Senate panel approves 'NOPEC' legislation

By Dana Bash/CNN

WASHINGTON (CNN) -- The Senate Judiciary Committee unanimously approved bipartisan legislation Thursday to allow the United States government to sue other countries or cartels for the price fixing of oil.

Although it doesn't mention names, sponsors of the measure said it is aimed squarely at preventing cartels such as OPEC from fixing oil prices.

The so-called "NOPEC" (No Oil Producing and Exporting Cartels) legislation enables the Justice Department or the Federal Trade Commission to sue in federal court "any nation, or any instrumentality or agent of any foreign nation, that is engaging in cartel or conspiracy to limit the production of oil or set the priced of oil which causes an effect on the U.S. market."

"In light of the skyrocketing price of oil, the escalating cost of gasoline, and with winter just a few months away, the time is well past to clarify the law to enable our government, for the first time, to take effective action to combat the oil cartel," said Sen. Herb Kohl, D-Wisconsin., a chief sponsor of the bill.

In successful lawsuits, the government would be eligible for damages for the suffering of U.S. consumers.

Criminal action could be sought against members of the oil cartel as well.

Sponsors say rulings would be enforced by seizing assets of international governments or companies held in the U.S. government could also try to enforce a judgment in the courts of the foreign nation found liable.

Although current law does not prevent such lawsuits, judges have overturned suits against international cartels because of "sovereign immunity" and because they read the law as prohibiting the U.S. government from ruling what companies do on non-U.S. soil.

This measure seeks to clarify the law by explicitly stripping governments and non-U.S. companies of "sovereign immunity" from such lawsuits.

"Our NOPEC legislation will, for the first time, enable U.S. authorities to combat the price-fixing conspiracy of the oil cartel and will, at minimum, have a real deterrent effect on nations that join forces to fix oil prices to the detriment of American consumers," said Sen. Herb Kohl, D-Wisconsin.

Sponsors said they with the growth of the global market, a consensus has been formed that certain basic standards are universal, and that "rogue actions of the international oil cartel should be treated no differently."

Besides Kohl, other lawmakers sponsoring this legislation are Sen. Strom Thurmond, R-North Carolina, Sen. Mike Dewine, R-Ohio, Sen. Joseph Lieberman, D-Connecticut and Sen. Russ Feingold, D-Wisconsin.

There is currently a similar bill moving through the House of Representatives, and with just a few weeks left in the legislative session, it is unclear whether the full Senate will take it up for a vote.