Text: H.R.4992 — 114th Congress (2015-2016)All Information (Except Text)

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Engrossed in House (07/14/2016)


114th CONGRESS
2d Session
H. R. 4992


AN ACT

To codify regulations relating to transfers of funds involving Iran, and for other purposes.

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 “United States Financial System Protection Act of 2016”.

SEC. 2. Findings, sense of Congress, and statement of policy.

(a) Findings.—Congress finds the following:

(1) On November 8, 2011, the Department of the Treasury identified the Islamic Republic of Iran as a jurisdiction of primary money laundering concern pursuant to section 5318A of title 31, United States Code, including Iran’s Central Bank, private Iranian banks, branches, and subsidiaries of Iranian banks operating outside of Iran as posing illicit finance risks for the global financial system.

(2) On November 6, 2008, the Department of the Treasury announced that it was revoking the “U-turn” license for Iran, stating that “as a member of the Financial Action Task Force (FATF), the United States today fulfilled its obligation to strengthen measures to protect the financial sector from the risks posed to the international financial system by Iran”.

(3) On February 19, 2016, the Financial Action Task Force (FATF), the global standard setting body for anti-money laundering and combating the financing of terrorism which has determined that Iran is a “non-cooperating country or territory” in the fight against money laundering and terror financing since 2008, stated that, “the FATF remains particularly and exceptionally concerned about Iran’s failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system”.

(4) United States and foreign businesses operating or seeking to operate in Iran run significant risks, as corruption in Iran is endemic, with Transparency International ranking Iran 130 out of 168 countries.

(b) Sense of Congress.—It is the sense of Congress that the entire financial sector of Iran, including Iran’s Central Bank, private Iranian banks and branches, and subsidiaries of Iranian banks operating outside of Iran, poses illicit finance risks for the global financial system due to its proliferation, support for terrorism, and other illicit conduct.

(c) Statement of policy.—It shall be the policy of the United States to—

(1) deny Iran access to funds denominated in United States dollars, including through any offshore United States dollar clearing system for transactions involving the Government of Iran or an Iranian person; and

(2) deny Iran access to United States dollars through any offshore United States dollar clearing system conducted or overseen by a foreign government or a foreign financial institution for transactions involving the Government of Iran or an Iranian person.

SEC. 3. Codification of regulations relating to transfers of funds involving Iran; clarification of application of regulations to foreign depository institutions and foreign registered brokers and dealers.

(a) Codification of regulations.—Section 560.516 of title 31, Code of Federal Regulations, as in effect on January 1, 2016, shall apply with respect to transfers of funds to or from Iran, or for the direct or indirect benefit of an Iranian person or the Government of Iran, for the period beginning on or after January 1, 2016, and ending on the date on which the President makes the certification to the appropriate congressional committees under section 401(a) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (22 U.S.C. 8551(a)).

(b) Clarification of application of regulations to foreign financial institutions and foreign registered brokers and dealers.—

(1) FOREIGN FINANCIAL INSTITUTIONS.—Subsection (a) of section 560.516 of title 31, Code of Federal Regulations, as in effect on January 1, 2016, shall apply with respect to foreign financial institutions to the same extent and in the same manner as such subsection applies with respect to United States depository institutions if the funds that are to be transferred as described in such subsection are funds that are denominated in United States dollars.

(2) FOREIGN REGISTERED BROKERS AND DEALERS.—Subsection (b) of section 560.516 of title 31, Code of Federal Regulations, as in effect on January 1, 2016, shall apply with respect to foreign registered brokers or dealers in securities to the same extent and in the same manner as such subsection applies with respect to United States registered brokers or dealers in securities if the funds that are to be transferred as described in such subsection are funds that are denominated in United States dollars.

(3) SUSPENSION.—The President may suspend the application of paragraph (1) with respect to a foreign financial institution or the application of paragraph (2) with respect to a foreign registered broker or dealer in securities for a period not to exceed 60 days, and the President may renew the suspension of the application of paragraph (1) or paragraph (2), respectively, for additional periods of not more than 60 days, on and after the date on which the President certifies to the appropriate congressional committees that during the preceding 60-day period the Government of Iran is in compliance with the criteria described in section 401(a)(1) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (22 U.S.C. 8551(a)(1)).

(c) Licensing restrictions.—

(1) IN GENERAL.—Except as provided in paragraph (2), the President may not issue any license under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) or provide other guidance, including executive actions, rules, regulations, frequently asked questions, written communications, or any other commitments, that permits—

(A) a United States depository institution or United States registered broker or dealer in securities—

(i) to conduct an offshore United States dollar clearing system for transactions involving or for the benefit of the Government of Iran or an Iranian person, including to process transfers of funds to or from Iran under section 560.516 of title 31, Code of Federal Regulations, as in effect on January 1, 2016; or

(ii) to provide United States dollars for any offshore United States dollar clearing system conducted or overseen by a foreign government or a foreign financial institution for transactions involving or for the benefit of the Government of Iran or an Iranian person, including to process transfers of funds to or from Iran under section 560.516 of title 31, Code of Federal Regulations, as in effect on January 1, 2016; or

(B) a foreign financial institution or foreign registered broker or dealer in securities—

(i) to conduct an offshore United States dollar clearing system for transactions involving or for the benefit of the Government of Iran or an Iranian person, including to process transfers of funds to or from Iran under section 560.516 of title 31, Code of Federal Regulations, as in effect on January 1, 2016, and as applied under subsection (b); or

(ii) to provide United States dollars for any offshore United States dollar clearing system conducted or overseen by a foreign government or a foreign financial institution for transactions involving or for the benefit of the Government of Iran or an Iranian person, including to process transfers of funds to or from Iran under section 560.516 of title 31, Code of Federal Regulations, as in effect on January 1, 2016, and as applied under subsection (b).

(2) EXCEPTION FOR HUMANITARIAN PURPOSES.—The President may, on a case-by-case basis, issue a license described in paragraph (1) to authorize the activities described in clause (i) or (ii) of paragraph (1)(A) or the activities described in clause (i) or (ii) of paragraph (1)(B) if—

(A) such activities relate solely to—

(i) the provision of agricultural commodities, food, medicine, or medical devices to Iran; or

(ii) the provision of humanitarian assistance to the people of Iran; and

(B) the President submits to the appropriate congressional committees a copy of the license.

(d) Definitions.—In this section:

(1) APPROPRIATE CONGRESSIONAL COMMITTEES.—The term “appropriate congressional committees” means—

(A) the Committee on Foreign Affairs and the Committee on Financial Services of the House of Representatives; and

(B) the Committee on Foreign Relations and the Committee on Banking, Housing, and Urban Affairs of the Senate.

(2) FOREIGN FINANCIAL INSTITUTION.—The term “foreign financial institution” has the meaning given such term in section 1010.605 of title 31, Code of Federal Regulations, as in effect on January 1, 2016.

(3) IRAN.—The term “Iran” has the meaning given the term in section 561.329 of title 31, Code of Federal Regulations, as in effect on January 1, 2016.

(4) IRANIAN PERSON.—The term “Iranian person” means a person or entity (as such terms are defined in section 560.305 of title 31, Code of Federal Regulations, as in effect on January 1, 2016) that—

(A) is organized under the laws of Iran or any jurisdiction within Iran (including foreign branches); or

(B) is a person in Iran.

(5) TRANSFER OF FUNDS.—The term “transfer of funds”—

(A) has the meaning given the term “funds transfer” in section 1010.100 of title 31, Code of Federal Regulations, as in effect on January 1, 2016; and

(B) includes a transfer of funds or other property for the benefit of an Iranian financial institution that is made between accounts of the same financial institution even if that Iranian financial institution is not the direct recipient of the transfer.

(6) UNITED STATES DEPOSITORY INSTITUTION.—The term “United States depository institution” has the meaning given such term in section 560.319 of title 31, Code of Federal Regulations, as in effect on January 1, 2016.

(7) UNITED STATES REGISTERED BROKER OR DEALER IN SECURITIES.—The term “United States registered broker or dealers in securities” has the meaning given such term in section 560.321 of title 31, Code of Federal Regulations, as in effect on January 1, 2016.

SEC. 4. Certification requirement for removal of designation of Iran as a jurisdiction of primary money laundering concern.

(a) In general.—The President may not rescind a preliminary draft rule or final rule (as in effect on the day before the date of the enactment of this Act) that provides for the designation of Iran as a jurisdiction of primary money laundering concern pursuant to section 5318A of title 31, United States Code, unless the President submits to the appropriate congressional committees a certification described in subsection (b) with respect to Iran.

(b) Certification.—The President may rescind a preliminary draft rule or final rule described in subsection (a) if the President submits to the appropriate congressional committees a certification that the Government of Iran is no longer engaged in support for terrorism, pursuit of weapons of mass destruction, and any illicit and deceptive financial activities.

(c) Form.—The certification described in subsection (b) shall be submitted in unclassified form, but may contain a classified annex.

(d) Definition.—In this section, the term “appropriate congressional committees” means—

(1) the Committee on Foreign Affairs and the Committee on Financial Services of the House of Representatives; and

(2) the Committee on Banking, Housing, and Urban Affairs of the Senate.

Passed the House of Representatives July 14, 2016.

Attest:





Clerk.  


114th CONGRESS
     2d Session
H. R. 4992

AN ACT
To codify regulations relating to transfers of funds involving Iran, and for other purposes.