Israel Anti-Boycott Act of 2017

[Hannah]

  

IN THE SENATE OF THE UNITED STATES

 

Ms. James, for herself (with thanks to Mr. Cardin and Mr. Rubio) introduced the following bill;

 

A BILL

To amend the Export Administration Act of 1979 to include in the prohibitions on boycotts against allies of the United States boycotts fostered by international governmental organizations against Israel and to direct the Export-Import Bank of the United States to oppose boycotts against Israel, to provide for nonpreemption of measures by State and local governments to divest from entities that engage in commerce-related or investment-related boycott, divestment, or sanctions activities targeting Israel, and for other purposes.

 

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

 

SEC. 1. Short title.

 

This Act may be cited as the “Israel Anti-Boycott Act of 2017”.

 

SEC. 2. Findings.

 

Congress finds the following:

 

(1) The United Nations Human Rights Council (in this section referred to as the “UNHRC”) has long targeted Israel with systematic, politically motivated, assaults on its legitimacy designed to stigmatize and isolate Israel internationally.

 

(2) The UNHRC maintains a permanent agenda item known as “Item 7” to ensure that Israel will be criticized at every gathering of the UNHRC.

 

(3) At its 31st session on March 24, 2016, the UNHRC targeted Israel with a commercial boycott, calling for the establishment of a database, such as a “blacklist”, of companies that operate, or have business relations with entities that operate, beyond Israel’s 1949 Armistice lines, including East Jerusalem.

 

(4) For a half century, Congress has combated anti-Israel boycotts and other discriminatory activity under the Export Administration Act of 1979 (as continued in effect pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)), under part VI of title X of the Tax Reform Act of 1976 (Public Law 94–455; 90 Stat. 1649) (commonly referred to as the “Ribicoff Amendment”), in free trade agreements with Bahrain and Oman, and in Saudi Arabia’s accession negotiations to the World Trade Organization.

 

(5) The recent action of the UNHRC is reminiscent of the Arab League Boycott, which also called for the establishment of a “blacklist” and promoted a primary, as well as a secondary and tertiary, boycott against Israel, targeting United States and other companies that trade or invest with or in Israel, designed to harm Israel, any business operating in, or doing business with, Israel, or companies that do business with companies operating in Israel.

 

(6) Congress recently passed anti-boycott, divestment, and sanctions measures in the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (19 U.S.C. 4201 et seq.) and section 909 of the Trade Facilitation and Trade Enforcement Act of 2015 (19 U.S.C. 4452), which establish, among other things—

 

(A) the opposition of the United States to actions to boycott, divest from, or sanction Israel;

 

(B) requirements that the United States utilize trade negotiations to combat state-led or international governmental organization-led actions to boycott, divest from, or sanction Israel; and

 

(C) reporting requirements regarding the actions of foreign countries or international organizations that establish barriers to trade or investment for United States companies in or with Israel.

 

SEC. 3. Statement of policy.

 

Congress—

 

(1) opposes the United Nations Human Rights Council resolution of March 24, 2016, which urges countries to pressure their own companies to divest from, or break contracts with, Israel, and calls for the creation of a “blacklist” of companies that either operate, or have business relations with entities that operate, beyond Israel’s 1949 Armistice lines, including East Jerusalem;

 

(2) views such policies as actions to boycott, divest from, or sanction Israel; and

 

(3) in order to counter the effects of actions to boycott, divest from, or sanction Israel, encourages full implementation of the United States-Israel Strategic Partnership Act of 2014 (Public Law 113–296; 128 Stat. 4075) through enhanced, governmentwide, coordinated United States-Israel scientific and technological cooperation in civilian areas such as with respect to energy, water, agriculture, alternative fuel technology, civilian space technology, and security.

 

SEC. 4. Definitions.

 

(a) In general.—In this Act:

 

(1) ACTIONS TO BOYCOTT, DIVEST FROM, OR SANCTION ISRAEL.—The term “actions to boycott, divest from, or sanction Israel” has the meaning given that term in section 102(b)(20)(B) of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (19 U.S.C. 4201(b)(20)(B)).

 

(2) INTERNATIONAL GOVERNMENTAL ORGANIZATION.—The term “international governmental organization” includes the United Nations and the European Union.

 

(3) POLITICALLY MOTIVATED.—The term “politically motivated” means actions to impede or constrain commerce with Israel that are intended to coerce political action from or impose policy positions on Israel.

 

(4) ASSETS.—

 

(A) IN GENERAL.—Except as provided in subparagraph (B), the term “assets” means 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.).

 

(5) ENTITY.—The term “entity” includes—

 

(A) any corporation, company, business association, partnership, or trust; and

 

(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))).

 

(6) INVESTMENT.—The term “investment” includes—

 

(A) a commitment or contribution of funds or property;

 

(B) a loan or other extension of credit; and

 

(C) the entry into or renewal of a contract for goods or services.

 

(7) STATE.—The term “State” means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, the United States Virgin Islands, and any other territory or possession of the United States.

 

(8) 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; and

 

(C) any other governmental instrumentality of a State or locality.

 

(b) Rule of construction.—Nothing in this Act shall be construed to alter the established policy of the United States or to establish new United States policy concerning final status issues associated with the Arab-Israeli conflict, including border delineation, that can only be resolved through direct negotiations between the parties.

 

SEC. 5. Additional prohibitions relating to foreign boycotts under Export Administration Act of 1979.

 

(a) Declaration of policy.—Section 3(5) of the Export Administration Act of 1979 (50 U.S.C. 4602(5)) (as continued in effect pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)) is amended—

 

(1) by amending subparagraph (A) to read as follows:

 

“(A) to oppose—

 

“(i) restrictive trade practices or boycotts fostered or imposed by foreign countries, or requests to impose restrictive trade practices or boycotts by foreign countries, against other countries friendly to the United States or against any United States person; and

 

“(ii) restrictive trade practices or boycotts fostered or imposed by any international governmental organization against Israel or requests to impose restrictive trade practices or boycotts by any international governmental organization against Israel;”; and

 

(2) in subparagraph (B), by striking “which have the effect” and all the follows and inserting the following: “which have the effect of furthering or supporting—

 

“(i) restrictive trade practices or boycotts fostered or imposed by any foreign country, or requests to impose restrictive trade practices or boycotts by any foreign country, against a country friendly to the United States or against any United States person; and

 

“(ii) restrictive trade practices or boycotts fostered or imposed by any international governmental organization against Israel or requests to impose restrictive trade practices or boycotts by any international governmental organization against Israel; and”.

 

(b) Foreign boycotts.—Section 8 of the Export Administration Act of 1979 (50 U.S.C. 4607) (as continued in effect pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)) is amended—

 

(1) in subsection (a)(1)—

 

(A) in the matter preceding subparagraph (A)—

 

(i) by inserting “, or request to impose any boycott by a foreign country,” after “a foreign country”;

 

(ii) by inserting “, or support any boycott fostered or imposed by any international governmental organization against Israel or request to impose any boycott by any international governmental organization against Israel” after “pursuant to United States law or regulation”;

 

(B) in subparagraph (A), by inserting “or international governmental organization (as the case may be)” after “of the boycotting country”; and

 

(C) in subparagraph (D)—

 

(i) by inserting “, or requesting the furnishing of information,” after “Furnishing information”; and

 

(ii) by inserting “or with the international governmental organization (as the case may be)” after “in the boycotting country”; and

 

(2) in subsection (c)—

 

(A) by inserting “, or requests to impose restrictive trade practices or boycotts by foreign countries,” after “foreign countries”; and

 

(B) by inserting “or restrictive trade practices or boycotts fostered or imposed by any international governmental organization against Israel or requests to impose restrictive trade practices or boycotts by any international governmental organization against Israel” before the period at the end.

 

(c) Violations of section 8(a).—Section 11 of the Export Administration Act of 1979 (50 U.S.C. 4610) (as continued in effect pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)) is amended—

 

(1) in subsection (a), by inserting “or (j)” after “subsection (b)”; and

 

(2) by adding at the end the following:

 

“(j) Violations of section 8(a).—Whoever knowingly violates or conspires to or attempts to violate any provision of section 8(a) or any regulation, order, or license issued thereunder shall be fined in accordance with section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705).”.

 

(d) Definition of international governmental organization.—Section 16 of the Export Administration Act of 1979 (50 U.S.C. 4618) (as continued in effect pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)) is amended—

 

(1) by redesignating paragraphs (7) and (8) as paragraphs (8) and (9), respectively; and

 

(2) by inserting after paragraph (6) the following:

 

“(7) the term ‘international governmental organization’ includes the United Nations and the European Union;”.

 

(e) Effective date.—The amendments made by this section take effect on the date of the enactment of this Act and apply with respect to actions described in section 8(a) of the Export Administration Act of 1979 (as continued in effect pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)) taken or knowingly agreed to be taken on or after such date of enactment.

 

(f) Implementation.—The President shall implement the amendments made by this section by exercising the authorities of the President under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.).

 

SEC. 6. Policy of the United States relating to boycott of Israel under Export-Import Bank Act of 1945.

 

Section 2(b)(1)(B) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b)(1)(B)) is amended in the sixth sentence by inserting after “child labor),” the following: “or opposing policies and actions that are politically motivated and are intended to penalize or otherwise limit commercial relations specifically with citizens or residents of Israel, entities organized under the laws of Israel, or the Government of Israel,”.

 

SEC. 7. Nonpreemption of measures by State and local governments to divest from entities that engage in certain boycott, divestment, or sanctions activities targeting Israel.

 

(a) State and local measures.—Notwithstanding any other provision of law, a State or local government may adopt and enforce measures that meet the requirements of subsection (b) to divest the assets of the State or local government from, prohibit investment of the assets of the State or local government in, or restrict contracting by the State or local government for goods and services with—

 

(1) an entity that the State or local government determines, using credible information available to the public, knowingly engages in a commerce-related or investment-related boycott, divestment, or sanctions activity targeting Israel;

 

(2) a successor entity or subunit of an entity described in paragraph (1); or

 

(3) an entity that owns or controls, is owned or controlled by, or is under common ownership or control with, an entity described in paragraph (1).

 

(b) Requirements.—A State or local government that seeks to adopt or enforce a measure under subsection (a) shall meet the following requirements:

 

(1) NOTICE.—The State or local government shall provide written notice to each entity to which a measure under subsection (a) is to be applied.

 

(2) TIMING.—The measure shall apply to an entity not earlier than the date that is 90 days after the date on which written notice is provided to the entity under paragraph (1).

 

(3) OPPORTUNITY FOR COMMENT.—The State or local government shall provide an opportunity to comment in writing to each entity to which a measure is to be applied. If the entity demonstrates to the State or local government that the entity has not engaged in a commerce-related or investment-related boycott, divestment, or sanctions activity targeting Israel, the measure shall not apply to the entity.

 

(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 (a) with respect to an entity unless the State or local government has made every effort to avoid erroneously targeting the entity and has verified that the entity engages in a commerce-related or investment-related boycott, divestment, or sanctions activity targeting Israel.

 

(c) Notice to Department of Justice.—

 

(1) IN GENERAL.—Except as provided in paragraph (2), not later than 30 days after adopting a measure described in subsection (a), the State or local government that adopted the measure shall submit written notice to the Attorney General describing the measure.

 

(2) EXISTING MEASURES.—With respect to measures described in subsection (a) adopted before the date of the enactment of this Act, the State or local government that adopted the measure shall submit written notice to the Attorney General describing the measure not later than 30 days after the date of the enactment of this Act.

 

(d) Nonpreemption.—A measure of a State or local government that is consistent with subsection (a) is not preempted by any Federal law.

 

(e) Effective date.—This section applies to any measure adopted by a State or local government before, on, or after the date of the enactment of this Act.

 

(f) Prior enacted measures.—

 

(1) IN GENERAL.—Notwithstanding any other provision of this section or any other provision of law, and except as provided in paragraph (2), a State or local government may enforce a measure described in subsection (a) adopted by the State or local government before the date of the enactment of this Act without regard to the requirements of subsection (b).

 

(2) APPLICATION OF NOTICE AND OPPORTUNITY FOR COMMENT.—A measure described in paragraph (1) shall be subject to the requirements of subsection (b) on and after the date that is 2 years after the date of the enactment of this Act.

 

(g) Rules of construction.—

 

(1) AUTHORITY OF STATES.—Nothing in this section shall be construed to abridge the authority of a State to issue and enforce rules governing the safety, soundness, and solvency of a financial institution subject to its jurisdiction or the business of insurance pursuant to the Act of March 9, 1945 (59 Stat. 33, chapter 20; 15 U.S.C. 1011 et seq.) (commonly known as the “McCarran-Ferguson Act”).

 

(2) SCOPE OF NONPREEMPTION.—Nothing in this section shall be construed as establishing a basis for preempting or implying preemption of State measures relating to boycott, divestment, or sanctions activity targeting Israel that are outside the scope of subsection (a).

 

SEC. 8. Safe harbor for changes of investment policies by asset managers.

 

Section 13(c)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a–13(c)(1)) is amended—

 

(1) in subparagraph (A), by striking “; or” and inserting a semicolon;

 

(2) in subparagraph (B), by striking the period at the end and inserting “; or”; and

 

(3) by adding at the end the following:

 

“(C) engage in any boycott, divestment, or sanctions activity targeting Israel described in section 2 of the Israel Anti-Boycott Act of 2017”..”.

 

Plain English Summary

 

Israel Anti-Boycott Act-This bill declares that Congress: (1) opposes the United Nations Human Rights Council resolution of March 24, 2016, which urges countries to pressure companies to divest from, or break contracts with, Israel; and (2) encourages full implementation of the United States-Israel Strategic Partnership Act of 2014 through enhanced, governmentwide, coordinated U.S.-Israel scientific and technological cooperation in civilian areas.

 

The bill amends the Export Administration Act of 1979 to declare that it shall be U.S. policy to oppose:

• requests by foreign countries to impose restrictive practices or boycotts against other countries friendly to the United States or against U.S. persons; and
• restrictive trade practices or boycotts fostered or imposed by an international governmental organization, or requests to impose such practices or boycotts, against Israel.

The bill prohibits any U.S. person engaged interstate or foreign commerce from supporting:

• any request by a foreign country to impose any boycott against a country that is friendly to the United States and that is not itself the object of any form of boycott pursuant to United States law or regulation, or
• any boycott fostered or imposed by any international governmental organization against Israel or any request by any international governmental organization to impose such a boycott.

The bill amends the Export-Import Bank Act of 1945 to include as a reason for the Export-Import Bank to deny credit applications for the export of goods and services between the United States and foreign countries, opposition to policies and actions that are politically motivated and are intended to penalize or otherwise limit commercial relations specifically with citizens or residents of Israel, entities organized under the laws of Israel, or the government of Israel.

 

The bill allows a state or local government to adopt and enforce measures to divest its assets from, prohibit investment of its assets in, or restrict contracting with: (1) an entity that engages in a commerce- or investment-related boycott, divestment, or sanctions activity targeting Israel; or (2) an entity that owns or controls, is owned or controlled by, or is under common ownership or control with such an entity. Such measures are not preempted by federal law. A state or local government that seeks to adopt or enforce such measures shall comply with specified requirements related to notice, timing, and opportunity for comment.

 

The bill amends the Investment Company Act of 1940 to prohibit a person from bringing any civil, criminal, or administrative action against a registered investment company based solely upon that company's divestment from securities issued by a person that engages in a commerce- or investment-related boycott, divestment, or sanctions activity targeting Israel.

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