek to operate in those countries.
(f) Existing Alien Insurance Organization Activity.--The authority
of subsection (e) may not be exercised with the respect to any
registration filed by an alien insurance organization which is engaged
in insurance activities within the United States as of January 4, 1995.
(g) Report.--
(1) Contents of report.--Not later than December 1, 1996,
and annually after such date, the President shall transmit to
the Speaker of the House of Representatives and the Committee
on Banking, Housing, and Urban Affairs of the Senate a report
that--
(A) specifies the foreign countries identified
under subsection (a);
(B) if a determination has been published under
subsection (d)(1) with respect to a foreign country,
provides the reasons for such determination;
(C) if the President has not made or has rescinded
such a determination with respect to a foreign country,
provides the reasons for the failure to make the
determination or for the rescission;
(D) describes the results of any negotiations
conducted under subsection (c)(1) with a foreign
country; and
(E) discusses the effectiveness of the
administration of this section in achieving the
purposes of the section.
(2) Submission of report.--The report required by paragraph
(1) may be submitted as part of a report or update submitted
under section 3602 of the Omnibus Trade and Competitiveness Act
of 1988.
(h) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Alien insurance organization.--The term ``alien
insurance organization'' means an insurance organization which
is a person of a foreign country.
(2) Insurance organization.--The term ``insurance
organization'' means any insurer and any reinsurer.
(3) Insurer.--The term ``insurer'' means a party to a
contract of insurance who assumes the risk and undertakes to
indemnify the insured, or to pay a certain sum on the
occurrence of a specified contingency.
(4) Reinsurer.--The term ``reinsurer'' means an insurer
which contracts to indemnify a ceding insurer for all or part
of a risk originally undertaken by the ceding insurer.
(i) Consultation.--In carrying out the duties under this section,
the President may consult with the appropriate State insurance
commissioners or regulatory agencies and other entities the President
may consider appropriate.
(j) Registration of Alien Insurance Organizations With the
Secretary.--
(1) In general.--No alien insurance organization may engage
in insurance activities within the United States after the date
of the enactment of this Act unless--
(A) a registration statement has been filed by the
organization with the Secretary indicating the
organization's intention to engage in insurance
activities within the United States; and
(B) applicable State insurance requirements have
been satisfied.
(2) Annual report.--The Secretary shall submit an annual
report to the Congress on the extent of alien insurance
organization activity within the United States.
(k) Delegation.--
(1) In general.--The President may delegate any authority
of the President under this section.
(2) Exercise of authority.--If the President delegates any
authority of the President under this section, the designee's
authority shall be exercised according to the specific
direction (if any) of the President.
SEC. 6. CONFORMING AMENDMENTS.
(a) Reports on Foreign Treatment of United States Financial
Institutions.--Section 3602 of the Omnibus Trade and Competitiveness
Act of 1988 (22 U.S.C. 5352) is amended--
(1) in the 1st sentence, by inserting ``with updates on
significant developments every 2 years following the study
conducted in 1994,'' before ``the Secretary of the Treasury'';
and
(2) by adding at the end the following: ``For purposes of
this section, a foreign country denies national treatment to
United States entities unless the foreign country offers such
entities the same competitive opportunities (including
effective market access) as are available to the domestic
entities of the foreign country in like circumstances.''.
(b) Negotiations To Promote Fair Trade in Financial Services.--
Section 3603(a)(1) of the Omnibus Trade and Competitiveness Act of 1988
(22 U.S.C. 5353(a)(1)) is amended by inserting ``effective'' before
``access''.
(c) Primary Dealers in Government Debt Instruments.--Section
3502(b)(1) of the Omnibus Trade and Competitiveness Act of 1988 (22
U.S.C. 5342(b)(1)) is amended--
(1) by striking ``does not accord to'' and inserting ``does
not offer''; and
(2) by striking ``as such country accords to domestic
companies of such country.'' and inserting ``as are available
to domestic companies of such country in like circumstances.''.
(d) Conforming Amendments to the Securities Exchange Act of 1934.--
(1) Section 15.--Section 15(b)(1) of the Securities
Exchange Act of 1934 (15 U.S.C. 78o(b)(1)) is amended by adding
at the end the following: ``The Commission may suspend
consideration or deny registration, as provided in section 4(e)
of the Fair Trade in Financial Services Act of 1995.''.
(2) Section 15b.--Section 15B(a)(2) of the Securities
Exchange Act of 1934 (15 U.S.C. 78o-4(a)(2)) is amended by
adding at the end the following: ``The Commission may suspend
consideration and deny registration, as provided in section
4(e) of the Fair Trade in Financial Services Act of 1995''.
(3) Section 15c.--Section 15C(a)(2) of the Securities
Exchange Act of 1934 (15 U.S.C. 78o-5(a)(2)) is amended by
adding at the end the following: ``The Commission may suspend
consideration and deny registration, as provided in section
4(e) of the Fair Trade in Financial Services Act of 1995.''.
(e) Conforming Amendment to the Investment Company Act of 1940.--
Section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8) is
amended by adding at the end the following new subsection:
``(g) The Commission may suspend consideration and deny
registration, as provided in section 4(e) of the Fair Trade in
Financial Services Act of 1995.''.
(f) Conforming Amendment to the Investment Advisers Act of 1940.--
Section 203(c)(2) of the Investment Advisers Act of 1940 (15 U.S.C.
(c)(2)) is amended by adding at the end the following: ``The Commission
may suspend consideration or deny registration, as provided in section
4(e) of the Fair Trade in Financial Services Act of 1995.''.
(g) Report on Denial of National Treatment for Insurance
Organizations.--Section 3602(3) of the Omnibus Trade and
Competitiveness Act of 1988 (22 U.S.C. 5352(3)) is amended by inserting
``, insurance organizations,'' after ``banking organizations''.
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HR 19 IH----3
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HR 19 IH----5
Introduced in House
Introduced in House
Referred to the Committee on Banking and Financial Services, and in addition to the Committees on Commerce, and Ways and Means, 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.
Referred to the Committee on Banking and Financial Services, and in addition to the Committees on Commerce, and Ways and Means, 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.
Referred to the Committee on Banking and Financial Services, and in addition to the Committees on Commerce, and Ways and Means, 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.
Referred to the Committee on Banking and Financial Services, and in addition to the Committees on Commerce, and Ways and Means, 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.
Referred to the Subcommittee on Trade.
Referred to the Subcommittee on Domestic and International Monetary Policy.
Referred to the Subcommittee on Financial Institutions and Consumer Credit.
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Referred to the Subcommittee on Commerce, Trade, and Hazardous Materials, for a period to be subsequently determined by the Chairman.
Referred to the Subcommittee on Telecommunications and Finance, for a period to be subsequently determined by the Chairman.