[110th Congress Public Law 174]
[From the U.S. Government Printing Office]
[DOCID: f:publ174.110]
[[Page 2515]]
SUDAN ACCOUNTABILITY AND DIVESTMENT ACT OF 2007
[[Page 121 STAT. 2516]]
Public Law 110-174
110th Congress
An Act
To authorize State and local governments to divest assets in companies
that conduct business operations in Sudan, to prohibit United States
Government contracts with such companies, and for other <<NOTE: Dec. 31,
2007 - [S. 2271]>> purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress <<NOTE: Sudan Accountability and
Divestment Act of 2007. 50 USC 1701 note.>> assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Sudan Accountability and Divestment
Act of 2007''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Banking, Housing, and Urban
Affairs, the Committee on Foreign Relations, and the
Select Committee on Intelligence of the Senate; and
(B) the Committee on Financial Services, the
Committee on Foreign Affairs, and the Permanent Select
Committee on Intelligence of the House of
Representatives.
(2) Business operations.--The term ``business operations''
means engaging in commerce in any form in Sudan, including by
acquiring, developing, maintaining, owning, selling, possessing,
leasing, or operating equipment, facilities, personnel,
products, services, personal property, real property, or any
other apparatus of business or commerce.
(3) Executive agency.--The term ``executive agency'' has the
meaning given the term in section 4 of the Office of Federal
Procurement Policy Act (41 U.S.C. 403).
(4) Government of sudan.--The term ``Government of Sudan''--
(A) means the government in Khartoum, Sudan, which
is led by the National Congress Party (formerly known as
the National Islamic Front) or any successor government
formed on or after October 13, 2006 (including the
coalition National Unity Government agreed upon in the
Comprehensive Peace Agreement for Sudan); and
(B) does not include the regional government of
southern Sudan.
(5) Marginalized populations of sudan.--The term
``marginalized populations of Sudan'' refers to--
(A) adversely affected groups in regions authorized
to receive assistance under section 8(c) of the Darfur
Peace
[[Page 121 STAT. 2517]]
and Accountability Act (Public Law 109-344; 50 U.S.C.
1701 note); and
(B) marginalized areas in Northern Sudan described
in section 4(9) of such Act.
(6) Military equipment.--The term ``military equipment''
means--
(A) weapons, arms, military supplies, and equipment
that readily may be used for military purposes,
including radar systems or military-grade transport
vehicles; or
(B) supplies or services sold or provided directly
or indirectly to any force actively participating in
armed conflict in Sudan.
(7) Mineral extraction activities.--The term ``mineral
extraction activities'' means exploring, extracting, processing,
transporting, or wholesale selling or trading of elemental
minerals or associated metal alloys or oxides (ore), including
gold, copper, chromium, chromite, diamonds, iron, iron ore,
silver, tungsten, uranium, and zinc.
(8) Oil-related activities.--
(A) In general.--Except as provided in subparagraph
(B), the term ``oil-related activities'' means--
(i) exporting, extracting, producing,
refining, processing, exploring for, transporting,
selling, or trading oil; and
(ii) constructing, maintaining, or operating a
pipeline, refinery, or other oilfield
infrastructure.
(B) Exclusions.--A person shall not be considered to
be involved in an oil-related activity if--
(i) the person is involved in the retail sale
of gasoline or related consumer products in Sudan
but is not involved in any other activity
described in subparagraph (A); or
(ii) the person is involved in leasing, or
owns, rights to an oil block in Sudan but is not
involved in any other activity described in
subparagraph (A).
(9) Person.--The term ``person'' means--
(A) a natural person, corporation, company, business
association, partnership, society, trust, any other
nongovernmental entity, organization, or group;
(B) any governmental entity or instrumentality of a
government, including a multilateral development
institution (as defined in section 1701(c)(3) of the
International Financial Institutions Act (22 U.S.C.
262r(c)(3))); and
(C) any successor, subunit, parent company or
subsidiary of any entity described in subparagraph (A)
or (B).
(10) Power production activities.--The term ``power
production activities'' means any business operation that
involves a project commissioned by the National Electricity
Corporation of Sudan or other similar entity of the Government
of Sudan whose purpose is to facilitate power generation and
delivery, including establishing power-generating plants or
hydroelectric dams, selling or installing components for the
project, or providing service contracts related to the
installation or maintenance of the project.
(11) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
[[Page 121 STAT. 2518]]
Rico, the United States Virgin Islands, Guam, American Samoa,
and the Commonwealth of the Northern Mariana Islands.
(12) State or local government.--The term ``State or local
government'' includes--
(A) any State and any agency or instrumentality
thereof;
(B) any local government within a State, and any
agency or instrumentality thereof;
(C) any other governmental instrumentality; and
(D) any public institution of higher education
within the meaning of the Higher Education Act of 1965
(20 U.S.C. 1001 et seq.).
SEC. 3. AUTHORITY OF STATE AND LOCAL GOVERNMENTS TO DIVEST FROM
CERTAIN COMPANIES DIRECTLY INVESTED IN CERTAIN
SUDANESE SECTORS.
(a) Sense of Congress.--It is the sense of Congress that the United
States Government should support the decision of any State or local
government to divest from, or to prohibit the investment of assets of
the State or local government in, a person that the State or local
government determines poses a financial or reputational risk.
(b) Authority To Divest.--Notwithstanding any other provision of
law, a State or local government may adopt and enforce measures that
meet the requirements of subsection (e) to divest the assets of the
State or local government from, or prohibit investment of the assets of
the State or local government in, persons that the State or local
government determines, using credible information available to the
public, are conducting or have direct investments in business operations
described in subsection (d).
(c) Notice to <<NOTE: Deadline.>> Department of Justice.--Not later
than 30 days after adopting a measure pursuant to subsection (b), a
State or local government shall submit written notice to the Attorney
General describing the measure.
(d) Business Operations Described.--
(1) In general.--Business operations described in this
subsection are business operations in Sudan that include power
production activities, mineral extraction activities, oil-
related activities, or the production of military equipment.
(2) Exceptions.--Business operations described in this
subsection do not include business operations that the person
conducting the business operations can demonstrate--
(A) are conducted under contract directly and
exclusively with the regional government of southern
Sudan;
(B) are conducted under a license from the Office of
Foreign Assets Control, or are expressly exempted under
Federal law from the requirement to be conducted under
such a license;
(C) consist of providing goods or services to
marginalized populations of Sudan;
(D) consist of providing goods or services to an
internationally recognized peacekeeping force or
humanitarian organization;
(E) consist of providing goods or services that are
used only to promote health or education; or
(F) have been voluntarily suspended.
[[Page 121 STAT. 2519]]
(e) Requirements.--Any measure taken by a State or local government
under subsection (b) shall meet the following requirements:
(1) Notice.--The State or local government shall provide
written notice and an opportunity to comment in writing to each
person to whom a measure is to be applied.
(2) Timing.--The <<NOTE: Applicability. Deadline.>> measure
shall apply to a person not earlier than the date that is 90
days after the date on which written notice is provided to the
person under paragraph (1).
(3) Applicability.--The measure shall not apply to a person
that demonstrates to the State or local government that the
person does not conduct or have direct investments in business
operations described in subsection (d).
(4) Sense of congress on avoiding erroneous targeting.--It
is the sense of Congress that a State or local government should
not adopt a measure under subsection (b) with respect to a
person unless the State or local government has made every
effort to avoid erroneously targeting the person and has
verified that the person conducts or has direct investments in
business operations described in subsection (d).
(f) Definitions.--In this section:
(1) Investment.--The ``investment'' of assets, with respect
to a State or local government, includes--
(A) a commitment or contribution of assets;
(B) a loan or other extension of credit of assets;
and
(C) the entry into or renewal of a contract for
goods or services.
(2) Assets.--
(A) In general.--Except as provided in subparagraph
(B), the term ``assets'' refers to public monies and
includes any pension, retirement, annuity, or endowment
fund, or similar instrument, that is controlled by a
State or local government.
(B) Exception.--The term ``assets'' does not include
employee benefit plans covered by title I of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1001 et seq.).
(g) Nonpreemption.--A measure of a State or local government
authorized under subsection (b) is not preempted by any Federal law or
regulation.
(h) Effective Date.--
(1) In general.--Except as provided in paragraph (2), this
section applies to measures adopted by a State or local
government before, on, or after the date of the enactment of
this Act.
(2) Notice <<NOTE: Applicability.>> requirements.--
Subsections (c) and (e) apply to measures adopted by a State or
local government on or after the date of the enactment of this
Act.
SEC. 4. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY ASSET
MANAGERS.
(a) In General.--Section 13 of the Investment Company Act of 1940
(15 U.S.C. 80a-13) is amended by adding at the end the following:
``(c) Limitation on Actions.--
``(1) In general.--Notwithstanding any other provision of
Federal or State law, no person may bring any civil, criminal,
[[Page 121 STAT. 2520]]
or administrative action against any registered investment
company, or any employee, officer, director, or investment
adviser thereof, based solely upon the investment company
divesting from, or avoiding investing in, securities issued by
persons that the investment company determines, using credible
information that is available to the public, conduct or have
direct investments in business operations in Sudan described in
section 3(d) of the Sudan Accountability and Divestment Act of
2007.
``(2) Applicability.--
``(A) Actions for breaches of fiduciary duties.--
Paragraph (1) does not prevent a person from bringing an
action based on a breach of a fiduciary duty owed to
that person with respect to a divestment or non-
investment decision, other than as described in
paragraph (1).
``(B) Disclosures.--Paragraph (1) shall not apply to
a registered investment company, or any employee,
officer, director, or investment adviser thereof, unless
the investment company makes disclosures in accordance
with regulations prescribed by the Commission.
``(3) Person defined.--For purposes of this subsection the
term `person' includes the Federal Government and any State or
political subdivision of a State.''.
(b) SEC <<NOTE: Deadline.>> Regulations.--Not later than 120 days
after the date of the enactment of this Act, the Securities and Exchange
Commission shall prescribe regulations, in the public interest and for
the protection of investors, to require disclosure by each registered
investment company that divests itself of securities in accordance with
section 13(c) of the Investment Company Act of 1940. Such rules shall
require the disclosure to be included in the next periodic report filed
with the Commission under section 30 of such Act (15 U.S.C. 80a-29)
following such divestiture.
SEC. 5. SENSE OF CONGRESS REGARDING CERTAIN ERISA PLAN
INVESTMENTS.
It is the sense of Congress that a fiduciary of an employee benefit
plan, as defined in section 3(3) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(3)), may divest plan assets from,
or avoid investing plan assets in, any person the fiduciary determines
is conducting or has direct investments in business operations in Sudan
described in section 3(d) of this Act, without breaching the
responsibilities, obligations, or duties imposed upon the fiduciary by
section 404 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1104), if--
(1) the fiduciary makes such determination using credible
information that is available to the public; and
(2) such divestment or avoidance of investment is conducted
in accordance with section 2509.94-1 of title 29, Code of
Federal Regulations (as in effect on the day before the date of
the enactment of this Act).
SEC. 6. PROHIBITION ON UNITED STATES GOVERNMENT CONTRACTS.
(a) Certification Requirement.--The head of each executive agency
shall ensure that each contract entered into by such executive agency
for the procurement of goods or services includes a clause that requires
the contractor to certify to the contracting officer that the contractor
does not conduct business operations in Sudan described in section 3(d).
[[Page 121 STAT. 2521]]
(b) Remedies.--
(1) In general.--The head of an executive agency may impose
remedies as provided in this subsection if the head of the
executive agency determines that the contractor has submitted a
false certification under subsection (a) after the date the
Federal Acquisition Regulation is amended under subsection (e)
to implement the requirements of this section.
(2) Termination.--The head of an executive agency may
terminate a covered contract upon the determination of a false
certification under paragraph (1).
(3) Suspension and debarment.--The head of an executive
agency may debar or suspend a contractor from eligibility for
Federal contracts upon the determination of a false
certification under paragraph (1). The debarment period may not
exceed 3 years.
(4) Inclusion on list of parties excluded from federal
procurement and nonprocurement programs.--The Administrator of
General Services shall include on the List of Parties Excluded
from Federal Procurement and Nonprocurement Programs maintained
by the Administrator under part 9 of the Federal Acquisition
Regulation issued under section 25 of the Office of Federal
Procurement Policy Act (41 U.S.C. 421) each contractor that is
debarred, suspended, proposed for debarment or suspension, or
declared ineligible by the head of an executive agency on the
basis of a determination of a false certification under
paragraph (1).
(5) Rule of construction.--This section shall not be
construed to limit the use of other remedies available to the
head of an executive agency or any other official of the Federal
Government on the basis of a determination of a false
certification under paragraph (1).
(c) Waiver.--
(1) In <<NOTE: Certification.>> general.--The President may
waive the requirement of subsection (a) on a case-by-case basis
if the President determines and certifies in writing to the
appropriate congressional committees that it is in the national
interest to do so.
(2) Reporting requirement.--Not later than April 15, 2008,
and semi-annually thereafter, the Administrator for Federal
Procurement Policy shall submit to the appropriate congressional
committees a report on waivers granted under paragraph (1).
(d) Implementation <<NOTE: Deadline.>> Through the Federal
Acquisition Regulation.--Not later than 120 days after the date of the
enactment of this Act, the Federal Acquisition Regulatory Council shall
amend the Federal Acquisition Regulation issued pursuant to section 25
of the Office of Federal Procurement Policy Act (41 U.S.C. 421) to
provide for the implementation of the requirements of this section.
(e) Report.--Not later than one year after the date the Federal
Acquisition Regulation is amended under subsection (e) to implement the
requirements of this section, the Administrator of General Services,
with the assistance of other executive agencies, shall submit to the
Office of Management and Budget and the appropriate congressional
committees a report on the actions taken under this section.
[[Page 121 STAT. 2522]]
SEC. 7. SENSE OF CONGRESS ON EFFORTS BY OTHER COUNTRIES.
It is the sense of Congress that the governments of all other
countries should adopt measures, similar to those contained in this Act,
to publicize the activities of all persons that, through their financial
dealings, knowingly or unknowingly enable the Government of Sudan to
continue to oppress and commit genocide against people in the Darfur
region and other regions of Sudan, and to authorize divestment from, and
the avoidance of further investment in, such persons.
SEC. 8. SENSE OF CONGRESS ON PEACEKEEPING EFFORTS IN SUDAN.
It is the sense of Congress that the President should--
(1) continue to work with other members of the international
community, including the Permanent Members of the United Nations
Security Council, the African Union, the European Union, the
Arab League, and the Government of Sudan to facilitate the
urgent deployment of a peacekeeping force to Sudan; and
(2) bring before the United Nations Security Council, and
call for a vote on, a resolution requiring meaningful
multilateral sanctions against the Government of Sudan in
response to its acts of genocide against the people of Darfur
and its continued refusal to allow the implementation of a
peacekeeping force in Sudan.
SEC. 9. SENSE OF CONGRESS ON THE INTERNATIONAL OBLIGATIONS OF THE
UNITED STATES.
It is the sense of Congress that nothing in this Act--
(1) conflicts with the international obligations or
commitments of the United States; or
(2) affects article VI, clause 2, of the Constitution of the
United States.
SEC. 10. REPORTS ON SANCTIONS IN SUPPORT OF PEACE IN DARFUR.
(a) In General.--The Secretary of State and the Secretary of the
Treasury shall submit to the appropriate congressional committees a
report assessing the effectiveness of sanctions imposed with respect to
Sudan at the time the Secretary of State and the Secretary of the
Treasury submits reports required under--
(1) the Sudan Peace Act (Public Law 107-245; 50 U.S.C. 1701
note);
(2) the Comprehensive Peace in Sudan Act of 2004 (Public Law
108-497; 50 U.S.C. 1701 note); and
(3) the Darfur Peace and Accountability Act of 2006 (Public
Law 109-344; 50 U.S.C. 1701 note).
(b) Additional Report by the Secretary of the Treasury.--The
Secretary of the Treasury shall submit to the appropriate congressional
committees a report assessing the effectiveness of sanctions imposed
with respect to Sudan under the International Emergency Economic Powers
Act (50 U.S.C. 1701 et seq.) at the time the President submits the
reports required by section 204(c) of such Act (50 U.S.C. 1703(c)) with
respect to Executive Order 13,067 (50 U.S.C. 1701 note; relating to
blocking property of persons in connection with the conflict in Sudan's
region of Darfur).
(c) Contents.--The reports required by subsections (a) and (b) shall
include--
(1) a description of each sanction imposed under a law or
executive order described in subsection (a) or (b);
[[Page 121 STAT. 2523]]
(2) the name of the person subject to the sanction, if any;
and
(3) whether or not the person subject to the sanction is
also subject to sanctions imposed by the United Nations.
SEC. 11. REPEAL OF REPORTING REQUIREMENT.
Section 6305 of the U.S. Troop Readiness, Veterans' Care, Katrina
Recovery, and Iraq Accountability Appropriations Act, 2007 (Public Law
110-28; 121 Stat. 172) is repealed.
SEC. 12. <<NOTE: President. Certification.>> TERMINATION.
The provisions of sections 3, 4, 5, 6, and 10 shall terminate 30
days after the date on which the President has certified to Congress
that the Government of Sudan has honored its commitments to--
(1) abide by United Nations Security Council Resolution 1769
(2007);
(2) cease attacks on civilians;
(3) demobilize and demilitarize the Janjaweed and associated
militias;
(4) grant free and unfettered access for delivery of
humanitarian assistance; and
(5) allow for the safe and voluntary return of refugees and
internally displaced persons.
Approved December 31, 2007.
LEGISLATIVE HISTORY--S. 2271:
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SENATE REPORTS: No. 110-213 (Comm. on Banking, Housing, and Urban
Affairs).
CONGRESSIONAL RECORD, Vol. 153 (2007):
Dec. 12, considered and passed Senate.
Dec. 18, considered and passed House.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 43 (2007):
Dec. 31, Presidential statement.
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