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111th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 111-512
======================================================================
COMPREHENSIVE IRAN SANCTIONS, ACCOUNTABILITY, AND DIVESTMENT ACT OF
2010
_______
June 23, 2010.--Ordered to be printed
_______
Mr. Berman, from the committee of conference, submitted the following
CONFERENCE REPORT
[To accompany H.R. 2194]
The committee of conference on the disagreeing votes of the
two Houses on the amendment of the Senate to the bill (H.R.
2194), to amend the Iran Sanctions Act of 1996 to enhance
United States diplomatic efforts with respect to Iran by
expanding economic sanctions against Iran, having met, after
full and free conference, have agreed to recommend and do
recommend to their respective Houses as follows:
That the House recede from its disagreement to the
amendment of the Senate and agree to the same with an amendment
as follows:
In lieu of the matter proposed to be inserted by the Senate
amendment, insert the following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the
``Comprehensive Iran Sanctions, Accountability, and Divestment
Act of 2010''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Sense of Congress regarding the need to impose additional
sanctions with respect to Iran.
TITLE I--SANCTIONS
Sec. 101. Definitions.
Sec. 102. Expansion of sanctions under the Iran Sanctions Act of 1996.
Sec. 103. Economic sanctions relating to Iran.
Sec. 104. Mandatory sanctions with respect to financial institutions
that engage in certain transactions.
Sec. 105. Imposition of sanctions on certain persons who are responsible
for or complicit in human rights abuses committed against
citizens of Iran or their family members after the June 12,
2009, elections in Iran.
Sec. 106. Prohibition on procurement contracts with persons that export
sensitive technology to Iran.
Sec. 107. Harmonization of criminal penalties for violations of
sanctions.
Sec. 108. Authority to implement United Nations Security Council
resolutions imposing sanctions with respect to Iran.
Sec. 109. Increased capacity for efforts to combat unlawful or terrorist
financing.
Sec. 110. Reports on investments in the energy sector of Iran.
Sec. 111. Reports on certain activities of foreign export credit
agencies and of the Export-Import Bank of the United States.
Sec. 112. Sense of Congress regarding Iran's Revolutionary Guard Corps
and its affiliates.
Sec. 113. Sense of Congress regarding Iran and Hezbollah.
Sec. 114. Sense of Congress regarding the imposition of multilateral
sanctions with respect to Iran.
Sec. 115. Report on providing compensation for victims of international
terrorism.
TITLE II--DIVESTMENT FROM CERTAIN COMPANIES THAT INVEST IN IRAN
Sec. 201. Definitions.
Sec. 202. Authority of State and local governments to divest from
certain companies that invest in Iran.
Sec. 203. Safe harbor for changes of investment policies by asset
managers.
Sec. 204. Sense of Congress regarding certain ERISA plan investments.
Sec. 205. Technical corrections to Sudan Accountability and Divestment
Act of 2007.
TITLE III--PREVENTION OF DIVERSION OF CERTAIN GOODS, SERVICES, AND
TECHNOLOGIES TO IRAN
Sec. 301. Definitions.
Sec. 302. Identification of countries of concern with respect to the
diversion of certain goods, services, and technologies to or
through Iran.
Sec. 303. Destinations of Diversion Concern.
Sec. 304. Report on expanding diversion concern system to address the
diversion of United States origin goods, services, and
technologies to certain countries other than Iran.
Sec. 305. Enforcement authority.
TITLE IV--GENERAL PROVISIONS
Sec. 401. General provisions.
Sec. 402. Determination of budgetary effects.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) The illicit nuclear activities of the
Government of Iran, combined with its development of
unconventional weapons and ballistic missiles and its
support for international terrorism, represent a threat
to the security of the United States, its strong ally
Israel, and other allies of the United States around
the world.
(2) The United States and other responsible
countries have a vital interest in working together to
prevent the Government of Iran from acquiring a nuclear
weapons capability.
(3) The International Atomic Energy Agency has
repeatedly called attention to Iran's illicit nuclear
activities and, as a result, the United Nations
Security Council has adopted a range of sanctions
designed to encourage the Government of Iran to suspend
those activities and comply with its obligations under
the Treaty on the Non-Proliferation of Nuclear Weapons,
done at Washington, London, and Moscow July 1, 1968,
and enteredinto force March 5, 1970 (commonly known as
the ``Nuclear Non-Proliferation Treaty'').
(4) The serious and urgent nature of the threat
from Iran demands that the United States work together
with its allies to do everything possible--
diplomatically, politically, and economically--to
prevent Iran from acquiring a nuclear weapons
capability.
(5) The United States and its major European
allies, including the United Kingdom, France, and
Germany, have advocated that sanctions be strengthened
should international diplomatic efforts fail to achieve
verifiable suspension of Iran's uranium enrichment
program and an end to its nuclear weapons program and
other illicit nuclear activities.
(6) The Government of Iran continues to engage in
serious, systematic, and ongoing violations of human
rights, including suppression of freedom of expression
and religious freedom, illegitimately prolonged
detention, torture, and executions. Such violations
have increased in the aftermath of the fraudulent
presidential election in Iran on June 12, 2009.
(7) The Government of Iran has been unresponsive to
President Obama's unprecedented and serious efforts at
engagement, revealing that the Government of Iran is
not interested in a diplomatic resolution, as made
clear, for example, by the following:
(A) Iran's apparent rejection of the Tehran
Research Reactor plan, generously offered by
the United States and its partners, of
potentially great benefit to the people of
Iran, and endorsed by Iran's own negotiators in
October 2009.
(B) Iran's ongoing clandestine nuclear
program, as evidenced by its work on the secret
uranium enrichment facility at Qom, its
subsequent refusal to cooperate fully with
inspectors from the International Atomic Energy
Agency, and its announcement that it would
build 10 new uranium enrichment facilities.
(C) Iran's official notification to the
International Atomic Energy Agency that it
would enrich uranium to the 20 percent level,
followed soon thereafter by its providing to
that Agency a laboratory result showing that
Iran had indeed enriched some uranium to 19.8
percent.
(D) A February 18, 2010, report by the
International Atomic Energy Agency expressing
``concerns about the possible existence in Iran
of past or current undisclosed activities
related to the development of a nuclear payload
for a missile. These alleged activities consist
of a number of projects and sub-projects,
covering nuclear and missile related aspects,
run by military-related organizations.''.
(E) A May 31, 2010, report by the
International Atomic Energy Agency expressing
continuing strong concerns about Iran's lack of
cooperation with the Agency's verification
efforts and Iran's ongoing enrichment
activities, which are contrary to the
longstanding demands of the Agency and the
United Nations Security Council.
(F) Iran's announcement in April 2010 that
it had developed a new, faster generation of
centrifuges for enriching uranium.
(G) Iran's ongoing arms exports to, and
support for, terrorists in direct contravention
of United Nations Security Council resolutions.
(H) Iran's July 31, 2009, arrest of 3 young
citizens of the United States on spying
charges.
(8) There is an increasing interest by State
governments, local governments, educational
institutions, and private institutions, business firms,
and other investors to disassociate themselves from
companies that conduct business activities in the
energy sector of Iran, since such business activities
may directly or indirectly support the efforts of the
Government of Iran to achieve a nuclear weapons
capability.
(9) Black market proliferation networks continue to
flourish in the Middle East, allowing countries like
Iran to gain access to sensitive dual-use technologies.
(10) Economic sanctions imposed pursuant to the
provisions of this Act, the Iran Sanctions Act of 1996,
as amended by this Act, and the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.), and other
authorities available to the United States to impose
economic sanctions to prevent Iran from developing
nuclear weapons, are necessary to protect the essential
security interests of the United States.
SEC. 3. SENSE OF CONGRESS REGARDING THE NEED TO IMPOSE ADDITIONAL
SANCTIONS WITH RESPECT TO IRAN.
It is the sense of Congress that--
(1) international diplomatic efforts to address
Iran's illicit nuclear efforts and support for
international terrorism are more likely to be effective
if strong additional sanctions are imposed on the
Government of Iran;
(2) the concerns of the United States regarding
Iran are strictly the result of the actions of the
Government of Iran;
(3) the revelation in September 2009 that Iran is
developing a secret uranium enrichment site on a base
of Iran's Revolutionary Guard Corps near Qom, which
appears to have no civilian application, highlights the
urgency that Iran--
(A) disclose the full nature of its nuclear
program, including any other secret locations;
and
(B) provide the International Atomic Energy
Agency unfettered access to its facilities
pursuant to Iran's legal obligations under the
Treaty on the Non-Proliferation of Nuclear
Weapons, done at Washington, London, and Moscow
July 1, 1968, and entered into force March 5,
1970 (commonly known as the ``Nuclear Non-
Proliferation Treaty'') and Iran's safeguards
agreement with the International Atomic Energy
Agency;
(4) because of the involvement of Iran's
Revolutionary Guard Corps in Iran's nuclear program,
international terrorism, and domestic human rights
abuses, the President should impose the full range of
applicable sanctions on--
(A) any individual or entity that is an
agent, alias, front, instrumentality,
representative, official, or affiliate of
Iran's Revolutionary Guard Corps; and
(B) any individual or entity that has
conducted any commercial transaction or
financial transaction with an individual or
entity described in subparagraph (A);
(5) additional measures should be adopted by the
United States to prevent the diversion of sensitive
dual-use technologies to Iran;
(6) the President should--
(A) continue to urge the Government of Iran
to respect the internationally recognized human
rights and religious freedoms of its citizens;
(B) identify the officials of the
Government of Iran and other individuals who
are responsible for continuing and severe
violations of human rights and religious
freedom in Iran; and
(C) take appropriate measures to respond to
such violations, including by--
(i) prohibiting officials and other
individuals the President identifies as
being responsible for such violations
from entry into the United States; and
(ii) freezing the assets of the
officials and other individuals
described in clause (i);
(7) additional funding should be provided to the
Secretary of State to document, collect, and
disseminate information about human rights abuses in
Iran, including serious abuses that have taken place
since the presidential election in Iran on June 12,
2009;
(8) with respect to nongovernmental organizations
based in the United States--
(A) many of such organizations are
essential to promoting human rights and
humanitarian goals around the world;
(B) it is in the national interest of the
United States to allow responsible
nongovernmental organizations based in the
United States to establish and carry out
operations in Iran to promote civil society and
foster humanitarian goodwill among the people
of Iran; and
(C) the United States should ensure that
the organizations described in subparagraph (B)
are not unnecessarily hindered from working in
Iran to provide humanitarian, human rights, and
people-to-people assistance, as appropriate, to
the people of Iran;
(9) the United States should not issue a license
pursuant to an agreement for cooperation (as defined in
section 11 b. of the Atomic Energy Act of 1954 (42
U.S.C. 2014(b))) for the export of nuclear material,
facilities, components, or other goods, services, or
technology that are or would be subject to such an
agreement to a country that is providing similar
nuclear material, facilities, components, or other
goods, services, or technology to another country that
is not in full compliance with its obligations under
the Nuclear Non-Proliferation Treaty, including its
obligations under the safeguards agreement between that
country and the International Atomic Energy Agency,
unless the President determines that the provision of
such similar nuclear material, facilities, components,
or other goods, services, or technology to such other
country does not undermine the nonproliferation
policies and objectives of the United States; and
(10) the people of the United States--
(A) have feelings of friendship for the
people of Iran;
(B) regret that developments in recent
decades have created impediments to that
friendship; and
(C) hold the people of Iran, their culture,
and their ancient and rich history in the
highest esteem.
TITLE I--SANCTIONS
SEC. 101. DEFINITIONS.
In this title:
(1) Agricultural commodity.--The term
``agricultural commodity'' has the meaning given that
term in section 102 of the Agricultural Trade Act of
1978 (7 U.S.C. 5602).
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' has the
meaning given that term in section 14 of the Iran
Sanctions Act of 1996 (Public Law 104-172; 50 U.S.C.
1701 note), as amended by section 102 of this Act.
(3) Executive agency.--The term ``executive
agency'' has the meaning given that term in section 4
of the Office of Federal Procurement Policy Act (41
U.S.C. 403).
(4) Family member.--The term ``family member''
means, with respect to an individual, a spouse, child,
parent, sibling, grandchild, or grandparent of the
individual.
(5) Iranian diplomats and representatives of other
government and military or quasi-governmental
institutions of iran.--The term ``Iranian diplomat or
representative of another government or military or
quasi-governmental institution of Iran'' means any of
the Iranian diplomats and representatives of other
government and military or quasi-governmental
institutions of Iran (as that term is defined in
section 14 of the Iran Sanctions Act of 1996 (Public
Law 104-172; 50 U.S.C. 1701 note)).
(6) Knowingly.--The term ``knowingly'', with
respect to conduct, a circumstance, or a result, means
that a person has actual knowledge, or should have
known, of the conduct, the circumstance, or the result.
(7) Medical device.--The term ``medical device''
has the meaning given the term ``device'' in section
201 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 321).
(8) Medicine.--The term ``medicine'' has the
meaning given the term ``drug'' in section 201 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).
(9) 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.
(10) United states person.--The term ``United
States person'' means--
(A) a natural person who is a citizen or
resident of the United States or a national of
the United States (as defined in section 101(a)
of the Immigration and Nationality Act (8
U.S.C. 1101(a)); and
(B) an entity that is organized under the
laws of the United States or any State.
SEC. 102. EXPANSION OF SANCTIONS UNDER THE IRAN SANCTIONS ACT OF 1996.
(a) In General.--Section 5 of the Iran Sanctions Act of
1996 (Public Law 104-172; 50 U.S.C. 1701 note) is amended--
(1) by striking subsection (a) and inserting the
following:
``(a) Sanctions With Respect to the Development of
Petroleum Resources of Iran, Production of Refined Petroleum
Products in Iran, and Exportation of Refined Petroleum Products
to Iran.--
``(1) Development of petroleum resources of iran.--
``(A) In general.--Except as provided in
subsection (f), the President shall impose 3 or
more of the sanctions described in section 6(a)
with respect to a person if the President
determines that the person knowingly, on or
after the date of the enactment of the
Comprehensive Iran Sanctions, Accountability,
and Divestment Act of 2010--
``(i) makes an investment described
in subparagraph (B) of $20,000,000 or
more; or
``(ii) makes a combination of
investments described in subparagraph
(B) in a 12-month period if each such
investment is of at least $5,000,000
and such investments equal or exceed
$20,000,000 in the aggregate.
``(B) Investment described.--An investment
described in this subparagraph is an investment
that directly and significantly contributes to
the enhancement of Iran's ability to develop
petroleum resources.
``(2) Production of refined petroleum products.--
``(A) In general.--Except as provided in
subsection (f), the President shall impose 3 or
more of the sanctions described in section 6(a)
with respect to a person if the President
determines that the person knowingly, on or
after the date of the enactment of the
Comprehensive Iran Sanctions, Accountability,
and Divestment Act of 2010, sells, leases, or
provides to Iran goods, services, technology,
information, or support described in
subparagraph (B)--
``(i) any of which has a fair
market value of $1,000,000 or more; or
``(ii) that, during a 12-month
period, have an aggregate fair market
value of $5,000,000 or more.
``(B) Goods, services, technology,
information, or support described.--Goods,
services, technology, information, or support
described in this subparagraph are goods,
services, technology, information, or support
that could directly and significantly
facilitate the maintenance or expansion of
Iran's domestic production of refined petroleum
products, including any direct and significant
assistance with respect to the construction,
modernization, or repair of petroleum
refineries.
``(3) Exportation of refined petroleum products to
iran.--
``(A) In general.--Except as provided in
subsection (f), the President shall impose 3 or
more of the sanctions described in section 6(a)
with respect to a person if the President
determines that the person knowingly, on or
after the date of the enactment of the
Comprehensive Iran Sanctions, Accountability,
and Divestment Act of 2010--
``(i) sells or provides to Iran
refined petroleum products--
``(I) that have a fair
market value of $1,000,000 or
more; or
``(II) that, during a 12-
month period, have an aggregate
fair market value of $5,000,000
or more; or
``(ii) sells, leases, or provides
to Iran goods, services, technology,
information, or support described in
subparagraph (B)--
``(I) any of which has a
fair market value of $1,000,000
or more; or
``(II) that, during a 12-
month period, have an aggregate
fair market value of $5,000,000
or more.
``(B) Goods, services, technology,
information, or support described.--Goods,
services, technology, information, or support
described in this subparagraph are goods,
services, technology, information, or support
that could directly and significantly
contribute to the enhancement of Iran's ability
to import refined petroleum products,
including--
``(i) except as provided in
subparagraph (C), underwriting or
entering into a contract to provide
insurance or reinsurance for the sale,
lease, or provision of such goods,
services, technology, information, or
support;
``(ii) financing or brokering such
sale, lease, or provision; or
``(iii) providing ships or shipping
services to deliver refined petroleum
products to Iran.
``(C) Exception for underwriters and
insurance providers exercising due diligence.--
The President may not impose sanctions under
this paragraph with respect to a person that
provides underwriting services or insurance or
reinsurance if the President determines that
the person has exercised due diligence in
establishing and enforcing official policies,
procedures, and controls to ensure that the
person does not underwrite or enter into a
contract to provide insurance or reinsurance
for the sale, lease, or provision of goods,
services, technology, information, or support
described in subparagraph (B).'';
(2) in subsection (b)--
(A) by redesignating paragraphs (1) and (2)
as subparagraphs (A) and (B), respectively, and
moving such subparagraphs, as so redesignated,
2 ems to the right;
(B) by striking ``The President shall
impose'' and inserting the following:
``(1) In general.--The President shall impose'';
and
(C) in paragraph (1), as redesignated by
subparagraph (B) of this paragraph, by striking
``two or more'' and all that follows through
``of this Act'' and inserting ``3 or more of
the sanctions described in section 6(a) if the
President determines that a person has, on or
after the date of the enactment of the
Comprehensive Iran Sanctions, Accountability,
and Divestment Act of 2010''; and
(D) by adding at the end the following:
``(2) Additional mandatory sanctions relating to
transfer of nuclear technology.--
``(A) In general.--Except as provided in
subparagraphs (B) and (C), in any case in which
a person is subject to sanctions under
paragraph (1) because of an activity described
in that paragraph that relates to the
acquisition or development of nuclear weapons
or related technology or of missiles or
advanced conventional weapons that are designed
or modified to deliver a nuclear weapon, no
license may be issued for the export, and no
approval may be given for the transfer or
retransfer, directly or indirectly, to the
country the government of which has primary
jurisdiction over the person, of any nuclear
material, facilities, components, or other
goods, services, or technology that are or
would be subject to an agreement for
cooperation between the United States and that
government.
``(B) Exception.--The sanctions described
in subparagraph (A) shall not apply with
respect to a country the government of which
has primary jurisdiction over a person that
engages in an activity described in that
subparagraph if the President determines and
notifies the appropriate congressional
committees that the government of the country--
``(i) does not know or have reason
to know about the activity; or
``(ii) has taken, or is taking, all
reasonable steps necessary to prevent a
recurrence of the activity and to
penalize the person for the activity.
``(C) Individual approval.--Notwithstanding
subparagraph (A), the President may, on a case-
by-case basis, approve the issuance of a
license for the export, or approve the transfer
or retransfer, of any nuclear material,
facilities, components, or other goods,
services, or technology that are or would be
subject to an agreement for cooperation, to a
person in a country to which subparagraph (A)
applies (other than a person that is subject to
the sanctions under paragraph (1)) if the
President--
``(i) determines that such approval
is vital to the national security
interests of the United States; and
``(ii) not later than 15 days
before issuing such license or
approving such transfer or retransfer,
submits to the Committee on Foreign
Affairs of the House of Representatives
and the Committee on Foreign Relations
of the Senate the justification for
approving such license, transfer, or
retransfer.
``(D) Construction.--The restrictions in
subparagraph (A) shall apply in addition to all
other applicable procedures, requirements, and
restrictions contained in the Atomic Energy Act
of 1954 and other related laws.
``(E) Definition.--In this paragraph, the
term `agreement for cooperation' has the
meaning given that term insection 11 b. of the
Atomic Energy Act of 1954 (42 U.S.C. 2014(b)).
``(F) Applicability.--The sanctions under
subparagraph (A) shall apply only in a case in
which a person is subject to sanctions under
paragraph (1) because of an activity described
in that paragraph in which the person engages
on or after the date of the enactment of the
Comprehensive Iran Sanctions, Accountability,
and Divestment Act of 2010.'';
(3) in subsection (c)--
(A) by striking ``(b)'' each place it
appears and inserting ``(b)(1)''; and
(B) by striking paragraph (2) and inserting
the following:
``(2) any person that--
``(A) is a successor entity to the person
referred to in paragraph (1);
``(B) owns or controls the person referred
to in paragraph (1), if the person that owns or
controls the person referred to in paragraph
(1) had actual knowledge or should have known
that the person referred to in paragraph (1)
engaged in the activities referred to in that
paragraph; or
``(C) is owned or controlled by, or under
common ownership or control with, the person
referred to in paragraph (1), if the person
owned or controlled by, or under common
ownership or control with (as the case may be),
the person referred to in paragraph (1)
knowingly engaged in the activities referred to
in that paragraph.''; and
(4) in subsection (f)--
(A) in the matter preceding paragraph (1),
by striking ``(b)'' and inserting ``(b)(1)'';
and
(B) in paragraph (2), by striking ``section
301(b)(1) of that Act (19 U.S.C. 2511(b)(1))''
and inserting ``section 301(b) of that Act (19
U.S.C. 2511(b))''.
(b) Description of Sanctions.--Section 6 of such Act is
amended--
(1) by striking ``The sanctions to be imposed'' and
inserting the following:
``(a) In General.--The sanctions to be imposed'';
(2) in subsection (a), as redesignated by paragraph
(1)--
(A) by redesignating paragraph (6) as
paragraph (9); and
(B) by inserting after paragraph (5) the
following:
``(6) Foreign exchange.--The President may,
pursuant to such regulations as the President may
prescribe, prohibit any transactions in foreign
exchange that are subject to the jurisdiction of the
United States and in which the sanctioned person has
any interest.
``(7) Banking transactions.--The President may,
pursuant to such regulations as the President may
prescribe, prohibit any transfers of credit or payments
between financial institutions or by, through, or to
any financial institution, to the extent that such
transfers or payments are subject to the jurisdiction
of the United States and involve any interest of the
sanctioned person.
``(8) Property transactions.--The President may,
pursuant to such regulations as the President may
prescribe, prohibit any person from--
``(A) acquiring, holding, withholding,
using, transferring, withdrawing, transporting,
importing, or exporting any property that is
subject to the jurisdiction of the United
States and with respect to which the sanctioned
person has any interest;
``(B) dealing in or exercising any right,
power, or privilege with respect to such
property; or
``(C) conducting any transaction involving
such property.''; and
(3) by adding at the end the following:
``(b) Additional Measure Relating to Government
Contracts.--
``(1) Modification of federal acquisition
regulation.--Not later than 90 days after the date of
the enactment of the Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010, the Federal
Acquisition Regulation issued pursuant to section 25 of
the Office of Federal Procurement Policy Act (41 U.S.C.
421) shall be revised to require a certification from
each person that is a prospective contractor that the
person, and any person owned or controlled by the
person, does not engage in any activity for which
sanctions may be imposed under section 5.
``(2) Remedies.--
``(A) In general.--If the head of an
executive agency determines that a person has
submitted a false certification under paragraph
(1) on or after the date on which the revision
of the Federal Acquisition Regulation required
by this subsection becomes effective, the head
of that executive agency shall terminate a
contract with such person or debar or suspend
such person from eligibility for Federal
contracts for a period of not more than 3
years. Any such debarment or suspension shall
be subject to the procedures that apply to
debarment and suspension under the Federal
Acquisition Regulation under subpart 9.4 of
part 9 of title 48, Code of Federal
Regulations.
``(B) 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 pursuant to
section 25 of the Office of Federal Procurement
Policy Act (41 U.S.C. 421) each person that is
debarred, suspended, or proposed for debarment
or suspension by the head of an executive
agency on the basis of a determination of a
false certification under subparagraph (A).
``(3) Clarification regarding certain products.--
The remedies set forth in paragraph (2) shall not apply
with respect to the procurement of eligible products,
as defined in section 308(4) of the Trade Agreements
Act of 1974 (19 U.S.C. 2518(4)),of any foreign country
or instrumentality designated under section 301(b) of that Act (19
U.S.C. 2511(b)).
``(4) Rule of construction.--This subsection 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).
``(5) Waivers.--The President may on a case-by-case
basis waive the requirement that a person make a
certification under paragraph (1) if the President
determines and certifies in writing to the appropriate
congressional committees, the Committee on Armed
Services of the Senate, and the Committee on Armed
Services of the House of Representatives, that it is in
the national interest of the United States to do so.
``(6) Executive agency defined.--In this
subsection, the term `executive agency' has the meaning
given that term in section 4 of the Office of Federal
Procurement Policy Act (41 U.S.C. 403).
``(7) Applicability.--The revisions to the Federal
Acquisition Regulation required under paragraph (1)
shall apply with respect to contracts for which
solicitations are issued on or after the date that is
90 days after the date of the enactment of the
Comprehensive Iran Sanctions, Accountability, and
Divestment Act of 2010.''.
(c) Presidential Waiver.--Section 9 of such Act is
amended--
(1) in subsection (a), by striking ``5(b)'' each
place it appears and inserting ``5(b)(1)''; and
(2) in subsection (c)--
(A) by striking ``section 5(a) or (b)''
each place it appears and inserting ``section
5(a) or 5(b)(1)'';
(B) in paragraph (1), by striking
``important to the national interest'' and
inserting ``necessary to the national
interest''; and
(C) in paragraph (2), by striking
subparagraph (C) and inserting the following:
``(C) an estimate of the significance of
the conduct of the person in contributing to
the ability of Iran to, as the case may be--
``(i) develop petroleum resources,
produce refined petroleum products, or
import refined petroleum products; or
``(ii) acquire or develop--
``(I) chemical, biological,
or nuclear weapons or related
technologies; or
``(II) destabilizing
numbers and types of advanced
conventional weapons; and''.
(d) Reports on Global Trade Relating to Iran.--Section 10
of such Act is amended by adding at the end the following:
``(d) Reports on Global Trade Relating to Iran.--Not later
than 90 days after the date of the enactment of the
Comprehensive Iran Sanctions, Accountability, and Divestment
Act of 2010, and annually thereafter, the President shall
submit to the appropriate congressional committees a report,
with respect to the most recent 12-month period for which data
are available, on the dollar value amount of trade, including
in the energy sector, between Iran and each country maintaining
membership in the Group of 20 Finance Ministers and Central
Bank Governors.''.
(e) Extension of Iran Sanctions Act of 1996.--Section 13(b)
of such Act is amended by striking ``December 31, 2011'' and
inserting ``December 31, 2016''.
(f) Clarification and Expansion of Definitions.--Section 14
of such Act is amended--
(1) in paragraph (2), by striking ``the Committee
on Banking and Financial Services, and the Committee on
International Relations'' and inserting ``the Committee
on Financial Services, and the Committee on Foreign
Affairs'';
(2) in paragraph (9), in the flush text following
subparagraph (C), by striking ``The term `investment'
does not include'' and all that follows through
``technology.'';
(3) by redesignating paragraphs (12), (13), (14),
(15), and (16) as paragraphs (13), (14), (15), (17),
and (18), respectively;
(4) by inserting after paragraph (11) the
following:
``(12) Knowingly.--The term `knowingly', with
respect to conduct, a circumstance, or a result, means
that a person has actual knowledge, or should have
known, of the conduct, the circumstance, or the
result.'';
(5) in paragraph (14), as redesignated by paragraph
(3) of this subsection--
(A) by redesignating subparagraphs (A),
(B), and (C) as clauses (i), (ii), and (iii),
respectively, and moving such clauses, as so
redesignated, 2 ems to the right;
(B) by striking ``The term `person' means--
'' and inserting the following:
``(A) In general.--The term `person'
means--'';
(C) in subparagraph (A), as redesignated by
this paragraph--
(i) in clause (ii), by inserting
``financial institution, insurer,
underwriter, guarantor, and any other
business organization,'' after
``trust,''; and
(ii) in clause (iii), by striking
``subparagraph (B)'' and inserting
``clause (ii)''; and
(D) by adding at the end the following:
``(B) Application to governmental
entities.--The term `person' does not include a
government or governmental entity that is not
operating as a business enterprise.'';
(6) in paragraph (15), as redesignated by paragraph
(3) of this subsection, by striking ``petroleum and
natural gas resources'' and inserting ``petroleum,
refined petroleum products, oil or liquefied natural
gas, natural gas resources, oil or liquefied natural
gas tankers, and products used to construct or maintain
pipelines used to transport oil or liquefied natural
gas''; and
(7) by inserting after paragraph (15), as so
redesignated, the following:
``(16) Refined petroleum products.--The term
`refined petroleum products' means diesel, gasoline,
jet fuel (including naphtha-type and kerosene-type jet
fuel), and aviation gasoline.''.
(g) Waiver for Certain Persons in Certain Countries;
Mandatory Investigations and Reporting; Conforming
Amendments.--Section 4 of such Act is amended--
(1) in subsection (b)(2), by striking ``(in
addition to that provided in subsection (d))'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) by striking ``The President
may'' and inserting the following:
``(A) General waiver.--The President may'';
and
(ii) by adding at the end the
following:
``(B) Waiver with respect to persons in
countries that cooperate in multilateral
efforts with respect to iran.--The President
may, on a case by case basis, waive for a
period of not more than 12 months the
application of section 5(a) with respect to a
person if the President, at least 30 days
before the waiver is to take effect--
``(i) certifies to the appropriate
congressional committees that--
``(I) the government with
primary jurisdiction over the
person is closely cooperating
with the United States in
multilateral efforts to prevent
Iran from--
``(aa) acquiring or
developing chemical,
biological, or nuclear
weapons or related
technologies; or
``(bb) acquiring or
developing
destabilizing numbers
and types of advanced
conventional weapons;
and
``(II) such a waiver is
vital to the national security
interests of the United States;
and
``(ii) submits to the appropriate
congressional committees a report
identifying--
``(I) the person with
respect to which the President
waives the application of
sanctions; and
``(II) the actions taken by
the government described in
clause (i)(I) to cooperate in
multilateral efforts described
in that clause.''; and
(B) by striking paragraph (2) and inserting
the following:
``(2) Subsequent renewal of waiver.--At the
conclusion of the period of a waiver under subparagraph
(A) or (B) of paragraph (1), the President may renew
the waiver--
``(A) if the President determines, in
accordance with subparagraph (A) or (B) of that
paragraph (as the case may be), that the waiver
is appropriate; and
``(B)(i) in the case of a waiver under
subparagraph (A) of paragraph (1), for
subsequent periods of not more than six months
each; and
``(ii) in the case of a waiver under
subparagraph (B) of paragraph (1), for
subsequent periods of not more than 12 months
each.'';
(3) by striking subsection (d);
(4) by redesignating subsections (e) and (f) as
subsections (d) and (e), respectively; and
(5) in subsection (e), as redesignated by paragraph
(4) of this subsection--
(A) in paragraph (1)--
(i) by striking ``should initiate''
and inserting ``shall initiate''; and
(ii) by striking ``investment
activity in Iran as'' and inserting
``an activity'';
(B) in paragraph (2)--
(i) by striking ``should
determine'' and inserting ``shall
(unless paragraph (3) applies)
determine''; and
(ii) by striking ``investment
activity in Iran as'' and inserting
``an activity''; and
(C) by adding at the end the following:
``(3) Special rule.--The President need not
initiate an investigation, and may terminate an
investigation, under this subsection if the President
certifies in writing to the appropriate congressional
committees that--
``(A) the person whose activity was the
basis for the investigation is no longer
engaging in the activity or has taken
significant verifiable steps toward stopping
the activity; and
``(B) the President has received reliable
assurances that the person will not knowingly
engage in an activity described in section 5(a)
in the future.''.
(h) Effective Date.--
(1) In general.--The amendments made by this
section shall--
(A) take effect on the date of the
enactment of this Act; and
(B) except as provided in this subsection
or section 6(b)(7) of the Iran Sanctions Act of
1996, as amended by subsection (b) of this
section, apply with respect to an investment or
activity described in subsection (a) or (b) of
section 5 of the Iran Sanctions Act of 1996, as
amended by this section, that is commenced on
or after such date of enactment.
(2) Applicability to ongoing investments prohibited
under prior law.--A person that makes an investment
described in section 5(a) of the Iran Sanctions Act of
1996, as in effect on the day before the date of the
enactment of this Act, that is commenced before such
date of enactment and continues on or after such date
of enactment, shall, except as provided in paragraph
(4), be subject to the provisions of the Iran Sanctions
Act of 1996, as in effect on the day before such date
of enactment.
(3) Applicability to ongoing activities relating to
chemical, biological, or nuclear weapons or related
technologies.--A person that, before the date of the
enactment of this Act, commenced an activity described
in section 5(b) of the Iran Sanctions Act of 1996, as
in effect on the day before such date of enactment, and
continues the activity on or after such date of
enactment, shall be subject to the provisions of the
Iran Sanctions Act of 1996, as amended by this Act.
(4) Applicability of mandatory investigations to
investments.--The amendments made by subsection (g)(5)
of thissection shall apply on and after the date of the
enactment of this Act--
(A) with respect to an investment described
in section 5(a)(1) of the Iran Sanctions Act of
1996, as amended by subsection (a) of this
section, that is commenced on or after such
date of enactment; and
(B) with respect to an investment described
in section 5(a) of the Iran Sanctions Act of
1996, as in effect on the day before the date
of the enactment of this Act, that is commenced
before such date of enactment and continues on
or after such date of enactment.
(5) Applicability of mandatory investigations to
activities relating to petroleum.--
(A) In general.--Except as provided in
subparagraph (B), the amendments made by
subsection (g)(5) of this section shall apply
on and after the date that is 1 year after the
date of the enactment of this Act with respect
to an activity described in paragraph (2) or
(3) of section 5(a) of the Iran Sanctions Act
of 1996, as amended by subsection (a) of this
section, that is commenced on or after the date
that is 1 year after the date of the enactment
of this Act or the date on which the President
fails to submit a certification that is
required under subparagraph (B) (whichever is
applicable).
(B) Special rule for delay of effective
date.--
(i) Reporting requirement.--Not
later than 30 days before the date that
is 1 year after the date of the
enactment of this Act, the President
shall submit to the appropriate
congressional committees a report
describing--
(I) the diplomatic and
other efforts of the
President--
(aa) to dissuade
foreign persons from
engaging in activities
described in paragraph
(2) or (3) of section
5(a) of the Iran
Sanctions Act of 1996,
as amended by
subsection (a) of this
section; and
(bb) to encourage
other governments to
dissuade persons over
which those governments
have jurisdiction from
engaging in such
activities;
(II) the successes and
failures of the efforts
described in subclause (I); and
(III) each investigation
under section 4(e) of the Iran
Sanctions Act of 1996, as
amended by subsection (g)(5) of
this section and as in effect
pursuant to subparagraph (C) of
this paragraph, or any other
review of an activity described
in paragraph (2) or (3) of
section 5(a) of the Iran
Sanctions Act of 1996, as
amended by subsection (a) of
this section, that is initiated
or ongoing during the period
beginning on the date of the
enactment of this Act and
ending on the date on which the
President is required to submit
the report.
(ii) Certification.--If the
President submits to the appropriate
congressional committees, with the
report required by clause (i), a
certification that there was a
substantial reduction in activities
described in paragraphs (2) and (3) of
section 5(a) of the Iran Sanctions Act
of 1996, as amended by subsection (a)
of this section, during the period
described in clause (i)(III), the
effective date provided for in
subparagraph (A) shall be delayed for a
180-day period beginning after the date
provided for in that subparagraph.
(iii) Subsequent reports and
delays.--The effective date provided
for in subparagraph (A) shall be
delayed for additional 180-day periods
occurring after the end of the 180-day
period provided for under clause (ii),
if, not later than 30 days before the
180-day period preceding such
additional 180-day period expires, the
President submits to the appropriate
congressional committees--
(I) a report containing the
matters required in the report
under clause (i) for the period
beginning on the date on which
the preceding report was
required to be submitted under
clause (i) or this clause (as
the case may be) and ending on
the date on which the President
is required to submit the most
recent report under this
clause; and
(II) a certification that,
during the period described in
subclause (I), there was (as
compared to the period for
which the preceding report was
submitted under this
subparagraph) a progressive
reduction in activities
described in paragraphs (2) and
(3) of section 5(a) of the Iran
Sanctions Act of 1996, as
amended by subsection (a) of
this section.
(iv) Consequence of failure to
certify.--If the President does not
make a certification at a time required
by this subparagraph--
(I) the amendments made by
subsection (g)(5) of this
section shall apply on and
after the date on which the
certification was required to
be submitted by this
subparagraph, with respect to
an activity described in
paragraph (2) or (3) of section
5(a) of the Iran Sanctions Act
of 1996, as amended by
subsection (a) of this section,
that--
(aa) is referenced
in the most recent
report required to be
submitted under this
subparagraph; or
(bb) is commenced
on or after the date on
which such most recent
report is required to
be submitted; and
(II) not later than 45 days
after the date on which the
certification was required to
be submitted by this
subparagraph, the President
shall make a determination
under paragraph (2) or (3) of
section 5(a) of the Iran
Sanctions Act of 1996 (as the
case may be), as amended by
subsection (a) ofthis section,
with respect to relevant activities described in subclause (I)(aa).
(C) Applicability of permissive
investigations.--During the 1-year period
beginning on the date of the enactment of this
Act and during any 180-day period during which
the effective date provided for in subparagraph
(A) is delayed pursuant to subparagraph (B),
section 4(e) of the Iran Sanctions Act of 1996,
as amended by subsection (g)(5) of this
section, shall be applied, with respect to an
activity described in paragraph (2) or (3) of
section 5(a) of the Iran Sanctions Act of 1996,
as amended by subsection (a) of this section,
by substituting ``should'' for ``shall'' each
place it appears.
(6) Waiver authority.--The amendments made by
subsection (c) shall not be construed to affect any
exercise of the authority under section 9(c) of the
Iran Sanctions Act of 1996, as in effect on the day
before the date of the enactment of this Act.
SEC. 103. ECONOMIC SANCTIONS RELATING TO IRAN.
(a) In General.--Notwithstanding section 101 of the Iran
Freedom Support Act (Public Law 109-293; 120 Stat. 1344), and
in addition to any other sanction in effect, beginning on the
date that is 90 days after the date of the enactment of this
Act, the economic sanctions described in subsection (b) shall
apply with respect to Iran.
(b) Sanctions.--The sanctions described in this subsection
are the following:
(1) Prohibition on imports.--
(A) In general.--Except as provided in
subparagraph (B), no good or service of Iranian
origin may be imported directly or indirectly
into the United States.
(B) Exceptions.--The exceptions provided
for in section 203(b) of the International
Emergency Economic Powers Act (50 U.S.C.
1702(b)), including the exception for
information and informational materials, shall
apply to the prohibition in subparagraph (A) of
this paragraph to the same extent that such
exceptions apply to the authority provided
under section 203(a) of that Act.
(2) Prohibition on exports.--
(A) In general.--Except as provided in
subparagraph (B), no good, service, or
technology of United States origin may be
exported to Iran from the United States or by a
United States person, wherever located.
(B) Exceptions.--
(i) Personal communications;
articles to relieve human suffering;
information and informational
materials; transactions incident to
travel.--The exceptions provided for in
section 203(b) of the International
Emergency Economic Powers Act (50
U.S.C. 1702(b)), including the
exception for information and
informational materials, shall apply to
the prohibition in subparagraph (A) of
this paragraph to the same extent that
such exceptions apply to the authority
provided under section 203(a) of that
Act.
(ii) Food; medicine; humanitarian
assistance.--The prohibition in
subparagraph (A) shall not apply to the
exportation of--
(I) agricultural
commodities, food, medicine, or
medical devices; or
(II) articles exported to
Iran to provide humanitarian
assistance to the people of
Iran.
(iii) Internet communications.--The
prohibition in subparagraph (A) shall
not apply to the exportation of--
(I) services incident to
the exchange of personal
communications over the
Internet or software necessary
to enable such services, as
provided for in section 560.540
of title 31, Code of Federal
Regulations (or any
corresponding similar
regulation or ruling);
(II) hardware necessary to
enable such services; or
(III) hardware, software,
or technology necessary for
access to the Internet.
(iv) Goods, services, or
technologies necessary to ensure the
safe operation of commercial
aircraft.--The prohibition in
subparagraph (A) shall not apply to the
exportation of goods, services, or
technologies necessary to ensure the
safe operation of commercial aircraft
produced in the United States or
commercial aircraft into which aircraft
components produced in the United
States are incorporated, if the
exportation of such goods, services, or
technologies is approved by the
Secretary of the Treasury, in
consultation with the Secretary of
Commerce, pursuant to regulations
issued by the Secretary of the Treasury
regarding the exportation of such
goods, services, or technologies, if
appropriate.
(v) Goods, services, or
technologies exported to support
international organizations.--The
prohibition in subparagraph (A) shall
not apply to the exportation of goods,
services, or technologies that--
(I) are provided to the
International Atomic Energy
Agency and are necessary to
support activities of that
Agency in Iran; or
(II) are necessary to
support activities, including
the activities of
nongovernmental organizations,
relating to promoting democracy
in Iran.
(vi) Exports in the national
interest.--The prohibition in
subparagraph (A) shall not apply to the
exportation of goods, services, or
technologies if the President
determines the exportation of such
goods, services, or technologies to be
in the national interest of the United
States.
(3) Freezing assets.--
(A) In general.--At such time as the
President determines that a person in Iran,
including an Iranian diplomat or representative
of another government or military or quasi-
governmental institution of Iran (including
Iran'sRevolutionary Guard Corps and its
affiliates), satisfies the criteria for designation with respect to the
imposition of sanctions under the authority of the International
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), the President
shall take such action as may be necessary to freeze, as soon as
possible--
(i) the funds and other assets
belonging to that person; and
(ii) any funds or other assets that
person transfers, on or after the date
on which the President determines the
person satisfies such criteria, to any
family member or associate acting for
or on behalf of the person.
(B) Reports to the office of foreign assets
control.--The action described in subparagraph
(A) includes requiring any United States
financial institution that holds funds or
assets of a person described in that
subparagraph or funds or assets that person
transfers to a family member or associate
described in that subparagraph to report
promptly to the Office of Foreign Assets
Control information regarding such funds and
assets.
(C) Reports to congress.--Not later than 14
days after a decision is made to freeze the
funds or assets of any person under
subparagraph (A), the President shall report
the name of the person to the appropriate
congressional committees. Such a report may
contain a classified annex.
(D) Termination.--The President shall
release assets or funds frozen under
subparagraph (A) if the person to which the
assets or funds belong or the person that
transfers the assets or funds as described in
subparagraph (A)(ii) (as the case may be) no
longer satisfies the criteria for designation
with respect to the imposition of sanctions
under the authority of the International
Emergency Economic Powers Act (50 U.S.C. 1701
et seq.).
(E) United states financial institution
defined.--In this paragraph, the term ``United
States financial institution'' means a
financial institution (as defined in section 14
of the Iran Sanctions Act of 1996 (Public Law
104-172; 50 U.S.C. 1701 note)) that is a United
States person.
(c) Penalties.--The penalties provided for in subsections
(b) and (c) of section 206 of the International Emergency
Economic Powers Act (50 U.S.C. 1705) shall apply to a person
that violates, attempts to violate, conspires to violate, or
causes a violation of this section or regulations prescribed
under this section to the same extent that such penalties apply
to a person that commits an unlawful act described in section
206(a) of that Act.
(d) Regulatory Authority.--
(1) In general.--The President shall prescribe
regulations to carry out this section, which may
include regulatory exceptions to the sanctions
described in subsection (b).
(2) Applicability of certain regulations.--No
exception to the prohibition under subsection (b)(1)
may be made for the commercial importation of an
Iranian origin good described in section 560.534(a) of
title 31, Code of Federal Regulations (as in effect on
the day before the date of the enactment of this Act),
unless the President--
(A) prescribes a regulation providing for
such an exception on or after the date of the
enactment of this Act; and
(B) submits to the appropriate
congressional committees--
(i) a certification in writing that
the exception is in the national
interest of the United States; and
(ii) a report describing the
reasons for the exception.
SEC. 104. MANDATORY SANCTIONS WITH RESPECT TO FINANCIAL INSTITUTIONS
THAT ENGAGE IN CERTAIN TRANSACTIONS.
(a) Findings.--Congress makes the following findings:
(1) The Financial Action Task Force is an
intergovernmental body whose purpose is to develop and
promote national and international policies to combat
money laundering and terrorist financing.
(2) Thirty-three countries, plus the European
Commission and the Cooperation Council for the Arab
States of the Gulf, belong to the Financial Action Task
Force. The member countries of the Financial Action
Task Force include the United States, Canada, most
countries in western Europe, Russia, the People's
Republic of China, Japan, South Korea, Argentina, and
Brazil.
(3) In 2008 the Financial Action Task Force
extended its mandate to include addressing ``new and
emerging threats such as proliferation financing'',
meaning the financing of the proliferation of weapons
of mass destruction, and published ``guidance papers''
for members to assist them in implementing various
United Nations Security Council resolutions dealing
with weapons of mass destruction, including United
Nations Security Council Resolutions 1737 (2006) and
1803 (2008), which deal specifically with proliferation
by Iran.
(4) The Financial Action Task Force has repeatedly
called on members--
(A) to advise financial institutions in
their jurisdictions to give special attention
to business relationships and transactions with
Iran, including Iranian companies and financial
institutions;
(B) to apply effective countermeasures to
protect their financial sectors from risks
relating to money laundering and financing of
terrorism that emanate from Iran;
(C) to protect against correspondent
relationships being used by Iran and Iranian
companies and financial institutions to bypass
or evade countermeasures and risk-mitigation
practices; and
(D) to take into account risks relating to
money laundering and financing of terrorism
when considering requests by Iranian financial
institutions to open branches and subsidiaries
in their jurisdictions.
(5) At a February 2010 meeting of the Financial
Action Task Force, the Task Force called on members to
apply countermeasures ``to protect the international
financial system from the ongoing and substantial money
laundering and terrorist financing (ML/TF) risks''
emanating from Iran.
(b) Sense of Congress Regarding the Imposition of Sanctions
on the Central Bank of Iran.--Congress--
(1) acknowledges the efforts of the United Nations
Security Council to impose limitations on transactions
involving Iranian financial institutions, including the
Central Bank of Iran; and
(2) urges the President, in the strongest terms, to
consider immediately using the authority of the
President to impose sanctions on the Central Bank of
Iran and any other Iranian financial institution
engaged in proliferation activities or support of
terrorist groups.
(c) Prohibitions and Conditions With Respect to Certain
Accounts Held by Foreign Financial Institutions.--
(1) In general.--Not later than 90 days after the
date of the enactment of this Act, the Secretary of the
Treasury shall prescribe regulations to prohibit, or
impose strict conditions on, the opening or maintaining
in the United States of a correspondent account or a
payable-through account by a foreign financial
institution that the Secretary finds knowingly engages
in an activity described in paragraph (2).
(2) Activities described.--A foreign financial
institution engages in an activity described in this
paragraph if the foreign financial institution--
(A) facilitates the efforts of the
Government of Iran (including efforts of Iran's
Revolutionary Guard Corps or any of its agents
or affiliates)--
(i) to acquire or develop weapons
of mass destruction or delivery systems
for weapons of mass destruction; or
(ii) to provide support for
organizations designated as foreign
terrorist organizations under section
219(a) of the Immigration and
Nationality Act (8 U.S.C. 1189(a)) or
support for acts of international
terrorism (as defined in section 14 of
the Iran Sanctions Act of 1996 (Public
Law 104-172; 50 U.S.C. 1701 note));
(B) facilitates the activities of a person
subject to financial sanctions pursuant to
United Nations Security Council Resolution 1737
(2006), 1747 (2007), 1803 (2008), or 1929
(2010), or any other resolution that is agreed
to by the Security Council and imposes
sanctions with respect to Iran;
(C) engages in money laundering to carry
out an activity described in subparagraph (A)
or (B);
(D) facilitates efforts by the Central Bank
of Iran or any other Iranian financial
institution to carry out an activity described
in subparagraph (A) or (B); or
(E) facilitates a significant transaction
or transactions or provides significant
financial services for--
(i) Iran's Revolutionary Guard
Corps or any of its agents or
affiliates whose property or interests
in property are blocked pursuant to the
International Emergency Economic Powers
Act (50 U.S.C. 1701 et seq.); or
(ii) a financial institution whose
property or interests in property are
blocked pursuant to that Act in
connection with--
(I) Iran's proliferation of
weapons of mass destruction or
delivery systems for weapons of
mass destruction; or
(II) Iran's support for
international terrorism.
(3) Penalties.--The penalties provided for in
subsections (b) and (c) of section 206 of the
International Emergency Economic Powers Act (50 U.S.C.
1705) shall apply to a person that violates, attempts
to violate, conspires to violate, or causes a violation
of regulations prescribed under paragraph (1) of this
subsection to the same extent that such penalties apply
to a person that commits an unlawful act described in
section 206(a) of that Act.
(d) Penalties for Domestic Financial Institutions for
Actions of Persons Owned or Controlled by Such Financial
Institutions.--
(1) In general.--Not later than 90 days after the
date of the enactment of this Act, the Secretary of the
Treasury shall prescribe regulations to prohibit any
person owned or controlled by a domestic financial
institution from knowingly engaging in a transaction or
transactions with or benefitting Iran's Revolutionary
Guard Corps or any of its agents or affiliates whose
property or interests in property are blocked pursuant
to the International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.).
(2) Penalties.--The penalties provided for in
section 206(b) of the International Emergency Economic
Powers Act (50 U.S.C. 1705(b)) shall apply to a
domestic financial institution to the same extent that
such penalties apply to a person that commits an
unlawful act described in section 206(a) of that Act
if--
(A) a person owned or controlled by the
domestic financial institution violates,
attempts to violate, conspires to violate, or
causes a violation of regulations prescribed
under paragraph (1) of this subsection; and
(B) the domestic financial institution knew
or should have known that the person violated,
attempted to violate, conspired to violate, or
caused a violation of such regulations.
(e) Requirements for Financial Institutions Maintaining
Accounts for Foreign Financial Institutions.--
(1) In general.--The Secretary of the Treasury
shall prescribe regulations to require a domestic
financial institution maintaining a correspondent
account or payable-through account in the United States
for a foreign financial institution to do one or more
of the following:
(A) Perform an audit of activities
described in subsection (c)(2) that may be
carried out by the foreign financial
institution.
(B) Report to the Department of the
Treasury with respect to transactions or other
financial services provided with respect to any
such activity.
(C) Certify, to the best of the knowledge
of the domestic financial institution, that the
foreign financial institution is not knowingly
engaging in any such activity.
(D) Establish due diligence policies,
procedures, and controls, such as the due
diligence policies, procedures, and controls
described in section 5318(i) of title 31,
United States Code, reasonably designed to
detect whether the Secretary of the Treasury
has found the foreign financial institution to
knowingly engage in any such activity.
(2) Penalties.--The penalties provided for in
sections 5321(a) and 5322 of title 31, United States
Code, shall apply to a person that violates a
regulation prescribed under paragraph (1) of this
subsection, in the same manner and to the same extent
as such penalties would apply to any person that is
otherwise subject to such section 5321(a) or 5322.
(f) Waiver.--The Secretary of the Treasury may waive the
application of a prohibition or condition imposed with respect
to a foreign financial institution pursuant to subsection (c)
or the imposition of a penalty under subsection (d) with
respect to a domestic financial institution on and after the
date that is 30 days after the Secretary--
(1) determines that such a waiver is necessary to
the national interest of the United States; and
(2) submits to the appropriate congressional
committees a report describing the reasons for the
determination.
(g) Procedures for Judicial Review of Classified
Information.--
(1) In general.--If a finding under subsection
(c)(1), a prohibition, condition, or penalty imposed as
a result of any such finding, or a penalty imposed
under subsection (d), is based on classified
information (as defined in section 1(a) of the
Classified Information Procedures Act (18 U.S.C. App.))
and a court reviews the finding or the imposition of
the prohibition, condition, or penalty, the Secretary
of the Treasury may submit such information to the
court ex parte and in camera.
(2) Rule of construction.--Nothing in this
subsection shall be construed to confer or imply any
right to judicial review of any finding under
subsection (c)(1), any prohibition, condition, or
penalty imposed as a result of any such finding, or any
penalty imposed under subsection (d).
(h) Consultations in Implementation of Regulations.--In
implementing this section and the regulations prescribed under
this section, the Secretary of the Treasury--
(1) shall consult with the Secretary of State; and
(2) may, in the sole discretion of the Secretary of
the Treasury, consult with such other agencies and
departments and such other interested parties as the
Secretary considers appropriate.
(i) Definitions.--
(1) In general.--In this section:
(A) Account; correspondent account;
payable-through account.--The terms
``account'', ``correspondent account'', and
``payable-through account'' have the meanings
given those terms in section 5318A of title 31,
United States Code.
(B) Agent.--The term ``agent'' includes an
entity established by a person for purposes of
conducting transactions on behalf of the person
in order to conceal the identity of the person.
(C) Financial institution.--The term
``financial institution'' means a financial
institution specified in subparagraph (A), (B),
(C), (D), (E), (F), (G), (H), (I), (J), (M), or
(Y) of section 5312(a)(2) of title 31, United
States Code.
(D) Foreign financial institution; domestic
financial institution.--The terms ``foreign
financial institution'' and ``domestic
financial institution'' shall have the meanings
of those terms as determined by the Secretary
of the Treasury.
(E) Money laundering.--The term ``money
laundering'' means the movement of illicit cash
or cash equivalent proceeds into, out of, or
through a country, or into, out of, or through
a financial institution.
(2) Other definitions.--The Secretary of the
Treasury may further define the terms used in this
section in the regulations prescribed under this
section.
SEC. 105. IMPOSITION OF SANCTIONS ON CERTAIN PERSONS WHO ARE
RESPONSIBLE FOR OR COMPLICIT IN HUMAN RIGHTS ABUSES
COMMITTED AGAINST CITIZENS OF IRAN OR THEIR FAMILY
MEMBERS AFTER THE JUNE 12, 2009, ELECTIONS IN IRAN.
(a) In General.--The President shall impose sanctions
described in subsection (c) with respect to each person on the
list required by subsection (b).
(b) List of Persons Who Are Responsible for or Complicit in
Certain Human Rights Abuses.--
(1) In general.--Not later than 90 days after the
date of the enactment of this Act, the President shall
submit to the appropriate congressional committees a
list of persons who are officials of the Government of
Iran or persons acting on behalf of that Government
(including members of paramilitary organizations such
as Ansar-e-Hezbollah and Basij-e Mostaz'afin), that the
President determines, based on credible evidence, are
responsible for or complicit in, or responsible for
ordering, controlling, or otherwise directing, the
commission of serious human rights abuses against
citizens of Iran or their family members on or after
June 12, 2009, regardless of whether such abuses
occurred in Iran.
(2) Updates of list.--The President shall submit to
the appropriate congressional committees an updated
list under paragraph (1)--
(A) not later than 270 days after the date
of the enactment of this Act and every 180 days
thereafter; and
(B) as new information becomes available.
(3) Form of report; public availability.--
(A) Form.--The list required by paragraph
(1) shall be submitted in unclassified form but
may contain a classified annex.
(B) Public availability.--The unclassified
portion of the list required by paragraph (1)
shall be made available to the public and
posted on the websites of the Department of the
Treasury and the Department of State.
(4) Consideration of data from other countries and
nongovernmental organizations.--In preparing the list
required by paragraph (1), the President shall consider
credible data already obtained by other countries and
nongovernmentalorganizations, including organizations
in Iran, that monitor the human rights abuses of the Government of
Iran.
(c) Sanctions Described.--The sanctions described in this
subsection are ineligibility for a visa to enter the United
States and sanctions pursuant to the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.), including
blocking of property and restrictions or prohibitions on
financial transactions and the exportation and importation of
property, subject to such regulations as the President may
prescribe, including regulatory exceptions to permit the United
States to comply with the Agreement between the United Nations
and the United States of America regarding the Headquarters of
the United Nations, signed June 26, 1947, and entered into
force November 21, 1947, and other applicable international
obligations.
(d) Termination of Sanctions.--The provisions of this
section shall terminate on the date on which the President
determines and certifies to the appropriate congressional
committees that the Government of Iran has--
(1) unconditionally released all political
prisoners, including the citizens of Iran detained in
the aftermath of the June 12, 2009, presidential
election in Iran;
(2) ceased its practices of violence, unlawful
detention, torture, and abuse of citizens of Iran while
engaging in peaceful political activity;
(3) conducted a transparent investigation into the
killings, arrests, and abuse of peaceful political
activists that occurred in the aftermath of the June
12, 2009, presidential election in Iran and prosecuted
the individuals responsible for such killings, arrests,
and abuse; and
(4) made public commitments to, and is making
demonstrable progress toward--
(A) establishing an independent judiciary;
and
(B) respecting the human rights and basic
freedoms recognized in the Universal
Declaration of Human Rights.
SEC. 106. PROHIBITION ON PROCUREMENT CONTRACTS WITH PERSONS THAT EXPORT
SENSITIVE TECHNOLOGY TO IRAN.
(a) In General.--Except as provided in subsection (b), and
pursuant to such regulations as the President may prescribe,
the head of an executive agency may not enter into or renew a
contract, on or after the date that is 90 days after the date
of the enactment of this Act, for the procurement of goods or
services with a person that exports sensitive technology to
Iran.
(b) Authorization to Exempt Certain Products.--The
President is authorized to exempt from the prohibition under
subsection (a) only eligible products, as defined in section
308(4) of the Trade Agreements Act of 1979 (19 U.S.C. 2518(4)),
of any foreign country or instrumentality designated under
section 301(b) of that Act (19 U.S.C. 2511(b)).
(c) Sensitive Technology Defined.--
(1) In general.--The term ``sensitive technology''
means hardware, software, telecommunications equipment,
or any other technology, that the President determines
is to be used specifically--
(A) to restrict the free flow of unbiased
information in Iran; or
(B) to disrupt, monitor, or otherwise
restrict speech of the people of Iran.
(2) Exception.--The term ``sensitive technology''
does not include information or informational materials
the exportation of which the President does not have
the authority to regulate or prohibit pursuant to
section 203(b)(3) of the International Emergency
Economic Powers Act (50 U.S.C. 1702(b)(3)).
(d) Government Accountability Office Report on Effect of
Procurement Prohibition.--Not later than 1 year after the date
of the enactment of this Act, the Comptroller General of the
United States shall submit to the appropriate congressional
committees, the Committee on Armed Services of the Senate, and
the Committee on Armed Services of the House of
Representatives, a report assessing the extent to which
executive agencies would have entered into or renewed contracts
for the procurement of goods or services with persons that
export sensitive technology to Iran if the prohibition under
subsection (a) were not in effect.
SEC. 107. HARMONIZATION OF CRIMINAL PENALTIES FOR VIOLATIONS OF
SANCTIONS.
(a) In General.--
(1) Violations of united nations security council
resolutions imposing sanctions.--Section 5(b) of the
United Nations Participation Act of 1945 (22 U.S.C.
287c(b)) is amended--
(A) by striking ``find not more than
$10,000'' and inserting ``fined not more than
$1,000,000''; and
(B) by striking ``ten years'' and all that
follows and inserting ``20 years, or both.''.
(2) Violations of controls on exports and imports
of defense articles and defense services.--Section
38(c) of the Arms Export Control Act (22 U.S.C.
2778(c)) is amended by striking ``ten years'' and
inserting ``20 years''.
(3) Violations of prohibition on transactions with
countries that support acts of international
terrorism.--Section 40(j) of the Arms Export Control
Act (22 U.S.C. 2780(j)) is amended by striking ``10
years'' and inserting ``20 years''.
(4) Violations of the trading with the enemy act.--
Section 16(a) of the Trading with the enemy Act (50
U.S.C. App. 16(a)) is amended by striking ``if a
natural person'' and all that follows and inserting
``if a natural person, be imprisoned for not more than
20 years, or both.''.
(b) Study by United States Sentencing Commission.--Not
later than 1 year after the date of the enactment of this Act,
the United States Sentencing Commission, pursuant to the
authority under sections 994 and 995 of title 28, United States
Code, and the responsibility of the United States Sentencing
Commission to advise Congress on sentencing policy under
section 995(a)(20) of title 28, United States Code, shall study
and submit to Congress a report on the impact and advisability
of imposing a mandatory minimum sentence for violations of--
(1) section 5(a) of the United Nations
Participation Act of 1945 (22 U.S.C. 287c(a));
(2) sections 38, 39, and 40 of the Arms Export
Control Act (22 U.S.C. 2778, 2779, and 2780); and
(3) the Trading with the enemy Act (50 U.S.C. App.
1 et seq.).
SEC. 108. AUTHORITY TO IMPLEMENT UNITED NATIONS SECURITY COUNCIL
RESOLUTIONS IMPOSING SANCTIONS WITH RESPECT TO
IRAN.
In addition to any other authority of the President with
respect to implementing resolutions of the United Nations
Security Council, the President may prescribe such regulations
as may be necessary to implement a resolution that is agreed to
by the United Nations Security Council and imposes sanctions
with respect to Iran.
SEC. 109. INCREASED CAPACITY FOR EFFORTS TO COMBAT UNLAWFUL OR
TERRORIST FINANCING.
(a) Findings.--Congress finds the following:
(1) The work of the Office of Terrorism and
Financial Intelligence of the Department of the
Treasury, which includes the Office of Foreign Assets
Control and the Financial Crimes Enforcement Network,
is critical to ensuring that the international
financial system is not used for purposes of supporting
terrorism and developing weapons of mass destruction.
(2) The Secretary of the Treasury has designated,
including most recently on June 16, 2010, various
Iranian individuals and banking, military, energy, and
shipping entities as proliferators of weapons of mass
destruction pursuant to Executive Order 13382 (50
U.S.C. 1701 note), thereby blocking transactions
subject to the jurisdiction of the United States by
those individuals and entities and their supporters.
(3) The Secretary of the Treasury has also
identified an array of entities in the insurance,
petroleum, and petrochemicals industries that the
Secretary has determined to be owned or controlled by
the Government of Iran and added those entities to the
list contained in Appendix A to part 560 of title 31,
Code of Federal Regulations (commonly known as the
``Iranian Transactions Regulations''), thereby
prohibiting transactions between United States persons
and those entities.
(b) Authorization of Appropriations for Office of Terrorism
and Financial Intelligence.--There are authorized to be
appropriated to the Secretary of the Treasury for the Office of
Terrorism and Financial Intelligence--
(1) $102,613,000 for fiscal year 2011; and
(2) such sums as may be necessary for each of the
fiscal years 2012 and 2013.
(c) Authorization of Appropriations for the Financial
Crimes Enforcement Network.--Section 310(d)(1) of title 31,
United States Code, is amended by striking ``such sums as may
be necessary for fiscal years 2002, 2003, 2004, and 2005'' and
inserting ``$100,419,000 for fiscal year 2011 and such sums as
may be necessary for each of the fiscal years 2012 and 2013''.
(d) Authorization of Appropriations for Bureau of Industry
and Security of the Department of Commerce.--There are
authorized to be appropriated to the Secretary of Commerce for
the Bureau of Industry and Security of the Department of
Commerce--
(1) $113,000,000 for fiscal year 2011; and
(2) such sums as may be necessary for each of the
fiscal years 2012 and 2013.
SEC. 110. REPORTS ON INVESTMENTS IN THE ENERGY SECTOR OF IRAN.
(a) Initial Report.--
(1) In general.--Not later than 90 days after the
date of the enactment of this Act, the President shall
submit to the appropriate congressional committees a
report--
(A) on investments in the energy sector of
Iran that were made during the period described
in paragraph (2); and
(B) that contains--
(i) an estimate of the volume of
energy-related resources (other than
refined petroleum), including ethanol,
that Iran imported during the period
described in paragraph (2); and
(ii) a list of all significant
known energy-related joint ventures,
investments, and partnerships located
outside Iran that involve Iranian
entities in partnership with entities
from other countries, including an
identification of the entities from
other countries; and
(iii) an estimate of--
(I) the total value of each
such joint venture, investment,
and partnership; and
(II) the percentage of each
such joint venture, investment,
and partnership owned by an
Iranian entity.
(2) Period described.--The period described in this
paragraph is the period beginning on January 1, 2006,
and ending on the date that is 60 days after the date
of the enactment of this Act.
(b) Updated Reports.--Not later than 180 days after
submitting the report required by subsection (a), and every 180
days thereafter, the President shall submit to the appropriate
congressional committees a report containing the matters
required in the report under subsection (a)(1) for the 180-day
period beginning on the date that is 30 days before the date on
which the preceding report was required to be submitted by this
section.
SEC. 111. REPORTS ON CERTAIN ACTIVITIES OF FOREIGN EXPORT CREDIT
AGENCIES AND OF THE EXPORT-IMPORT BANK OF THE
UNITED STATES.
(a) Report on Certain Activities of Export Credit Agencies
of Foreign Countries.--
(1) In general.--Not later than 90 days after the
date of the enactment of this Act, the President shall
submit to the appropriate congressional committees a
report on any activity of an export credit agency of a
foreign country that is an activity comparable to an
activity described in subsection (a) or (b) of section
5 of the Iran Sanctions Act of 1996, as amended by
section 102 of this Act.
(2) Updates.--The President shall update the report
required by paragraph (1) as new information becomes
available with respect to the activities of export
credit agencies of foreign countries.
(b) Report on Certain Financing by the Export-Import Bank
of the United States.--Not later than 30 days (or, in
extraordinary circumstances, not later than 15 days) before the
Export-Import Bank of the United States approves cofinancing
(including loans, guarantees, other credits, insurance, and
reinsurance) in which an export credit agency of a foreign
country identified in the report required by subsection (a)
will participate, the President shall submit to the appropriate
congressional committees a report identifying--
(1) the export credit agency of the foreign
country; and
(2) the beneficiaries of the financing.
SEC. 112. SENSE OF CONGRESS REGARDING IRAN'S REVOLUTIONARY GUARD CORPS
AND ITS AFFILIATES.
It is the sense of Congress that the United States should--
(1) persistently target Iran's Revolutionary Guard
Corps and its affiliates with economic sanctions for
its support for terrorism, its role in proliferation,
and its oppressive activities against the people of
Iran;
(2) identify, as soon as possible--
(A) any foreign individual or entity that
is an agent, alias, front, instrumentality,
official, or affiliate of Iran's Revolutionary
Guard Corps;
(B) any individual or entity that--
(i) has provided material support
to any individual or entity described
in subparagraph (A); or
(ii) has conducted any financial or
commercial transaction with any such
individual or entity; and
(C) any foreign government that--
(i) provides material support to
any such individual or entity; or
(ii) conducts any commercial
transaction or financial transaction
with any such individual or entity; and
(3) immediately impose sanctions, including travel
restrictions, sanctions authorized pursuant to this Act
or the Iran Sanctions Act of 1996, as amended by
section 102 of this Act, and the full range of
sanctions available to the President under the
International Emergency Economic Powers Act (50 U.S.C.
1701 et seq.), on the individuals, entities, and
governments described in paragraph (2).
SEC. 113. SENSE OF CONGRESS REGARDING IRAN AND HEZBOLLAH.
It is the sense of Congress that the United States should--
(1) continue to counter support received by
Hezbollah from the Government of Iran and other foreign
governments in response to Hezbollah's terrorist
activities and the threat Hezbollah poses to Israel,
the democratic sovereignty of Lebanon, and the national
security interests of the United States;
(2) impose the full range of sanctions available to
the President under the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.) on
Hezbollah, affiliates and supporters of Hezbollah
designated for the imposition of sanctions under that
Act, and persons providing Hezbollah with commercial,
financial, or other services;
(3) urge the European Union, individual countries
in Europe, and other countries to classify Hezbollah as
a terrorist organization to facilitate the disruption
of Hezbollah's operations; and
(4) renew international efforts to disarm Hezbollah
and disband its militias in Lebanon, as called for by
United Nations Security Council Resolutions 1559 (2004)
and 1701 (2006).
SEC. 114. SENSE OF CONGRESS REGARDING THE IMPOSITION OF MULTILATERAL
SANCTIONS WITH RESPECT TO IRAN.
It is the sense of Congress that--
(1) in general, effective multilateral sanctions
are preferable to unilateral sanctions in order to
achieve desired results from countries such as Iran;
and
(2) the President should continue to work with
allies of the United States to impose such sanctions as
may be necessary to prevent the Government of Iran from
acquiring a nuclear weapons capability.
SEC. 115. REPORT ON PROVIDING COMPENSATION FOR VICTIMS OF INTERNATIONAL
TERRORISM.
Not later than 180 days after the date of the enactment of
this Act, the President shall submit to the appropriate
congressional committees a report on equitable methods for
providing compensation on a comprehensive basis to victims of
acts of international terrorism who are citizens or residents
of the United States or nationals of the United States (as
defined in section 101(a) of the Immigration and Nationality
Act (8 U.S.C. 1101(a)).
TITLE II--DIVESTMENT FROM CERTAIN COMPANIES THAT INVEST IN IRAN
SEC. 201. DEFINITIONS.
In this title:
(1) Energy sector of iran.--The term ``energy
sector of Iran'' refers to activities to develop
petroleum or natural gas resources or nuclear power in
Iran.
(2) Financial institution.--The term ``financial
institution'' has the meaning given that term in
section 14 of the Iran Sanctions Act of 1996 (Public
Law 104-172; 50 U.S.C. 1701 note).
(3) Iran.--The term ``Iran'' includes the
Government of Iran and any agency or instrumentality of
Iran.
(4) Person.--The term ``person'' means--
(A) a natural person, corporation, company,
business association, partnership, society,
trust, or 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 entity,
or subsidiary of, or any entity under common
ownership or control with, any entity described
in subparagraph (A) or (B).
(5) 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.
(6) 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
of a State or locality; 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. 202. AUTHORITY OF STATE AND LOCAL GOVERNMENTS TO DIVEST FROM
CERTAIN COMPANIES THAT INVEST IN IRAN.
(a) Sense of Congress.--It is the sense of Congress that
the United States should support the decision of any State or
local government that for moral, prudential, or reputational
reasons divests from, or prohibits the investment of assets of
the State or local government in, a person that engages in
investment activities in the energy sector of Iran, as long as
Iran is subject to economic sanctions imposed by the United
States.
(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 (d)
to divest the assets of the State or local government from, or
prohibit investment of the assets of the State or local
government in, any person that the State or local government
determines, using credible information available to the public,
engages in investment activities in Iran described in
subsection (c).
(c) Investment Activities Described.--A person engages in
investment activities in Iran described in this subsection if
the person--
(1) has an investment of $20,000,000 or more in the
energy sector of Iran, including in a person that
provides oil or liquified natural gas tankers, or
products used to construct or maintain pipelines used
to transport oil or liquified natural gas, for the
energy sector of Iran; or
(2) is a financial institution that extends
$20,000,000 or more in credit to another person, for 45
days or more, if that person will use the credit for
investment in the energy sector of Iran.
(d) 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 to each person to which a
measure is to be applied.
(2) Timing.--The 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) Opportunity for hearing.--The State or local
government shall provide an opportunity to comment in
writing to each person to which a measure is to be
applied. If the person demonstrates to the State or
local government that the person does not engage in
investment activities in Iran described in subsection
(c), the measure shall not apply to the person.
(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 engages in investment activities in
Iran described in subsection (c).
(e) Notice to 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.
(f) Nonpreemption.--A measure of a State or local
government authorized under subsection (b) or (i) is not
preempted by any Federal law or regulation.
(g) Definitions.--In this section:
(1) 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.).
(2) Investment.--The ``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.
(h) Effective Date.--
(1) In general.--Except as provided in paragraph
(2) or subsection (i), 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 requirements.--Except as provided in
subsection (i), subsections (d) and (e) apply to
measures adopted by a State or local government on or
after the date of the enactment of this Act.
(i) Authorization for Prior Enacted Measures.--
(1) In general.--Notwithstanding any other
provision of this section or any other provision of
law, a State or local government may enforce a measure
(without regard to the requirements of subsection (d),
except as provided in paragraph (2)) adopted by the
State or local government before the date of the
enactment of this Act that provides for the divestment
of assets of the State or local government from, or
prohibits the investment of the assets of the State or
local government in, any person that the State or local
government determines, using credible information
available to the public, engages in investment
activities in Iran (determined without regard to
subsection (c)) or other business activities in Iran
that are identified in the measure.
(2) Application of notice requirements.--A measure
described in paragraph (1) shall be subject to the
requirements of paragraphs (1) and (2) and the first
sentence of paragraph (3) of subsection (d) on and
after the date that is 2 years after the date of the
enactment of this Act.
SEC. 203. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY ASSET
MANAGERS.
(a) In General.--Section 13(c)(1) of the Investment Company
Act of 1940 (15 U.S.C. 80a-13(c)(1)) is amended to read as
follows:
``(1) In general.--Notwithstanding any other
provision of Federal or State law, no person may bring
any civil, criminal, 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 available to the public--
``(A) conduct or have direct investments in
business operations in Sudan described in
section 3(d) of the Sudan Accountability and
Divestment Act of 2007 (50 U.S.C. 1701 note);
or
``(B) engage in investment activities in
Iran described in section 202(c) of the
Comprehensive Iran Sanctions, Accountability,
and Divestment Act of 2010.''.
(b) SEC Regulations.--Not later than 120 days after the
date of the enactment of this Act, the Securities and Exchange
Commission shall issue any revisions the Commission determines
to be necessary to the regulations requiring disclosure by each
registered investment company that divests itself of securities
in accordance with section 13(c) of the Investment Company Act
of 1940 to include divestments of securities in accordance with
paragraph (1)(B) of such section, as added by subsection (a) of
this section.
SEC. 204. 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 engages in investment
activities in Iran described in section 202(c) of this Act,
without breaching the responsibilities, obligations, or duties
imposed upon the fiduciary by subparagraph (A) or (B) of
section 404(a)(1) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1104(a)(1)), if--
(1) the fiduciary makes such determination using
credible information that is available to the public;
and
(2) the fiduciary prudently determines that the
result of such divestment or avoidance of investment
would not be expected to provide the employee benefit
plan with--
(A) a lower rate of return than alternative
investments with commensurate degrees of risk;
or
(B) a higher degree of risk than
alternative investments with commensurate rates
of return.
SEC. 205. TECHNICAL CORRECTIONS TO SUDAN ACCOUNTABILITY AND DIVESTMENT
ACT OF 2007.
(a) ERISA Plan Investments.--Section 5 of the Sudan
Accountability and Divestment Act of 2007 (Public Law 110-174;
50 U.S.C. 1701 note) is amended--
(1) by striking ``section 404 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1104)'' and inserting ``subparagraph (A) or (B) of
section 404(a)(1) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1104(a)(1))''; and
(2) by striking paragraph (2) and inserting the
following:
``(2) the fiduciary prudently determines that the
result of such divestment or avoidance of investment
would not be expected to provide the employee benefit
plan with--
``(A) a lower rate of return than
alternative investments with commensurate
degrees of risk; or
``(B) a higher degree of risk than
alternative investments with commensurate rates
of return.''.
(b) Safe Harbor for Changes of Investment Policies by Asset
Managers.--
(1) In general.--Section 13(c)(2)(A) of the
Investment Company Act of 1940 (15 U.S.C. 80a-
13(c)(2)(A)) is amended to read as follows:
``(A) Rule of construction.--Nothing in
paragraph (1) shall be construed to create,
imply, diminish, change, or affect in any way
whether or not a private right of action exists
under subsection (a) or any other provision of
this Act.''.
(2) Applicability.--The amendment made by paragraph
(1) shall apply as if included in the Sudan
Accountability and Divestment Act of 2007 (Public Law
110-174; 50 U.S.C. 1701 note).
TITLE III--PREVENTION OF DIVERSION OF CERTAIN GOODS, SERVICES, AND
TECHNOLOGIES TO IRAN
SEC. 301. DEFINITIONS.
In this title:
(1) Allow.--The term ``allow'', with respect to the
diversion through a country of goods, services, or
technologies, means the government of the country knows
or has reason to know that the territory of the country
is being used for such diversion.
(2) 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 Foreign Affairs and
the Permanent Select Committee on Intelligence
of the House of Representatives.
(3) Commerce control list.--The term ``Commerce
Control List'' means the list maintained pursuant to
part 774 of the Export Administration Regulations (or
any corresponding similar regulation or ruling).
(4) Divert; diversion.--The terms ``divert'' and
``diversion'' refer to the transfer or release,
directly or indirectly, of a good, service, or
technology to an end-user or an intermediary that is
not an authorized recipient of the good, service, or
technology.
(5) End-user.--The term ``end-user'', with respect
to a good, service, or technology, means the person
that receives and ultimately uses the good, service, or
technology.
(6) Export administration regulations.--The term
``Export Administration Regulations'' means subchapter
C of chapter VII of title 15, Code of Federal
Regulations (or any corresponding similar regulation or
ruling).
(7) Government.--The term ``government'' includes
any agency or instrumentality of a government.
(8) Intermediary.--The term ``intermediary'' means
a person that receives a good, service, or technology
while the good, service, or technology is in transit to
the end-user of the good, service, or technology.
(9) International traffic in arms regulations.--The
term ``International Traffic in Arms Regulations''
means subchapter M of chapter I of title 22, Code of
Federal Regulations (or any corresponding similar
regulation or ruling).
(10) Iran.--The term ``Iran'' includes the
Government of Iran and any agency or instrumentality of
Iran.
(11) Iranian end-user.--The term ``Iranian end-
user'' means an end-user that is the Government of Iran
or a person in, or an agency or instrumentality of,
Iran.
(12) Iranian intermediary.--The term ``Iranian
intermediary'' means an intermediary that is the
Government of Iran or a person in, or an agency or
instrumentality of, Iran.
(13) State sponsor of terrorism.--The term ``state
sponsor of terrorism'' means any country the government
of which the Secretary of State has determined has
repeatedly provided support for acts of international
terrorism pursuant to--
(A) section 6(j)(1)(A) of the Export
Administration Act of 1979 (50 U.S.C. App.
2405(j)(1)(A)) (or any successor thereto);
(B) section 40(d) of the Arms Export
Control Act (22 U.S.C. 2780(d)); or
(C) section 620A(a) of the Foreign
Assistance Act of 1961 (22 U.S.C. 2371(a)).
(14) United states munitions list.--The term
``United States Munitions List'' means the list
maintained pursuant to part 121 of the International
Traffic in Arms Regulations (or any corresponding
similar regulation or ruling).
SEC. 302. IDENTIFICATION OF COUNTRIES OF CONCERN WITH RESPECT TO THE
DIVERSION OF CERTAIN GOODS, SERVICES, AND
TECHNOLOGIES TO OR THROUGH IRAN.
(a) In General.--Not later than 180 days after the date of
the enactment of this Act, the Director of National
Intelligence shall submit to the President, the Secretary of
Defense, the Secretary of Commerce, the Secretary of State, the
Secretary of the Treasury, and the appropriate congressional
committees a report that identifies each country the government
of which the Director believes, based on all information
available to the Director, is allowing the diversion through
the country of goods, services, or technologies described in
subsection (b) to Iranian end-users or Iranian intermediaries.
(b) Goods, Services, and Technologies Described.--Goods,
services, or technologies described in this subsection are
goods, services, or technologies--
(1) that--
(A) originated in the United States;
(B) would make a material contribution to
Iran's--
(i) development of nuclear,
chemical, or biological weapons;
(ii) ballistic missile or advanced
conventional weapons capabilities; or
(iii) support for international
terrorism; and
(C) are--
(i) items on the Commerce Control
List or services related to those
items; or
(ii) defense articles or defense
services on the United States Munitions
List; or
(2) that are prohibited for export to Iran under a
resolution of the United Nations Security Council.
(c) Updates.--The Director of National Intelligence shall
update the report required by subsection (a)--
(1) as new information becomes available; and
(2) not less frequently than annually.
(d) Form.--The report required by subsection (a) and the
updates required by subsection (c) may be submitted in
classified form.
SEC. 303. DESTINATIONS OF DIVERSION CONCERN.
(a) Designation.--
(1) In general.--The President shall designate a
country as a Destination of Diversion Concern if the
President determines that the government of the country
allows substantial diversion of goods, services, or
technologies described in section 302(b) through the
country to Iranian end-users or Iranian intermediaries.
(2) Determination of substantial.--For purposes of
paragraph (1), the President shall determine whether
the government of a country allows substantial
diversion of goods, services, or technologies described
in section 302(b) through the country to Iranian end-
users or Iranian intermediaries based on criteria that
include--
(A) the volume of such goods, services, and
technologies that are diverted through the
country to such end-users or intermediaries;
(B) the inadequacy of the export controls
of the country;
(C) the unwillingness or demonstrated
inability of the government of the country to
control the diversion of such goods, services,
and technologies to such end-users or
intermediaries; and
(D) the unwillingness or inability of the
government of the country to cooperate with the
United States in efforts to interdict the
diversion of such goods, services, or
technologies to such end-users or
intermediaries.
(b) Report on Designation.--Upon designating a country as a
Destination of Diversion Concern under subsection (a), the
Presidentshall submit to the appropriate congressional
committees a report--
(1) notifying those committees of the designation
of the country; and
(2) containing a list of the goods, services, and
technologies described in section 302(b) that the
President determines are diverted through the country
to Iranian end-users or Iranian intermediaries.
(c) Licensing Requirement.--Not later than 45 days after
submitting a report required by subsection (b) with respect to
a country designated as a Destination of Diversion Concern
under subsection (a), the President shall require a license
under the Export Administration Regulations or the
International Traffic in Arms Regulations (whichever is
applicable) to export to that country a good, service, or
technology on the list required under subsection (b)(2), with
the presumption that any application for such a license will be
denied.
(d) Delay of Imposition of Licensing Requirement.--
(1) In general.--The President may delay the
imposition of the licensing requirement under
subsection (c) with respect to a country designated as
a Destination of Diversion Concern under subsection (a)
for a 12-month period if the President--
(A) determines that the government of the
country is taking steps--
(i) to institute an export control
system or strengthen the export control
system of the country;
(ii) to interdict the diversion of
goods, services, or technologies
described in section 302(b) through the
country to Iranian end-users or Iranian
intermediaries; and
(iii) to comply with and enforce
United Nations Security Council
Resolutions 1696 (2006), 1737 (2006),
1747 (2007), 1803 (2008), and 1929
(2010), and any other resolution that
is agreed to by the Security Council
and imposes sanctions with respect to
Iran;
(B) determines that it is appropriate to
carry out government-to-government activities
to strengthen the export control system of the
country; and
(C) submits to the appropriate
congressional committees a report describing
the steps specified in subparagraph (A) being
taken by the government of the country.
(2) Additional 12-month periods.--The President may
delay the imposition of the licensing requirement under
subsection (c) with respect to a country designated as
a Destination of Diversion Concern under subsection (a)
for additional 12-month periods after the 12-month
period referred to in paragraph (1) if the President,
for each such 12-month period--
(A) makes the determinations described in
subparagraphs (A) and (B) of paragraph (1) with
respect to the country; and
(B) submits to the appropriate
congressional committees an updated version of
the report required by subparagraph (C) of
paragraph (1).
(3) Strengthening export control systems.--If the
President determines under paragraph (1)(B) that is it
appropriate to carry out government-to-government
activities to strengthen the export control system of a
country designated as a Destination of Diversion
Concern under subsection (a), the United States shall
initiate government-to-government activities that may
include--
(A) cooperation by agencies and departments
of the United States with counterpart agencies
and departments in the country--
(i) to develop or strengthen the
export control system of the country;
(ii) to strengthen cooperation
among agencies of the country and with
the United States and facilitate
enforcement of the export control
system of the country; and
(iii) to promote information and
data exchanges among agencies of the
country and with the United States;
(B) training officials of the country to
strengthen the export control systems of the
country--
(i) to facilitate legitimate trade
in goods, services, and technologies;
and
(ii) to prevent terrorists and
state sponsors of terrorism, including
Iran, from obtaining nuclear,
biological, and chemical weapons,
defense technologies, components for
improvised explosive devices, and other
defense articles; and
(C) encouraging the government of the
country to participate in the Proliferation
Security Initiative, such as by entering into a
ship boarding agreement pursuant to the
Initiative.
(e) Termination of Designation.--The designation of a
country as a Destination of Diversion Concern under subsection
(a) shall terminate on the date on which the President
determines, and certifies to the appropriate congressional
committees, that the country has adequately strengthened the
export control system of the country to prevent the diversion
of goods, services, and technologies described in section
302(b) to Iranian end-users or Iranian intermediaries.
(f) Form of Reports.--A report required by subsection (b)
or (d) may be submitted in classified form.
SEC. 304. REPORT ON EXPANDING DIVERSION CONCERN SYSTEM TO ADDRESS THE
DIVERSION OF UNITED STATES ORIGIN GOODS, SERVICES,
AND TECHNOLOGIES TO CERTAIN COUNTRIES OTHER THAN
IRAN.
(a) In General.--Not later than 1 year after the date of
the enactment of this Act, the President shall submit to the
appropriate congressional committees a report that--
(1) identifies any country that the President
determines is allowing the diversion, in violation of
United States law, of items on the Commerce Control
List or services related to those items, or defense
articles or defense services on the United States
Munitions List, that originated in the United States to
another country if such other country--
(A) is seeking to obtain nuclear,
biological, or chemical weapons, or ballistic
missiles; or
(B) provides support for acts of
international terrorism; and
(2) assesses the feasibility and advisability of
expanding the system established under section 303 for
designating countries as Destinations of Diversion
Concern to include countries identified under paragraph
(1).
(b) Form.--The report required by subsection (a) may be
submitted in classified form.
SEC. 305. ENFORCEMENT AUTHORITY.
The Secretary of Commerce may designate any employee of the
Office of Export Enforcement of the Department of Commerce to
conduct activities specified in clauses (i), (ii), and (iii) of
section 12(a)(3)(B) of the Export Administration Act of 1979
(50 U.S.C. App. 2411(a)(3)(B)) when the employee is carrying
out activities to enforce--
(1) the provisions of the Export Administration Act
of 1979 (50 U.S.C. App. 2401 et seq.) (as in effect
pursuant to the International Emergency Economic Powers
Act (50 U.S.C. 1701 et seq.));
(2) the provisions of this title, or any other
provision of law relating to export controls, with
respect to which the Secretary of Commerce has
enforcement responsibility; or
(3) any license, order, or regulation issued
under--
(A) the Export Administration Act of 1979
(50 U.S.C. App. 2401 et seq.) (as in effect
pursuant to the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.));
or
(B) a provision of law referred to in
paragraph (2).
TITLE IV--GENERAL PROVISIONS
SEC. 401. GENERAL PROVISIONS.
(a) Sunset.--The provisions of this Act (other than
sections 105 and 305 and the amendments made by sections 102,
107, 109, and 205) shall terminate, and section 13(c)(1)(B) of
the Investment Company Act of 1940, as added by section 203(a),
shall cease to be effective, on the date that is 30 days after
the date on which the President certifies to Congress that--
(1) the Government of Iran has ceased providing
support for acts of international terrorism and no
longer satisfies the requirements for designation as a
state sponsor of terrorism (as defined in section 301)
under--
(A) section 6(j)(1)(A) of the Export
Administration Act of 1979 (50 U.S.C. App.
2405(j)(1)(A)) (or any successor thereto);
(B) section 40(d) of the Arms Export
Control Act (22 U.S.C. 2780(d)); or
(C) section 620A(a) of the Foreign
Assistance Act of 1961 (22 U.S.C. 2371(a)); and
(2) Iran has ceased the pursuit, acquisition, and
development of nuclear, biological, and chemical
weapons and ballistic missiles and ballistic missile
launch technology.
(b) Presidential Waivers.--
(1) In general.--The President may waive the
application of sanctions under section 103(b), the
requirement to impose or maintain sanctions with
respect to a person under section 105(a), the
requirement to include a person on the list required by
section 105(b), the application of the prohibition
under section 106(a), or the imposition of the
licensing requirement under section 303(c) with respect
to a country designated as a Destination of Diversion
Concern under section 303(a), if the President
determines that such a waiver is in the national
interest of the United States.
(2) Reports.--
(A) In general.--If the President waives
the application of a provision pursuant to
paragraph (1), the President shall submit to
the appropriate congressional committees a
report describing the reasons for the waiver.
(B) Special rule for report on waiving
imposition of licensing requirement under
section 303(c).--In any case in which the
President waives, pursuant to paragraph (1),
the imposition of the licensing requirement
under section 303(c) with respect to a country
designated as a Destination of Diversion
Concern under section 303(a), the President
shall include in the report required by
subparagraph (A) of this paragraph an
assessment of whether the government of the
country is taking the steps described in
subparagraph (A) of section 303(d)(1).
(c) Authorizations of Appropriations.--
(1) Authorization of appropriations for the
department of state and the department of the
treasury.--There are authorized to be appropriated to
the Secretary of State and to the Secretary of the
Treasury such sums as may be necessary to implement the
provisions of, and amendments made by, titles I and III
of this Act.
(2) Authorization of appropriations for the
department of commerce.--There are authorized to be
appropriated to the Secretary of Commerce such sums as
may be necessary to carry out title III.
SEC. 402. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go-Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
jointly submitted for printing in the Congressional Record by
the Chairmen of the House and Senate Budget Committees,
provided that such statement has been submitted prior to the
vote on passage in the House acting first on this conference
report or amendment between the Houses.
And the Senate agree to the same.
From the Committee on Foreign Affairs, for
consideration of the House bill and the Senate
amendment, and modifications committed to
conference:
Howard L. Berman,
Gary L. Ackerman,
Brad Sherman,
Joseph Crowley,
David Scott,
Jim Costa,
Ron Klein,
Ileana Ros-Lehtinen,
Dan Burton,
Edward R. Royce,
Mike Pence,
From the Committee on Financial Services, for
consideration of secs. 3 and 4 of the House
bill, and secs. 101-103, 106, 203, and 401 of
the Senate amendment, and modifications
committed to conference:
Barney Frank,
Gregory W. Meeks,
Scott Garrett,
From the Committee on Ways and Means, for
consideration of secs. 3 and 4 of the House
bill, and secs. 101-103 and 401 of the Senate
amendment, and modifications committed to
conference:
Sander M. Levin,
John S. Tanner,
Dave Camp,
Managers on the Part of the House.
Christopher J. Dodd,
John F. Kerry,
Joseph I. Lieberman,
Robert Menendez,
Richard C. Shelby,
Robert F. Bennett,
Richard G. Lugar,
Managers on the Part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at the
conference on the disagreeing votes of the two Houses on the
amendment of the Senate to the bill (H.R. 2194), to amend the
Iran Sanctions Act of 1996 to enhance United States diplomatic
efforts with respect to Iran by expanding economic sanctions
against Iran, submit the following joint statement to the House
and the Senate in explanation of the effect of the action
agreed upon by the managers and recommended in the accompanying
conference report:
The Senate amendment struck all of the House bill after the
enacting clause and inserted a substitute text.
The House recedes from its disagreement to the amendment of
the Senate with an amendment that is a substitute for the House
bill and the Senate amendment. The differences between the
House bill, the Senate amendment, and the substitute agreed to
in conference are noted below, except for clerical corrections,
conforming changes made necessary by agreements reached by the
conferees, and minor drafting and clerical changes.
Summary and Purpose
H.R. 2194, the Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010, would strengthen
the underlying Iran Sanctions Act (ISA) by imposing an array of
tough new economic penalties aimed at persuading Iran to change
its conduct. The Act reinforces and goes far beyond recently-
enacted UN Sanctions. Targets of the Act range from business
entities involved in refined petroleum sales to Iran or support
for Iran's domestic refining efforts to international banking
institutions involved with Iran's Islamic Revolutionary Guards
Corps (IRGC) or with Iran's illicit nuclear program or its
support for terrorism.
The Conference text would augment the sanctions regime
envisioned in the earlier versions of the Act passed by the
House and the Senate by supplementing the energy sanctions in
those versions with an additional, powerful set of banking
prohibitions. The Act would impose severe restrictions on
foreign financial institutions doing business with key Iranian
banks or the IRGC. In effect, the Act presents foreign banks
doing business with blacklisted Iranian entities a stark
choice--cease your activities or be denied critical access to
America's financial system. The Act also would hold U.S. banks
accountable for actions by their foreign subsidiaries (U.S.
companies have long been banned from all the activities for
which foreign entities will be sanctionable under this Act).
In addition to new financial sector and refined petroleum-
focused sanctions, the Act would also provide a legal framework
by which U.S. states, local governments, and certain other
investors can divest their portfolios of foreign companies
involved in Iran's energy sector and establishes a mechanism to
address concerns about diversion of sensitive technologies to
Iran through other countries. Sanctions under this Act are
subject to several waivers with varying thresholds. The
sanctions could terminate either in 2016 or, as provided for in
the Sunset clause of the Conference text, could terminate once
the President certifies to Congress that Iran (1) has ceased
its support for acts of international terrorism and no longer
satisfies the requirements for designation as a state-sponsor
of terrorism under U.S. law; and (2) has ceased its efforts to
develop or acquire nuclear, biological, and chemical weapons
and ballistic missiles and ballistic-missile launch technology.
The effectiveness of this Act will depend on its forceful
implementation. The Conferees urge the President to vigorously
impose the sanctions provided for in this Act.
Conferees urge friends and allies of the United States to
follow the U.S. lead in cutting off key economic relationships
with Iran until Iran terminates its illicit nuclear program.
Few objective observers now dispute that Iran's nuclear program
represents a threat to global stability. All concur that Iran
is pursuing its nuclear program in defiance of the demands of
the international community. Conferees believe it is time for
responsible actors to cease any economic involvement with Iran
that contributes to its ability to finance its nuclear weapons
capability.
Background and Need for the Legislation
Iran poses a significant threat to the United States and
its allies in the Middle East and elsewhere. A nuclear Iran
would intimidate its neighbors; be further emboldened in
pursuing terrorism abroad and oppression at home; represent an
imminent threat to Israel and other friends and allies of the
United States; and likely spark a destabilizing Middle East
arms race that would deal a major blow to U.S. and
international non-proliferation efforts and threaten vital U.S.
national security interests.
Iran's persistent deception regarding its nuclear program,
its general unresponsiveness to diplomacy, and its rejection of
international community demands regarding its nuclear program
have deepened Congressional concerns about that program. Since
2006 the UN Security Council has been calling on Iran to
suspend its uranium enrichment program and increase its
cooperation with the International Atomic Energy Agency
(IAEA)--to no avail.
Notwithstanding the additional costs imposed on Iran as a
result of previous U.S. and UN Security Council sanctions,
Iran's development of its nuclear program continues. The
International Atomic Energy Agency (IAEA) now estimates that
Iran has produced and stockpiled sufficient low-enriched
uranium, if further enriched, for two nuclear explosive
devices. For these reasons, Conferees assess that additional
and tougher sanctions are needed in order to persuade Iran to
cease its nuclear program. Conferees believe that the imminence
and seriousness of the threat posed to U.S. interests by Iran's
nuclear weapons program warrants the enactment of H.R. 2194.
Conferees take note of and applaud recent adoption by the
U.N. Security Council of Resolution 1929 regarding Iran's
nuclear program. Conferees believe the resolution is a powerful
statement of opposition by the international community to
Iran's ongoing illicit nuclear activities and a critical step
in strengthening the multilateral sanctions regime intended to
persuade Iran to suspend those activities. Conferees believe
this legislation will complement UNSCR 1929 and will deepen
efforts to thwart Iran's efforts to obtain a nuclear weapons
capability.
Background: U.S. Sanctions
Iran's economy, and Iran's ability to fund its nuclear
program, is heavily dependent on the revenue derived from
energy exports. Accordingly, an important part of U.S. efforts
to prevent Iran from acquiring nuclear weapons has focused on
deterring investment in Iran's energy sector.
U.S. individuals and companies have been prohibited from
investing in Iran's petroleum sector since Executive Order
12957 was issued on March 15, 1995, by President William J.
Clinton as a follow-on to his Administration's assessment that
``the actions and policies of the Government of Iran constitute
an unusual and extraordinary threat to the national security,
foreign policy, and economy of the United States.'' The White
House spokesman at that time, Michael McCurry, made clear that
the objectionable activities were Iran's pursuit of weapons of
mass destruction, its support of international terrorism, and
its efforts to undermine the Middle East peace process.
A subsequent executive order, E.O. 12959, issued on May 8,
1995, banned all new investment in Iran by U.S. individuals and
companies. The same executive order banned virtually all trade
with Iran. In conjunction with the latter executive order,
then-Secretary of State Warren Christopher warned the
international community that the path Iran was following was a
mirror image of the steps taken by other nations that had
sought nuclear weapons capabilities. A trade embargo was thus
implemented in furtherance of the President's powers exercised
pursuant to the International Emergency Powers Act (IEEPA, 50
U.S.C. 1701 et seq.), which authorizes the President to block
transactions and freeze assets to deal with the ``unusual and
extraordinary threat,'' in this case posed by Iran.
With the U.S. having voluntarily removed itself from the
Iran market, Congress in 1996 passed the Iran and Libya
Sanctions Act, P.L. 104-172 (`ILSA,' now usually referred to as
the Iran Sanctions Act, or `ISA,' following termination of
applicability of sanctions to Libya in 2006), to encourage
foreign persons to withdraw from the Iranian market. ILSA
authorized the President to impose sanctions on any foreign
entity that invested $20 million or more in Iran's energy
sector. ILSA was passed in 1996 for a five-year period and has
been renewed twice, in 2001 and 2006, for additional five-year
periods. (H.R. 2194 would extend ISA another five years,
through 2016.)
Although ILSA was enacted more than a decade ago, no
Administration has sanctioned a foreign entity for investing
$20 million or more in Iran's energy sector, despite a number
of such investments. Indeed, on only one occasion, in 1998, did
the Administration make a determination regarding a sanctions-
triggering investment, but the Administration waived sanctions
against the offending persons. Conferees believe that the lack
of enforcement of relevant enacted sanctions may have served to
encourage rather than deter Iran's efforts to pursue nuclear
weapons.
Despite successive Executive Branch failures to implement
ISA, the legislation has made a positive contribution to United
States national security. Arguably, the supply of capital to
the Iranian petroleum sector has been constrained by the mere
threat of sanctions. Further, by highlighting the threat from
Iran, ISA has emerged as a deterrent to additional investment,
and it has encouraged increased international community
involvement with the Iranian nuclear issue.
To further strengthen sanctions targeting foreign
investment in Iran's energy sector, Congress passed the `Iran
Freedom Support Act' (IFSA), a bill subsequently signed into
law (P.L. 109-293) by President George W. Bush in September
2006. Among other provisions, the IFSA strengthened sanctions
under ISA, including raising certain waiver thresholds to
`vital to the national security interests of the United
States,' enlarging the scope of those who might be subject to
sanctions, and enhancing tools for using financial means to
address Iran's activities of concern.
In addition, in June 2007, the Senate passed the
International Emergency Powers Enhancement Act, with the House
following suit and the President's signing it into law (P.L.
110-96) four months later. The Act greatly increased penalties
for violators of U.S. sanctions. As a result, U.S. persons who
illegally trade with Iran now face civil fines up to $250,000
or twice the amount of the transaction. In addition, the Act
increased criminal penalties to $1 million with a maximum jail
sentence of 20 years. Unlike ISA, these measures have been
exercised extensivelyby the Department of the Treasury's Office
of Foreign Assets Control and the Department of Justice to enforce the
U.S. trade embargo on Iran.
MULTILATERAL SANCTIONS EFFORTS
Conferees strongly support multilateral efforts aimed at
curbing Iran's nuclear program. The United Nations Security
Council (UNSC) has passed a number of resolutions condemning
Iran's nuclear activities and urging compliance with its
international obligations. For example, on December 23, 2006,
UNSC Resolution 1737 was unanimously approved, banning supply
of nuclear technology and equipment to Iran and freezing the
assets of organizations and individuals involved in Iran's
nuclear program, until Iran suspends enrichment of uranium and
halts Plutonium reprocessing-related activities. UNSC
Resolution 1747 was unanimously approved on March 24, 2007,
imposing a ban on Iranian arms sales, expanding the freeze on
assets, and setting a deadline for Iranian compliance two
months later.
Absent compliance, further sanctions were adopted in UNSC
Resolution 1803 on March 3, 2008, including a ban on sales of
dual-use items; authorization of inspections of cargo suspected
of containing WMD-related goods; an expanded Iranian travel-ban
list; and a call to ban transactions with Iran's Bank Melli and
Bank Saderat. On August 7, 2008, the European Union (EU)
implemented the sanctions specified in Resolution 1803,
including an assertion of authority to inspect suspect
shipments, and called on its members to refrain from providing
new credit guarantees on exports to Iran. On September 27,
2008, the Security Council adopted Resolution 1835, calling on
Iran to comply with previous resolutions. On June 9, 2010,
Resolution 1929 was adopted, strengthening existing sanctions
in a variety of ways, including further targeting Iran's
Revolutionary Guard Corps; authorizing an inspection regime for
ships suspected to be carrying contraband to Iran; prohibiting
countries from allowing Iran to invest in uranium mining and
related nuclear technologies, or nuclear-capable ballistic
missile technology; banning sales of most heavy arms to Iran;
requiring countries to insist that their companies refrain from
doing business with Iran if there is reason to believe that
such business could further Iran's WMD programs; and adopting
other similar measures. Iran has contemptuously dismissed all
of these UNSC resolutions, with President Ahmadinejad labeling
them ``illegal.''
Contents of H.R. 2194
H.R. 2194 contains four Titles: Title I (Sanctions), Title
II (Divestment from Certain Companies That Invest in Iran);
Title III (Prevention of Diversion of Certain Goods, Services,
and Technologies to Iran); and Title IV (General Provisions).
TITLE I: SANCTIONS
Title I of H.R. 2194 strengthens the U.S. sanctions regime
by requiring severe limitations on U.S. correspondent banking
for foreign financial institutions doing business with relevant
Iranian banks. The Act further strengthens existing legislation
by broadening the categories of transactions that trigger
sanctions, increasing the number of sanctions the President can
impose on foreign companies whose activities trigger sanctions,
and requiring the President to investigate reports of
sanctionable activities to determine whether sanctionable
activity has indeed occurred.
In broadening the categories of transactions that trigger
sanctions, the bill focuses on sales to Iran of refined
petroleum and assistance to Iran for its own domestic refining
capacity. Under H.R. 2194, companies engaged in either of these
activities would be subject to the same sanctions as companies
that invest $20 million or more in Iran's energy sector (the
original category of sanctionable activity established under
ISA). Despite being one of the world's leading oil producers,
Iran reportedly imports between 25 and 40 percent of its
refined oil needs, due to its limited domestic refining
capacity. Accordingly, Conferees believe that imposition of
refined-petroleum-related sanctions could have a powerful
impact on Iran's economy and, as a result, on its decision-
making regarding its nuclear program.
The bill likewise imposes sanctions on companies that sell
Iran goods, services, or know-how that assist it in developing
its energy sector. As is the case with refined-petroleum-
related sanctions, companies that engage in such transactions
would be subject to the same sanctions as companies that invest
$20 million or more in Iran's energy sector. Furthermore,
energy investment now covers the sale of petroleum-related
goods, services, and technology to Iran, which was a category
of activity that was not previously covered by the U.S.
sanctions regime.
The bill also expands in other ways the universe of
activities to be considered sanctionable.
H.R. 2194 establishes three new sanctions, in addition to
the menu of six sanctions that already exists under ISA. The
three new sanctions are, respectively, a prohibition on access
to foreign exchange in the U.S., a prohibition on access to the
U.S. banking system, and a prohibition on property transactions
in the United States. H.R. 2194 requires the President to
impose at least three of the nine sanctions on a company
involved in sanctionable activity, in addition to other
mandatory sanctions.
The bill also toughens the sanctions regime by requiring
the President (a) to investigate any report of sanctionable
activity for which there is credible evidence; and (b) to make
a determination in writing to Congress whether such activity
has indeed occurred. The President would then be expected
either to impose or waive sanctions. Under current law, the
President is authorized to investigate and make a determination
but is not required to do so. In fact, the President has made
only one determination under current law, despite at least two
dozen credible reports of sanctionable activity. That
determination, in 1998, was made for the purpose of waiving
sanctions.
H.R. 2194 is designed to impose considerable additional
pressure on Iran by mandating a new financial sanction that, if
implemented appropriately, will substantially reduce Iran's
access to major segments of the global financial system. The
Act requires the Secretary of the Treasury to prohibit or
impose strict conditions on U.S. banks' correspondent
relationships with foreign financial institutions that (1)
engage in financial transactions that facilitate Iranian
efforts to develop WMD or promote terrorist activities,
including through money-laundering or through enabling an
Iranian financial institution--including the Central Bank of
Iran, for example--to facilitate such efforts; (2) facilitate
or otherwise contribute to a transaction or provides
financialservices for a financial institution that the Office of
Foreign Assets Control at the Department of the Treasury has designated
to be supporting the proliferation of weapons of mass destruction or
financing of international terrorism; or (3) involve the Islamic
Revolutionary Guard Corps (IRGC) or its affiliates or agents. In
addition, H.R. 2194 prohibits any U.S. financial institution or its
foreign subsidiaries from engaging in any financial transaction with
IRGC entities.
Indeed, the IRGC, its affiliates, and agents have
reportedly extended their reach heavily into various parts of
the Iranian economy, dominating critical financial services,
construction, energy, shipping, telecommunications, and certain
manufacturing sectors throughout the country. Thus, in addition
to playing pivotal roles in Tehran's proliferation of weapons
of mass destruction, financing of international terrorism, and
gross human rights abuses, the IRGC is now a key source of
wealth for the Iranian regime. Conferees join the
administration and international community in seeking to combat
the IRGC's growing power, and to curb the IRGC's access to
capital, which is used to further Tehran's various ambitions.
Other major measures in Title I include:
--visa, property, and financial sanctions on
Iranians the President determines to be complicit in
serious human rights abuses against other Iranians on
or after June 12, 2009, the date of Iran's most recent
Presidential election;
--a ban on U.S. government procurement contracts
for any company that exports to Iran technology used to
restrict the free flow of information or to disrupt,
monitor, or otherwise restrict freedom of speech;
--an authorization for the President to prescribe
regulations for the purpose of implementing Iran-
related sanctions in UN Security Council resolutions;
and
--an authorization for FY 2011 appropriations of
slightly more than $100 million each to the Secretary
of the Treasury for the Office of Terrorism and
Financial Intelligence; to the Secretary of the
Treasury for the Financial Crimes Enforcement Network;
and to the Secretary of Commerce for the Bureau of
Industry and Security, for the purposes of reinforcing
the U.S. trade embargo, combating diversion of
sensitive technology to Iran, and preventing the
international financial system from being used to
support terrorism or develop WMD.
TITLE II: DIVESTMENT FROM CERTAIN COMPANIES THAT INVEST IN IRAN
State and local divestment efforts.--In recent years, there
has been increasing interest by U.S. state and local
governments, educational institutions, and private institutions
to divest from companies and financial institutions that
directly or indirectly provide support for the Government of
Iran. Financial advisors, policy-makers, and fund managers may
find prudential or reputational reasons to divest from
companies that accept the business risk of operating in
countries subject to international economic sanctions or that
have business relationships with countries, governments, or
entities with which any United States company would be
prohibited from dealing because of economic sanctions imposed
by the United States.
In addition to the wide range of diplomatic and economic
sanctions that have been imposed by the U.N. Security Council,
the U.S. and other national governments, many U.S. states and
localities have begun to enact measures restricting their
agencies' economic transactions with firms that do business
with, or in, Iran. More than twenty states and the District of
Columbia have already enacted some form of divestment
legislation or otherwise adopted divestment measures, and
legislation is pending in additional state legislatures. Other
states and localities have taken administrative action to
facilitate divestment. Also joining this movement are colleges
and universities, large cities, non-profit organizations, and
pension and mutual funds.
Conferees concluded that Congress and the President have
the constitutional power to authorize states to enact
divestment measures and that Federal consent removes any doubt
as to the constitutionality of those measures. Thus, the Act
explicitly states the sense of Congress that the United States
should support the decisions of state and local governments to
divest from firms conducting business operations in Iran's
energy sector and clearly authorizes divestment decisions made
consistent with the standards the legislation articulates. It
also provides a `safe harbor' for changes of investment
policies by private asset managers, and it expresses the sense
of Congress that certain divestments, or avoidance of
investment, do not constitute a breach of fiduciary duties
under the Employee Retirement Income Security Act (ERISA). With
regard to pre-emption, the legislation supports state and local
efforts to divest from companies conducting business operations
in Iran by clearly stating that these efforts are not pre-
empted by any Federal law or regulation.
TITLE III: PREVENTION OF DIVERSION OF CERTAIN GOODS, SERVICES, AND
TECHNOLOGIES TO IRAN
In recent years, studies by the Government Accountability
Office, the Commerce Department, and others have asserted that
Iran continues to circumvent sanctions and receive sensitive
equipment, including some of U.S. origin. This equipment, which
facilitates Iran's nuclear activities, may be trans-shipped
illegally to Iran via other countries.
Title III is meant to disrupt international black-market
proliferation networks that have reportedly thrived for years,
even after the discovery and subsequent arrest of notorious
weapons technology peddler A. Q. Khan. This provision requires
the Director of National Intelligence to report to the
President and Congress as to which governments he believes are
allowing the re-export, trans-shipment, transfer, re-transfer,
or diversion to Iranians of key goods, services, or
technologies that could be used for weapons of mass destruction
proliferation or acts of terrorism. Following receipt of that
report, the President may designate a country a Destination of
Diversion Concern. Such a designation would provide for the
U.S. to work with the host government of that country to help
it strengthen its export control system. If the President
determines that the government of that country is unresponsive
or otherwise fails to strengthen its export control system so
that substantial re-export, trans-shipment, transfer, re-
transfer, or diversion of certain goods, services, or
technologies continues, the President shall impose severe
restrictions on U.S. exports to that country.
TITLE IV: GENERAL PROVISIONS
The Act will terminate once the President certifies to
Congress that Iran both (1) has ceased its support for acts of
international terrorism and no longer satisfies the
requirements for designation as a state-sponsor of terrorism
under U.S. law; and (2) has ceased its efforts to develop or
acquire nuclear, biological, and chemical weapons, as well as
ballistic missiles and ballistic-missile launch technology. The
Act also provides various waivers related to economic sanctions
and exchange of technology. Finally, the Act authorizes such
sums as may be necessary for the Departments of State,
Treasury, and Commerce to implement the Act.
Section-by-Section Analysis and Discussion
Section 2. Findings
This section articulates the findings that frame the basis
for the additional sanctions and the purpose of the bill. The
findings in section 2 draw from both S. 2799 and H.R. 2194.
Subsection (1) finds that the illicit nuclear activities of
the Government of Iran, combined with its development of
unconventional weapons and ballistic missiles and its support
for international terrorism, represent a threat to the security
of the United States, its strong ally Israel, and other allies
of the United States around the world.
Subsection (2) asserts that the United States and other
responsible countries have a vital interest in working together
to prevent the Iranian regime from acquiring a nuclear weapons
capability.
Subsection (3) finds that the International Atomic Energy
Agency has repeatedly called attention to Iran's illicit
nuclear activities and, as a result, the United Nations
Security Council has adopted a range of sanctions designed to
encourage the Government of Iran to suspend those activities
and comply with its obligations under the Treaty on Non-
Proliferation of Nuclear Weapons, done at Washington, London,
and Moscow July 1, 1968, and entered into force March 5, 1970
(commonly known as the ``Nuclear Non-Proliferation Treaty'').
Subsection (4) finds that the serious and urgent nature of
the threat from Iran demands that the United States work
together with its allies to do everything possible--
diplomatically, politically, and economically--to prevent Iran
from acquiring a nuclear weapons capability.
Subsection (5) finds the United States and its major
European allies, including the United Kingdom, France, and
Germany, have advocated that sanctions be strengthened should
international diplomatic efforts fail to achieve verifiable
suspension of Iran's uranium enrichment program and an end to
its nuclear weapons program and other illicit nuclear
activities.
Subsection (6) finds that the Government of Iran continues
to engage in serious, systematic, and ongoing violations of
human rights, including suppression of freedom of expression
and religious freedom, illegitimately prolonged detention,
torture, and executions. Such violations have increased in the
aftermath of the fraudulent presidential election in Iran on
June 12, 2009.
Subsection (7) finds that the Iranian regime has been
unresponsive to President Obama's unprecedented and serious
efforts at engagement, revealing that the Government of Iran
does not appear to be interested in a diplomatic resolution, as
made clear by its recent actions detailed in this section.
Subsection (8) finds that there is an increasing interest
by State governments, local governments, educational
institutions, and private institutions, business firms, and
other investors to disassociate themselves from companies that
conduct business activities in the energy sector of Iran, since
such business activities may directly or indirectly support the
efforts of the Government of Iran to achieve a nuclear weapons
capability.
Subsection (9) finds that black market proliferation
networks continue to flourish in the Middle East, allowing
countries like Iran to gain access to sensitive dual-use
technologies.
Subsection (10) finds that economic sanctions imposed
pursuant to the provisions of this Act, the Iran Sanctions Act
of 1996, as amended by this Act, and the International
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), and
other authorities available to the United States to impose
economic sanctions to prevent Iran from developing nuclear
weapons, are necessary to protect the essential security
interest of the United States.
Section 3--Sense of Congress Regarding Illicit Nuclear
Activities and Violations of Human Rights in Iran. Section 3 of
the Senate bill expresses the Sense of Congress regarding
Iran's continuing illicit nuclear activities and ongoing
violations of human rights in Iran. The House bill contains no
such provision. The House recedes.
Paragraph (1) states that international diplomatic efforts
to address Iran's illicit nuclear efforts and support for
international terrorism are more likely to be effective if
strong additional sanctions are imposed on the Government of
Iran.
Paragraph (2) states that concerns of the United States
regarding Iran are strictly the result of the Government of
Iran's behavior.
Paragraph (3) states that the revelation in September 2009
that Iran is developing a secret uranium enrichment site on a
base of Iran's Revolutionary Guard Corps near Qom, which
appears to have no civilian application, highlights the urgency
for Iran to disclose fully the nature of its nuclear program,
including any other secret locations; to provide the
International Atomic Energy Agency unfettered access to its
facilities pursuant to Iran's legal obligations under the
Nuclear Non-Proliferation Treaty and Iran's Safeguards
Agreement with the International Atomic Energy Agency.
Paragraph (4) states that due to the Iranian Revolutionary
Guard Corps' involvement in Iran's nuclear program,
international terrorism activities, and domestic human rights
abuses, the President should impose the full range of
applicable sanctions against them. Those liable for sanctions
would include any individual or entity that is an agent, alias,
front, instrumentality, representative, official, or affiliate
of Iran's Revolutionary Guard Corps, and any individual
orentity that has conducted any commercial or financial transaction
with such an individual or entity.
Paragraph (5) states that additional measures should be
adopted by the United States to prevent the diversion and
transshipment of sensitive dual-use technologies to Iran.
Paragraph (6) outlines Congress' view of appropriate
Executive Branch responses to the human rights situation in
Iran. It states that the President should continue to press the
Government of Iran to respect the internationally-recognized
human rights and religious freedoms of its citizens, and
identify the officials of the Government of Iran that are
responsible for continuing and severe violations of human
rights and religious freedom in Iran. The paragraph also urges
the President to take appropriate measures to respond to such
violations by prohibiting officials the President identifies as
being responsible for such violations from entry into the
United States and freezing the assets of those officials.
Paragraph (7) states that additional funding should be
provided to the Secretary of State to document, collect, and
disseminate information about human rights abuses in Iran,
including serious abuses that have taken place since the
presidential election in Iran conducted on June 12, 2009.
Paragraph (8) states that it is in the national interest of
the United States for responsible nongovernmental organizations
based in the United States to establish and carry out
operations in Iran to promote civil society and foster
humanitarian goodwill among the people of Iran and the United
States should ensure that such nongovernmental organizations
are not unnecessarily hindered from working in Iran.
Paragraph (9) states that the United States should not
issue a license pursuant to an agreement for cooperation (a
``123 agreement'' for civil nuclear cooperation) for the export
of nuclear material, facilities, components, or other goods,
services, or technology that are or would be subject to such an
agreement to a country that is providing similar nuclear
material, facilities, components, or other goods, services, or
technology to another country that is not in full compliance
with its obligations under the Nuclear Non-Proliferation
Treaty.
Paragraph (10) states that the people of the United States
have feelings of friendship for the people of Iran; regret that
developments in recent decades have created impediments to that
friendship; and hold the people of Iran, their culture, and
their ancient and rich history in the highest esteem.
TITLE I--SANCTIONS
Section 101. Definitions. S. 2799 included definitions for
sanctions. H.R. 2194 contained no such provisions. Reflecting
the approach in S. 2799, this section defines terms used in
this title, including: agricultural commodity, executive
agency, family member, knowingly, appropriate Congressional
Committees, information and informational materials,
investment, Iranian diplomats and representatives of other
government and military or quasi-governmental institutions of
Iran, United States person, U.S. state, medical device, and
medicine.
Section 102. Expansion of Sanctions under the Iran
Sanctions Act of 1996.
Summary. The amendments to the ISA in this section address
the major role of Iran's oil and gas industry in generating
revenue for the regime's proliferation and international
terrorism activities; they require the President to impose at
least three out of a menu of nine sanctions on `persons' that
knowingly engage in activities related to Iran's refined
petroleum industry, in addition to other mandatory sanctions.
These activities include making an `investment' of more than
$20 million annually in Iran's energy sector; selling, leasing
or providing to Iran goods, services, or other support to
facilitate Iran's domestic oil production of refined petroleum;
or providing Iran with refined petroleum products with an
aggregate fair market value of $5 million. The sanctions
(Section 6 of the ISA) include the following underlying six
sanctions: (1) Denial of any guarantee, insurance, or extension
of credit from the U.S. Export-Import Bank; (2) denial of
licenses for the U.S. export of military or militarily-useful
technology to the entity; (3) denial of U.S. bank loans
exceeding $10 million in one year to the entity; (4) if the
entity is a financial institution, a prohibition on its service
as a primary dealer in U.S. government bonds; and/or a
prohibition on its serving as a repository for U.S. government
funds (each counts as one sanction); (5) prohibition on U.S.
government procurement from the entity; and (6) restriction on
imports from the entity, in accordance with the International
Emergency Economic Powers Act (IEEPA, 50 U.S.C. 1701). The Act
would provide for three new sanctions: (1) Prohibitions on any
transactions in foreign exchange that are subject to the
jurisdiction of the United States and in which a sanctioned
person has any interest; (2) prohibitions on any transfers of
credit or payments between, by, through, or to any financial
institution, to the extent such transfers or payments are
subject to the jurisdiction of the United States and involve
any interest of the sanctioned person; and (3) restrictions on
property transactions with respect to which a sanctioned person
has any interest. The President may waive the sanctions if he
determines that it is necessary to the national interest of the
U.S. to do so.
Development of Petroleum Resources of Iran. Subsection (a)
amends section 5(a) of the Iran Sanctions Act of 1996 (ISA) by
requiring the President to impose three or more sanctions under
ISA if a person has knowingly made an investment of $20 million
or more (or any combination of investments of at least $5
million each, which in the aggregate equals or exceeds $20
million in any 12-month period) that directly and significantly
contributed to Iran's ability to develop its petroleum
resources.
In the context of investment, the House-passed legislation
amends section 5(a) by shifting the mens rea standard for
investment in petroleum resources from `actual knowledge' to
`knowingly.' The Senate amendment contained no such provision.
The Senate recedes to the House language. The new standard will
expand the range of conduct potentially subject to sanctions,
thereby making it easier to implement sanctions under ISA.
Production and Exportation of Refined Petroleum Products.
Subsection (a) further amends section 5(a) of ISA to require
that the President impose three or more mandatory sanctions
described in section 6(a) of the Act if a person: (1) knowingly
sells, leases, or provides to Iran any goods, services,
technology, information, or support, that could directly and
significantly facilitate the maintenance or expansion of Iran's
domestic production of refined petroleum products, including
any direct and significant assistance with respect to
construction,modernization, or repair of petroleum refineries;
or (2) if a person knowingly provides Iran with refined petroleum
products or provides goods, services, technology, information, or
support that could directly and significantly contribute to Iran's
ability to refine petroleum or import refined petroleum resources,
including providing ships, vehicles, or other means of transportation
to deliver refined petroleum products to Iran or providing insurance or
financing services for such activities.
Subsection (a) of the Act further clarifies the categories
of persons against which sanctions are to be imposed to include
the parent and foreign subsidiary of a person determined by the
President to be engaged in sanctionable activities. The Act
further amends the mens rea standard for a parent by: (1)
Requiring sanctions to be imposed on a parent that either had
actual knowledge or ``should have known'' that its affiliate or
subsidiary engaged in the sanctionable activities described in
section 5(a); and (2) requiring sanctions to be imposed on an
affiliate or a subsidiary of a person determined to be carrying
out sanctionable activities if the affiliate or subsidiary
knowingly engaged in sanctionable activities.
The Act provides a ``safe harbor'' for a person that
provides underwriting services or insurance or reinsurance, if
that person exercises due diligence to ensure it does not
provide insurance or reinsurance for the sale, lease, or
provision of goods, services, technology, information, or
support that could directly and significantly contribute to the
enhancement of Iran's ability to import refined petroleum
products. Such due diligence would include procedures and
controls to prevent such underwriting or the entry into
contracts for such purposes, and the designation of an official
with responsibility for enforcing the policy. The Act further
establishes that the fair market value of the goods, services,
technology, information, or support provided by such activities
must exceed $1 million to be subject to the requirement of
Section 102(a). The combination of such sales, leases, or
provision of support in any 12-month period, or to be provided
under contracts entered into in any 12-month period, must
exceed $5 million.
Subsection (a) also prohibits the issuance of export
licenses pursuant to an agreement for peaceful civil nuclear
cooperation for any country whose nationals have engaged in
activities with Iran relating to the acquisition or development
of nuclear weapons or related technology, or of missiles or
other advanced conventional weapons that have been designed or
modified to deliver a nuclear weapon.
This prohibition can be set aside for a government if the
President determines and notifies the appropriate Congressional
committees that such government does not know or have reason to
know about the activity, or has taken, or is taking, all
reasonable steps necessary to prevent a recurrence of the
activity and penalize the person(s) involved. Further,
notwithstanding the prohibition on issuance of export licenses,
the President may, on a case-by-case basis, approve the
issuance of a license for the export, or approve the transfer
or retransfer, of any nuclear material, facilities, components,
or other goods, services, or technology that are or would be
subject to an agreement for cooperation, to a person in a
country otherwise restricted by this paragraph (except to a
person that is subject to sanctions under paragraph (1)) if the
President determines that such approval is vital to U.S.
national security interests and pre-notifies Congress not less
than 15 days before approving the license, transfer, or
retransfer. This sanction would apply only in a case in which a
person is subject to sanctions for an activity engaged on or
after the date of enactment of the Act.
The Conferees believe that as a general principle, the
United States cannot and should not reward any country with
U.S. civil nuclear trade if that country's nationals are able
to advance Iran's nuclear weapons programs and/or their means
of delivery.
Subsection 102(b) of the Act adds three new, sweeping
sanctions to the now nine possible sanctions from which the
President must choose three. If invoked, the sanctions would
prohibit, respectively, foreign exchange, banking, and property
transactions with persons involved in activities related to
refined petroleum products, as specified in section 5(a) of the
ISA, as amended. The Act clarifies that the prohibition on
banking activities extends solely to those transfers or
payments that are subject to the jurisdiction of the United
States and involve any interest of the sanctioned person. The
banking sanction in the Act will complement restrictions on
financial institutions available in the underlying ISA,
including a prohibition on U.S. financial institutions from
making loans or providing credits to any sanctioned person
totaling more than $10 million in any 12-month period.
Finally, subsection 102(b) amends ISA by adding a new
section which requires each prospective contractor submitting a
bid to the Federal Government to certify that the contractor or
a person owned or controlled by the contractor does not conduct
any activity for which sanctions may be imposed under section
(5). Conferees believe that exercising control as a ``parent
company'' over subsidiaries or affiliates should be considered
in functional terms, as the ability to exercise certain powers
over important matters affecting an entity. ``Control'' may
also be defined according to ownership of a majority or a
dominant minority of the total outstanding voting interest in
an entity, board representation, proxy voting, a special share,
or contractual arrangements, to direct important matters
affecting an entity. The prospective contractor, when making
the certification pursuant to this subsection, must certify
that it is not engaged in any activity sanctionable under
section 5 of ISA. The Act mandates the head of an executive
agency that determines that a person has submitted a false
certification under paragraph (1) after the date on which the
Federal Acquisition Regulation is revised to implement the
requirements of this subsection, to terminate a contract or
agreement or debar or suspend such person from eligibility for
Federal contracts or such agreements for a period not to exceed
3 years. The Act requires the Administrator of General Services
to include on the List of Parties Excluded from Federal
Procurement and Nonprocurement Programs each person that is
debarred, suspended, proposed for debarment, or declared
ineligible by the head of an executive agency on the basis of a
determination of a false certification. The Act authorizes the
President to waive the certification requirement on a case-by-
case basis if the President determines and certifies that it is
in the national interest to do so. Conferees believe that one
of the instances where the President may exercise the waiver is
where a company has demonstrated that it is taking steps to
extricate itself from all sanctionable activities with Iran.
Subsection 102(c) amends the standard for the President to
waive sanctions under ISA to `necessary to the national
interest of the United States'. The Senate recedes to the House
in elevating the waiver standard. Subsection (c) further amends
the reporting requirements of section 9(c)(2) of ISA relating
to a waiver by requiring the President to include (1) an
estimate ofthe significance of a sanctioned action to Iran's
ability to develop its petroleum resources, produce refined petroleum
products, or import refined petroleum products; or (2) acquire or
develop chemical, biological, or nuclear weapons or related
technologies or destabilizing numbers and types of advanced
conventional weapons.
Subsection 102(d) incorporates a reporting requirement in
H.R. 2194 on the dollar value amount of trade, including in the
energy sector, between Iran and each country maintaining
membership in the Group of Twenty Finance Ministers and Central
Bank Governors.
Consistent with subsection (h) of section 3 of the House
bill, Subsection 102(e) amends ISA to extend the operative date
of that legislation from 2011 to 2016. The Senate bill has no
such provision. The Senate recedes. ISA was initially passed
for a five-year period. It was extended for five years in 2001
and again in 2006. Given the urgency of the Iranian nuclear
problem and the conviction of Conferees that this problem will
persist beyond 2011 and that Iran almost certainly will not
meet the criteria for terminating ISA in 2011, Conferees have
decided to extend the law for another five years.
Finally, subsection (f) amends ISA to expand the definition
of a ``person'' subject to sanctions to include a financial
institution, insurer, underwriter, guarantor, any other
business organization, including any foreign subsidiary,
parent, or affiliate of such a business organization, any other
nongovernmental entity, organization, or group, and any
governmental entity operating as a business enterprise. The
term ``person'' does not include a government or governmental
entity that is not operating as a business enterprise.
Subsection (f) also defines the term ``knowingly'' to
include a person who has actual knowledge of sanctionable
activities or should have known of the conduct, the
circumstance, or the result. The Conferees intend to prevent
persons from evading sanctions by relying on the prior standard
of ``actual knowledge.'' This prior standard might otherwise be
used to enable certain persons to deliberately avoid knowledge
of sanctionable activities.
Subsection (f) amends the definition of ``investment'' in
the underlying ISA to include entry into, performance, or
financing of a contract to sell or purchase goods, services, or
technology. The Conferees believe that expanding the definition
of investment to include the activities above will deter
persons from doing business in the Iranian energy sector. Based
on the expanded definition of ``investment'' and ``petroleum
resources,'' the Conferees intend that, for example, sales of
technology for natural gas would now be considered a
sanctionable offense falling into the category of
``investment,'' provided such a sale reached the $20 million
threshold.
Subsection (f) expands the term ``petroleum resources'' to
include petroleum, refined petroleum products, oil or liquefied
natural gas, natural gas resources, oil or liquefied natural
gas tankers, and products used to construct or maintain
pipelines used to transport oil or liquefied natural gas.
The House version of H.R. 2194 defines the term ``refined
petroleum products'' to include gasoline, kerosene, diesel
fuel, residual fuel oil, and distillates and other goods
classified in headings 2709 and 2710 of the Harmonized Tariff
Schedule of the United States. The Senate bill defines
``refined petroleum products'' as ``diesel, gasoline, jet fuel
(including naphtha-type and kerosene-type jet fuel), and
aviation gasoline.
The House recedes.
Section 102(g). Waiver for certain persons in certain countries,
mandatory investigations and reporting; conforming amendments
Waiver for Certain Persons in Certain Countries. The
conference agreement amends subsection (c) of Section 4 of the
Iran Sanctions Act to provide an additional exception to the
underlying requirement that the President impose sanctions for
certain activities. Under this additional exception, the
President would be authorized to waive sanctions for a period
not longer than 12 months (as opposed to the 6 months now
authorized) on a case by case basis for persons under the
jurisdiction of governments that are closely cooperating with
the United States in multilateral efforts to prevent Iran from
acquiring or developing chemical, biological, or nuclear
weapons or related technologies, including ballistic missiles
or delivery systems; or acquiring or developing destabilizing
numbers and types of conventional weapons. The President must
further certify that the waiver is vital to the national
security interests of the United States and submit a report to
the appropriate congressional committees. It is the
understanding of the Conferees that this waiver would not be
available as a preemptive waiver; rather, in order to exercise
the waiver, the President must initiate an investigation and
make a determination pursuant to section 4(f).
To utilize this exception, the President would have to
provide advance notice to Congress and provide a certification
of the person with respect to which the President will waive
the application of sanctions; the actions taken by the
government cooperating in multilateral efforts; and that the
waiver is vital to the national security interests of the
United States. ``Cooperating actions'' must include a
substantial number of the following types of actions:
--restricting Iran's access to the global financial
system;
--limiting Iran's import of refined petroleum
products and refinery equipment;
--strictly enforcing UN sanctions;
--prohibiting commercial activities with the Iran
Revolutionary Guard Corps;
--cooperating with U.S. anti-terrorism initiatives
against the IRGC and other Iranian elements;
--taking concrete, verifiable steps to impede
Iran's WMD programs and its support for international
terrorism;
--restricting trade with Iran, including provision
of export credits.
The President may renew the waiver in six-month increments
if the President determines that the waiver threshold is met.
Investigations. H.R. 2194 requires that the President shall
immediately investigate a person upon receipt of credible
information that such person is engaged in sanctionable
activity as described in section 5. The House-passed bill
further requires the President, not later than 180 days after
an investigation is initiated, to make a determination whether
a person has engaged in sanctionable activity described in
section 5. The Senate-passed bill contained no such language.
The Senate recedes. The Conferees believe that a statutory
mandate is required to ensure sanctionable entities are pursued
and prosecuted. By not enforcing current sanctions law,
theUnited States has sent mixed messages to the corporate world when it
comes to doing business in Iran by rewarding companies whose commercial
interests conflict with American security goals.
Special Rule. However, in order to provide an incentive for
companies that are withdrawing from Iran, the Act provides that
the President need not initiate an investigation, and may
terminate an investigation, if the President certifies that the
person whose activities were the basis for the investigation is
no longer engaging in such activities; and the President has
received reliable, verifiable assurances that the person will
not knowingly engage in such activities in the future.
The Conferees provided this Special Rule to allow firms to
avoid sanction for activities described in the revised Section
5 of the Iran Sanctions Act by taking steps to curtail and
eventually eliminate such activities. Ideally, in order to
benefit, a firm would provide the President the required
assurances that it will not undertake Section 5 activity in the
future, and any other assurances required by the president, in
writing. Such assurances should be credible and transparently
verifiable by the United States government. Firms should also
be strongly encouraged to provide the President a detailed
catalog of their existing activity in Iran, and a plan for
winding down any activity covered by Section 5 as soon as
possible. The goal of this measure is to facilitate their
withdrawal from such activities.
To the extent a person benefitting from the special rule
continues activities described in section 5, such continuing
activities should be pursuant solely to a contract or other
legally binding commitment. Conferees expect that any firm
seeking to take advantage of this special rule will commit to
refuse any expansion or extension of business or investment
pursuant to a clause in a contract that allows the firm to
elect to do so. Binding commitments should be narrowly
construed and any firm seeking to benefit from this rule should
be encouraged to provide assurances that it will do only the
minimum required by an agreement involving Iran. The Conferees
intend to evaluate carefully any certifications under this
Special Rule.
Section 102(h). Effective Date. In order to clarify the
timing of application of the Act, subsection 102(h) further
provides that the provisions of section 102 shall take effect
on the date of enactment of the Act. Investments sanctionable
under the underlying ISA shall continue to be unlawful.
However, pursuant to subsection (g) of this section, the
President shall, in the context of investment, commence an
investigation of a person which engaged in conduct prior to the
passage of this Act that would be sanctionable under ISA and
that continues after the date of enactment. This differs from
the underlying ISA by requiring the President to commence an
investigation of sanctionable activities. Likewise, a person
that conducts activities related to the development of Iranian
chemical, biological, or nuclear weapons or related
technologies shall be subject immediately upon enactment of the
Act to the new provisions under the Act. With respect to
refined petroleum-related activities described in paragraph (2)
or (3) of section 5(a) of ISA (as amended by subsection 102(a)
of the Act), the new requirement to commence an investigation
shall apply one year after the date of enactment.
Not later than 30 days before the date that is one year
after the date of enactment, the President shall issue a report
describing the President's efforts to dissuade foreign persons
from engaging in sanctionable activity described in paragraphs
(2) and (3) (facilitation of Iran's production and import of
refined petroleum), along with a list of each investment under
section 4(e) of ISA, that is initiated or ongoing during the
previous one-year period. If the President certifies that there
was a substantial reduction in the sanctionable activities
described in paragraphs (2) and (3) of ISA, the requirement to
commence an investigation shall be delayed by six months.
Conferees understand ``substantial reduction'' to mean a
roughly 20-30% reduction in such activities, a similar
reduction in the volume of refined petroleum imported by Iran,
and/or a similar reduction in the amount of refined petroleum
Iran produces domestically. The President may continue to defer
the requirement to commence an investigation every six months
by issuing a report containing the above-mentioned items, along
with a certification regarding reduction of activities, for the
previous six-month period. If the President fails to make the
certification, the requirement to commence an investigation
shall apply on the date the certification was due, and he would
then be required to make a determination in 45 days.
Section 103. Economic sanctions relating to Iran
The Senate bill contained a provision building on actions
taken under the Iran Freedom Support Act (IFSA) (P.L. 109-293)
codifying critical restrictions on imports from and exports to
Iran, currently authorized by the President in accordance with
IEEPA. The House-passed bill contained no such provision. The
House recedes. This provision strengthens the current trade
embargo by eliminating certain import exceptions for luxury and
other goods from Iran made under the Clinton administration.
Consistent with IEEPA, exceptions to the import ban are made
for informational materials that may be used, for example, in
the conduct of news reporting, or in mapping for air travel
over land. Similarly, exceptions to the export ban include
food, medicine, humanitarian assistance, informational
materials, goods used to ensure safety of flight for U.S.-made
aircraft, aid necessary to support IAEA efforts in Iran, and
democracy promotion initiatives. The exception related to
Internet communications extends to personal communications, as
provided for in section 560.540 of the Code of Federal
Regulations; it does not apply to the Iranian Government or any
affiliated entities. Notwithstanding the exceptions, the
standard requirements pursuant to IEEPA to seek a license for
such activities remain in effect.
Consistent with his existing regulatory authority, the
President is authorized to issue regulations, orders, and
licenses to implement these provisions. In addition, this
section requires asset freezes for persons, including officials
of Iranian agencies specified in ISA and certain of their
affiliates that have engaged in activities such as terrorism or
weapons proliferation under IEEPA sanction. To limit sanctioned
persons' ability to evade U.S. scrutiny and penalty, this
section further stipulates that the assets freeze should extend
to those assets which sanctioned persons transfer to family
members or associates. The Conferees recognize that agencies
involved in implementing these measures will require time to
prepare appropriate evidentiary materials before executing
corresponding sanctions, which this section requires to be
imposed as soon as possible.
Section 104--Mandatory Sanctions with Respect to Financial
Institutions that Engage in Certain Transactions. Section 104
establishes a sanction in addition to those enumerated in
section 6(a) of ISA, as amended. The additional sanction would
require the Secretary of the Treasury to prohibit from or
impose strict sanctions on U.S. financial institutions that
establish, maintain, administer, or manage a correspondent or
payable-through account by a foreign financialinstitution if
that institution engages in certain financial transactions. Targets of
this provision include foreign banks that: (A) Facilitate the Iranian
government's efforts to acquire weapons of mass destruction (WMD) or to
support international terrorism; (B) Engage in dealings with Iranian
companies sanctioned by the U.N. Security Council; (C) Help launder
money, to aid Iran's WMD programs, to support Iran's sponsorship of
terrorism, or to support companies/persons under sanction by the U.N.
Security Council; (D) Facilitate efforts by the Central Bank of Iran to
aid Iran's WMD programs, to support Iran's sponsorship of terrorism, or
to support companies sanctioned by the U.N. Security Council; or (E)
Conduct significant business with Iran's Revolutionary Guard Corps, its
front companies, or its affiliates, and other key Iranian financial
institutions currently blacklisted by the U.S. Department of the
Treasury. These measures are roughly patterned after Section 311 of the
USA Patriot Act (31 U.S.C. 5318A), which Conferees recognize as some of
our government's most effective targeted financial sanctions. However,
while the USA Patriot Act measures are generally regarded as defensive
of the U.S. financial system from special money laundering concerns,
these new sanctions are to be deployed in an offensive fashion. Under
the Comprehensive Iran Sanctions, Accountability, and Divestment Act,
the Department of the Treasury is mandated to pursue relentlessly
foreign banks engaged in business with blacklisted Iranian entities.
Conferees expect any conditions imposed on U.S. correspondent accounts
under this Act to be stringent and temporary. Most important, if
foreign institutions do not cease their business with blacklisted
Iranian entities, after an appropriate warning, the Treasury Department
is to direct U.S. banks to sever immediately their correspondent or
payable through account services with these foreign institutions.
Under the Act, U.S. banks maintaining correspondent or
payable through accounts for foreign financial institutions
will be required to take appropriate steps to ensure that they
remain in full compliance with this law, which may include due
diligence policies, procedures and controls. Subsection (f)
provides for a mechanism for domestic financial institutions to
conduct audits of their correspondent or payable-through
accounts report to the Treasury Department on compliance, and
certify that the foreign financial institutions using such
accounts are not engaged in sanctionable activities. Subsection
(g) authorizes the Secretary of the Treasury to waive the
application of sanctions with respect to a foreign financial
institution opening a correspondent or payable-through account
and with respect to a domestic institution engaging in
transactions with the IRGC if the Secretary determines that
such a waiver is necessary to the national interest of the
United States. Those U.S. financial institutions that fail to
comply with the directives of the Department of the Treasury--
imposing strict conditions, prohibiting correspondent or
payable through accounts, following appropriate auditing,
reporting, due diligence, or certification measures--are to be
subject to the same penalties as U.S. banks that fail to comply
with Title III of the USA PATRIOT Act.
Once the legislation is enacted, the Conferees expect
representatives of the Administration to take all necessary
actions to fully implement this section, including by directly
engaging the numerous foreign financial institutions banking
with Iranian financiers and supporters of WMD proliferation and
international terrorism. Severing U.S. correspondent relations
with these foreign financial institutions is merely a means to
an end. The goal is the termination of international commerce
with Iranian businesses that threaten global peace and
security.
In general, subparagraph (c)(2)(A) is a conduct-based
prohibition. Thus, if the Secretary of the Treasury determines
that a foreign financial institution has engaged in
transactions that facilitate Iran's efforts to develop WMD or
support terrorism, among other activities, the Secretary need
not designate such entities before restricting that entity's
opening or maintaining a correspondent account or a payable-
through account in the United States. However, a financial
institution doing business with an entity on the designated
list pursuant to IEEPA would also be barred. Subparagraph
(c)(2)(E) further requires that the Secretary prohibit or
impose strict conditions on a foreign financial institution
that (1) facilitates a transaction involving the IRGC,
regardless of what the transaction was for; or (2) facilitates
a transaction with any entity on the designated list maintained
by the Department of Treasury pursuant to its authority under
IEEPA, regardless of the type or reason for the transaction.
Section 104 would further require the Secretary to prohibit
foreign subsidiaries of U.S. financial institutions from
engaging in any transaction involving Iran's Islamic
Revolutionary Guard Corps (IRGC), its agents or affiliates.
U.S. companies already face severe civil and criminal penalties
for doing business in Iran under IEEPA, as amended by the
International Emergency Economic Powers Enhancement Act of 2007
(P.L. 110-96). This provision imposes similar judicial
procedures and penalties on U.S. banks if their foreign
subsidiaries are doing any business with the IRGC, its front
companies, or affiliates. Thus, companies and financial
institutions may be subjected to civil penalties of as much as
either $250,000 or an amount twice the value of the actual
transaction. Criminal penalties may be as high as $1 million
per transaction and/or entail prison sentences of up to 20
years.
Subsection (j) defines key terms, including
``correspondent'' and ``payable-through'' account.
Section 105--Imposition of sanctions on certain persons who are
complicit in human rights abuses committed against citizens of
Iran or their family members after the June 12, 2009, elections
in Iran
Section 105 requires the President to impose sanctions on
persons who are citizens of Iran that the President determines,
based on credible evidence, are complicit in, or responsible
for ordering, controlling, or otherwise directing the
commission of serious human rights abuses against citizens of
Iran or their family members on or after the Presidential
elections of June 12, 2009, regardless of whether such abuses
occurred in Iran. The President is to do so no later than 90
days after the date of enactment of this legislation. The
President will also provide appropriate Congressional
committees with a list of those persons the President
determines meet the criteria for sanctions, and the President
will also be required to submit to the appropriate
Congressional committees updates to the list of Iranian
citizens eligible for sanction not later than 270 days after
the date of enactment and every 180 days thereafter, and as new
information becomes available. Furthermore, the unclassified
portion of this list will be made available to the public on
the websites of the Department of the Treasury and the
Department of State. In addition, the President's list must
consider credible data already obtained by other countries and
non-governmental organizations, including in Iran, that monitor
the human rights abuses of the Government of Iran.
The President shall impose two sanctions on the Iranian
human rights violators listed in his report to the appropriate
Congressional committees. The first is a visa ban making
thosehuman rights violators ineligible to enter the United States. The
second is financial sanctions authorized under the International
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.). These sanctions
include the blocking of property; restrictions or prohibitions on
financial transactions; and the exportation and importation of
property. This section provides for regulatory exceptions, including
those to permit the United States to comply with the Agreement between
the United Nations and the United States of America regarding the
Headquarters of the United Nations, signed June 26, 1947, and entered
into force November 21, 1947, and other applicable international
agreements.
The President may waive the sanctions required by Section
105 if the President determines that such a waiver is in the
national interest of the United States and submits to the
appropriate Congressional committees a report describing the
reasons for the waiver determination.
The provisions of Section 105 shall cease to have force and
effect on the date on which the President determines and
certifies to the appropriate Congressional committees that the
Government of Iran has unconditionally released all political
prisoners, including the citizens of Iran detained in the
aftermath of the June 12, 2009, presidential election in Iran;
ceased its practices of violence, unlawful detention, torture,
and abuse of citizens of Iran while engaging in peaceful
political activity; conducted a transparent investigation into
the killings, arrest, and abuse of peaceful political activists
in Iran and prosecuted those responsible; and made progress
toward establishing an independent Judiciary and respecting
internationally-recognized human rights.
Section 106. Prohibition of procurement contracts with
persons that export sensitive technology to Iran. This section
would prohibit the head of any U.S. executive agency from
entering into procurement contracts with an entity that the
President determines has exported to Iran sensitive
communications technology to be used for monitoring, jamming,
or other disruption of communications by the people of Iran.
This section further requires the Comptroller General to submit
a report assessing the impact of sanctions on executive
agencies' procurement of goods of services with persons that
export sensitive technology to Iran.
Section 107. Harmonization of Criminal Penalties for
Violations of Sanctions. This section harmonizes penalties for
violating export controls and U.S. sanctions across various
statutes with the strongest such penalty standards in the U.S.
Code, consistent with the International Emergency Economic
Powers Enhancement Act of 2007 (P.L. 110-96). The section
specifically increases criminal penalties for violators of the
provisions of the Arms Export Control Act, Trading with the
Enemy Act, and the United Nations Participation Act to up to $1
million and 20 years in prison.
Section 108. Authority to Implement United Nations Security
Council Resolutions Imposing Sanctions with Respect to Iran.
This section authorizes the President to prescribe regulations
as may be necessary to implement a resolution imposing
sanctions with respect to Iran agreed to by the United National
Security Council on or after the date of enactment of this Act.
Section 109. Increased capacity for efforts to combat
unlawful or terrorist financing. This section authorizes
funding of $102.6 million in fiscal year 2011 for the Office of
Terrorism and Financial Intelligence of the Department of the
Treasury, and such sums as may be necessary for each of the
fiscal years 2012 and 2013. This section also authorizes $100.4
million for the Financial Crimes Enforcement Network and $113
million for the Department of Commerce. This section also
acknowledges the Treasury Department's recent designation of
various Iranian individuals and banking, military, energy, and
shipping entities as proliferators of weapons of mass
destruction pursuant to Executive Order 13382 (50 U.S.C. 1701
note), along with designation of entities in the insurance,
petroleum, and petrochemicals industries that the Secretary has
determined to be owned or controlled by the Government of Iran.
Section 110. Reports on Investments in the Energy Sector of
Iran. The Act requires the President, within 90 days of
enactment of the bill and every 180 days thereafter, to report
to the appropriate congressional committees on an estimate of
the volume of energy-related resources (other than refined
petroleum) including ethanol, that Iran imported since January
1, 2006, along with a list of all known energy-related joint
ventures, investments, and partnerships located outside Iran
that involve Iranian entities in partnership with entities from
other countries. It is the intention of the Conferees that the
report be undertaken by the Secretary of Energy and parallel
the format of previous reports, including one provided as
recently as 2006, and should include updated information as
provided by the Energy Information Administration (EIA). The
report shall also include information on the effect of Iranian
know-how in the energy sector as a result of joint energy-
related ventures with other countries.
Section 111. Reports on certain activities of foreign
export credit agencies and of the Export-Import Bank of the
United States. This section requires the President--90 days
after the date of enactment--to submit a report on any activity
of an export credit agency of a foreign country that would be
engaged in activities comparable to those which would otherwise
be sanctionable under subsection (a) or (b) of section 5 of
ISA, as amended by this Act. Not later than 30 days (or, in
extraordinary circumstances, not later than 15 days) prior to
the Export-Import Bank of the United States approving
cofinancing with an export credit agency of a foreign country
identified in the above-mentioned report, the President shall
inform Congress of such action and of the beneficiaries of the
financing. The Conferees intend to raise awareness about which
countries and persons are engaged in activities comparable to
those which would trigger U.S. sanctions and which may benefit
from financing provided by the Export-Import Bank.
Section 112. Sense of Congress on Iran's Revolutionary
Guard Corps (IRGC) and its Affiliates. Expresses the sense of
Congress that (1) the U.S. should persistently target with
sanctions Iran's Revolutionary Guard Corps, its supporters and
affiliates, and any foreign governments determined to be
providing material support for the IRGC; (2) identify any
foreign individual or entity that is an agent, alias, front,
instrumentality, official, or affiliate of Iran's Revolutionary
Guard Corps or providing material support to the IRGC; and (3)
immediately impose sanctions on the individuals, entities, and
governments described in paragraph (2).
Section 113. Sense of Congress Regarding Iran and
Hezbollah. Expresses the Sense of Congress that the U.S. should
continue to: (1) work to counter support for Hezbollah from
Iran and otherforeign governments; (2) target with sanctions
Hezbollah, its affiliates and supporters; (3) urge other nations to do
the same; and (4) take steps to renew international efforts to disarm
Hezbollah.
Section 114. Sense of Congress Regarding the Imposition of
Multilateral Sanctions with Respect to Iran. Expresses the
Sense of Congress that, in general, multilateral sanctions are
more effective than unilateral sanctions against countries like
Iran, and that the President should continue to work with our
allies to impose multilateral sanctions if diplomatic efforts
to end Iran's illicit nuclear activities fail.
Section 115. Report on Providing Compensation for Victims
of International Terrorism. This section requires the President
to submit a report within 180 days of enactment on equitable
methods for providing compensation on a comprehensive basis to
victims of acts of international terrorism who are citizens or
residents of the United States or nationals of the United
States. The Conferees intend to address concerns presented by
numerous plaintiffs' groups that have yet to gain compensation
for terrorist attacks.
TITLE II--DIVESTMENT
Section 201--Definitions. This section defines terms used
in this title including: energy sector, financial institution,
Iran, person, state, and state or local government.
Section 202--Authority of state and local governments to
divest from certain companies that invest in Iran. This section
authorizes States and localities to divest from companies
involved in investments of $20 million or more in Iran's energy
sector and sets standards for them to do so. While not
mandating divestment, this section authorizes State and local
governments, if they so choose, to divest public assets from
entities doing business in Iran. Authorization to divest
afforded under this Act does not extend to business conducted
under a license from the Office of Foreign Assets Control, or
that is expressly exempted under Federal law from the
requirement to be conducted under such a license. For example,
such licenses or exemptions might include humanitarian trade in
agricultural and medical products. In its formulation of this
section, the Conferees recognized that divestment actions are
being taken by investors for prudential and economic reasons,
as expressed in subsection (a), including to address investor
concerns about reputational and financial risks associated with
investment in Iran and to sever indirect business ties to a
government that is subject to international sanctions.
The Conferees require that a state or local government
provide notice to the Department of Justice when it enacts an
Iran-related divestment law. Persons are to be informed in
writing by the State or local government before divestment.
Persons then have at least 90 days to comment on that decision.
Subsection (i)--Authorization for Prior Enacted Measures.
Subsection (i) constitutes a ``grandfather clause''--it
authorizes a state or local government to enforce a divestment
measure without regard to the procedural requirements and scope
of this section up to two years after the date of the enactment
of the Act. After two years, if the state or locality has
complied with the procedural requirements required by the Act
regarding notice, the state or locality may enforce a measure
that provides for divestment, notwithstanding any other
provision of law. In order to secure the protections of the
Act, state and local entities, which have not enacted or
adopted divestment measures prior to the date of enactment,
must abide by both the scope and procedural requirements it
outlines.
Section 203--Safe harbor for changes in investment policies
by asset managers. This section adds to measures authored by
the Senate and enacted last year authorizing divestment from
certain Sudan-related assets (Public Law 110-174), allowing
private asset managers, if they so choose, to divest from the
securities of companies investing $20 million or more in Iran's
energy sector, and provides a `safe harbor' for divestment
decisions made in accordance with the Act. A major concern
inhibiting divestment has been the possibility of a breach of
fiduciary responsibility by asset managers who decide to
divest. The Conferees thus find that fund managers may have
financial or reputational reasons to divest from companies that
accept the business risk of operating in countries subject to
international economic sanctions. Fund managers will still be
required to observe all other normal fiduciary
responsibilities. The Securities and Exchange Commission is
required to promulgate rules as necessary that require fund
managers to disclose their divestment decisions made pursuant
to Section 203 of this legislation in regular periodic reports
filed with the Commission.
Section 204--Sense of Congress regarding certain ERISA Plan
investments. This section expresses the sense of Congress
affirming pension managers' rights to divest from companies
investing $20 million or more in Iran's energy sector if the
fiduciary makes the divestment decision based upon credible
public information, and determines that the action would not
provide a lower rate of return than alternate investments with
a commensurate degree of risk, or provides for a higher degree
of risk than alternate investments with commensurate rates of
return. Section 205 makes certain technical corrections to
Sudan Accountability and Divestment Act of 2007, to clarify the
divestment standards contained in this Act.
Section 205--Technical Corrections to Sudan Accountability
and Divestment Act of 2007. This section is designed to clarify
that Congress did not intend, in the Sudan Divestment
legislation, to imply the creation of a new private right of
action under the Investment Company Act of 1940.
TITLE III--PREVENTION OF DIVERSION OF CERTAIN ORIGIN GOODS, SERVICES,
AND TECHNOLOGIES TO IRAN
Title III of the Senate version of the bill provides new
authority and imposes new responsibilities to stop the
diversion from the U.S. to Iran of critical goods through other
countries. The House recedes to the Senate. This provision
relates to (1) U.S.-origin goods, services and technologies
that are controlled for export from the United States, and (2)
items denied for export to Iran by a United Nations Security
Council resolution. The purpose is to shut off Iran's
clandestine acquisition of items and technologies that would
contribute to its weapons development programs, its other
defense capabilities and its support for international
terrorism. While U.S.-origin items do not make a significant
contribution to Iran's military or terrorism capabilities, by
utilizing U.S. global jurisdiction over our export-controlled
items, effective leverage can be utilized to identify and shut
down Iran's black-market technology acquisition and
proliferation around the world.
Section 301--Definitions. This section defines terms used
in this title including: allow, Commerce List, end user, entity
owned or controlled by the Government of Iran, Export
Administration Regulations, government, Iran, state sponsor of
terrorism, as well as diversion.
Section 302 requires the Director of National Intelligence
to identify, on an ongoing basis, those countries that allow
diversion to Iran, either directly or through indirect routes,
of U.S.-origin goods, services and technologies and items
prohibited for Iran under a UN Security Council resolution. The
Director shall report such countries to the President, relevant
departments and the Congress.
Section 303 requires the President to designate
Destinations of Diversion Concern and authorizes U.S.-provided
training, technical assistance and law enforcement support to
strengthen other governments' capability to stop diversions to
Iran. For governments that take effective action against
diversion to Iran, the President removes the designation.
Specific standards are required to be met by a country in
halting diversions to Iran.
Further under Section 303, for governments identified under
Section 302 that are deemed resistant to U.S. engagement, or
where U.S. assistance fails to secure cooperation, the
President must require a license, under the Export
Administration Regulations, for the export from the U.S. of any
good, service or technology that, if diverted to Iran, would
contribute to Iran's weapons programs, defense capabilities or
support of terrorism. There would be a presumption of denial
for all applications for such licenses. The requirement for a
license could be delayed during efforts by the U.S. to assist a
country to take effective action to stop diversions to Iran.
Section 304 requires a report to Congress by the President
on other countries that may be allowing diversion of certain
U.S.-origin items to other countries, aside from Iran, that may
be seeking nuclear and other weapons of mass destruction, other
defense technologies, or other capabilities for terrorist
support.
Section 305 clarifies and reinforces the statutory law
enforcement authority for agents of the Enforcement Division of
the Commerce Department's Bureau of Industry and Security, so
that they can fully carry out the expanded duties required by
enactment of this legislation.
TITLE IV--GENERAL PROVISIONS
Sunset. The House-passed bill contained a ``sunset''
provision specifying the conditions for termination of
petroleum-specific sanctions. The Senate contained no such
provision. Adopting the House approach, section 105(a) provides
that--except for several provisions--the provisions of the Act
shall terminate if the President determines and certifies to
the appropriate congressional committees that Iran: (1) Has
ceased providing support for acts of international terrorism
and is no longer a state sponsor of terrorism; and (2) has
ceased the pursuit, acquisition, and development of nuclear,
biological, and chemical weapons and ballistic missiles and
ballistic missile launch technology.
Waiver. Subsection (b) provides that the President may
waive the application of sanctions under section 103(b), the
requirement to impose or maintain sanctions with respect to a
person under section 105(a), the requirement to include a
person on the list required by section 105(b), the application
of the prohibition under section 106(a), or the imposition of
the licensing requirement under section 303(c) with respect to
a country designated as a Destination of Diversion Concern
under section 303(a) if the President determines that such a
waiver is in the national interest of the United States. If the
President does elect to use the waiver of 303(c) rather than
delay imposition of export restrictions, he must provide an
assessment to Congress of the steps being taken by the country
to institute or strengthen an export control system; to
interdict the diversion of goods, services, or technologies
described in section 302(b) through the country to Iranian end-
users or Iranian intermediaries; and to comply with and enforce
appropriate U.N. Security Council Resolutions. The Conferees
intend that the waiver authority in this section shall be case
by case and shall not be used as a general waiver.
Authorization of Appropriations. Subsection (c) provides
that there are authorized to be appropriated to the Secretary
of State and the Secretary of the Treasury such sums as may be
necessary to carry out Titles I and III of this Act. Further,
the Act authorizes to be appropriated to the Secretary of
Commerce such sums as may be necessary to carry out Title III.
Compliance With Clause 9 of Rule XXI
Pursuant to clause 9 of rule XXI of the Rules of the House
of Representatives, neither this conference report nor the
accompanying joint statement of managers contains any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9 of rule XXI.
CBO ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS FOR THE CONFERENCE REPORT TO ACCOMPANY H.R. 2194, THE COMPREHENSIVE IRAN SANCTIONS, ACCOUNTABILITY,
AND DIVESTMENT ACT OF 2010, AS PROVIDED TO CBO ON JUNE 23, 2010 (FILENAME MAR10519)
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year in millions of dollars--
--------------------------------------------------------------------------------------------------
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010-2015 2010-2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact....................... 0 0 0 0 0 0 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: H.R. 2194 would ban certain imports from Iran and impose sanctions on certain entities that conduct business with Iran. The act would reduce
customs duties and impose civil and criminal penalties, but CBO estimates those effects would not be significant in any year.
From the Committee on Foreign Affairs, for
consideration of the House bill and the Senate
amendment, and modifications committed to
conference:
Howard L. Berman,
Gary L. Ackerman,
Brad Sherman,
Joseph Crowley,
David Scott,
Jim Costa,
Ron Klein,
Ileana Ros-Lehtinen,
Dan Burton,
Edward R. Royce,
Mike Pence,
From the Committee on Financial Services, for
consideration of secs. 3 and 4 of the House
bill, and secs. 101-103, 106, 203, and 401 of
the Senate amendment, and modifications
committed to conference:
Barney Frank,
Gregory W. Meeks,
Scott Garrett,
From the Committee on Ways and Means, for
consideration of secs. 3 and 4 of the House
bill, and secs. 101-103 and 401 of the Senate
amendment, and modifications committed to
conference:
Sander M. Levin,
John S. Tanner,
Dave Camp,
Managers on the Part of the House.
Christopher J. Dodd,
John F. Kerry,
Joseph I. Lieberman,
Robert Menendez,
Richard C. Shelby,
Robert F. Bennett,
Richard G. Lugar,
Managers on the Part of the Senate.
