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Thursday July 27 2:27 PM ET
U.S. Senate Panel Approves Bill to Punish OPEC U.S. Senate Panel Approves Bill to Punish OPEC

WASHINGTON (Reuters) - U.S. antitrust regulators will be able to sue OPEC for fixing prices and setting production levels of crude oil, under legislation approved by a U.S. Senate subcommittee on Thursday.

Under pressure from their constituents about this summer's high gasoline prices, U.S. lawmakers have blamed the Organization of Petroleum Exporting Countries' (OPEC) collusive practices for the soaring fuel costs.

``Indisputably, the biggest contributor to high gas and fuel prices is the unacceptably high price of imported crude oil -- a price set by anti-competitive agreements among the OPEC nations,'' said Ohio Republican Senator Mike DeWine, who chairs the Senate Antitrust subcommittee and co-sponsored the legislation.

Similar to legislation also pending in the House of Representatives, the bill faces an uphill battle to make it through Congress, as lawmakers are off in August, and then return for four weeks of work before they adjourn in early October.

The legislation cleared by the subcommittee would put pressure on OPEC not to restrict oil supplies by giving the U.S. government the legal authority to bring an antitrust enforcement action against foreign states engaging in anti-competitive conduct with regard to oil and other petroleum products.

Normally, the Federal Sovereign Immunities Act allows prosecution of foreign governments when they are engaged in ''commercial activity,'' but prohibits prosecution of those states that are engaged in ``governmental activity.''

A federal district court has previously ruled that OPEC's actions to control oil supplies is ``governmental activity'' protected from prosecution under U.S. law.

``OPEC members have used the shield of 'sovereign immunity'' to escape accountability for their price-fixing, said Wisconsin Democratic Senator Herb Kohl, the other co-sponsor of the bill.

And just how could the U.S. government effectively sue foreign nations engaging in an oil cartel?

``If the OPEC nations have assets in the United States, they can be seized,'' Kohl said.

The bill will also give federal district courts the jurisdiction and authority to consider such cases brought by the Justice Department or the Federal Trade Commission.

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