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115th Congress    }                                 {    Rept. 115-366
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                 {           Part 1

======================================================================



 
  HIZBALLAH INTERNATIONAL FINANCING PREVENTION AMENDMENTS ACT OF 2017

                                _______
                                

October 24, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Royce of California, from the Committee on Foreign Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 3329]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Foreign Affairs, to whom was referred the 
bill (H.R. 3329) to amend the Hizballah International Financing 
Prevention Act of 2015 to impose additional sanctions with 
respect to Hizballah, and for other purposes, having considered 
the same, report favorably thereon with an amendment and 
recommend that the bill as amended do pass.

                           TABLE OF CONTENTS

                                                                   Page
The Amendment....................................................     1
Summary and Purpose..............................................    12
Background and Need for Legislation..............................    13
Hearings.........................................................    20
Committee Consideration..........................................    21
Committee Oversight Findings.....................................    21
New Budget Authority, Tax Expenditures, and Federal Mandates.....    21
Congressional Budget Office Cost Estimate........................    22
Directed Rule Making.............................................    23
Non-Duplication of Federal Programs..............................    23
Performance Goals and Objectives.................................    23
Congressional Accountability Act.................................    24
New Advisory Committees..........................................    24
Earmark Identification...........................................    24
Section-by-Section Analysis......................................    24
Changes in Existing Law Made by the Bill, as Reported............    26

                             The Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Hizballah 
International Financing Prevention Amendments Act of 2017''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

 TITLE I--PREVENTION OF ACCESS BY HIZBALLAH TO INTERNATIONAL FINANCIAL 
                         AND OTHER INSTITUTIONS

Sec. 101. Mandatory sanctions with respect to fundraising and 
recruitment activities for Hizballah.
Sec. 102. Modification of report with respect to financial institutions 
that engage in certain transactions.
Sec. 103. Sanctions against foreign states that support Hizballah.
Sec. 104. Prohibitions and conditions with respect to certain accounts 
held by foreign financial institutions.
Sec. 105. United States strategy to prevent hostile activities by Iran 
and disrupt and degrade Hizballah's illicit networks in the Western 
Hemisphere.

TITLE II--NARCOTICS TRAFFICKING AND SIGNIFICANT TRANSNATIONAL CRIMINAL 
                        ACTIVITIES OF HIZBALLAH

Sec. 201. Blocking of property of affiliated networks of Hizballah.
Sec. 202. Report on racketeering activities engaged in by Hizballah.
Sec. 203. Modification of report on activities of foreign governments 
to disrupt global logistics networks and fundraising, financing, and 
money laundering activities of Hizballah.
Sec. 204. Report on combating the illicit tobacco trafficking networks 
used by Hizballah and other foreign terrorist organizations.

                     TITLE III--GENERAL PROVISIONS

Sec. 301. Regulatory authority.
Sec. 302. Implementation; penalties; judicial review; exemptions.

 TITLE I--PREVENTION OF ACCESS BY HIZBALLAH TO INTERNATIONAL FINANCIAL 
                         AND OTHER INSTITUTIONS

SEC. 101. MANDATORY SANCTIONS WITH RESPECT TO FUNDRAISING AND 
                    RECRUITMENT ACTIVITIES FOR HIZBALLAH.

  (a) In General.--Section 101 of the Hizballah International Financing 
Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 note) is 
amended to read as follows:

``SEC. 101. MANDATORY SANCTIONS WITH RESPECT TO FUNDRAISING AND 
                    RECRUITMENT ACTIVITIES FOR HIZBALLAH.

  ``(a) In General.--The President shall, on or after the date of the 
enactment of this section, impose the sanctions described in subsection 
(b) with respect to any foreign person that the President determines 
knowingly assists, sponsors, or, provides significant financial, 
material, or technological support for--
          ``(1) Bayt al-Mal, Jihad al-Bina, the Islamic Resistance 
        Support Association, the Foreign Relations Department of 
        Hizballah, the External Security Organization of Hizballah, or 
        any successor or affiliate thereof;
          ``(2) al-Manar TV, al Nour Radio, or the Lebanese Media 
        Group, or any successor or affiliate thereof;
          ``(3) a foreign person determined by the President to be 
        engaged in fundraising or recruitment activities for Hizballah; 
        or
          ``(4) a foreign person owned or controlled by a foreign 
        person described in paragraph (1), (2), or (3).
  ``(b) Sanctions Described.--
          ``(1) In general.--The sanctions described in this subsection 
        are the following:
                  ``(A) Asset blocking.--The exercise of all powers 
                granted to the President by the International Emergency 
                Economic Powers Act (50 U.S.C. 1701 et seq.) (except 
                that the requirements of section 202 of such Act (50 
                U.S.C. 1701) shall not apply) to the extent necessary 
                to block and prohibit all transactions in all property 
                and interests in property of a foreign person 
                determined by the President to be subject to subsection 
                (a) if such property and interests in property are in 
                the United States, come within the United States, or 
                are or come within the possession or control of a 
                United States person.
                  ``(B) Aliens ineligible for visas, admission, or 
                parole.--
                          ``(i) Visas, admission, or parole.--An alien 
                        who the President determines is subject to 
                        subsection (a) is--
                                  ``(I) inadmissible to the United 
                                States;
                                  ``(II) ineligible to receive a visa 
                                or other documentation to enter the 
                                United States; and
                                  ``(III) otherwise ineligible to be 
                                admitted or paroled into the United 
                                States or to receive any other benefit 
                                under the Immigration and Nationality 
                                Act (8 U.S.C. 1101 et seq.).
                          ``(ii) Current visas revoked.--
                                  ``(I) In general.--The issuing 
                                consular officer, the Secretary of 
                                State, or the Secretary of Homeland 
                                Security shall revoke any visa or other 
                                entry documentation issued to an alien 
                                who the President determines is subject 
                                to subsection (a), regardless of when 
                                issued.
                                  ``(II) Effect of revocation.--A 
                                revocation under subclause (I) shall 
                                take effect immediately and shall 
                                automatically cancel any other valid 
                                visa or entry documentation that is in 
                                the possession of the alien.
          ``(2) 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)(A) to the same extent that such penalties apply to a person 
        that commits an unlawful act described in subsection (a) of 
        such section 206.
  ``(c) Implementation.--The President may exercise all authorities 
provided under sections 203 and 205 of the International Emergency 
Economic Powers Act (50 U.S.C. 1702 and 1704) to carry out this 
section.
  ``(d) Waiver.--
          ``(1) In general.--The President may, for periods not to 
        exceed 180 days, waive the imposition of sanctions under this 
        section with respect to a foreign person or foreign persons if 
        the President certifies to the appropriate congressional 
        committees that such waiver is in the national security 
        interests of the United States.
          ``(2) Consultation.--
                  ``(A) Before waiver exercised.--Before a waiver under 
                paragraph (1) takes effect with respect to a foreign 
                person, the President shall notify and brief the 
                appropriate congressional committees on the status of 
                the involvement of the foreign person in activities 
                described in subsection (a).
                  ``(B) After waiver exercised.--Not later than 90 days 
                after the issuance of a waiver under paragraph (1) with 
                respect to a foreign person, and every 120 days 
                thereafter while the waiver remains in effect, the 
                President shall brief the appropriate congressional 
                committees on the status of the involvement of the 
                foreign person in activities described in subsection 
                (a).
  ``(e) Report.--Not later than 90 days after the date of the enactment 
of the Hizballah International Financing Prevention Amendments Act of 
2017, and every 180 days thereafter, the President shall submit to the 
appropriate congressional committees a report that lists the foreign 
persons that the President has credible evidence knowingly assists, 
sponsors, or provides significant financial, material, or technological 
support for the foreign persons described in paragraph (1), (2), (3), 
or (4) of subsection (a).
  ``(f) Definitions.--In this section:
          ``(1) Admitted; alien.--The terms `admitted' and `alien' have 
        meanings given those terms in section 101 of the Immigration 
        and Nationality Act (8 U.S.C. 1101).
          ``(2) Appropriate congressional committees.--The term 
        `appropriate congressional committees' means--
                  ``(A) the Committee on Foreign Affairs, the Committee 
                on Ways and Means, the Committee on the Judiciary, and 
                the Committee on Financial Services of the House of 
                Representatives; and
                  ``(B) the Committee on Foreign Relations, the 
                Committee on Banking, Housing, and Urban Affairs, and 
                the Committee on the Judiciary of the Senate.
          ``(3) Entity.--The term `entity'--
                  ``(A) means a partnership, association, corporation, 
                or other organization, group, or subgroup; and
                  ``(B) includes a governmental entity
          ``(4) Fundraising or recruitment activities.--The term 
        `fundraising or recruitment activities' includes online 
        fundraising and other online commercial activities, or other 
        means of such fundraising, recruitment, and retention, as 
        determined by the President.
          ``(5) Hizballah.--The term `Hizballah' has the meaning given 
        such term in section 102(f).
          ``(6) Person.--The term `person' means an individual or 
        entity.
          ``(7) United states person.--The term `United States person' 
        means a United States citizen, permanent resident alien, entity 
        organized under the laws of the United States (including 
        foreign branches), or a person in the United States.''.
  (b) Clerical Amendment.--The table of contents for the Hizballah 
International Financing Prevention Act of 2015 is amended by striking 
the item relating to section 101 and inserting the following new item:

``Sec. 101. Mandatory sanctions with respect to fundraising and 
recruitment activities for Hizballah.''.

SEC. 102. MODIFICATION OF REPORT WITH RESPECT TO FINANCIAL INSTITUTIONS 
                    THAT ENGAGE IN CERTAIN TRANSACTIONS.

  (a) In General.--Subsection (d) of section 102 of the Hizballah 
International Financing Prevention Act of 2015 (Public Law 114-102; 50 
U.S.C. 1701 note) is amended to read as follows:
  ``(d) Report on Financial Institutions Organized Under the Laws of 
State Sponsors of Terrorism.--
          ``(1) In general.--Not later than 90 days after the date of 
        the enactment of the Hizballah International Financing 
        Prevention Amendments Act of 2017, and annually thereafter for 
        a period not to exceed three years, the President shall submit 
        to the appropriate congressional committees a report that--
                  ``(A) identifies each foreign financial institution 
                described in paragraph (2) that the President 
                determines engages in one or more activities described 
                in subsection (a)(2);
                  ``(B) provides a detailed description of each such 
                activity; and
                  ``(C) contains a determination with respect to each 
                such foreign financial institution that is identified 
                under subparagraph (A) as engaging in one or more 
                activities described in subsection (a)(2) as to whether 
                or not such foreign financial institution is in 
                violation of Executive Order 13224 (50 U.S.C. 1701 
                note; relating to blocking property and prohibiting 
                transactions with persons who commit, threaten to 
                commit, or support terrorism) or section 2339B of title 
                18, United States Code, by reason of engaging in one or 
                more such activities.
          ``(2) Foreign financial institution described.--
                  ``(A) In general.--A foreign financial institution 
                described in this paragraph is a foreign financial 
                institution--
                          ``(i) that, wherever located, is--
                                  ``(I) organized under the laws of a 
                                state sponsor of terrorism or any 
                                jurisdiction within a state sponsor of 
                                terrorism;
                                  ``(II) owned or controlled by the 
                                government of a state sponsor of 
                                terrorism;
                                  ``(III) located in the territory of a 
                                state sponsor of terrorism; or
                                  ``(IV) owned or controlled by a 
                                foreign financial institution described 
                                in subclause (I), (II), or (III); and
                          ``(ii) the capitalization of which exceeds 
                        $10,000,000.
                  ``(B) State sponsor of terrorism.--In this paragraph, 
                the term `state sponsor of terrorism' means a country 
                the government of which the Secretary of State has 
                determined is a government that has repeatedly provided 
                support for acts of international terrorism for 
                purposes of--
                          ``(i) section 6(j) of the Export 
                        Administration Act of 1979 (50 U.S.C. 4605(j)) 
                        (as continued in effect pursuant to the 
                        International Emergency Economic Powers Act (50 
                        U.S.C. 1701 et seq.));
                          ``(ii) section 620A of the Foreign Assistance 
                        Act of 1961 (22 U.S.C. 2371);
                          ``(iii) section 40 of the Arms Export Control 
                        Act (22 U.S.C. 2780); or
                          ``(iv) any other provision of law.''.
  (b) Sense of Congress.--It is the sense of the Congress that--
          (1) all countries should designate the entirety of Hizballah 
        as a terrorist organization; and
          (2) the notion of separate Hizballah political and military 
        ``wings'' is an artificial construct that attempts to 
        legitimize Hizballah members of parliament and Hizballah 
        cabinet officials who are complicit in Hizballah's use of 
        violence and coercion against its political opponents.
  (c) Modification of Definition of Hizballah.--Clause (ii) of section 
102(f)(1)(E) of the Hizballah International Financing Prevention Act of 
2015 (Public Law 114-102; 50 U.S.C. 1701 note) is amended--
          (1) by striking ``(I)'' and inserting ``(I)(aa)'';
          (2) by striking ``(II)'' and inserting ``(bb)'';
          (3) by striking ``of Hizballah.'' and inserting ``of 
        Hizballah; or''; and
          (4) by adding at the end the following:
                                  ``(II) who the President determines 
                                is an agent or affiliate of, or is 
                                owned or controlled by Hizballah.''.
  (d) Report.--
          (1) In general.--Not later than 120 days after the date of 
        the enactment of this Act, the President shall transmit to the 
        appropriate congressional committee a report that contains a 
        description of any sanctions described in section 102 of the 
        Hizballah International Financing Prevention Act of 2015 
        (Public Law 114-102; 50 U.S.C. 1701 note) apply with respect to 
        a foreign financial institution by reason of engaging in an 
        activity described in subsection (a)(2) of such section with a 
        member of the Lebanese parliament or any cabinet official of 
        the Lebanese Republic who is a member of Hizballah or 
        identifies as such.
          (2) Form.--The report required by this subsection shall be 
        transmitted in unclassified form but may include a classified 
        annex.

SEC. 103. SANCTIONS AGAINST FOREIGN STATES THAT SUPPORT HIZBALLAH.

  (a) In General.--Title I of the Hizballah International Financing 
Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 note) is 
amended by adding at the end the following:

``SEC. 103. SANCTIONS AGAINST FOREIGN STATES THAT SUPPORT HIZBALLAH.

  ``(a) Sanctions Against Certain Agencies and Instrumentalities of 
Foreign States.--
          ``(1) In general.--Not later than 90 days after the date of 
        the enactment of this section, and as appropriate thereafter, 
        the President shall impose the sanctions described in paragraph 
        (3) with respect to any agency or instrumentality of a foreign 
        state described in paragraph (2).
          ``(2) Agency or instrumentality described.--An agency or 
        instrumentality of a foreign state described in this paragraph 
        is an agency or instrumentality of a foreign state that the 
        President determines has, on or after the date of the enactment 
        of this section, knowingly--
                  ``(A) directly or indirectly conducted combat 
                operations with, or supported combat operations of, 
                Hizballah or an entity owned or controlled by 
                Hizballah; or
                  ``(B) directly or indirectly provided significant 
                financial or material support for, or significant arms 
                or related material to, Hizballah or an entity owned or 
                controlled by Hizballah.
          ``(3) Sanctions described.--The sanctions described in this 
        paragraph are the exercise of all powers granted to the 
        President by the International Emergency Economic Powers Act 
        (50 U.S.C. 1701 et seq.) (except that the requirements of 
        section 202 of such Act (50 U.S.C. 1701) shall not apply) to 
        the extent necessary to block and prohibit all transactions in 
        all property and interests in property of an agency or 
        instrumentality of a foreign state if such property and 
        interests in property are in the United States, come within the 
        United States, or are or come within the possession or control 
        of a United States person.
  ``(b) Sanctions Against State Sponsors of Terrorism.--
          ``(1) In general.--In the case of an agency or 
        instrumentality of a foreign state that engages in the 
        activities described in subsection (a) that is an agency or 
        instrumentality of a foreign state described in paragraph (2), 
        the President shall, pursuant to section 6 of the Export 
        Administration Act of 1979 (as continued in effect pursuant to 
        the International Emergency Economic Powers Act (50 U.S.C. 1701 
        et seq.)), require a license under the Export Administration 
        Regulations to export or re-export to that foreign state any 
        item designated by the Secretary of Commerce as `EAR 99', other 
        than food, medicine, medical devices, or similarly licensed 
        items.
          ``(2) Foreign state described.--A foreign state described in 
        this paragraph is a foreign state that--
                  ``(A) the President determines has, on or after the 
                date of the enactment of this section, knowingly 
                provided significant financial or material support for, 
                or arms or related material to--
                          ``(i) Hizballah; or
                          ``(ii) an entity owned or controlled by 
                        Hizballah; and
                  ``(B) is a state sponsor of terrorism.
  ``(c) Waiver.--
          ``(1) In general.--The President may, for periods not to 
        exceed 180 days, waive the imposition of sanctions under this 
        section with respect to a foreign state or an agency or 
        instrumentality of a foreign state if the President certifies 
        to the appropriate congressional committees that such waiver is 
        vital to the national security interests of the United States.
          ``(2) Consultation.--
                  ``(A) Before waiver exercised.--Before a waiver under 
                paragraph (1) takes effect with respect to a foreign 
                state or an agency or instrumentality of a foreign 
                state, the President shall notify and brief the 
                appropriate congressional committees on the status of 
                the involvement of the foreign state in activities 
                described in subsection (b)(2) or involvement of the 
                agency or instrumentality of a foreign state in 
                activities described in subsection (a)(2), as the case 
                may be.
                  ``(B) After waiver exercised.--Not later than 90 days 
                after the issuance of a waiver under paragraph (1) with 
                respect to a foreign state or an agency or 
                instrumentality of a foreign state, and every 120 days 
                thereafter while the waiver remains in effect, the 
                President shall brief the appropriate congressional 
                committees on the status of the involvement of the 
                foreign state in activities described in subsection 
                (b)(2) or involvement of the agency or instrumentality 
                of a foreign state in activities described in 
                subsection (a)(2), as the case may be.
  ``(d) Report on Supply Chain of Hizballah's Missile Production 
Facilities.--
          ``(1) In general.--Not later than 120 days after the date of 
        the enactment of this subsection, the President shall submit to 
        the appropriate congressional committees a report that contains 
        the following:
                  ``(A) An analysis of the foreign and domestic supply 
                chain that significantly facilitates, supports, or 
                otherwise aids Hizballah's acquisition or development 
                of missile production facilities.
                  ``(B) A description of the geographic distribution of 
                the foreign and domestic supply chain described in 
                subparagraph (A).
                  ``(C) An assessment of the provision of goods, 
                services, or technology transferred to Hizballah by the 
                Government of Iran or its affiliates to indigenously 
                manufacture or otherwise produce missiles.
                  ``(D) An identification of foreign persons that have, 
                on or after the date of the enactment of this 
                subsection, and based on credible evidence--
                          ``(i) knowingly provided significant 
                        financial or material support for, or 
                        significant arms or related material to, 
                        Hizballah or an entity owned or controlled by 
                        Hizballah; or
                          ``(ii) knowingly facilitated the transfer of 
                        significant arms or related materiel to 
                        Hizballah utilizing commercial aircraft or air 
                        carriers.
                  ``(E) A description of the steps that the President 
                is taking to disrupt the foreign and domestic supply 
                chain described in subparagraph (A).
          ``(2) Form.--The report required under paragraph (1) shall be 
        submitted in unclassified form, but may contain a classified 
        annex.
  ``(e) Definitions.--In this section:
          ``(1) Agency or instrumentality of a foreign state; foreign 
        state.--The terms `agency or instrumentality of a foreign 
        state' and `foreign state' have the meanings given those terms 
        in section 1603 of title 28, United States Code.
          ``(2) Appropriate congressional committees.--The term 
        `appropriate congressional committees' means--
                  ``(A) the Committee on Foreign Affairs, the Committee 
                on Financial Services, the Committee on Ways and Means, 
                and the Committee on the Judiciary of the House of 
                Representatives; and
                  ``(B) the Committee on Foreign Relations, the 
                Committee on Banking, Housing, and Urban Affairs, and 
                the Committee on the Judiciary of the Senate.
          ``(3) Arms or related material.--The term `arms or related 
        material' means--
                  ``(A) nuclear, biological, chemical, or radiological 
                weapons or materials or components of such weapons;
                  ``(B) ballistic or cruise missile weapons or 
                materials or components of such weapons;
                  ``(C) destabilizing numbers and types of advanced 
                conventional weapons;
                  ``(D) defense articles or defense services, as those 
                terms are defined in paragraphs (3) and (4), 
                respectively, of section 47 of the Arms Export Control 
                Act (22 U.S.C. 2794); or
                  ``(E) defense information, as that term is defined in 
                section 644 of the Foreign Assistance Act of 1961 (22 
                U.S.C. 2403).
          ``(4) Export administration regulations.--The term `Export 
        Administration Regulations' means subchapter C of chapter VII 
        of title 15, Code of Federal Regulations (as in effect on the 
        date of the enactment of this Act).
          ``(5) Hizballah.--The term `Hizballah' has the meaning given 
        that term in section 102(f).
          ``(6) State sponsor of terrorism.--In this paragraph, the 
        term `state sponsor of terrorism' means a country the 
        government of which the Secretary of State has determined is a 
        government that has repeatedly provided support for acts of 
        international terrorism for purposes of--
                  ``(A) section 6(j) of the Export Administration Act 
                of 1979 (50 U.S.C. 4605(j)) (as continued in effect 
                pursuant to the International Emergency Economic Powers 
                Act (50 U.S.C. 1701 et seq.));
                  ``(B) section 620A of the Foreign Assistance Act of 
                1961 (22 U.S.C. 2371);
                  ``(C) section 40 of the Arms Export Control Act (22 
                U.S.C. 2780); or
                  ``(D) any other provision of law.''.
  (b) Clerical Amendment.--The table of contents for the Hizballah 
International Financing Prevention Act of 2015 is amended by inserting 
after the item relating to section 102 the following new item:

``Sec. 103. Sanctions against foreign states that support Hizballah.''.

  (c) Report on Significant Material Support and Arms or Related 
Materiel Provided by the Russian Federation to Hizballah.--
          (1) In general.--Not later than 120 days after the date of 
        the enactment of this Act, the President shall submit to the 
        appropriate congressional committees a report that contains the 
        following:
                  (A) A description of significant material support and 
                arms or related material that the Government of the 
                Russian Federation has, on or after the date of the 
                enactment of this Act, knowingly, directly or 
                indirectly, provided to Hizballah or an entity owned or 
                controlled by Hizballah.
                  (B) An analysis of the extent to which Russian 
                strategic weapons deployed in Syria, including air 
                defense systems, have provided protection for Hizballah 
                fighters in Syria.
                  (C) An assessment of whether Russian counter-
                proliferation safeguards can ensure that any arms or 
                related materiel described in subparagraph (A) will not 
                be used against Israel in the future.
          (2) Form.--The report required by paragraph (1) shall be 
        submitted in unclassified form but may include a classified 
        annex.
          (3) Definitions.--In this subsection:
                  (A) Appropriate congressional committees.--The term 
                ``appropriate congressional committees'' means the 
                Committee on Foreign Affairs of the House of 
                Representatives and the Committee on Foreign Relations 
                of the Senate.
                  (B) Arms or related material.--The term ``arms or 
                related material'' has the meaning given such term in 
                section 103 of the Hizballah International Financing 
                Prevention Act of 2015, as added by this section.

SEC. 104. PROHIBITIONS AND CONDITIONS WITH RESPECT TO CERTAIN ACCOUNTS 
                    HELD BY FOREIGN FINANCIAL INSTITUTIONS.

  Section 104(c)(2)(A)(ii) of the Comprehensive Iran Sanctions, 
Accountability, and Divestment Act of 2010 (22 U.S.C. 
8513(c)(2)(A)(ii)) is amended by inserting before ``or support for acts 
of international terrorism'' the following ``, including Hizballah (as 
defined in section 102(f)(1)(E) of the Hizballah International 
Financing Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 
note)), and any affiliates or successors thereof,''.

SEC. 105. UNITED STATES STRATEGY TO PREVENT HOSTILE ACTIVITIES BY IRAN 
                    AND DISRUPT AND DEGRADE HIZBALLAH'S ILLICIT 
                    NETWORKS IN THE WESTERN HEMISPHERE.

  (a) In General.--Not later than 180 days after the date of the 
enactment of this Act, the Secretary of State shall submit to the 
relevant congressional committees a strategy to prevent hostile 
activities by Iran and disrupt and degrade Hizballah's illicit networks 
in the Western Hemisphere that--
          (1) identifies Department of State priorities, in 
        coordination with other executive branch agencies, for defining 
        United States policy to protect United States interests from 
        Iranian and Hizballah threats in the Western Hemisphere;
          (2) coordinates with other executive branch agencies to 
        ensure that information-sharing, interdictions, arrests, 
        investigations, indictments, sanctions, and designations 
        related to Hizballah individuals or networks in the Western 
        Hemisphere are integrated, coordinated, and publicly 
        communicated by the United States in a manner that supports 
        United States interests;
          (3) describes Iranian and Hizballah activities in the Western 
        Hemisphere, their relationships with transnational criminal 
        organizations in the region, their use of the region's 
        commodities trade to engage in illicit activities, and their 
        use of Latin American and Caribbean visas, including through 
        Citizenship by Investment Programs to seek admittance into the 
        United States, as well as a plan to address any security 
        vulnerabilities to the United States;
          (4) includes a review of all relevant United States sanctions 
        that relate to Hizballah's activities in Latin America and the 
        Caribbean and an assessment of their use, effectiveness, and 
        any capability gaps;
          (5) includes a review of the use of the Department of State's 
        rewards program under section 36 of the State Department Basic 
        Authorities Act (22 U.S.C. 2708) to obtain information related 
        to Latin America-based Hizballah operatives and illicit 
        networks and an assessment of the effectiveness of this program 
        for targeting Hizballah in the Western Hemisphere;
          (6) includes a review of all relevant United States sanctions 
        on financial institutions in Latin America and the Caribbean 
        that engage in activities outlined by section 102 of Hizballah 
        International Financing Prevention Act of 2015 (Public Law 114-
        102; 50 U.S.C. 1701 note) and an assessment of the use of the 
        authorities outlined, their effectiveness, and recommendations 
        for improvement;
          (7) describes Hizballah criminal support networks, including 
        country facilitation, in the Western Hemisphere and outlines a 
        United States approach to partners in the region to address 
        those illicit networks and build country capacity to combat the 
        transnational criminal activities of Hizballah; and
          (8) includes a review of the actions of governments in the 
        Western Hemisphere to identify, investigate, and prosecute 
        Latin America-based Hizballah operatives, and enforce sanctions 
        either personally or to their business interests of Latin 
        America-based Hizballah operatives as well as recommendations 
        for United States action towards governments who refuse to 
        impose sanctions or who willingly facilitate Latin America-
        based Hizballah illicit activities.
  (b) Form.--The strategy required by subsection (a) shall be submitted 
in unclassified form to the greatest extent possible but may include a 
classified annex.
  (c) Diplomatic Engagement.--
          (1) In general.--Title I of the Hizballah International 
        Financing Prevention Act of 2015 (Public Law 114-102; 129 Stat. 
        2206; 50 U.S.C. 1701 note), as amended by section 103 of this 
        Act, is further amended by adding at the end the following:

``SEC. 104. DIPLOMATIC INITIATIVES.

  ``Not later than 90 days after the date of the enactment of this 
section, the President shall instruct--
          ``(1) the Secretary of State to increase cooperation with 
        countries in the Western Hemisphere to assist in strengthening 
        the capacity of governments to prevent hostile activity by Iran 
        and disrupt and degrade Hizballah's illicit networks operating 
        in the region, including diplomatic engagement that involves--
                  ``(A) efforts to target and expose illicit networks, 
                arrest perpetrators, freeze assets, and attack Iran and 
                Hizballah's use of illicit networks using international 
                trade and banking systems;
                  ``(B) efforts to revoke or deny visas from those 
                implicated in Hizballah's activity in the region, 
                including lawyers, accountants, business partners, 
                service providers, and politicians who knowingly 
                facilitate or fail to take measures to counter 
                Hizballah's illicit finance in their own jurisdictions;
                  ``(C) efforts to assist willing nations with the 
                development of counter-organized crime legislation, the 
                strengthening of financial investigative capacity, and 
                a fully-vetted counter-organized crime judicial model 
                in places plagued with corruption; and
                  ``(D) efforts to persuade governments in the region 
                to list Hizballah as a terrorist organization;
          ``(2) the United States Permanent Representative to the 
        Organization of American States to work to secure support at 
        the Organization of American States for a resolution that would 
        declare Hizballah as a terrorist organization and address 
        Hizballah's illicit networks operating in the region;
          ``(3) the United States Ambassador to the Organization for 
        Security and Cooperation in Europe (OSCE) to work to secure a 
        report on compliance by participating states with OSCE Decision 
        Number 1063, the `Consolidated Framework for the Fight Against 
        Terrorism', in regard to Hizballah, with particular focus on 
        the mandate to `suppress the financing of terrorism, including 
        its links with money-laundering and illegal economic 
        activities', especially as it relates transatlantic relations, 
        including with Latin America and the Caribbean; and
          ``(4) United States diplomats to work with international 
        forums, including the Financial Action Task Force, to identify 
        government entities within Latin America and the Caribbean that 
        provide support, facilitation, or assistance to individuals 
        affiliated with Hizballah in the Western Hemisphere.''.
          (2) Clerical amendment.--The table of contents for the 
        Hizballah International Financing Prevention Act of 2015 is 
        amended by inserting after the item related to section 103 the 
        following new item:

``Sec. 104. Diplomatic initiatives.''.

TITLE II--NARCOTICS TRAFFICKING AND SIGNIFICANT TRANSNATIONAL CRIMINAL 
                        ACTIVITIES OF HIZBALLAH

SEC. 201. BLOCKING OF PROPERTY OF AFFILIATED NETWORKS OF HIZBALLAH.

  (a) In General.--Section 201 of the Hizballah International Financing 
Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 note) is 
amended to read as follows:

``SEC. 201. IMPOSITION OF SANCTIONS WITH RESPECT TO AFFILIATED NETWORKS 
                    OF HIZBALLAH.

  ``(a) In General.--Not later than 120 days after the date of the 
enactment of this section, and as appropriate thereafter, the President 
shall impose the sanctions described in subsection (b) with respect to 
affiliated networks of Hizballah, including by reason of significant 
transnational criminal activities of such networks.
  ``(b) Sanctions Described.--The sanctions described in this 
subsection are sanctions applied with respect to a foreign person 
pursuant to Executive Order 13581 (75 Fed. Reg. 44,757) (as such 
Executive order was in effect on the day before the date of the 
enactment of this section).
  ``(c) Definition.--In this section, the term `Hizballah' has the 
meaning given such term in section 102(f).''.
  (b) Clerical Amendments.--The table of contents for the Hizballah 
International Financing Prevention Act of 2015 is amended--
          (1) by striking the item relating to title II and inserting 
        the following:

``TITLE II--IMPOSITION OF SANCTIONS WITH RESPECT TO AFFLIATED NETWORKS 
  OF HIZBALLAH AND REPORTS AND BRIEFINGS ON NARCOTICS TRAFFICKING AND 
     SIGNIFICANT TRANSNATIONAL CRIMINAL ACTIVITIES OF HIZBALLAH'';

        and
          (2) by striking the item relating to section 201 and 
        inserting the following:

``Sec. 201. Imposition of sanctions with respect to affiliated networks 
of Hizballah.''.

  (c) Effective Date.--The amendments made by this section take effect 
on the date that is 90 days after the date of the enactment of this 
Act.

SEC. 202. REPORT ON RACKETEERING ACTIVITIES ENGAGED IN BY HIZBALLAH.

  (a) In General.--Section 202 of the Hizballah International Financing 
Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 note) is 
amended to read as follows:

``SEC. 202. REPORT ON RACKETEERING ACTIVITIES ENGAGED IN BY HIZBALLAH.

  ``(a) In General.--Not later than 120 days after the date of the 
enactment of the Hizballah International Financing Prevention 
Amendments Act of 2017, and annually thereafter for the following 5 
years, the Assistant Attorney General for the Criminal Division of the 
Department of Justice and the Administrator of the Drug Enforcement 
Administration, in coordination with the Secretary of the Treasury and 
the heads of other applicable Federal agencies, shall jointly submit to 
the appropriate congressional committees a report on the following:
          ``(1) Activities that Hizballah, and agents and affiliates of 
        Hizballah, have engaged in that are racketeering activities.
          ``(2) The extent to which Hizballah, and agents and 
        affiliates of Hizballah, engage in a pattern of such 
        racketeering activities.
  ``(b) Form of Report.--Each report required under subsection (a) 
shall be submitted in an unclassified form but may contain a classified 
annex.
  ``(c) Definitions.--In this section:
          ``(1) Appropriate congressional committees.--The term 
        `appropriate congressional committees' means--
                  ``(A) the Committee on the Judiciary and the 
                Committee on Foreign Affairs of the House of 
                Representatives; and
                  ``(B) the Committee on the Judiciary and the 
                Committee on Foreign Relations of the Senate.
          ``(2) Hizballah.--The term `Hizballah' has the meaning given 
        that term in section 102(f).
          ``(3) Racketeering activity.--The term `racketeering 
        activity' has the meaning given that term in section 1961(1) of 
        title 18, United States Code.''.
  (b) Clerical Amendment.--The table of contents for the Hizballah 
International Financing Prevention Act of 2015 is amended by striking 
the item relating to section 202 and inserting the following:

``Sec. 202. Report on racketeering activities engaged in by 
Hizballah.''.

SEC. 203. MODIFICATION OF REPORT ON ACTIVITIES OF FOREIGN GOVERNMENTS 
                    TO DISRUPT GLOBAL LOGISTICS NETWORKS AND 
                    FUNDRAISING, FINANCING, AND MONEY LAUNDERING 
                    ACTIVITIES OF HIZBALLAH.

  (a) In General.--Section 204(a)(1) of the Hizballah International 
Financing Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 
note) is amended--
          (1) in the matter preceding subparagraph (A), by striking 
        ``this Act'' and inserting ``the Hizballah International 
        Financing Prevention Amendments Act of 2017, and annually 
        thereafter for the following 5 years'';
          (2) in subparagraph (D)(ii)(II), by striking ``and'' at the 
        end;
          (3) in subparagraph (E), by striking ``and free-trade 
        zones.'' and inserting ``free-trade zones, business 
        partnerships and joint ventures, and other investments in small 
        and medium-sized enterprises;''; and
          (4) by adding at the end the following:
                  ``(F) a list of provinces, municipalities, and local 
                governments outside of Lebanon that expressly consent 
                to, or with knowledge allow, tolerate, or disregard the 
                use of their territory by Hizballah to carry out 
                terrorist activities, including training, financing, 
                and recruitment;
                  ``(G) a description of the total aggregate revenues 
                and remittances that Hizballah receives from the global 
                logistics networks of Hizballah, including--
                          ``(i) a list of Hizballah's sources of 
                        revenue, including sources of revenue based on 
                        illicit activity, revenues from Iran, 
                        charities, and other business activities; and
                          ``(ii) a list of Hizballah's expenditures, 
                        including expenditures for ongoing military 
                        operations, social networks, and external 
                        operations;
                  ``(H) a survey of national and transnational legal 
                measures available to target Hizballah's financial 
                networks;
                  ``(I) a review of Hizballah's international 
                operational capabilities, including in the United 
                States; and
                  ``(J) a review of--
                          ``(i) the total number and value of 
                        Hizballah-related assets seized and forfeited; 
                        and
                          ``(ii) the total number of indictments, 
                        prosecutions, and extraditions of Hizballah 
                        members or affiliates.''.
  (b) Report on Estimated Net Worth of and Determination With Respect 
to Senior Hizballah Members.--
          (1) In general.--Not later than 180 days after the date of 
        the enactment of this Act, and not less frequently than 
        annually thereafter for the following 2 years, the President 
        shall submit to the appropriate congressional committees a 
        report that contains--
                  (A) the estimated total net worth of each individual 
                described in paragraph (2);
                  (B) a description of how funds of each individual 
                described in paragraph (2) were acquired, and how such 
                funds have been used or employed; and
                  (C) a determination of whether each individual 
                described in paragraph (2) meets the criteria described 
                in paragraph (3) or (4) of section 1263(a) of the 
                National Defense Authorization Act for Fiscal Year 2017 
                (Public Law 114-328; 22 U.S.C. 2656 note).
          (2) Individuals described.--The individuals described in this 
        paragraph are the following:
                  (A) The Secretary General of Hizballah.
                  (B) Members of the Hizballah Politburo.
                  (C) Any other individual that the President 
                determines is a senior foreign political figure of 
                Hizballah, is associated with Hizballah, or otherwise 
                provides significant support to Hizballah.
          (3) Form of report; public availability.--
                  (A) Form.--The report required under paragraph (1) 
                shall be submitted in unclassified form but may include 
                a classified annex.
                  (B) Public availability.--The unclassified portion of 
                the report required under paragraph (1) shall be made 
                available to the public and posted on the website of 
                the Department of State and all United States Embassy 
                websites.
          (4) Definitions.--In this subsection:
                  (A) Appropriate congressional committees.--The term 
                ``appropriate congressional committees'' means--
                          (i) the Committee on Foreign Affairs and the 
                        Committee on Financial Services of the House of 
                        Representatives; and
                          (ii) the Committee on Foreign Relations and 
                        the Committee on Banking, Housing, and Urban 
                        Affairs of the Senate.
                  (B) Funds.--The term ``funds'' means--
                          (i) cash;
                          (ii) equity;
                          (iii) any other intangible asset the value of 
                        which is derived from a contractual claim, 
                        including bank deposits, bonds, stocks, a 
                        security (as defined in section 2(a) of the 
                        Securities Act of 1933 (15 U.S.C. 77b(a))), or 
                        a security or an equity security (as those 
                        terms are defined in section 3(a) of the 
                        Securities Exchange Act of 1934 (15 U.S.C. 
                        78c(a))); and
                          (iv) anything else of value that the 
                        President determines to be appropriate.
                  (C) Senior foreign political figure.--The term 
                ``senior foreign political figure'' has the meaning 
                given that term in section 1010.605 of title 31, Code 
                of Federal Regulations (or any successor regulation).

SEC. 204. REPORT ON COMBATING THE ILLICIT TOBACCO TRAFFICKING NETWORKS 
                    USED BY HIZBALLAH AND OTHER FOREIGN TERRORIST 
                    ORGANIZATIONS.

  (a) In General.--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 combating the illicit tobacco 
trafficking networks used by Hizballah and other foreign terrorist 
organizations to finance their operations, as described in the report 
submitted to Congress in December 2015 by the Department of State, the 
Department of Justice, the Department of the Treasury, the Department 
of Homeland Security, and the Department of Health and Human Services 
entitled, ``The Global Illicit Trade in Tobacco: A Threat to National 
Security.''.
  (b) Matters To Be Addressed.--The report required by subsection (a) 
shall include the following:
          (1) A description of the steps to be taken by Federal 
        agencies to combat the illicit tobacco trafficking networks 
        used by Hizballah, other foreign terrorist organizations, and 
        other illicit actors.
          (2) A description of the steps to be taken to engage State 
        and local law enforcement authorities in efforts to combat 
        illicit tobacco trafficking networks operating within the 
        United States.
          (3) A description of the steps to be taken to engage foreign 
        government law enforcement and intelligence authorities in 
        efforts to combat illicit tobacco trafficking networks 
        operating outside the United States.
          (4) Recommendations for legislative or administrative action 
        needed to address the threat of illicit tobacco trafficking 
        networks.
  (c) Appropriate Congressional Committees Defined.--In this section, 
the term ``appropriate congressional committees'' means--
          (1) the Committee on Foreign Affairs, the Committee on Armed 
        Services, the Committee on Homeland Security, the Committee on 
        the Judiciary, the Committee on Financial Services, and the 
        Committee on Ways and Means of the House of Representatives; 
        and
          (2) the Committee on Foreign Relations, the Committee on 
        Armed Services, the Committee on Homeland Security and 
        Governmental Affairs, the Committee on the Judiciary, the 
        Committee on Banking, Housing, and Urban Affairs, and the 
        Committee on Finance of the Senate.

                     TITLE III--GENERAL PROVISIONS

SEC. 301. REGULATORY AUTHORITY.

  (a) In General.--The President shall, not later than 180 days after 
the date of the enactment of this Act, prescribe regulations as 
necessary for the implementation of this Act and the amendments made by 
this Act.
  (b) Briefing to Congress.--Not later than 10 days before the 
prescription of regulations under subsection (a), the President shall 
brief the appropriate congressional committees of the proposed 
regulations and the provisions of this Act and the amendments made by 
this Act that the regulations are implementing.
  (c) Appropriate Congressional Committees Defined.--In this section, 
the term ``appropriate congressional committees'' means--
          (1) the Committee on Foreign Affairs and the Committee on 
        Financial Services of the House of Representatives; and
          (2) the Committee on Foreign Relations and the Committee on 
        Banking, Housing, and Urban Affairs of the Senate.

SEC. 302. IMPLEMENTATION; PENALTIES; JUDICIAL REVIEW; EXEMPTIONS.

  (a) In General.--Title I of the Hizballah International Financing 
Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 note), as 
amended by sections 103 and 105 of this Act, is further amended by 
adding at the end the following:

``SEC. 105. IMPLEMENTATION; PENALTIES; JUDICIAL REVIEW; EXEMPTIONS; 
                    RULE OF CONSTRUCTION.

  ``(a) Implementation.--The President may exercise all authorities 
provided under sections 203 and 205 of the International Emergency 
Economic Powers Act (50 U.S.C. 1702 and 1704) to carry out sections 101 
and 103.
  ``(b) 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 to carry out section 101 or 103 to the same extent that such 
penalties apply to a person that commits an unlawful act described in 
subsection (a) of such section 206.
  ``(c) Procedures for Judicial Review of Classified Information.--
          ``(1) In general.--If a finding, or a prohibition, condition, 
        or penalty imposed as a result of any such finding, 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 President 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 section 101 or 103 or any prohibition, 
        condition, or penalty imposed as a result of any such finding.
  ``(d) Exemptions.--The following activities shall be exempt from 
sections 101 and 103:
          ``(1) Any authorized intelligence, law enforcement, or 
        national security activities of the United States.
          ``(2) Any transaction necessary to comply with United States 
        obligations under the Agreement between the United Nations and 
        the United States of America regarding the Headquarters of the 
        United States, signed at Lake Success June 26, 1947, and 
        entered into force November 21, 1947, or under the Convention 
        on Consular Relations, done at Vienna April 24, 1963, and 
        entered into force March 19, 1967, or any other United States 
        international agreement.
  ``(e) Rule of Construction.--Nothing in section 101 or 103 shall be 
construed to limit the authority of the President under the 
International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) or 
under any other provision of law.''.
  (b) Clerical Amendment.--The table of contents for the Hizballah 
International Financing Prevention Act of 2015 is amended by inserting 
after the item relating to section 104, as added by section 105(c) of 
this Act, the following new item:

``Sec. 105. Implementation; penalties; judicial review; exemptions; 
rule of construction.''.

                          Summary and Purpose

    Hizballah has been designated a Foreign Terrorist 
Organization by the U.S. Department of State since 1997. 
Hizballah is responsible for some of the deadliest attacks 
against American citizens and, as former Secretary of Defense 
Robert Gates observed, possesses ``far more rockets and 
missiles than most governments in the world.'' While Hizballah 
has been sanctioned under the Hizballah International Financing 
Prevention Act of 2015 and designated pursuant to multiple 
executive orders and provisions of law, this legislation 
specifically expands efforts to target the organization's 
international financial and logistics networks, including its 
efforts to raise funds utilizing illicit means. These support 
networks not only provide funding and logistics for the 
terrorist group, but also a platform to conduct terrorist 
attacks. The intent of this legislation is to continue to 
increase the aggregate risk associated with knowingly aiding 
Hizballah's international operations.
    This bipartisan legislation will broaden sanctions against 
Hizballah's fundraising and recruitment efforts; agencies and 
instrumentalities of foreign states that provide arms and 
related material to Hizballah; and imposes sanctions on 
Hizballah for its involvement in transnational organized crime, 
including narcotics trafficking. It also contains robust 
reporting requirements that will focus the administration's 
information gathering on Hizballah's global logistics and 
financial network. In doing so, it provides a comprehensive 
framework for addressing Hizballah's support network and 
fulfills the objective of the legislation, which is to prevent 
Hizballah's global logistics and financial network from 
operating in order to curtail the funding of its international 
activities.

                  Background and Need for Legislation

    In recent years, the U.S. has taken multiple financial 
steps to counter the ability of Hizballah, a terrorist 
organization with reputedly sophisticated financial expertise. 
Nonetheless, Hizballah has been able to exploit the 
international financial system and move and store illicit 
assets. Hizballah criminal enterprises--some formal, some 
informal--span the globe. From narcotics to international used 
car sales, and from money laundering to procurement front 
companies, U.S. law enforcement now sees multiple cases where 
the Hizballah-affiliated criminal operators are themselves 
acting as ``super-facilitators'' for a wide range of crimes and 
clients. With the Treasury Department's designation of Lebanese 
Canadian Bank SAL in February 2011 as a financial institution 
of primary money laundering concern, Hizballah's role in Latin 
American cocaine trafficking (and the laundering of such 
illicit proceeds through informal value transfer mechanisms), 
trade-based money laundering schemes that span the globe, and 
the exploitation of Lebanese exchange houses were publicly 
revealed.
    Since 2011, pressure on the group has persisted through 
targeted financial sanctions, law enforcement investigations, 
and judicial prosecutions. On December 18, 2015, the 114th 
Congress enacted the Hizballah International Financing 
Prevention Act of 2015 (P.L. 114-102), which requires enhanced 
restrictions on foreign financial institutions that facilitate 
financial transactions and services for Hizballah. Adding 
pressure, the European Union partially designated Hizballah a 
terrorist organization in 2013 and the Gulf Cooperation Council 
and the Arab League designated Hizballah a terrorist 
organization in March 2016.
    And yet, Hizballah continues to threaten stability in 
Lebanon, Syria, throughout the Middle East region, and beyond. 
Hizballah continues to use its media appendages for propaganda, 
organizing, recruitment, and fundraising purposes by operating 
its own television channel, Al-Manar, radio station, Radio Al-
Nour, and a media company, the Lebanese Media Group. Each of 
these were designated as terrorist entities by the U.S. 
Treasury Department in 2006. Additionally, Hizballah's refining 
of its online recruitment and fundraising tools require a 
response from Congress.
The Iran-Hizballah Relationship
    The 2016 State Department Country Reports on Terrorism 
states that Iran ``continued its terrorist-related activity in 
2016, including support for Hizballah. Iran used the Islamic 
Revolutionary Guard Corps-Qods Force (IRGC-QF) to implement 
foreign policy goals, provide cover for intelligence 
operations, and create instability in the Middle East. Iran has 
acknowledged the involvement of the IRGC-QF in the conflicts in 
Iraq and Syria and the IRGC-QF is Iran's primary mechanism for 
cultivating and supporting terrorists abroad.'' Iran's support 
for Hizballah is a centerpiece of this effort.
    Hizballah acts in support of its own interests as well as 
those of Iran, including through acts of terrorism and other 
armed action. The relationship began when Lebanese Shi'a 
clerics of the pro-Iranian Lebanese Da'wa (Islamic Call) Party 
began to organize, following the Israeli occupation of Lebanon, 
into what later was unveiled in 1985 as Hizballah. Iran sent 
IRGC forces to Lebanon to help develop the group's military 
capabilities, and these IRGC forces subsequently evolved into 
the IRGC-QF. The most recent State Department report on 
international terrorism says that Hizballah continues to be 
``capable of operating around the globe.'' The report adds that 
Iran has provided Hizballah with ``hundreds of millions of 
dollars'' and has ``trained thousands of [Hizballah] fighters 
at camps in Iran.'' It is clear that Iran's support for 
Hizballah has helped the organization become a major force in 
Lebanon's politics and allowed the group to assert a de facto 
veto over Lebanese political developments.
    Iranian leaders have long worked with Hizballah to pressure 
and threaten Israel. Hizballah's attacks on Israeli forces in 
its self-declared ``security zone'' in southern Lebanon 
contributed to an Israeli withdrawal from that territory in May 
2000. Hizballah fired Iranian-supplied rockets on Israel's 
northern towns and cities during a July-August 2006 war with 
Israel, and in July 2006 Hizballah damaged an Israeli warship 
with an Iran-supplied C-802 sea-skimming missile. Since that 
conflict, Iran has resupplied Hizballah with, according to some 
sources, over 100,000 rockets and missiles, some capable of 
reaching nearly all areas in Israel from south Lebanon, as well 
as upgraded artillery, anti-ship, anti-tank, and anti-aircraft 
capabilities. In addition, Iran bought significant quantities 
of C-802s from China in the 1990s.
    Iran has directed and facilitated Hizballah's involvement 
in the Syrian conflict on behalf of the Assad regime, whose 
continuation in power is in the interests of both Iran and 
Hizballah. Syria is the key conduit through which the IRGC-QF 
arms and assists Hizballah. Throughout Syria's internal 
conflict, Israel has carried out occasional air strikes inside 
Syria against Iranian arms shipments to Hizballah. In January 
2015, Hizballah attacked an Israeli military convoy near the 
Lebanon-Israel-Syria tri-border area, killing two Israeli 
soldiers, but the incident did not escalate. On February 3, 
2017, under Executive Order 13224, the United States imposed 
sanctions on eight IRGC-QF and allied individuals for providing 
funds to Hizballah and related activities. One of the 
designated individuals was accused of procuring aviation spare 
parts for the IRGC-QF.
    The committee has strong concerns about the role that Iran 
and Hizballah could potentially play in a post-ISIS Syria. The 
United States, Russia, and Jordan negotiated a de-escalation 
zone in Southern Syria, which has the potential to create a 
safe haven for Hizballah and Iranian actors, thereby 
exacerbating existing tensions and creating a corridor from 
Tehran to the Mediterranean through Iraq, Syria, and Lebanon.
    Additionally, the committee is concerned regarding Iranian 
efforts to move high-tech materiel to Hizballah in Lebanon, 
including the reported establishment of production facilities 
in Lebanon and Syria for Hizballah of sophisticated missiles. 
U.N. Security Council Resolution (UNSCR) 1701 on Lebanon, 
adopted in 2006, requires member states to prevent the export 
of unauthorized arms to Lebanon from or through their 
territories and authorizes the United Nations Interim Force in 
Lebanon (UNIFIL) to assist the Lebanese Government in securing 
its borders at the Lebanese Government's request. The United 
States and others have provided assistance to the LAF as well 
as to Lebanon's Internal Security Forces (ISF), designed in 
part to improve their capability to enforce arms provisions of 
UNSCR 1701. In September of this year, the UNIFIL mandate was 
expanded to allow UNIFIL to take all necessary action to stop 
its area of operations from being used for hostile activities 
and calls on UNIFIL to establish a more visible presence, 
stepping up its patrols and inspections to disrupt Hizballah's 
illicit activities.
    Thus, there is a need for the United States to expand and 
promote the enforcement of UNSCR 1701, with respect to halting 
the flow of illegal weapons into Lebanon by Hizballah and Iran, 
in particular.
Hizballah's Global Activities and Financing
            Middle East
    Hizballah is based in Lebanon and also has operated 
extensively in Syria since at least 2013. In Lebanon, the group 
functions as both an armed militia and a domestic political 
party. Since its emergence in the 1980s, Hizballah has clashed 
with Israeli forces in Lebanon--and has continued to target 
Israeli forces following the latter's withdrawal from Lebanon 
in 2000. Hizballah's last major clash with Israel occurred in 
2006 and highlighted Hizballah's capacity to launch thousands 
of rockets into Israel. Since then, Israeli officials have 
sought to draw attention to Hizballah's weapons buildup--
including reported upgrades to the range and precision of its 
projectiles--and its alleged use of Lebanese civilian areas as 
strongholds. Most recently, reports that Iran and Hizballah 
have established production lines of sophisticated missiles in 
southern Lebanon and Syria highlight the need for additional 
legislation.
    Hizballah is also a prominent political force in Lebanon. 
As a member of the March 8 political coalition, it is allied 
with Christian political parties such as that of Lebanese 
President Michel Aoun. Hizballah has participated in elections 
since 1992 and currently holds two cabinet posts. It has also 
fared well in municipal elections, winning seats in conjunction 
with allied Shi'a Amal party representatives in many areas of 
southern and eastern Lebanon. Hizballah operates a vast network 
of schools, clinics, youth programs, private businesses, and 
provides local security--leading some to describe the group as 
``a state within a state.'' Hizballah leader Hassan Nasrallah 
has stated that the group receives its funding from Iran and 
that this funding has not been disrupted by recent U.S. 
legislation.
    Hizballah personnel have played significant roles in 
battles inside Syria, including in the Syrian military campaign 
that eventually recaptured the city of Aleppo from opposition 
control in late 2016. In addition to conducting military 
operations, Hizballah trains Syrian paramilitary forces, known 
as National Defense Forces (NDF), to improve their capacity to 
hold cleared terrain. Hizballah reportedly maintains between 
4,000 and 8,000 fighters in Syria, although it has reportedly 
lost over a thousand fighters in Syria to date, including 
several senior leaders.
    Hizballah reportedly maintains a limited presence in Yemen, 
and Yemen's Government has accused Hizballah of training Houthi 
rebels and in some cases fighting alongside them. In 2013, the 
U.S. Department of the Treasury imposed sanctions on Hizballah 
member Khalil Harb, who it described as responsible for 
Hizballah's activities in Yemen. According to the designation, 
``Since the summer of 2012, Harb has been involved in the 
movement of large amounts of currency to Yemen through Saudi 
Arabia and the UAE, and in late 2012, Harb advised the leader 
of a Yemeni political party that the party's monthly Hizballah 
funding of $50,000 was ready for pick up.'' The United States 
and Saudi Arabia jointly imposed sanctions on Hashem 
Safieddine, a key member of Hizballah's executive council, 
which oversees their group's political, organizational, social 
and educational activities. It was the first time that the U.S. 
and Saudi Arabia coordinated such an action. However, more 
action is necessary.
            Africa
    Although Hizballah does not appear to have carried out 
armed activities in Africa, the State Department says that it 
receives ``financial support from Lebanese Shia communities'' 
on the continent, among other locations. The laundered proceeds 
of certain organized crime activities in West Africa, which is 
home to sizable Lebanese diaspora populations, are a reported 
financing source. Notably, under Executive Order 13224 in 2009, 
the U.S. Treasury Department designated two alleged West 
Africa-based Hizballah supporters for targeted financial 
sanctions including Kassim Tajideen, a dual Lebanese-Belgian 
citizen who settled in Sierra Leone in the 1970s and later 
moved to Cote d'Ivoire. He is described as ``an important 
financial contributor to Hizballah who operates a network of 
businesses in Lebanon and Africa.'' Lebanese national Abd al 
Menhem Qubaysi is described as ``a Cote d'Ivoire-based 
Hizballah supporter and . . . the personal representative of 
Hizballah Secretary General Hassan Nasrallah.'' Treasury also 
identified Qubaysi as helping to ``recruit new members for 
Hizballah's military ranks in Lebanon'' through a Cote 
d'Ivoire-based foundation. Treasury further designated two 
brothers and business partners of Tajideen in 2010, one of whom 
was described as ``a primary Hizballah fundraiser and prominent 
Hizballah supporter in The Gambia.'' In March 2017, Moroccan 
authorities arrested Tajideen while he was transiting through 
Morocco en route to Lebanon from Guinea. He was extradited to 
the United States, where he has pled not guilty to conspiracy, 
fraud, and money laundering.
    In 2013, in designating two Lebanon-based financial 
institutions as being ``of primary money-laundering concern,'' 
U.S. Treasury and Drug Enforcement Agency (DEA) officials 
described a ``drug-money-laundering network'' in which the 
proceeds of drug trafficking from South America through West 
Africa to Europe were allegedly being laundered ``for the 
benefit of Hizballah.'' Reports of Hizballah links in the 
region emerge periodically--in 2013, for example, Nigerian 
authorities arrested three Lebanese on suspicion of being 
members of the group, reportedly uncovering a stash of heavy 
weapons in one of their residences. The trio was later 
acquitted of charges that they were plotting attacks against 
Western and Israeli targets inside Nigeria, although one was 
found guilty on weapons charges.
    Iran has reportedly smuggled arms to both Hamas and 
Hizballah through East Africa. Sudan, until recently, was 
widely viewed as a significant transit country for Iranian 
smuggling to the groups, but it reportedly ceased cooperation 
with the trafficking in 2014, according to U.S. and Israeli 
officials.
            Western Hemisphere
    U.S. policymakers have had concerns since the 1990s about 
the activities of Hizballah and Iran in Latin America. Both 
groups carried out two bombings in Buenos Aires--the 1992 
bombing of the Israeli Embassy in Buenos Aires that killed 29 
people and the 1994 bombing of the Argentine-Israeli Mutual 
Association (AMIA) that killed 85 people. The State Department 
asserted in its June 2016 Country Reports on Terrorism that 
Hizballah ``continued to maintain a presence in the region, 
with members, facilitators, and supporters engaging in activity 
in support of the organization,'' including efforts to build 
the organization's ``infrastructure in South America and 
fundraising, both through licit and illicit means.''
    This characterization was reiterated in April 2017 by 
Admiral Kurt Tidd, Commander of the U.S. Southern Command 
(SOUTHCOM), in presenting the command's 2017 posture statement 
to Congress. According to Admiral Tidd, ``Hizballah members, 
facilitators, and supporters engage in licit and illicit 
activities in support of the organization, moving weapons, 
cash, and other contraband to raise funds and build Hizballah's 
infrastructure in the region.'' Other contraband includes the 
trafficking of illicit drugs. Because of Hizballah's role in 
the two bombings in Argentina in the 1990s, Admiral Tidd 
maintained that Hizballah is probably the most dangerous 
terrorist group in the region.
    The State Department's terrorism report noted Hizballah 
fundraising activities in the tri-border area (TBA) of 
Argentina, Brazil, and Paraguay and the presence of Hizballah 
supporters and sympathizers in Venezuela. The TBA has long been 
used for arms and drug trafficking, contraband smuggling, 
document and currency fraud, money laundering, and the 
manufacture and movement of pirated goods.
    The Treasury Department has imposed sanctions (utilizing 
anti-terrorism and anti-drug sanctions programs) on numerous 
individuals and companies in Latin America over the years for 
providing support to Hizballah. These have included sanctions 
against individuals and entities in the TBA countries of 
Argentina, Brazil, and Paraguay as well as in Colombia, Panama, 
and Venezuela. In February 2016, the DEA announced enforcement 
actions against a Hizballah network reported to be working with 
South American drug cartels responsible for supplying large 
amounts of cocaine to U.S. and European markets. A DEA 
operation in October 2016 reportedly uncovered a money 
laundering ring linked to Colombian drug traffickers and 
alleged Hizballah associates.
    For more than a decade, U.S. policymakers have had concerns 
about the Venezuelan Government's permissive environment that 
has allowed for activities benefiting known terrorist groups, 
including Hizballah. In February 2017, a bipartisan group of 
Members of Congress wrote a letter to President Trump 
expressing several concerns about current Venezuelan Vice 
President Tareck El Aissami, including that he may have 
provided support for Hizballah. Later that month, the Treasury 
Department imposed financial sanctions on El Aissami and an 
associate for playing a significant role in drug trafficking 
associated with Colombian, Mexican, and Venezuelan drug 
traffickers, although not with Hizballah.
            Europe
    Terrorism experts assert that Hizballah has been active in 
Europe for decades. In the 1980s and 1990s, Hizballah 
operatives carried out bombings in France and Spain as well as 
assassinations in Germany and Italy. Hizballah has sought to 
recruit members in Europe and has used Europe as a launching 
pad for operatives seeking to infiltrate Israel. In 1997, for 
example, a German convert to Islam was recruited and trained by 
Hizballah and sent to Israel (using his own German passport) to 
conduct surveillance on prospective targets for attack.
    According to the Bulgarian Interior Ministry, Hizballah was 
responsible for the July 2012 bombing at the airport in Burgas, 
Bulgaria that killed five Israeli tourists and their Bulgarian 
bus driver. The group may have been planning similar attacks 
against Israeli tourists in Cyprus. In separate cases in 2013 
and 2015, two individuals were convicted in Cypriot courts of 
being Hizballah operatives. Both admitted that Hizballah was 
intending to mount attacks in Cyprus targeting Israeli or 
Jewish interests. In the 2015 case, one of the Hizballah 
operatives was found to be stockpiling tons of ammonium nitrate 
fertilizer, a potential explosive. Israeli investigators 
reportedly believe that Hizballah may have been using Cyprus as 
a ``point of export'' from which to funnel explosives to other 
European countries.
    Analysts also contend that Hizballah has used Europe as a 
primary base for fundraising and financial services for years, 
and has developed an extensive web of fundraising and 
logistical support cells in several European countries. In 
2014, for example, Germany shut down the Orphan Children 
Project Lebanon for being a Hizballah fundraising front 
organization. Europe is also considered to be a transit point 
for Hizballah money derived from drug trafficking and money 
laundering, and concerns appear to be growing about alleged 
Hizballah weapons and technology procurement operations in 
Europe. In 2014, the U.S. Treasury Department imposed sanctions 
on a Lebanese consumer electronic business for functioning as a 
``key Hizballah procurement network,'' suspected of purchasing 
technology and equipment from companies in Europe and elsewhere 
to develop drones for Hizballah to use over Israel and Syria. 
In February 2016, the U.S. Drug Enforcement Authority arrested 
several members of Hizballah, including the reported leaders of 
Hizballah's European operations, on charges related to using 
millions of dollars from the sale of cocaine in the U.S. and 
Europe to purchase weapons in Syria.
    In July 2013, the European Union (EU) added Hizballah's 
military wing to its so-called ``common terrorist list,'' 
thereby requiring all EU member states to freeze the group's 
assets and ensure that financial resources are not made 
available (within EU jurisdiction). The designation also 
requires EU member states to provide law enforcement assistance 
to each other in related police investigations and legal 
proceedings. The EU had been under considerable pressure for 
years (from the United States, Israel, and some EU member 
states) to include the whole Hizballah organization on its 
common terrorist list, but previously, EU consensus had proved 
elusive. There are concerns that the EU has not actually used 
the legal authority of the Hizballah ban to go after the group 
in a meaningful way.
            Southeast Asia
    Hizballah activities in Southeast Asia during the 2010s 
appear to continue but to be few in number. In January 2012, 
Thai police arrested Hussein Atris, a Lebanese Hizballah 
member, who was suspected of being involved in preparations for 
a terrorist attack on a tourist site in Bangkok. Some analysts 
surmised, however, that bomb-making materials found at a site 
rented by Atris indicated that Bangkok is more of a center for 
Hizballah smuggling and planning rather than a target for 
attacks. No completed bombs or weapons were found at the site.
Hizballah International Financing Prevention Act of 2015
    In December 2015, the 114th Congress enacted a sanctions 
bill targeting parties that facilitate financial transactions 
for Hizballah's benefit (H.R. 2297, P.L. 114-102). The 
Hizballah International Financing Prevention Act of 2015 
requires, inter alia, that the President 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 knowingly: Facilitates 
a transaction or transactions for Hizballah; facilitates a 
significant transaction or transactions of a person on 
specified lists of specially designated nationals and blocked 
persons, property, and property interests for acting on behalf 
of or at the direction of, or being owned or controlled by, 
Hizballah; engages in money laundering to carry out such an 
activity; or facilitates a significant transaction or provides 
significant financial services to carry out such an activity. 
The President, however, is authorized to waive the application 
of sanctions if he finds it in the national security interests 
of the United States to do so.
    In addition to substantial Iranian support, Hizballah has 
for decades helped fund its terrorist and social service 
initiatives through a diverse portfolio of commercial 
activities. On May 3, 2016, the Banque du Liban (BdL), 
Lebanon's central bank--in compliance with new U.S. 
legislation--issued a circular ordering banks to close accounts 
belonging to individuals and institutions associated with the 
organization. Hundreds of such Hizballah-linked accounts have 
since been closed, according to BdL, threatening the militia's 
social support network and commercial interests. It is widely 
believed that in response to these financial pressures, 
Hizballah detonated a bomb on June 12, 2016, outside the 
headquarters of Blom Bank in central Beirut, injuring two and 
substantially damaging the bank's offices. BdL's circular, 
issued May 3, builds on Basic Circular 126 of 2012, which 
called on Lebanese financial institutions to ``deal with 
[foreign correspondents] in conformity with the laws, 
regulations, procedures, sanctions and restrictions adopted . . 
. by the sovereign authorities in the correspondents' home 
countries.'' Beyond reminding banks of Basic Circular 126, the 
May 3 circular mandates that banks report account closures to 
the Special Investigation Commission, or SIC, Lebanon's 
Financial Intelligence Unit. The May 3 circular itself does not 
indicate that banks need BdL approval to close accounts.
    While the U.S. regulations present a fairly high bar for 
action against foreign banks, press reporting and anecdotal 
accounts claim that Lebanese banks were closing scores of 
accounts for undesignated individuals, including Hizballah-
affiliated hospitals, members of parliament, and even family 
members. Western banks have adopted no-tolerance policies with 
regard to foreign correspondents in the wake of large 
sanctions-related enforcement actions in recent years.

                                Hearings

    During the present Congress, the committee has continued 
its active oversight regarding Hizballah, including multiple 
hearings related to the content of H.R. 3329, such as:
          October 11, 2017, Subcommittee on the Middle East and 
        North Africa hearing, ``U.S. Policy Toward Lebanon'' 
        (Mr. Michael Ratney, Deputy Assistant Secretary, Bureau 
        of Near Eastern Affairs, U.S. Department of State; Ms. 
        Jeanne Pryor, Acting Deputy Assistant Administrator, 
        Bureau for the Middle East, U.S. Agency for 
        International Development).
          October 4, 2017, Subcommittee on Terrorism, 
        Nonproliferation, and Trade hearing, ``Iranian Backed 
        Militias: Destabilizing the Middle East'' (Michael 
        Knights, Ph.D., Lafer Fellow, The Washington Institute 
        for Near East Policy; Mr. Aram Nerguizian, Senior 
        Associate, Burke Chair in Strategy, Center for 
        Strategic and International Studies; Kenneth Pollack, 
        Ph.D., Resident Scholar, American Enterprise Institute; 
        Ms. Melissa Dalton, Senior Fellow and Deputy Director, 
        International Security Program, Center for Strategic 
        and International Studies).
          June 8, 2017, full committee hearing, ``Attacking 
        Hezbollah's Financial Network: Policy Options'' 
        (Matthew Levitt, Ph.D., Director and Fromer-Wexler 
        Fellow, Stein Program on Counterterrorism and 
        Intelligence, The Washington Institute for Near East 
        Policy; David Asher, Ph.D., Member, Board of Directors, 
        Center on Sanctions and Illicit Finance, Foundation for 
        Defense of Democracies; Mr. Derek Maltz, Executive 
        Director, Governmental Relations, Pen-Link, Ltd; Mara 
        Karlin, Ph.D., Associate Professor of Practice and 
        Associate Director of Strategic Studies, School for 
        Advanced International Studies, Johns Hopkins 
        University).
          May 24, 2017, Subcommittee on Terrorism, 
        Nonproliferation, and Trade hearing, ``Nuclear Deal 
        Fallout: The Global Threat of Iran'' (Mr. Ilan Berman, 
        Senior Vice President, American Foreign Policy Council; 
        Ray Takeyh, Ph.D., Hasib J. Sabbagh Senior Fellow for 
        Middle East Studies, Council on Foreign Relations; 
        Daniel L. Byman, Ph.D., Senior Fellow, Center for 
        Middle East Policy, Brookings Institution).
          March 29, 2017, Subcommittee on the Middle East and 
        North Africa hearing, ``Testing the Limits: Iran's 
        Ballistic Missile Program, Sanctions, and the Islamic 
        Revolutionary Guard Corps'' (Kenneth Katzman, Ph.D., 
        Specialist in Middle Eastern Affairs, Congressional 
        Research Service; Mr. Michael Eisenstadt, Kahn Fellow, 
        Director of Military and Security Studies Program, The 
        Washington Institute for Near East Policy; Ms. 
        Elizabeth Rosenberg, Senior Fellow and Director, 
        Energy, Economics and Security Program, Center for a 
        New American Security).
          February 16, 2017, full committee hearing, ``Iran on 
        Notice'' (Mr. Scott Modell, Managing Director, The 
        Rapidan Group; Ms. Katherine Bauer, Blumenstein-Katz 
        Family Fellow, The Washington Institute for Near East 
        Policy; Mr. David Albright, Founder and President, 
        Institute for Science and International Security; 
        Andrew Exum, Ph.D., Contributing Editor, The Atlantic).

                        Committee Consideration

    On September 28, 2017, the Committee on Foreign Affairs 
marked up H.R. 3329 in open session, pursuant to notice. An 
amendment in the nature of a substitute (offered by Chairman 
Royce) and five amendments to that amendment in the nature of a 
substitute (offered, respectively, by Mr. Boyle, Mr. Cicilline, 
Mr. Duncan, Ms. Ros-Lehtinen, and Mr. Schneider) were 
considered en bloc with the underlying bill, and were agreed to 
by voice vote.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of rules of 
the House of Representatives, the committee reports that 
findings and recommendations of the committee, based on 
oversight activities under clause 2(b)(1) of House Rule X, are 
incorporated in the descriptive portions of this report, 
particularly in the ``Background and Purpose of Legislation'' 
and ``Section-by-Section Analysis'' sections.

      New Budget Authority, Tax Expenditures, and Federal Mandates

    In compliance with clause 3(c)(2) of House Rule XIII and 
the Unfunded Mandates Reform Act (P.L. 104-4), the committee 
adopts as its own the estimate of new budget authority, 
entitlement authority, tax expenditure or revenues, and Federal 
mandates contained in the cost estimate prepared by the 
Director of the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974.

               Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 19, 2017.

Hon. Edward R. Royce, Chairman,
Committee on Foreign Affairs,
House of Representatives, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3329, the 
Hizballah International Financing Prevention Amendments Act of 
2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jacob Fabian, 
who can be reached at 226-2860.
            Sincerely,
                                                Keith Hall.
Enclosure

cc:
        Honorable Eliot L. Engel
        Ranking Member
H.R. 3329--Hizballah International Financing Prevention Amendments Act 
        of 2017.
    As ordered reported by the House Committee on Foreign 
Affairs on September 28, 2017.

    H.R. 3329 would expand federal sanctions and reporting 
requirements related to illicit interactions with Hizballah, a 
foreign terrorist organization based in Lebanon. It would 
direct the President to identify and impose sanctions on 
foreign people and entities engaged in fundraising and 
recruitment activities for Hizballah. The bill also would 
require the President to apply the sanctions in Executive Order 
13581 to affiliated networks of Hizballah. That executive order 
blocked the U.S. held assets of certain criminal organizations 
from being transferred, paid, exported, or withdrawn. Finally, 
federal agencies would be required to develop policies and 
prepare multiple reports related to Hizballah, including 
reports on certain diplomatic matters as well as on illicit 
transactions with foreign financial institutions, cooperation 
with foreign governments, racketeering, and trafficking in 
tobacco.
    Based on an analysis of information from the Administration 
and the costs of similar activities, CBO estimates that 
administering the sanctions and implementing the reporting 
requirements would cost about $1 million over the 2018-2022 
period, subject to the availability of appropriated funds.
    Enacting H.R. 3329 would increase the number of people and 
entities that would be subject to civil or criminal penalties 
and the number of people who would be denied visas by the 
Department of State. Penalties are recorded in the budget as 
revenues and a portion of those penalties can be spent without 
further appropriation. Most visa fees are retained by the 
Department of State and spent without further appropriation, 
but some fees are deposited in the Treasury as revenues. Pay-
as-you-go procedures apply to this legislation because enacting 
it would affect direct spending and revenues. However, CBO 
estimates that implementing those sanctions would affect very 
few additional people or entities and thus have insignificant 
effects on both revenues and direct spending because of the 
broad scope of restrictions in existing law and regulation that 
address illicit activities involving Hizballah.
    CBO estimates that enacting H.R. 3329 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 3329 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA).
    If the sanctions imposed by the President under the bill 
prevent U.S. entities from gaining access to property or from 
engaging in transactions that would otherwise be permitted 
under current law, the bill would impose a private-sector 
mandate as defined in UMRA. The cost of the mandate would be 
any forgone income directly related to the newly prohibited 
transactions or blocked property. Because of the broad scope of 
existing U.S. sanctions involving Hizballah, CBO expects the 
number of entities and individuals in the United States that 
could be affected by the legislation would be small. Further, 
CBO expects that the loss of income from any restrictions in 
the bill would be relatively low. Therefore, CBO estimates that 
the aggregate cost of the mandates would fall below the annual 
threshold established in UMRA for private-sector mandates ($156 
million in 2017, adjusted annually for inflation).
    The CBO staff contacts for this estimate are Jacob Fabian 
(for federal costs) and Logan Smith (for private-sector 
mandates). The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                          Directed Rule Making

    Pursuant to clause 3(c) of House Rule XIII, as modified by 
section 3(i) of H. Res. 5 during the 115th Congress, the 
committee notes that H.R. 3329 contains no directed rule-making 
provisions.

                  Non-Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of House Rule XIII, the 
committee states that no provision of this bill establishes or 
reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                    Performance Goals and Objectives

    The objective of this legislation is to broaden financial 
sector sanctions against Hizballah, force other critical 
designations regarding that terrorist organization, and target 
its media appendages, which aid in Hizballah's financing and 
logistics networks. The overriding goal is to prevent 
Hizballah's global logistics and financial network from 
operating, in order to curtail the funding of its international 
activities. Performance goals associated with these objectives 
include, but are not limited to, the following:

         LA verifiable decrease in Hizballah's ability 
        to fundraise or otherwise transfer funds through 
        foreign financial institutions, or businesses operating 
        as financial institutions.

         LA verifiable decrease in Hizballah's ability 
        to carry out operations against targets 
        internationally.

         LAn increase in U.S. Government and allied 
        action taken against Hizballah's illicit networks.

                    Congressional Accountability Act

    H.R. 3329 does not apply to terms and conditions of 
employment or to access to public services or accommodations 
within the legislative branch.

                        New Advisory Committees

    H.R. 3329 does not establish or authorize any new advisory 
committees.

                         Earmark Identification

    H.R. 3329 contains no congressional earmarks, limited tax 
benefits, or limited tariff benefits as described in clauses 
9(e), 9(f), and 9(g) of House Rule XXI.

                      Section-by-Section Analysis

    Section 1. Short Title and Table of Contents. States that 
the bill may be cited as the ``Hizballah International 
Financing Prevention Amendments Act of 2017'' and divides the 
bill into three corresponding titles.

 TITLE I--PREVENTION OF ACCESS BY HIZBALLAH TO INTERNATIONAL FINANCIAL 
                         AND OTHER INSTITUTIONS

    Section 101. Mandatory Sanctions with Respect to 
Fundraising and Recruitment Activities for Hizballah. Targets 
Hizballah's grassroots outreach by imposing mandatory, third-
party sanctions in the form of property blocking and visa 
denials against anyone that provides significant financial, 
material, or technological support for Hizballah's fundraising 
and recruitment efforts. In response to existing U.S. 
sanctions, including the underlying Hizballah International 
Financing Prevention Act, Hizballah has increased grassroots 
fundraising efforts in an effort to make its revenue streams 
more resistant to U.S. pressure. For example, Hizballah 
launched an online crowdsourcing campaign entitled ``Equip a 
Mujahid,'' which called for donations, large or small, payable 
all at once or in installments, to equip Hizballah fighters.
    Section 102. Modification of Report with Respect to 
Financial Institutions that Engage in Certain Transactions. 
Requires the President to provide additional reporting on the 
role that banks and other financial institutions connected to 
state-sponsors of terrorism play in supporting Hizballah. Also 
calls for sanctions on financial institutions that serve 
Lebanese Government officials affiliated with Hizballah. 
Despite its increasing reliance on grassroots fundraising and 
criminal activity, Hizballah still receives significant funding 
from Iran and Syria, with payments often laundered through 
banks and other financial institutions in those countries.
    Section 103. Sanctions Against Foreign States that Support 
Hizballah. Imposes sanctions against agencies of foreign 
governments that provide Hizballah with financial support, 
arms, or other assistance. Stiffer sanctions are imposed on 
designated state-sponsors of terrorism--such as Iran and Syria. 
Hizballah has received sophisticated military, training, and 
financial assistance from Iran, Syria, and Russia.
    Section 104. Prohibitions and Conditions with Respect to 
Certain Accounts Held by Foreign Financial Institutions. Amends 
existing law to sanction foreign financial institutions that 
facilitate Iran and its Revolutionary Guards' (IRGC) support 
for Hizballah. Iran and the IRGC remain a key source of 
military and financial support for Hizballah, facilitating many 
of the group's destabilizing activities.
    Section 105. United States Strategy to Prevent Hostile 
Activities by Iran and Disrupt and Degrade Hizballah's Illicit 
Networks in the Western Hemisphere. This provision requires the 
establishment of a regional strategy to push back against 
Iranian influence in the Western Hemisphere. Additionally, this 
provision highlights and recognizes the designation by the Gulf 
Cooperation Council of Hizballah as a terrorist organization. 
The U.S. should help amplify this designation by working 
through the Terrorist Financing Targeting Center. It also calls 
on the US to take additional measures with respect to the 
Europeans and within the Organization of American States to 
further designate Hizballah as a terrorist organization.

TITLE II--NARCOTICS TRAFFICKING AND SIGNIFICANT TRANSNATIONAL CRIMINAL 
                        ACTIVITIES OF HIZBALLAH

    Section 201. Blocking of Property of Hizballah. Identifies 
Hizballah's networks as a transnational criminal organization, 
and applies existing sanctions that block the property of 
persons who are affiliated with or provide assistance to 
Hizballah. Hizballah has turned to organized crime as an 
important funding source, to include drug trafficking, selling 
counterfeit currency and cigarettes, and money laundering via 
the Lebanese banking system. In 2016, U.S. Government 
investigations exposed Hizballah's efforts to move large 
quantities of cocaine into the U.S. and Europe. The U.S. is 
actively pursuing the group's various criminal funding 
mechanisms. These efforts target the drug smuggling and money 
laundering operations through which Hizballah obtains funds, 
and features inter-agency cooperation to seize assets and 
develop targeted sanctions. This provision is intended to 
further aid those processes.
    Section 202. Report on Racketeering Activities Engaged in 
by Hizballah. Requires the Department of Justice and Drug 
Enforcement Agency, in coordination with the Departments of the 
Treasury and State, to prepare a report on Hizballah activities 
that may be considered racketeering. This will provide greater 
insight into how the U.S. can more effectively leverage law 
enforcement tools to target Hizballah's international financial 
networks. Hizballah's extensive criminal activities appear to 
constitute racketeering, which would provide new avenues for 
U.S. policy to counter Hizballah's financial networks.
    Section 203. Modification of Report on Activities of 
Foreign Governments to Disrupt Global Logistics Networks and 
Fundraising, Financing, and Money Laundering Activities of 
Hizballah. Expands reporting on Hizballah's fundraising 
ventures, financial safe havens, income, assets, expenses, 
operational capabilities, and efforts the administration is 
pursuing to effectively dismantle Hizballah's financial 
networks. Requires the President to submit a report on the 
estimated net worth of Hizballah's senior leadership, 
supporters, and associates, in addition to a determination as 
to whether they should be sanctioned for their activities for 
corruption. The committee believes that this may involve 
certain elements within the March 8th Coalition, to include 
individuals associated with Amal and the Free Patriotic 
Movement who are key Hizballah supporters, among others. As 
Hizballah's fundraising and logistics networks is diverse--to 
include both support from state-sponsors of terror and criminal 
activity--the United States, our allies, and partners must 
adapt efforts to disrupt these destabilizing activities. 
Additionally, this section includes language demonstrating a 
need to fund and reinvigorate the multi-agency task force that 
had considerable success tracking Hizballah networks in the 
late 2000s.
    Section 204. Report on Combating the Illicit Tobacco 
Trafficking Networks Used by Hizballah and Other Foreign 
Terrorist Organizations. Requires the President to prepare a 
report on steps the United States is taking to combat the 
illicit tobacco trafficking networks used by Hizballah, foreign 
terrorist organizations, and other illicit actors.

                     TITLE III--GENERAL PROVISIONS

    Section 301. Regulatory Authority. This section requires 
the creation of the regulations necessary to implement this 
act, and to brief Congress on these regulations.
    Section 302. Implementation; Penalties; Judicial Review; 
Exemptions; Rule of Construction. This section contains 
administrative provisions related to the implementation and 
penalties described in this act. U.S. intelligence, law 
enforcement, and national security activities are exempt from 
these penalties, as are transactions to complete U.S. treaty 
obligations.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

        HIZBALLAH INTERNATIONAL FINANCING PREVENTION ACT OF 2015

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Hizballah 
International Financing Prevention Act of 2015''.
    (b) Table of Contents.--The table of contents for this Act 
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Statement of policy.

 TITLE I--PREVENTION OF ACCESS BY HIZBALLAH TO INTERNATIONAL FINANCIAL 
                         AND OTHER INSTITUTIONS

[Sec. 101. Report on imposition of sanctions on certain satellite 
          providers that carry al-Manar TV.]
Sec. 101. Mandatory sanctions with respect to fundraising and 
          recruitment activities for Hizballah.
Sec. 102. Sanctions with respect to financial institutions that engage 
          in certain transactions.
Sec. 103. Sanctions against foreign states that support Hizballah.
Sec. 104. Diplomatic initiatives.
Sec. 105. Implementation; penalties; judicial review; exemptions; rule 
          of construction.

     [TITLE II--REPORTS AND BRIEFINGS ON NARCOTICS TRAFFICKING AND 
       SIGNIFICANT TRANSNATIONAL CRIMINAL ACTIVITIES OF HIZBALLAH

TITLE II--IMPOSITION OF SANCTIONS WITH RESPECT TO AFFLIATED NETWORKS OF 
    HIZBALLAH AND REPORTS AND BRIEFINGS ON NARCOTICS TRAFFICKING AND 
       SIGNIFICANT TRANSNATIONAL CRIMINAL ACTIVITIES OF HIZBALLAH

[Sec. 201. Report and briefing on narcotics trafficking by Hizballah.]
Sec. 201. Imposition of sanctions with respect to affiliated networks of 
          Hizballah.
[Sec. 202. Report and briefing on significant transnational criminal 
          activities of Hizballah.]
Sec. 202. Report on racketeering activities engaged in by Hizballah.

           *       *       *       *       *       *       *


 TITLE I--PREVENTION OF ACCESS BY HIZBALLAH TO INTERNATIONAL FINANCIAL 
                         AND OTHER INSTITUTIONS

[SEC. 101. REPORT ON IMPOSITION OF SANCTIONS ON CERTAIN SATELLITE 
                    PROVIDERS THAT CARRY AL-MANAR TV.

    [(a) 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 and leadership a report on 
the following:
            [(1) The activities of all satellite, broadcast, 
        Internet, or other providers that have knowingly 
        entered into a contractual relationship with al-Manar 
        TV, and any affiliates or successors thereof.
            [(2) With respect to all providers described in 
        paragraph (1)--
                    [(A) an identification of those providers 
                that have been sanctioned pursuant to Executive 
                Order 13224 (50 U.S.C. 1701 note; relating to 
                blocking property and prohibiting transactions 
                with persons who commit, threaten to commit, or 
                support terrorism); and
                    [(B) an identification of those providers 
                that have not been sanctioned pursuant to 
                Executive Order 13224 and, with respect to each 
                such provider, any information indicating that 
                the provider has knowingly entered into a 
                contractual relationship with al-Manar TV, and 
                any affiliates or successors of al-Manar TV.
    [(b) Form of report.--The report required by subsection (a) 
shall be submitted in unclassified form to the greatest extent 
possible, but may include a classified annex.
    [(c) Appropriate Congressional Committees and Leadership 
Defined.--In this section, the term ``appropriate congressional 
committees and leadership'' means--
            [(1) the Speaker, the minority leader, the 
        Committee on Foreign Affairs, the Committee on 
        Financial Services, and the Permanent Select Committee 
        on Intelligence of the House of Representatives; and
            [(2) the majority leader, the minority leader, the 
        Committee on Foreign Relations, the Committee on 
        Banking, Housing, and Urban Affairs, and the Select 
        Committee on Intelligence of the Senate.]

SEC. 101. MANDATORY SANCTIONS WITH RESPECT TO FUNDRAISING AND 
                    RECRUITMENT ACTIVITIES FOR HIZBALLAH.

    (a) In General.--The President shall, on or after the date 
of the enactment of this section, impose the sanctions 
described in subsection (b) with respect to any foreign person 
that the President determines knowingly assists, sponsors, or, 
provides significant financial, material, or technological 
support for--
            (1) Bayt al-Mal, Jihad al-Bina, the Islamic 
        Resistance Support Association, the Foreign Relations 
        Department of Hizballah, the External Security 
        Organization of Hizballah, or any successor or 
        affiliate thereof;
            (2) al-Manar TV, al Nour Radio, or the Lebanese 
        Media Group, or any successor or affiliate thereof;
            (3) a foreign person determined by the President to 
        be engaged in fundraising or recruitment activities for 
        Hizballah; or
            (4) a foreign person owned or controlled by a 
        foreign person described in paragraph (1), (2), or (3).
    (b) Sanctions Described.--
            (1) In general.--The sanctions described in this 
        subsection are the following:
                    (A) Asset blocking.--The exercise of all 
                powers granted to the President by the 
                International Emergency Economic Powers Act (50 
                U.S.C. 1701 et seq.) (except that the 
                requirements of section 202 of such Act (50 
                U.S.C. 1701) shall not apply) to the extent 
                necessary to block and prohibit all 
                transactions in all property and interests in 
                property of a foreign person determined by the 
                President to be subject to subsection (a) if 
                such property and interests in property are in 
                the United States, come within the United 
                States, or are or come within the possession or 
                control of a United States person.
                    (B) Aliens ineligible for visas, admission, 
                or parole.--
                            (i) Visas, admission, or parole.--
                        An alien who the President determines 
                        is subject to subsection (a) is--
                                    (I) inadmissible to the 
                                United States;
                                    (II) ineligible to receive 
                                a visa or other documentation 
                                to enter the United States; and
                                    (III) otherwise ineligible 
                                to be admitted or paroled into 
                                the United States or to receive 
                                any other benefit under the 
                                Immigration and Nationality Act 
                                (8 U.S.C. 1101 et seq.).
                            (ii) Current visas revoked.--
                                    (I) In general.--The 
                                issuing consular officer, the 
                                Secretary of State, or the 
                                Secretary of Homeland Security 
                                shall revoke any visa or other 
                                entry documentation issued to 
                                an alien who the President 
                                determines is subject to 
                                subsection (a), regardless of 
                                when issued.
                                    (II) Effect of 
                                revocation.--A revocation under 
                                subclause (I) shall take effect 
                                immediately and shall 
                                automatically cancel any other 
                                valid visa or entry 
                                documentation that is in the 
                                possession of the alien.
            (2) 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)(A) to the 
        same extent that such penalties apply to a person that 
        commits an unlawful act described in subsection (a) of 
        such section 206.
    (c) Implementation.--The President may exercise all 
authorities provided under sections 203 and 205 of the 
International Emergency Economic Powers Act (50 U.S.C. 1702 and 
1704) to carry out this section.
    (d) Waiver.--
            (1) In general.--The President may, for periods not 
        to exceed 180 days, waive the imposition of sanctions 
        under this section with respect to a foreign person or 
        foreign persons if the President certifies to the 
        appropriate congressional committees that such waiver 
        is in the national security interests of the United 
        States.
            (2) Consultation.--
                    (A) Before waiver exercised.--Before a 
                waiver under paragraph (1) takes effect with 
                respect to a foreign person, the President 
                shall notify and brief the appropriate 
                congressional committees on the status of the 
                involvement of the foreign person in activities 
                described in subsection (a).
                    (B) After waiver exercised.--Not later than 
                90 days after the issuance of a waiver under 
                paragraph (1) with respect to a foreign person, 
                and every 120 days thereafter while the waiver 
                remains in effect, the President shall brief 
                the appropriate congressional committees on the 
                status of the involvement of the foreign person 
                in activities described in subsection (a).
    (e) Report.--Not later than 90 days after the date of the 
enactment of the Hizballah International Financing Prevention 
Amendments Act of 2017, and every 180 days thereafter, the 
President shall submit to the appropriate congressional 
committees a report that lists the foreign persons that the 
President has credible evidence knowingly assists, sponsors, or 
provides significant financial, material, or technological 
support for the foreign persons described in paragraph (1), 
(2), (3), or (4) of subsection (a).
    (f) Definitions.--In this section:
            (1) Admitted; alien.--The terms ``admitted'' and 
        ``alien'' have meanings given those terms in section 
        101 of the Immigration and Nationality Act (8 U.S.C. 
        1101).
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Foreign Affairs, the 
                Committee on Ways and Means, the Committee on 
                the Judiciary, and the Committee on Financial 
                Services of the House of Representatives; and
                    (B) the Committee on Foreign Relations, the 
                Committee on Banking, Housing, and Urban 
                Affairs, and the Committee on the Judiciary of 
                the Senate.
            (3) Entity.--The term ``entity''--
                    (A) means a partnership, association, 
                corporation, or other organization, group, or 
                subgroup; and
                    (B) includes a governmental entity
            (4) Fundraising or recruitment activities.--The 
        term ``fundraising or recruitment activities'' includes 
        online fundraising and other online commercial 
        activities, or other means of such fundraising, 
        recruitment, and retention, as determined by the 
        President.
            (5) Hizballah.--The term ``Hizballah'' has the 
        meaning given such term in section 102(f).
            (6) Person.--The term ``person'' means an 
        individual or entity.
            (7) United states person.--The term ``United States 
        person'' means a United States citizen, permanent 
        resident alien, entity organized under the laws of the 
        United States (including foreign branches), or a person 
        in the United States.

SEC. 102. SANCTIONS WITH RESPECT TO FINANCIAL INSTITUTIONS THAT ENGAGE 
                    IN CERTAIN TRANSACTIONS.

    (a) Prohibitions and Conditions With Respect to Certain 
Accounts Held by Foreign Financial Institutions.--
            (1) In general.--Not later than 120 days after the 
        date of the enactment of this Act, the President 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 
        President determines, on or after such date of 
        enactment, 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) knowingly facilitates a significant 
                transaction or transactions for Hizballah;
                    (B) knowingly facilitates a significant 
                transaction or transactions of a person 
                identified on the list of specially designated 
                nationals and blocked persons maintained by the 
                Office of Foreign Assets Control of the 
                Department of the Treasury and the property and 
                interests in property of which are blocked 
                pursuant to the International Emergency 
                Economic Powers Act (50 U.S.C. 1701 et seq.) 
                for acting on behalf of or at the direction of, 
                or being owned or controlled by, Hizballah;
                    (C) knowingly engages in money laundering 
                to carry out an activity described in 
                subparagraph (A) or (B); or
                    (D) knowingly facilitates a significant 
                transaction or transactions or provides 
                significant financial services to carry out an 
                activity described in subparagraph (A), (B), or 
                (C).
            (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 this subsection to the 
        same extent that such penalties apply to a person that 
        commits an unlawful act described in subsection (a) of 
        such section 206.
            (4) Procedures for judicial review of classified 
        information.--
                    (A) In general.--If a finding under this 
                subsection, or a prohibition, condition, or 
                penalty imposed as a result of any such 
                finding, 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 President may submit such 
                information to the court ex parte and in 
                camera.
                    (B) Rule of construction.--Nothing in this 
                paragraph shall be construed to confer or imply 
                any right to judicial review of any finding 
                under this subsection or any prohibition, 
                condition, or penalty imposed as a result of 
                any such finding.
    (b) Waiver.--
            (1) In general.--The President may waive, on a 
        case-by-case basis, the application of a prohibition or 
        condition imposed with respect to a foreign financial 
        institution pursuant to subsection (a) for a period of 
        not more than 180 days, and may renew the waiver for 
        additional periods of not more than 180 days, on and 
        after the date on which the President--
                    (A) determines that such a waiver is in the 
                national security interests of the United 
                States; and
                    (B) submits to the appropriate 
                congressional committees a report describing 
                the reasons for such determination.
            (2) Form.--The report required by paragraph (1)(B) 
        shall be submitted in unclassified form, but may 
        contain a classified annex.
    (c) Special Rule To Allow for Termination of Sanctionable 
Activity.--The President shall not be required to apply 
sanctions to a foreign financial institution described in 
subsection (a) if the President certifies in writing to the 
appropriate congressional committees that--
            (1) the foreign financial institution--
                    (A) is no longer engaging in the activity 
                described in subsection (a)(2); or
                    (B) has taken and is continuing to take 
                significant verifiable steps toward terminating 
                the activity described in that subsection; and
            (2) the President has received reliable assurances 
        from the government with primary jurisdiction over the 
        foreign financial institution that the foreign 
        financial institution will not engage in any activity 
        described in subsection (a)(2) in the future.
    [(d) Report on Foreign Central Banks.--
            [(1) In general.--Not later than 90 days after the 
        date of the enactment of this Act, and every 180 days 
        thereafter, the Secretary of the Treasury shall submit 
        to the appropriate congressional committees a report 
        that--
                    [(A) identifies each foreign central bank 
                that the Secretary determines engages in one or 
                more activities described in subsection 
                (a)(2)(D); and
                    [(B) provides a detailed description of 
                each such activity.
            [(2) Form of Report.--Each report required by 
        paragraph (1) shall be submitted in unclassified form, 
        but may include a classified annex.]
    (d) Report on Financial Institutions Organized Under the 
Laws of State Sponsors of Terrorism.--
            (1) In general.--Not later than 90 days after the 
        date of the enactment of the Hizballah International 
        Financing Prevention Amendments Act of 2017, and 
        annually thereafter for a period not to exceed three 
        years, the President shall submit to the appropriate 
        congressional committees a report that--
                    (A) identifies each foreign financial 
                institution described in paragraph (2) that the 
                President determines engages in one or more 
                activities described in subsection (a)(2);
                    (B) provides a detailed description of each 
                such activity; and
                    (C) contains a determination with respect 
                to each such foreign financial institution that 
                is identified under subparagraph (A) as 
                engaging in one or more activities described in 
                subsection (a)(2) as to whether or not such 
                foreign financial institution is in violation 
                of Executive Order 13224 (50 U.S.C. 1701 note; 
                relating to blocking property and prohibiting 
                transactions with persons who commit, threaten 
                to commit, or support terrorism) or section 
                2339B of title 18, United States Code, by 
                reason of engaging in one or more such 
                activities.
            (2) Foreign financial institution described.--
                    (A) In general.--A foreign financial 
                institution described in this paragraph is a 
                foreign financial institution--
                            (i) that, wherever located, is--
                                    (I) organized under the 
                                laws of a state sponsor of 
                                terrorism or any jurisdiction 
                                within a state sponsor of 
                                terrorism;
                                    (II) owned or controlled by 
                                the government of a state 
                                sponsor of terrorism;
                                    (III) located in the 
                                territory of a state sponsor of 
                                terrorism; or
                                    (IV) owned or controlled by 
                                a foreign financial institution 
                                described in subclause (I), 
                                (II), or (III); and
                            (ii) the capitalization of which 
                        exceeds $10,000,000.
                    (B) State sponsor of terrorism.--In this 
                paragraph, the term ``state sponsor of 
                terrorism'' means a country the government of 
                which the Secretary of State has determined is 
                a government that has repeatedly provided 
                support for acts of international terrorism for 
                purposes of--
                            (i) section 6(j) of the Export 
                        Administration Act of 1979 (50 U.S.C. 
                        4605(j)) (as continued in effect 
                        pursuant to the International Emergency 
                        Economic Powers Act (50 U.S.C. 1701 et 
                        seq.));
                            (ii) section 620A of the Foreign 
                        Assistance Act of 1961 (22 U.S.C. 
                        2371);
                            (iii) section 40 of the Arms Export 
                        Control Act (22 U.S.C. 2780); or
                            (iv) any other provision of law.
    (e) Implementation.--The President may exercise all 
authorities provided under sections 203 and 205 of the 
International Emergency Economic Powers Act (50 U.S.C. 1702 and 
1704) to carry out this section.
    (f) 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) Appropriate congressional committees.--
                The term ``appropriate congressional 
                committees'' means--
                            (i) the Committee on Foreign 
                        Affairs and the Committee on Financial 
                        Services of the House of 
                        Representatives; and
                            (ii) the Committee on Foreign 
                        Relations and the Committee on Banking, 
                        Housing, and Urban Affairs of the 
                        Senate.
                    (C) Financial institution.--The term 
                ``financial institution'' means a financial 
                institution specified in subparagraph (A), (B), 
                (C), (D), (E), (F), (G), (H), (I), (J), (K), 
                (M), (N), (P), (R), (T), (Y), or (Z) of section 
                5312(a)(2) of title 31, United States Code.
                    (D) Foreign financial institution.--The 
                term ``foreign financial institution'' has the 
                meaning given that term in section 1010.605 of 
                title 31, Code of Federal Regulations.
                    (E) Hizballah.--The term ``Hizballah'' 
                means--
                            (i) the entity known as Hizballah 
                        and designated by the Secretary of 
                        State as a foreign terrorist 
                        organization pursuant to section 219 of 
                        the Immigration and Nationality Act (8 
                        U.S.C. 1189); or
                            (ii) any person--
                                    (I)(aa) the property or 
                                interests in property of which 
                                are blocked pursuant to the 
                                International Emergency 
                                Economic Powers Act (50 U.S.C. 
                                1701 et seq.); and
                                    [(II)] (bb) who is 
                                identified on the list of 
                                specially designated nationals 
                                and blocked persons maintained 
                                by the Office of Foreign Assets 
                                Control of the Department of 
                                the Treasury as an agent, 
                                instrumentality, or affiliate 
                                [of Hizballah.] of Hizballah; 
                                or
                                    (II) who the President 
                                determines is an agent or 
                                affiliate of, or is owned or 
                                controlled by Hizballah.
                    (F) Money laundering.--The term ``money 
                laundering'' includes 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 President may further 
        define the terms used in this section in the 
        regulations prescribed under this section.

SEC. 103. SANCTIONS AGAINST FOREIGN STATES THAT SUPPORT HIZBALLAH.

    (a) Sanctions Against Certain Agencies and 
Instrumentalities of Foreign States.--
            (1) In general.--Not later than 90 days after the 
        date of the enactment of this section, and as 
        appropriate thereafter, the President shall impose the 
        sanctions described in paragraph (3) with respect to 
        any agency or instrumentality of a foreign state 
        described in paragraph (2).
            (2) Agency or instrumentality described.--An agency 
        or instrumentality of a foreign state described in this 
        paragraph is an agency or instrumentality of a foreign 
        state that the President determines has, on or after 
        the date of the enactment of this section, knowingly--
                    (A) directly or indirectly conducted combat 
                operations with, or supported combat operations 
                of, Hizballah or an entity owned or controlled 
                by Hizballah; or
                    (B) directly or indirectly provided 
                significant financial or material support for, 
                or significant arms or related material to, 
                Hizballah or an entity owned or controlled by 
                Hizballah.
            (3) Sanctions described.--The sanctions described 
        in this paragraph are the exercise of all powers 
        granted to the President by the International Emergency 
        Economic Powers Act (50 U.S.C. 1701 et seq.) (except 
        that the requirements of section 202 of such Act (50 
        U.S.C. 1701) shall not apply) to the extent necessary 
        to block and prohibit all transactions in all property 
        and interests in property of an agency or 
        instrumentality of a foreign state if such property and 
        interests in property are in the United States, come 
        within the United States, or are or come within the 
        possession or control of a United States person.
    (b) Sanctions Against State Sponsors of Terrorism.--
            (1) In general.--In the case of an agency or 
        instrumentality of a foreign state that engages in the 
        activities described in subsection (a) that is an 
        agency or instrumentality of a foreign state described 
        in paragraph (2), the President shall, pursuant to 
        section 6 of the Export Administration Act of 1979 (as 
        continued in effect pursuant to the International 
        Emergency Economic Powers Act (50 U.S.C. 1701 et 
        seq.)), require a license under the Export 
        Administration Regulations to export or re-export to 
        that foreign state any item designated by the Secretary 
        of Commerce as ``EAR 99'', other than food, medicine, 
        medical devices, or similarly licensed items.
            (2) Foreign state described.--A foreign state 
        described in this paragraph is a foreign state that--
                    (A) the President determines has, on or 
                after the date of the enactment of this 
                section, knowingly provided significant 
                financial or material support for, or arms or 
                related material to--
                            (i) Hizballah; or
                            (ii) an entity owned or controlled 
                        by Hizballah; and
                    (B) is a state sponsor of terrorism.
    (c) Waiver.--
            (1) In general.--The President may, for periods not 
        to exceed 180 days, waive the imposition of sanctions 
        under this section with respect to a foreign state or 
        an agency or instrumentality of a foreign state if the 
        President certifies to the appropriate congressional 
        committees that such waiver is vital to the national 
        security interests of the United States.
            (2) Consultation.--
                    (A) Before waiver exercised.--Before a 
                waiver under paragraph (1) takes effect with 
                respect to a foreign state or an agency or 
                instrumentality of a foreign state, the 
                President shall notify and brief the 
                appropriate congressional committees on the 
                status of the involvement of the foreign state 
                in activities described in subsection (b)(2) or 
                involvement of the agency or instrumentality of 
                a foreign state in activities described in 
                subsection (a)(2), as the case may be.
                    (B) After waiver exercised.--Not later than 
                90 days after the issuance of a waiver under 
                paragraph (1) with respect to a foreign state 
                or an agency or instrumentality of a foreign 
                state, and every 120 days thereafter while the 
                waiver remains in effect, the President shall 
                brief the appropriate congressional committees 
                on the status of the involvement of the foreign 
                state in activities described in subsection 
                (b)(2) or involvement of the agency or 
                instrumentality of a foreign state in 
                activities described in subsection (a)(2), as 
                the case may be.
    (d) Report on Supply Chain of Hizballah's Missile 
Production Facilities.--
            (1) In general.--Not later than 120 days after the 
        date of the enactment of this subsection, the President 
        shall submit to the appropriate congressional 
        committees a report that contains the following:
                    (A) An analysis of the foreign and domestic 
                supply chain that significantly facilitates, 
                supports, or otherwise aids Hizballah's 
                acquisition or development of missile 
                production facilities.
                    (B) A description of the geographic 
                distribution of the foreign and domestic supply 
                chain described in subparagraph (A).
                    (C) An assessment of the provision of 
                goods, services, or technology transferred to 
                Hizballah by the Government of Iran or its 
                affiliates to indigenously manufacture or 
                otherwise produce missiles.
                    (D) An identification of foreign persons 
                that have, on or after the date of the 
                enactment of this subsection, and based on 
                credible evidence--
                            (i) knowingly provided significant 
                        financial or material support for, or 
                        significant arms or related material 
                        to, Hizballah or an entity owned or 
                        controlled by Hizballah; or
                            (ii) knowingly facilitated the 
                        transfer of significant arms or related 
                        materiel to Hizballah utilizing 
                        commercial aircraft or air carriers.
                    (E) A description of the steps that the 
                President is taking to disrupt the foreign and 
                domestic supply chain described in subparagraph 
                (A).
            (2) Form.--The report required under paragraph (1) 
        shall be submitted in unclassified form, but may 
        contain a classified annex.
    (e) Definitions.--In this section:
            (1) Agency or instrumentality of a foreign state; 
        foreign state.--The terms ``agency or instrumentality 
        of a foreign state'' and ``foreign state'' have the 
        meanings given those terms in section 1603 of title 28, 
        United States Code.
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Foreign Affairs, the 
                Committee on Financial Services, the Committee 
                on Ways and Means, and the Committee on the 
                Judiciary of the House of Representatives; and
                    (B) the Committee on Foreign Relations, the 
                Committee on Banking, Housing, and Urban 
                Affairs, and the Committee on the Judiciary of 
                the Senate.
            (3) Arms or related material.--The term ``arms or 
        related material'' means--
                    (A) nuclear, biological, chemical, or 
                radiological weapons or materials or components 
                of such weapons;
                    (B) ballistic or cruise missile weapons or 
                materials or components of such weapons;
                    (C) destabilizing numbers and types of 
                advanced conventional weapons;
                    (D) defense articles or defense services, 
                as those terms are defined in paragraphs (3) 
                and (4), respectively, of section 47 of the 
                Arms Export Control Act (22 U.S.C. 2794); or
                    (E) defense information, as that term is 
                defined in section 644 of the Foreign 
                Assistance Act of 1961 (22 U.S.C. 2403).
            (4) Export administration regulations.--The term 
        ``Export Administration Regulations'' means subchapter 
        C of chapter VII of title 15, Code of Federal 
        Regulations (as in effect on the date of the enactment 
        of this Act).
            (5) Hizballah.--The term ``Hizballah'' has the 
        meaning given that term in section 102(f).
            (6) State sponsor of terrorism.--In this paragraph, 
        the term ``state sponsor of terrorism'' means a country 
        the government of which the Secretary of State has 
        determined is a government that has repeatedly provided 
        support for acts of international terrorism for 
        purposes of--
                    (A) section 6(j) of the Export 
                Administration Act of 1979 (50 U.S.C. 4605(j)) 
                (as continued in effect pursuant to the 
                International Emergency Economic Powers Act (50 
                U.S.C. 1701 et seq.));
                    (B) section 620A of the Foreign Assistance 
                Act of 1961 (22 U.S.C. 2371);
                    (C) section 40 of the Arms Export Control 
                Act (22 U.S.C. 2780); or
                    (D) any other provision of law.

SEC. 104. DIPLOMATIC INITIATIVES.

    Not later than 90 days after the date of the enactment of 
this section, the President shall instruct--
            (1) the Secretary of State to increase cooperation 
        with countries in the Western Hemisphere to assist in 
        strengthening the capacity of governments to prevent 
        hostile activity by Iran and disrupt and degrade 
        Hizballah's illicit networks operating in the region, 
        including diplomatic engagement that involves--
                    (A) efforts to target and expose illicit 
                networks, arrest perpetrators, freeze assets, 
                and attack Iran and Hizballah's use of illicit 
                networks using international trade and banking 
                systems;
                    (B) efforts to revoke or deny visas from 
                those implicated in Hizballah's activity in the 
                region, including lawyers, accountants, 
                business partners, service providers, and 
                politicians who knowingly facilitate or fail to 
                take measures to counter Hizballah's illicit 
                finance in their own jurisdictions;
                    (C) efforts to assist willing nations with 
                the development of counter-organized crime 
                legislation, the strengthening of financial 
                investigative capacity, and a fully-vetted 
                counter-organized crime judicial model in 
                places plagued with corruption; and
                    (D) efforts to persuade governments in the 
                region to list Hizballah as a terrorist 
                organization;
            (2) the United States Permanent Representative to 
        the Organization of American States to work to secure 
        support at the Organization of American States for a 
        resolution that would declare Hizballah as a terrorist 
        organization and address Hizballah's illicit networks 
        operating in the region;
            (3) the United States Ambassador to the 
        Organization for Security and Cooperation in Europe 
        (OSCE) to work to secure a report on compliance by 
        participating states with OSCE Decision Number 1063, 
        the ``Consolidated Framework for the Fight Against 
        Terrorism'', in regard to Hizballah, with particular 
        focus on the mandate to ``suppress the financing of 
        terrorism, including its links with money-laundering 
        and illegal economic activities'', especially as it 
        relates transatlantic relations, including with Latin 
        America and the Caribbean; and
            (4) United States diplomats to work with 
        international forums, including the Financial Action 
        Task Force, to identify government entities within 
        Latin America and the Caribbean that provide support, 
        facilitation, or assistance to individuals affiliated 
        with Hizballah in the Western Hemisphere.

SEC. 105. IMPLEMENTATION; PENALTIES; JUDICIAL REVIEW; EXEMPTIONS; RULE 
                    OF CONSTRUCTION.

    (a) Implementation.--The President may exercise all 
authorities provided under sections 203 and 205 of the 
International Emergency Economic Powers Act (50 U.S.C. 1702 and 
1704) to carry out sections 101 and 103.
    (b) 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 to carry out 
section 101 or 103 to the same extent that such penalties apply 
to a person that commits an unlawful act described in 
subsection (a) of such section 206.
    (c) Procedures for Judicial Review of Classified 
Information.--
            (1) In general.--If a finding, or a prohibition, 
        condition, or penalty imposed as a result of any such 
        finding, 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 President 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 section 
        101 or 103 or any prohibition, condition, or penalty 
        imposed as a result of any such finding.
    (d) Exemptions.--The following activities shall be exempt 
from sections 101 and 103:
            (1) Any authorized intelligence, law enforcement, 
        or national security activities of the United States.
            (2) Any transaction necessary to comply with United 
        States obligations under the Agreement between the 
        United Nations and the United States of America 
        regarding the Headquarters of the United States, signed 
        at Lake Success June 26, 1947, and entered into force 
        November 21, 1947, or under the Convention on Consular 
        Relations, done at Vienna April 24, 1963, and entered 
        into force March 19, 1967, or any other United States 
        international agreement.
    (e) Rule of Construction.--Nothing in section 101 or 103 
shall be construed to limit the authority of the President 
under the International Emergency Economic Powers Act (50 
U.S.C. 1701 et seq.) or under any other provision of law.

     TITLE II--REPORTS AND BRIEFINGS ON NARCOTICS TRAFFICKING AND 
       SIGNIFICANT TRANSNATIONAL CRIMINAL ACTIVITIES OF HIZBALLAH

[SEC. 201. REPORT AND BRIEFING ON NARCOTICS TRAFFICKING BY HIZBALLAH.

    [(a) Report.--
            [(1) In general.--Not later than 120 days after the 
        date of the enactment of this Act, the President shall 
        submit to the appropriate congressional committees and 
        leadership a report on the activities of Hizballah 
        related to narcotics trafficking worldwide.
            [(2) Form.--The report required by paragraph (1) 
        shall be submitted in unclassified form to the greatest 
        extent possible, but may include a classified annex.
    [(b) Briefing.--Not later than 30 days after the submission 
of the report required by subsection (a), the President shall 
provide to the appropriate congressional committees and 
leadership a briefing on--
            [(1) the report;
            [(2) procedures for designating Hizballah as a 
        significant foreign narcotics trafficker under the 
        Foreign Narcotics Kingpin Designation Act (21 U.S.C. 
        1901 et seq.); and
            [(3) Government-wide efforts to combat the 
        narcotics trafficking activities of Hizballah.
    [(c) Appropriate Congressional Committees and Leadership 
Defined.--In this section, the term ``appropriate congressional 
committees and leadership'' means--
            [(1) the Speaker, the minority leader, the 
        Committee on Foreign Affairs, the Committee on 
        Financial Services, the Committee on the Judiciary, and 
        the Permanent Select Committee on Intelligence of the 
        House of Representatives; and
            [(2) the majority leader, the minority leader, the 
        Committee on Foreign Relations, the Committee on 
        Banking, Housing, and Urban Affairs, the Committee on 
        Finance, the Committee on the Judiciary, and the Select 
        Committee on Intelligence of the Senate.

[SEC. 202. REPORT AND BRIEFING ON SIGNIFICANT TRANSNATIONAL CRIMINAL 
                    ACTIVITIES OF HIZBALLAH.

    [(a) Report.--
            [(1) In general.--Not later than 120 days after the 
        date of the enactment of this Act, the President shall 
        submit to the appropriate congressional committees and 
        leadership a report on the significant transnational 
        criminal activities of Hizballah, including human 
        trafficking.
            [(2) Form.--The report required by paragraph (1) 
        shall be submitted in unclassified form to the greatest 
        extent possible, but may include a classified annex.
    [(b) Briefing.--Not later than 30 days after the submission 
of the report required by subsection (a), the President shall 
provide to the appropriate congressional committees and 
leadership a briefing on--
            [(1) the report;
            [(2) procedures for designating Hizballah as a 
        significant transnational criminal organization under 
        Executive Order 13581 (75 Fed. Reg. 44,757); and
            [(3) Government-wide efforts to combat the 
        transnational criminal activities of Hizballah.
    [(c) Appropriate Congressional Committees and Leadership 
Defined.--In this section, the term ``appropriate congressional 
committees and leadership'' means--
            [(1) the Speaker, the minority leader, the 
        Committee on Foreign Affairs, the Committee on 
        Financial Services, the Committee on the Judiciary, and 
        the Permanent Select Committee on Intelligence of the 
        House of Representatives; and
            [(2) the majority leader, the minority leader, the 
        Committee on Foreign Relations, the Committee on 
        Banking, Housing, and Urban Affairs, the Committee on 
        Finance, the Committee on the Judiciary, and the Select 
        Committee on Intelligence of the Senate.]

SEC. 201. IMPOSITION OF SANCTIONS WITH RESPECT TO AFFILIATED NETWORKS 
                    OF HIZBALLAH.

    (a) In General.--Not later than 120 days after the date of 
the enactment of this section, and as appropriate thereafter, 
the President shall impose the sanctions described in 
subsection (b) with respect to affiliated networks of 
Hizballah, including by reason of significant transnational 
criminal activities of such networks.
    (b) Sanctions Described.--The sanctions described in this 
subsection are sanctions applied with respect to a foreign 
person pursuant to Executive Order 13581 (75 Fed. Reg. 44,757) 
(as such Executive order was in effect on the day before the 
date of the enactment of this section).
    (c) Definition.--In this section, the term ``Hizballah'' 
has the meaning given such term in section 102(f).

SEC. 202. REPORT ON RACKETEERING ACTIVITIES ENGAGED IN BY HIZBALLAH.

    (a) In General.--Not later than 120 days after the date of 
the enactment of the Hizballah International Financing 
Prevention Amendments Act of 2017, and annually thereafter for 
the following 5 years, the Assistant Attorney General for the 
Criminal Division of the Department of Justice and the 
Administrator of the Drug Enforcement Administration, in 
coordination with the Secretary of the Treasury and the heads 
of other applicable Federal agencies, shall jointly submit to 
the appropriate congressional committees a report on the 
following:
            (1) Activities that Hizballah, and agents and 
        affiliates of Hizballah, have engaged in that are 
        racketeering activities.
            (2) The extent to which Hizballah, and agents and 
        affiliates of Hizballah, engage in a pattern of such 
        racketeering activities.
    (b) Form of Report.--Each report required under subsection 
(a) shall be submitted in an unclassified form but may contain 
a classified annex.
    (c) Definitions.--In this section:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on the Judiciary and the 
                Committee on Foreign Affairs of the House of 
                Representatives; and
                    (B) the Committee on the Judiciary and the 
                Committee on Foreign Relations of the Senate.
            (2) Hizballah.--The term ``Hizballah'' has the 
        meaning given that term in section 102(f).
            (3) Racketeering activity.--The term ``racketeering 
        activity'' has the meaning given that term in section 
        1961(1) of title 18, United States Code.

           *       *       *       *       *       *       *


SEC. 204. REPORT ON ACTIVITIES OF FOREIGN GOVERNMENTS TO DISRUPT GLOBAL 
                    LOGISTICS NETWORKS AND FUNDRAISING, FINANCING, AND 
                    MONEY LAUNDERING ACTIVITIES OF HIZBALLAH.

    (a) Report.--
            (1) In general.--Not later than 90 days after the 
        date of the enactment of [this Act] the Hizballah 
        International Financing Prevention Amendments Act of 
        2017, and annually thereafter for the following 5 
        years, the President shall submit to the appropriate 
        congressional committees a report that includes--
                    (A) a list of countries that support 
                Hizballah or in which Hizballah maintains 
                important portions of its global logistics 
                networks;
                    (B) with respect to each country on the 
                list required by subparagraph (A)--
                            (i) an assessment of whether the 
                        government of the country is taking 
                        adequate measures to disrupt the global 
                        logistics networks of Hizballah within 
                        the territory of the country; and
                            (ii) in the case of a country the 
                        government of which is not taking 
                        adequate measures to disrupt such 
                        networks--
                                    (I) an assessment of the 
                                reasons that government is not 
                                taking such adequate measures; 
                                and
                                    (II) a description of 
                                measures being taken by the 
                                United States to encourage that 
                                government to improve measures 
                                to disrupt such networks;
                    (C) a list of countries in which Hizballah, 
                or any of its agents or affiliates, conducts 
                significant fundraising, financing, or money 
                laundering activities;
                    (D) with respect to each country on the 
                list required by subparagraph (C)--
                            (i) an assessment of whether the 
                        government of the country is taking 
                        adequate measures to disrupt the 
                        fundraising, financing, or money 
                        laundering activities of Hizballah and 
                        its agents and affiliates within the 
                        territory of the country; and
                            (ii) in the case of a country the 
                        government of which is not taking 
                        adequate measures to disrupt such 
                        activities--
                                    (I) an assessment of the 
                                reasons that government is not 
                                taking such adequate measures; 
                                and
                                    (II) a description of 
                                measures being taken by the 
                                United States to encourage that 
                                government to improve measures 
                                to disrupt such activities; 
                                [and]
                    (E) a list of methods that Hizballah, or 
                any of its agents or affiliates, utilizes to 
                raise or transfer funds, including trade-based 
                money laundering, the use of foreign exchange 
                houses, [and free-trade zones.] free-trade 
                zones, business partnerships and joint 
                ventures, and other investments in small and 
                medium-sized enterprises;
                    (F) a list of provinces, municipalities, 
                and local governments outside of Lebanon that 
                expressly consent to, or with knowledge allow, 
                tolerate, or disregard the use of their 
                territory by Hizballah to carry out terrorist 
                activities, including training, financing, and 
                recruitment;
                    (G) a description of the total aggregate 
                revenues and remittances that Hizballah 
                receives from the global logistics networks of 
                Hizballah, including--
                            (i) a list of Hizballah's sources 
                        of revenue, including sources of 
                        revenue based on illicit activity, 
                        revenues from Iran, charities, and 
                        other business activities; and
                            (ii) a list of Hizballah's 
                        expenditures, including expenditures 
                        for ongoing military operations, social 
                        networks, and external operations;
                    (H) a survey of national and transnational 
                legal measures available to target Hizballah's 
                financial networks;
                    (I) a review of Hizballah's international 
                operational capabilities, including in the 
                United States; and
                    (J) a review of--
                            (i) the total number and value of 
                        Hizballah-related assets seized and 
                        forfeited; and
                            (ii) the total number of 
                        indictments, prosecutions, and 
                        extraditions of Hizballah members or 
                        affiliates.
            (2) Form.--The report required by paragraph (1) 
        shall be submitted in unclassified form to the greatest 
        extent possible, and may contain a classified annex.
            (3) Global logistics networks of hizballah.--In 
        this subsection, the term ``global logistics networks 
        of Hizballah'', ``global logistics networks'', or 
        ``networks'' means financial, material, or 
        technological support for, or financial or other 
        services in support of, Hizballah.
    (b) Briefing on Hizballah's Assets and Activities Related 
To Fundraising, Financing, and Money Laundering Worldwide.--Not 
later than 90 days after the date of the enactment of this Act, 
and every 180 days thereafter, the Secretary of State, the 
Secretary of the Treasury, and the heads of other applicable 
Federal departments and agencies shall provide to the 
appropriate congressional committees a briefing on the 
disposition of Hizballah's assets and activities related to 
fundraising, financing, and money laundering worldwide.
    (c) Appropriate Congressional Committees Defined.--In this 
section, the term ``appropriate congressional committees'' 
means--
            (1) the Committee on Foreign Affairs, the Committee 
        on Financial Services, and the Permanent Select 
        Committee on Intelligence of the House of 
        Representatives; and
            (2) the Committee on Foreign Relations, the 
        Committee on Banking, Housing, and Urban Affairs, and 
        the Select Committee on Intelligence of the Senate.

           *       *       *       *       *       *       *

                              ----------                              


  COMPREHENSIVE IRAN SANCTIONS, ACCOUNTABILITY, AND DIVESTMENT ACT OF 
                                  2010



           *       *       *       *       *       *       *
TITLE I--SANCTIONS

           *       *       *       *       *       *       *


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)), 
                        including Hizballah (as defined in 
                        section 102(f)(1)(E) of the Hizballah 
                        International Financing Prevention Act 
                        of 2015 (Public Law 114-102; 50 U.S.C. 
                        1701 note)), and any affiliates or 
                        successors thereof, 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--
                            (i) 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; or
                            (ii) a person acting on behalf of 
                        or at the direction of, or owned or 
                        controlled by, a person described in 
                        clause (i);
                    (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 person 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.
            (4) Determinations regarding nioc and nitc.--
                    (A) Determinations.--For purposes of 
                paragraph (2)(E), the Secretary of the Treasury 
                shall, not later than 45 days after the date of 
                the enactment of the Iran Threat Reduction and 
                Syria Human Rights Act of 2012--
                            (i) determine whether the NIOC or 
                        the NITC is an agent or affiliate of 
                        Iran's Revolutionary Guard Corps; and
                            (ii) submit to the appropriate 
                        congressional committees a report on 
                        the determinations made under clause 
                        (i), together with the reasons for 
                        those determinations.
                    (B) Form of report.--A report submitted 
                under subparagraph (A)(ii) shall be submitted 
                in unclassified form but may contain a 
                classified annex.
                    (C) Applicability with respect to petroleum 
                transactions.--
                            (i) Application of sanctions.--
                        Except as provided in clause (ii), if 
                        the Secretary of the Treasury 
                        determines that the NIOC or the NITC is 
                        a person described in clause (i) or 
                        (ii) of paragraph (2)(E), the 
                        regulations prescribed under paragraph 
                        (1) shall apply with respect to a 
                        significant transaction or transactions 
                        or significant financial services 
                        knowingly facilitated or provided by a 
                        foreign financial institution for the 
                        NIOC or the NITC, as applicable, for 
                        the purchase of petroleum or petroleum 
                        products from Iran, only if a 
                        determination of the President under 
                        section 1245(d)(4)(B) of the National 
                        Defense Authorization Act for Fiscal 
                        Year 2012 (22 U.S.C. 8513a(d)(4)(B)) 
                        that there is a sufficient supply of 
                        petroleum and petroleum products 
                        produced in countries other than Iran 
                        to permit purchasers of petroleum and 
                        petroleum products from Iran to reduce 
                        significantly their purchases from Iran 
                        is in effect at the time of the 
                        transaction or the provision of the 
                        service.
                            (ii) Exception for certain 
                        countries.--If the Secretary of the 
                        Treasury determines that the NIOC or 
                        the NITC is a person described in 
                        clause (i) or (ii) of paragraph (2)(E), 
                        the regulations prescribed under 
                        paragraph (1) shall not apply to a 
                        significant transaction or transactions 
                        or significant financial services 
                        knowingly facilitated or provided by a 
                        foreign financial institution for the 
                        NIOC or the NITC, as applicable, for 
                        the purchase of petroleum or petroleum 
                        products from Iran if an exception 
                        under paragraph (4)(D) of section 
                        1245(d) of the National Defense 
                        Authorization Act for Fiscal Year 2012 
                        (22 U.S.C. 8513a(d)) applies to the 
                        country with primary jurisdiction over 
                        the foreign financial institution at 
                        the time of the transaction or the 
                        provision of the service.
                            (iii) Rule of construction.--The 
                        exceptions in clauses (i) and (ii) 
                        shall not be construed to limit the 
                        authority of the Secretary of the 
                        Treasury to impose sanctions pursuant 
                        to the regulations prescribed under 
                        paragraph (1) for an activity described 
                        in paragraph (2) to the extent the 
                        activity would meet the criteria 
                        described in that paragraph in the 
                        absence of the involvement of the NIOC 
                        or the NITC.
                    (D) Definitions.--In this paragraph:
                            (i) Nioc.--The term ``NIOC'' means 
                        the National Iranian Oil Company.
                            (ii) Nitc.--The term ``NITC'' means 
                        the National Iranian Tanker Company.
    (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 section 104A 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 paragraph (1) 
        or (4) of subsection (c) or section 104A, 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 paragraph 
        (1) or (4) of subsection (c) or section 104A, 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.

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