[House Report 111-342]
[From the U.S. Government Publishing Office]
111th Congress Rept. 111-342
HOUSE OF REPRESENTATIVES
1st Session Part 1
======================================================================
IRAN REFINED PETROLEUM SANCTIONS ACT OF 2009
_______
November 19, 2009.--Ordered to be printed
_______
Mr. Berman, from the Committee on Foreign Affairs, submitted the
following
R E P O R T
[To accompany H.R. 2194]
[Including cost estimate of the Congressional Budget Office]
The Committee on Foreign Affairs, to whom was referred the
bill (H.R. 2194) to amend the Iran Sanctions Act of 1996 to
enhance United States diplomatic efforts with respect to Iran
by expanding economic sanctions against Iran, having 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.............................................. 8
Background and Need for the Legislation.......................... 8
Hearings......................................................... 11
Committee Consideration.......................................... 11
Votes of the Committee........................................... 11
Committee Oversight Findings..................................... 11
New Budget Authority and Tax Expenditures........................ 12
Congressional Budget Office Cost Estimate........................ 12
Performance Goals and Objectives................................. 14
Constitutional Authority Statement............................... 14
New Advisory Committees.......................................... 14
Congressional Accountability Act................................. 14
Earmark Identification........................................... 14
Section-by-Section Analysis and Discussion....................... 14
Changes in Existing Law Made by the Bill, as Reported............ 20
The Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Iran Refined Petroleum Sanctions Act
of 2009''.
SEC. 2. FINDINGS; SENSE OF CONGRESS; STATEMENT OF POLICY.
(a) Findings.--Congress finds the following:
(1) The illicit nuclear activities of the Government of
Iran--combined with its development of unconventional weapons
and ballistic missiles, and support for international
terrorism--represent a serious threat to the security of the
United States and U.S. allies in Europe, the Middle East, and
around the world.
(2) The United States and other responsible nations have a
vital interest in working together to prevent the Government of
Iran from acquiring a nuclear weapons capability.
(3) The International Atomic Energy Agency has repeatedly
called attention to Iran's unlawful nuclear activities, and, as
a result, the United Nations Security Council has adopted a
range of sanctions designed to encourage the Government of Iran
to suspend those activities and comply with its obligations
under the Treaty on the Non-Proliferation of Nuclear Weapons
(commonly known as the ``Nuclear Non-Proliferation Treaty'').
(4) As a presidential candidate, then-Senator Obama stated
that additional sanctions, especially those targeting Iran's
dependence on imported refined petroleum, may help to persuade
the Government of Iran to abandon its illicit nuclear
activities.
(5) On October 7, 2008, then-Senator Obama stated, ``Iran
right now imports gasoline, even though it's an oil producer,
because its oil infrastructure has broken down. If we can
prevent them from importing the gasoline that they need and the
refined petroleum products, that starts changing their cost-
benefit analysis. That starts putting the squeeze on them.''.
(6) On June 4, 2008, then-Senator Obama stated, ``We should
work with Europe, Japan, and the Gulf states to find every
avenue outside the U.N. to isolate the Iranian regime--from
cutting off loan guarantees and expanding financial sanctions,
to banning the export of refined petroleum to Iran.''.
(7) Major European allies, including the United Kingdom,
France, and Germany, have advocated that sanctions be
significantly toughened should international diplomatic efforts
fail to achieve verifiable suspension of Iran's uranium
enrichment program and an end to its nuclear weapons program
and other illicit nuclear activities.
(8) The serious and urgent nature of the threat from Iran
demands that the United States work together with U.S. allies
to do everything possible--diplomatically, politically, and
economically--to prevent Iran from acquiring a nuclear weapons
capability.
(9) The human rights situation in Iran has steadily
deteriorated in 2009, as punctuated by the transparent fraud
that occurred on June 12, the brutal repression and murder,
arbitrary arrests, and show trials of peaceful dissidents, and
ongoing suppression of freedom of expression.
(b) Sense of Congress.--It is the sense of the Congress that--
(1) international diplomatic efforts to address Iran's
illicit nuclear efforts, unconventional and ballistic missile
development programs, and support for international terrorism
are more likely to be effective if the President is empowered
with the explicit authority to impose additional sanctions on
the Government of Iran;
(2) the concerns of the United States regarding Iran are
strictly the result of the actions of the Government of Iran;
(3) the revelation in September 2009 that Iran is
developing a secret uranium enrichment site on an Islamic
Revolutionary Guard Corps base near Qom, which appears to have
no civilian application, highlights the urgency for Iran to
fully disclose the full nature of its nuclear program,
including any other secret locations, and provide the
International Atomic Energy Agency (IAEA) unfettered access to
its facilities pursuant to Iran's legal obligations under the
Treaty on the Non-Proliferation of Nuclear Weapons and Iran's
Safeguards Agreement with the IAEA;
(4) because of its involvement in Iran's nuclear program
and other destabilizing activities, the President should impose
sanctions, including the full range of sanctions otherwise
applicable to Iran, on any individual or entity that is an
agent, alias, front, instrumentality, representative, official,
or affiliate of the Islamic Revolutionary Guard Corps or is an
individual serving as a representative of the Islamic
Revolutionary Guard Corps, or on any person that has conducted
any commercial transaction or financial transaction with such
entities;
(5) Government to Government agreements with Iran to
provide the regime with refined petroleum products, such as the
September 2009 agreement under which the Government of
Venezuela committed to provide 20,000 barrels of gasoline per
day to Iran, undermine efforts to pressure Iran to suspend its
nuclear weapons program and cease all enrichment activities;
and
(6) the people of the United States--
(A) have feelings of friendship for the people of
Iran; and
(B) hold the people of Iran, their culture, and
their ancient and rich history in the highest esteem.
(c) Statement of Policy.--It shall be the policy of the United
States--
(1) to prevent Iran from achieving the capability to make
nuclear weapons, including by supporting international
diplomatic efforts to halt Iran's uranium enrichment program;
(2) to fully implement and enforce the Iran Sanctions Act
of 1996 as a means of encouraging foreign governments to--
(A) direct state-owned entities to cease all
investment in, and support of, Iran's energy sector and
all exports of refined petroleum products to Iran; and
(B) require private entities based in their
territories to cease all investment in, and support of,
Iran's energy sector and all exports of refined
petroleum products to Iran;
(3) to impose sanctions on--
(A) the Central Bank of Iran, and any other
financial institution in Iran that is engaged in
proliferation activities or support of terrorist
groups, and
(B) any other financial institution that conducts
financial transactions with the Central Bank of Iran or
with another financial institution described in
subparagraph (A),
including through the use of Executive Orders 13224, 13382, and
13438 and United Nations Security Council Resolutions 1737,
1747, 1803, and 1835;
(4) to persuade the allies of the United States and other
countries to take appropriate measures to deny access to the
international financial system by Iranian banks and financial
institutions involved in proliferation activities or support of
terrorist groups;
(5) to support all Iranian citizens who embrace the values
of freedom, human rights, civil liberties, and the rule of law;
and
(6) for the Secretary of State to make every effort to
assist United States citizens held hostage in Iran at any time
during the period beginning on November 4, 1979 and ending on
January 20, 1981, and their survivors in matters of
compensation related to such citizens' detention.
SEC. 3. AMENDMENTS TO THE IRAN SANCTIONS ACT OF 1996.
(a) Expansion of Sanctions.--Section 5(a) of the Iran Sanctions Act
of 1996 (50 U.S.C. 1701 note) is amended to read as follows:
``(a) Sanctions With Respect to the Development of Petroleum
Resources of Iran and Exportation of Refined Petroleum to Iran.--
``(1) Development of petroleum resources of iran.--
``(A) Investment.--Except as provided in subsection
(f), the President shall impose 2 or more of the
sanctions described in paragraphs (1) through (6) of
section 6(a) if the President determines that a person
has knowingly, on or after the date of the enactment of
this Act, made an investment of $20,000,000 or more (or
any combination of investments of at least $5,000,000
each, which in the aggregate equals or exceeds
$20,000,000 in any 12-month period), that directly and
significantly contributed to the enhancement of Iran's
ability to develop petroleum resources of Iran.
``(B) Production of refined petroleum products.--
Except as provided in subsection (f), the President
shall impose the sanctions described in section 6(b) if
the President determines that a person knowingly sells,
leases, or provides to Iran any goods, services,
technology, information, or support, or enters into a
contract to sell, lease, or provide to Iran any goods,
services, technology, information, or support, that
would allow Iran to maintain or expand its domestic
production of refined petroleum products, including any
assistance in the construction, modernization, or
repair of refineries that make refined petroleum
products, if--
``(i) the value of the goods, services,
technology, information, or support provided in
such sale, lease, or provision, or to be
provided in such contract, exceeds $200,000; or
``(ii) the value of the goods, services,
technology, information, or support provided in
any combination of such sales, leases, or
provision in any 12-month period, or to be
provided under contracts entered into in any
12-month period, exceeds $500,000.
``(2) Exportation of refined petroleum products to iran.--
``(A) In general.--Except as provided in subsection
(f), the President shall impose the sanctions described
in section 6(b) if the President determines that a
person knowingly provides Iran with refined petroleum
products or engages in any of the activities described
in subparagraph (B), if--
``(i) the value of such products or of the
goods, services, technology, information, or
support provided or to be provided in
connection with such activity exceeds $200,000;
or
``(ii) the value of such products, or of
the goods, services, technology, information,
or support, provided or to be provided in
connection with any combination of providing
such products or such activities, in any 12-
month period exceeds $500,000.
``(B) Activities described.--The activities
referred to in subparagraph (A) are the following:
``(i) Providing ships, vehicles, or other
means of transportation to deliver refined
petroleum products to Iran, or providing
services relating to the shipping or other
transportation of refined petroleum products to
Iran.
``(ii) Underwriting or otherwise providing
insurance or reinsurance for an activity
described in clause (i).
``(iii) Financing or brokering an activity
described in clause (i).''.
(b) Description of Sanctions.--Section 6 of such Act is amended--
(1) by striking ``The sanctions to be imposed on a
sanctioned person under section 5 are as follows:'' and
inserting the following:
``(a) In General.--The sanctions to be imposed on a sanctioned
person under subsections (a)(1)(A) and (b)(1) of section 5 are as
follows:'';
(2) in paragraph (4), by striking ``section 5'' each place
it appears and inserting ``subsections (a)(1)(A) and (b) of
section 5''; and
(3) by adding at the end the following:
``(b) Additional Mandatory Sanctions.--The sanctions to be imposed
on a sanctioned person under paragraphs (1)(B) and (2) of section 5(a)
are as follows:
``(1) Foreign exchange.--The President shall prohibit any
transactions in foreign exchange by the sanctioned person.
``(2) Banking transactions.--The President shall prohibit
any transfers of credit or payments between, by, through, or to
any financial institution, to the extent that such transfers or
payments involve any interest of the sanctioned person.
``(3) Property transactions.--The President shall prohibit
any acquisition, holding, withholding, use, transfer,
withdrawal, transportation, importation, or exportation of,
dealing in, or exercising any right, power, or privilege with
respect to, or transactions involving, any property in which
the sanctioned person has any interest by any person, or with
respect to any property, subject to the jurisdiction of the
United States.
``(c) Additional Measure Relating to Refined Petroleum Products.--
``(1) In general.--The head of each executive agency shall
ensure that each contract with a person entered into by such
executive agency for the procurement of goods or services, or
agreement for the use of Federal funds as part of a grant,
loan, or loan guarantee to a person, includes a clause that
requires the person to certify to the contracting officer or
other appropriate official of such agency that the person does
not conduct any activity described in paragraph (1)(B) or (2)
of section 5(a).
``(2) Remedies.--
``(A) In general.--If the head of the executive
agency determines that such person has submitted a
false certification under paragraph (1) after the date
on which the Federal Acquisition Regulation is revised
to implement the requirements of this subsection, the
head of an executive agency may terminate a contract,
or agreement described in paragraph (1), with such
person or debar or suspend such person from eligibility
for Federal contracts or such agreements for a period
not to exceed 15 years.
``(B) Inclusion on list of parties excluded from
federal procurement and nonprocurement programs.--The
Administrator of General Services shall include on the
List of Parties Excluded from Federal Procurement and
Nonprocurement Programs maintained by the Administrator
under part 9 of the Federal Acquisition Regulation
issued under section 25 of the Office of Federal
Procurement Policy Act (41 U.S.C. 421) each person that
is debarred, suspended, proposed for debarment or
suspension, or declared ineligible by the head of an
executive agency on the basis of a determination of a
false certification under subparagraph (A).
``(C) Rule of construction.--This subsection shall
not be construed to limit the use of other remedies
available to the head of an executive agency or any
other official of the Federal Government on the basis
of a determination of a false certification under
paragraph (1).
``(3) Implementation through the federal acquisition
regulation.--Not later than 120 days after the date of the
enactment of the Iran Refined Petroleum Sanctions Act of 2009,
the Federal Acquisition Regulation issued pursuant to section
25 of the Office of Federal Procurement Policy Act (41 U.S.C.
421) shall be revised to provide for the implementation of the
requirements of this subsection.''.
(c) Additional Mandatory Sanctions Relating to Transfer of Nuclear
Technology.--Section 5(b) of the Iran Sanctions Act of 1996 is
amended--
(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and moving such
paragraphs 2 ems to the right;
(2) by striking ``The President shall impose'' and
inserting the following:
``(1) In general.--The President shall impose'';
(3) by striking ``section 6'' and inserting ``section
6(a)''; and
(4) by adding at the end the following:
``(2) Additional sanction.--
``(A) Restriction.--In any case in which a person
is subject to sanctions under paragraph (1) because of
an activity described in such paragraph that relates to
the acquisition or development of nuclear weapons or
related technology or of missiles or other advanced
conventional weapons that are capable of delivering a
nuclear weapon, then notwithstanding any other
provision of law, the following measures shall apply
with respect to the country that has jurisdiction over
such person, unless the President determines and
notifies the appropriate congressional committees that
the government of such country has taken, or is taking,
effective actions to penalize such person and to
prevent a reoccurrence of such activity in the future:
``(i) No agreement for cooperation between
the United States and the government of such
country may be submitted to the President or to
Congress pursuant to section 123 of the Atomic
Energy Act of 1954 (42 U.S.C. 2153), or may
enter into force.
``(ii) No license may be issued for the
export, and no approval may be given for the
transfer or retransfer, directly or indirectly,
to such country of any nuclear material,
facilities, components, or other goods,
services, or technology that would be subject
to an agreement to cooperation.
``(B) Construction.--The restrictions in
subparagraph (A) shall apply in addition to all other
applicable procedures, requirements, and restrictions
contained in the Atomic Energy Act of 1954 and other
laws.
``(C) Definition.--In this paragraph, the term
`agreement for cooperation' has the meaning given that
term in section 11 b. of the Atomic Energy Act of 1954
(42 U.S.C. 2014(b)).''.
(d) Strengthening of Waiver Authority and Sanctions
Implementation.--
(1) Investigations.--Section 4(f) of the Iran Sanctions Act
of 1996 (50 U.S.C. 1701 note) is amended--
(A) in paragraph (1)--
(i) by striking ``should initiate'' and
inserting ``shall immediately initiate'';
(ii) by inserting ``or 5(b)'' after
``section 5(a)''; and
(iii) by striking ``as described in such
section'' and inserting ``as described in
section 5(a)(1) or other activity described in
section 5(a)(2) or 5(b) (as the case may be)'';
and
(B) in paragraph (2), by striking ``should
determine, pursuant to section 5(a), if a person has
engaged in investment activity in Iran as described in
such section'' and inserting ``shall determine,
pursuant to section 5(a) or (b) (as the case may be),
if a person has engaged in investment activity in Iran
as described in section 5(a)(1) or other activity
described in section 5(a)(2) or 5(b) (as the case may
be)''.
(2) General waiver authority.--Section 9(c) of the Iran
Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended--
(A) in paragraph (1)--
(i) by inserting after ``on a person
described in section 5(c),'' the following:
``or on a country described in section
5(b)(2)(A) (if the President certifies to the
appropriate congressional committees that the
President is unable to make the determination
described in such section 5(b)(2)(A) with
respect to the government of that country),'';
and
(ii) by striking ``important to the
national interest of the United States'' and
inserting ``vital to the national security
interest of the United States''; and
(B) in paragraph (2)--
(i) in subparagraphs (A), (B), and (D), by
striking ``or (b)'' each place it appears and
inserting ``or (b)(1)''; and
(ii) by amending subparagraph (C) to read
as follows:
``(C) an estimate of the significance of the
provision of the items described in paragraph (1) or
(2) of section 5(a) or section 5(b)(1) to Iran's
ability to develop its petroleum resources, to maintain
or expand its domestic production of refined petroleum
products, to import refined petroleum products, or to
develop its weapons of mass destruction or other
military capabilities (as the case may be); and''.
(e) Reports on United States Efforts To Curtail Certain Business
and Other Transactions Relating to Iran.--Section 10 of such Act is
amended--
(1) in subsection (a), by amending paragraph (4) to read as
follows:
``(4) Iran's use in the Middle East, the Western
Hemisphere, Africa, and other regions, of Iranian diplomats and
representatives of other government and military or quasi-
governmental institutions or proxies of Iran, including, but
not limited to, Hezbollah, to promote acts of international
terrorism or to develop or sustain Iran's nuclear, chemical,
biological, and missile weapons programs.''; and
(2) by adding at the end the following:
``(d) Reports on Certain Business and Other Transactions Relating
to Iran.--
``(1) In general.--Not later than 90 days after the date of
the enactment of the Iran Refined Petroleum Sanctions Act of
2009, and every 6 months thereafter, the President shall submit
a report to the appropriate congressional committees regarding
any person who has--
``(A) provided Iran with refined petroleum
products;
``(B) sold, leased, or provided to Iran any goods,
services, or technology that would allow Iran to
maintain or expand its domestic production of refined
petroleum products; or
``(C) engaged in any activity that could contribute
to the enhancement of Iran's ability to import refined
petroleum products.
``(2) Description.--For each activity set forth in
subparagraphs (A) through (C) of paragraph (1), the President
shall provide a complete and detailed description of such
activity, including--
``(A) the date or dates of such activity;
``(B) the name of any persons who participated or
invested in or facilitated such activity;
``(C) the United States domiciliary of the persons
referred to in subparagraph (B);
``(D) any Federal Government contracts to which the
persons referred to in subparagraph (B) are parties;
and
``(E) the steps taken by the United States to
respond to such activity.
``(3) Additional information.--The report required by this
subsection shall also include a list of--
``(A) any person that the President determines is
an agent, alias, front, instrumentality,
representative, official, or affiliate of the Islamic
Revolutionary Guard Corps or is an individual serving
as a representative of the Islamic Revolutionary Guard
Corps;
``(B) any person that the President determines has
knowingly provided material support to the Islamic
Revolutionary Guard Corps or an agent, alias, front,
instrumentality, representative, official, or affiliate
of the Islamic Revolutionary Guard Corps; and
``(C) any person who has conducted any commercial
transaction or financial transaction with the Islamic
Revolutionary Guards Corps or an agent, alias, front,
instrumentality, representative, official, or affiliate
of the Islamic Revolutionary Guard Corps.
``(4) Form of reports; publication.--The reports required
under this subsection shall be--
``(A) submitted in unclassified form, but may
contain a classified annex; and
``(B) published in the Federal Register.
``(e) Reports on Global Trade Relating to Iran.--Not later than one
year after the date of the enactment of the Iran Refined Petroleum
Sanctions Act of 2009 and annually thereafter, the President shall
submit to the appropriate congressional committees a report, with
respect to the immediately preceding 12-month period, on the dollar
value amount of trade, including in the energy sector, between Iran and
each country maintaining membership in the Group of Twenty Finance
Ministers and Central Bank Governors.''.
(f) Clarification and Expansion of Definitions.--Section 14 of such
Act is amended--
(1) in paragraph (13)(B)--
(A) by inserting ``financial institution, insurer,
underwriter, guarantor, any other business
organization, including any foreign subsidiary, parent,
or affiliate of such a business organization,'' after
``trust,''; and
(B) by inserting ``, such as an export credit
agency'' before the semicolon at the end;
(2) by redesignating paragraphs (15) and (16) as paragraphs
(17) and (18), respectively; and
(3) by striking paragraph (14) and inserting the following:
``(14) Knowingly.--The term `knowingly' means--
``(A) having actual knowledge; or
``(B) having the constructive knowledge deemed to
be possessed by a reasonable individual who acts under
similar circumstances.
``(15) Petroleum resources.--The term `petroleum resources'
includes petroleum, oil or liquefied natural gas, oil or
liquefied natural gas tankers, and products used to construct
or maintain pipelines used to transport oil or compressed or
liquefied natural gas.
``(16) Refined petroleum products.--The term `refined
petroleum products' means gasoline, kerosene, diesel fuel,
residual fuel oil, and distillates and other goods classified
in headings 2709 and 2710 of the Harmonized Tariff Schedule of
the United States.''.
(g) Termination of Certain Provisions.--Section 8 of the Iran
Sanctions Act of 1996 is amended--
(1) by striking ``The requirement under section 5(a)'' and
inserting ``(a) Sanctions Relating to Investment.--The
requirement under section 5(a)(1)(A)'';
(2) by striking ``with respect to Iran''; and
(3) by adding at the end the following:
``(b) Refined Petroleum Products.--The requirements under
paragraphs (1)(B) and (2) of section 5(a) and section 6(b) to impose
sanctions shall no longer have force or effect if the President
determines and certifies to the appropriate congressional committees
that Iran--
``(1) has ceased its efforts to design, develop,
manufacture, or acquire a nuclear explosive device or related
materials and technology; and
``(2) has ceased nuclear-related activities, including
uranium enrichment, that would facilitate the efforts described
in paragraph (1).''.
(h) Extension of Act.--Section 13(b) of the Iran Sanctions Act of
1996 is amended by striking ``2011'' and inserting ``2016''.
(i) Technical Amendments.--
(1) Multilateral regime.--Section 4 of such Act is
amended--
(A) in subsection (b)(2), by striking ``(in
addition to that provided in subsection (d))''; and
(B) by striking subsection (d) and redesignating
subsections (e) and (f) as subsections (d) and (e),
respectively.
(2) Reference to committee on foreign affairs.--Section
14(2) of such Act is amended by striking ``International
Relations'' and inserting ``Foreign Affairs''.
(3) Conforming amendments.--(A) Section 5(c)(1) of such Act
is amended by striking ``or (b)'' and inserting ``or (b)(1)''.
(B) Section 9(a) of such Act is amended by striking ``or
5(b)'' each place it appears and inserting ``or 5(b)(1)''.
SEC. 4. EFFECTIVE DATE; RULE OF CONSTRUCTION.
(a) In General.--The amendments made by this Act shall take effect
upon the expiration of the 60-day period beginning on the date of the
enactment of this Act, except that--
(1) paragraphs (1) and (2) of section 5(a), section
5(b)(2), and section 6(b), of the Iran Sanctions Act of 1996,
as amended by this Act, shall apply to conduct engaged in on or
after October 28, 2009, notwithstanding section 5(f)(3) of the
Iran Sanctions Act of 1996; and
(2) the amendments made by subsection (d) of section 3 of
this Act shall apply with respect to conduct engaged in before,
on, or after the date of the enactment of this Act.
(b) Rule of Construction.--
(1) Existing sanctions not affected.--The amendments made
by subsections (a) and (b) of section 3 of this Act shall not
be construed to affect the requirements of section 5(a) of the
Iran Sanctions Act of 1996 as in effect before the date of the
enactment of this Act, and such requirements continue to apply,
on and after such date of enactment, to conduct engaged in
before October 28, 2009.
(2) Waiver authority.--The amendments made by subsection
(d) of section 3 of this Act shall not be construed to affect
any exercise of the authority under section 4(f) or section
9(c) of the Iran Sanctions Act of 1996 as in effect on the day
before the date of the enactment of this Act.
Summary and Purpose
H.R. 2194, the Iran Refined Petroleum Sanctions Act of 2009
(IRPSA), amends the Iran Sanctions Act of 1996 to provide
additional sanctions specifically related to Iran's production
of refined petroleum products and the export to Iran of such
products, among other measures. The purpose of the legislation
is to pressure the Government of Iran to verifiably suspend,
and ultimately dismantle its weapons-applicable nuclear
program, including, but not exclusive to, the ceasing of all
uranium enrichment activities through the application of
targeted sanctions. The sanctions will terminate once the
President determines that Iran has ceased its efforts to
design, develop, manufacture or acquire a nuclear explosive
device or related materials and technology, and has ceased
nuclear-related activities, including uranium enrichment, that
would facilitate such efforts.
Background and Need for the Legislation
Iran poses a significant threat to the United States and
our allies in the Middle East and elsewhere. Preventing Iran
from acquiring weapons of mass destruction, in particular
nuclear weapons, and ending its support for international
terrorism are vital U.S. national security interests. This
legislation is aimed at restricting economic activity that
relies on refined petroleum products in Iran, thereby
pressuring the Iranian regime to cease its nuclear program.
Iran's economy, and Iran's ability to influence events, is
heavily dependent on the revenue derived from energy exports.
Accordingly, most recent U.S. efforts to prevent Iran from
acquiring nuclear weapons have sought to deter foreign
investment in Iran's petroleum sector, thereby limiting Iran's
energy sector profits. Legislatively, this goal was first
embodied in the Iran and Libya Sanctions Act of 1996, P.L. 104-
172 (``ILSA,'' now referred to as the Iran Sanctions Act, or
``ISA''), which was passed in 1996 for a five-year period and
has been renewed twice, in 2001 and 2006, for additional five-
year periods. Although ISA was enacted more than a decade ago,
no Administration has sanctioned a foreign entity for investing
$20 million or more in Iran's energy sector, as specified in
the legislation, despite several such investments. Indeed, on
only one occasion, in 1998, the Administration made a
determination regarding a sanctions-triggering investment, but
the Administration waived sanctions against the offending
persons. The Committee believes that because of the lack of
enforcement of relevant enacted sanctions, measures to date
have not prevented or constrained Iran's efforts to pursue
nuclear weapons.
Despite the Executive Branch's failure to fully implement
the ISA, the legislation has made a positive contribution to
United States national security. Arguably, the supply of
capital to the Iranian petroleum sector has been constrained by
the threat of sanctions. Further, by highlighting the threat
from Iran, ISA has emerged as a deterrent to additional
investment. For these reasons, in 2006 Congress extended ISA
for five years.
Notwithstanding the additional costs imposed on Iran as a
result of these sanctions and other measures, such as sanctions
imposed by the United Nations Security Council, Iran's
development of its nuclear program continues. Iran most likely
did not possess a capacity to enrich uranium at the time the
ISA became law in 1996, but the International Atomic Energy
Agency (IAEA) now estimates that, in the interim, Iran has
produced and stockpiled sufficient low-enriched uranium for one
nuclear explosive device.
For these reasons, the Committee judged that additional and
tougher sanctions are needed in order to persuade Iran to cease
its nuclear program. IRPSA is an amendment to the ISA. Its
fundamental purpose is to deny Iran the ability to acquire or
produce nuclear weapons. The Committee seeks to achieve that
goal through limiting the amount of refined petroleum that Iran
is able to acquire or produce--especially gasoline for
automobiles. Refined petroleum is seen as a critical
vulnerability of the Iranian economy. Despite its position as
one of the world's leading oil producers, it is estimated that
Iran imports between 25 percent and 40 percent of its refined
oil needs, due to its limited domestic refining capacity.
Accordingly, IRPSA mandates sanctions on a foreign person who
(1) knowingly facilitates Iran's domestic production of refined
petroleum products, or (2) knowingly provides Iran with refined
petroleum products or contributes to Iran's ability to import
refined petroleum resources. Such persons would, in effect, be
barred from doing business with the United States.
H.R. 2194 strengthens the ISA in the following ways:
(1) It closes existing loopholes regarding investigations
of sanctionable activities and subsequent determinations. It
requires the President to investigate a person upon receipt of
credible information that such person is engaged in
sanctionable activity and to make a determination within 180
days of commencing such an investigation. Currently, the
President is not required to commence or conclude an
investigation, or even to make a determination regarding
sanctionable activities.
(2) It mandates a new category of sanctions against persons
engaged in assisting Iran's production of refined petroleum
products and in exporting such products to Iran, not just
persons who make investments that enhance Iran's ability to
develop petroleum resources.
IRPSA is the most recent legislative effort to tighten
sanctions on foreign companies doing significant business with
Iran for the purpose, in whole or in part, of bringing Iran's
nuclear program to a complete, verifiable, and irreversible
halt.
U.S. individuals and companies have been prohibited from
investing in Iran's petroleum sector since Executive Order
12957 was issued on March 15, 1995, by President William J.
Clinton as a follow-on to his Administration's assessment that
``the actions and policies of the Government of Iran constitute
an unusual and extraordinary threat to the national security,
foreign policy, and economy of the United States.'' The White
House spokesman at that time, Michael McCurry, made clear that
the objectionable activities were Iran's pursuit of weapons of
mass destruction, its support of international terrorism, and
its efforts to undermine the Middle East peace process.
Responding to the same concerns, a subsequent executive order,
E.O. 12959, issued on May 8, 1995, banned all ``new
investment'' in Iran by U.S. individuals and companies. The
same executive order banned virtually all trade with Iran. In
conjunction with the latter executive order, then-Secretary of
State Warren Christopher warned the international community
that the path Iran was following was a mirror image of the
steps taken by other nations that had sought nuclear weapons
capabilities. With the U.S. having voluntarily removed itself
from the Iran market, Congress passed ILSA in 1996 to encourage
foreign persons to withdraw from the Iranian market. On August
3, 2001, President George W. Bush signed into law the ``ILSA
Extension Act of 2001'' (P.L. 107-24).
In September 2006, to further strengthen sanctions
targeting foreign investment in Iran's energy sector, Congress
passed the ``Iran Freedom Support Act'' (IFSA), a bill
subsequently signed into law (P.L. 109-293) by President George
W. Bush. Among other provisions, the IFSA strengthened
sanctions under ISA, including by raising certain waiver
thresholds to `vital to the national security interests of the
United States,' by enlarging the scope of those who might be
subject to sanctions, and by enhancing tools for using
financial means to address Iran's activities of concern.
Another such effort was H.R.1400, the ``Iran Counter-
Proliferation Act of 2007,'' which passed the House in
September 2007, but did not become law. A key provision of that
bill eliminated the President's ability to waive sanctions
under ISA. A modified version of that legislation, H.R. 7112,
the ``Comprehensive Iran Sanctions, Accountability, and
Divestment Act of 2008,'' which did not include the waiver-
removal provision, passed the House in September 2008, but did
not become law.
The Committee believes that the imminence and seriousness
of the threat posed to U.S. interests by Iran's nuclear weapons
program warrants the enactment of H.R. 2194. The Committee
further believes that the sanctions contained in IRPSA are
necessary and proportional, as they are exclusively tied to
Iran's nuclear program. The Act specifically provides that the
additional sanctions shall terminate once the President
certifies that Iran has ceased its efforts to design, develop,
manufacture, or acquire a nuclear explosive device or related
materials and technology; and has ceased nuclear-related
activities that would facilitate such efforts. By strengthening
the underlying Act, the Committee recognizes the totality of
the threat that Iran poses to the United States, Israel, and
other U.S. allies.
The Committee urges friends and allies of the United States
to adopt similar measures and follow the U.S. lead in cutting
off virtually all economic relations with Iran until that
country terminates its nuclear program. In the 1990s, many U.S.
friends and allies who objected to ILSA asserted that Iran's
nuclear efforts were exclusively focused on the peaceful use of
nuclear energy. Clearly, that is no longer the case. In this
decade, revelations of secret Iranian nuclear-related
facilities, as well as Iran's lack of cooperation with the IAEA
and its refusal to comply with repeated UN Security Council
demands that it suspend its uranium enrichment activities, have
altered the Western world's attitude toward the Iranian nuclear
issue. Few, if any, objective observers now dispute that Iran's
nuclear program is military-related and represents a threat to
global stability. All concur that Iran is pursuing its nuclear
program in defiance of the demands of the international
community. The Committee believes it is time for responsible
nations to cease investing in Iran's energy industry in order
to undermine its ability to finance its nuclear weapons.
Hearings
The Committee held two hearings directly related to the
subject matter of the bill. A Full committee hearing took place
on July 22, 2009, entitled, ``Iran: Recent Developments and
Implications for U.S. Policy,'' which explored Iran's ongoing
nuclear program and U.S. efforts to contain that program.
Witnesses included Patrick Clawson, Ph.D., Deputy Director for
Research, the Washington Institute for Near East Policy;
Suzanne Maloney, Ph.D., Senior Fellow, the Brookings
Institution; Abbas Milani, Ph.D., Co-Director, Iran Democracy
Project, Hoover Institution, Director, Iranian Studies,
Stanford University; Ms. Karim Sadjadpour, Associate, Middle
East Program, Carnegie Endowment for International Peace;
Michael Rubin, Ph.D., Resident Scholar, the American Enterprise
Institute; and Orde F. Kittrie, J.D., Professor of Law, Arizona
State University.
The Subcommittee on Middle East and South Asia, in
conjunction with the Subcommittees on Western Hemisphere
Affairs and Terrorism, Nonproliferation, and Trade, held a
hearing entitled ``Iran in the Western Hemisphere,'' which took
place on October 27, 2009. Witnesses included Mr. Eric
Farnsworth, Vice President, Council of the Americas; Ms. Dina
Siegel Vann, Director, Latino and Latin American Institute,
American Jewish Committee; Mr. Douglas Farah, Senior Fellow,
Financial Investigations and Transparency, International
Assessment and Strategy Center; Mohsen M. Milani, Ph.D.,
Department of Government & International Affairs, University of
South Florida; and Norman A. Bailey, Ph.D., Consulting
Economist, the Potomac Foundation.
Committee Consideration
On October 28, 2009, the Committee marked up H.R. 2194 and
reported it favorably to the House, as amended, by a voice
vote, with a quorum present.
Votes of the Committee
There were no recorded votes during consideration of H.R.
2194.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
In compliance with Clause 3(c)(2) of House Rule XIII, the
Committee adopts as its own the estimate of new budget
authority, entitlement authority, or tax expenditures or
revenues contained in the cost estimate prepared by the
Director of the Congressional Budget Office, pursuant to
section 308(a) of the Congressional Budget Act of 1974.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 2194, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, November 18, 2009.
Hon. Howard L. Berman, 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. 2194, the Iran
Refined Petroleum Sanctions Act of 2009.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is John Chin,
who can be reached at 226-2840.
Sincerely,
Douglas W. Elmendorf
Enclosure
cc:
Honorable Ileana Ros-Lehtinen
Ranking Member
H.R. 2194--Iran Refined Petroleum Sanctions Act of 2009
H.R. 2194 would amend the Iran Sanctions Act of 1996 in
several ways. The bill would:
LRequire the President to immediately
investigate a person once the United States receives
credible information that they have supplied refined
petroleum products to Iran or supported the domestic
production of such products in Iran, and to determine
within 180 days whether that person has in fact engaged
in such sanctionable activity in Iran,
LProhibit any foreign exchange, banking, and
property transaction with persons engaged in
sanctionable activity in Iran unless the President
determines it is vital to the national security
interest of the United States, and
LExtend the act's sunset date from December
31, 2011, to December 31, 2016.
Enacting the bill would not affect direct spending or
revenues. However, the bill would increase spending subject to
appropriation to cover the costs of employing additional staff
to gather and analyze information, provide advisory opinions,
write reports, and administer blocked property. Based on
information provided by the Department of State, CBO estimates
that those costs would be about $2 million a year.
H.R. 2194 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would impose no
costs on state, local, or tribal governments.
By extending and expanding sanctions under the Iran
Sanctions Act, the bill could impose private-sector mandates as
defined in UMRA on entities in the United States that engage in
transactions with businesses or countries sanctioned under that
act. The bill would require the President to impose certain
sanctions on entities that invest more than a specified amount
of money in businesses involved in Iran's petroleum industry.
The bill also would require the President to sanction any
entity that provides Iran with refined petroleum resources, or
engages in an activity that could contribute to Iran's ability
to import such resources. Efforts to expand or improve Iran's
oil production or refinery capacity, any related shipments, and
any technical or material support for its nuclear weapons or
missile programs would also be sanctionable activities.
Entities sanctioned for those actions would effectively be
prohibited from engaging in business with persons in the United
States.
Entities in the United States involved in transactions with
entities sanctioned under the bill also would be required to
cease those transactions. For example, vessel chartering
companies as well as financial institutions engaged in
transactions related to trade with sanctioned entities could be
affected. The cost of the mandate would be the forgone net
income from the prohibited transactions, and would depend on
the specific sanctions applied by the President in the future.
CBO has no basis for predicting when the President might impose
such sanctions and thus cannot determine whether the aggregate
cost of mandates would exceed the annual threshold established
in UMRA for private-sector mandates ($139 million in 2009,
adjusted annually for inflation).
On November 17, 2009, CBO transmitted a cost estimate for
the Comprehensive Iran Sanctions, Accountability, and
Divestment Act of 2009 as ordered reported by the Senate
Committee on Banking, Housing, and Urban Affairs on October 29,
2009. Section 102 of that act is similar to H.R. 2194, but
would not extend the sunset date of the Iran Sanctions Act of
1996 beyond December 31, 2011. Thus, CBO estimated that it
would cost about $5 million to implement the previous
legislative language over the 2010-2014 period, whereas CBO
estimates that it would cost about $10 million to implement
H.R. 2194 over those five years.
The CBO staff contacts for this estimate are John Chin for
federal budget impacts and Marin Randall for impacts on the
private sector. This estimate was approved by Theresa Gullo,
Deputy Assistant Director for Budget Analysis.
Performance Goals and Objectives
The Act is intended to deprive Iran of the funds it needs
to pursue its nuclear program, including its efforts to acquire
or develop and produce nuclear weapons.
Constitutional Authority Statement
Pursuant to clause 3(d) (1) of rule XIII of the Rules of
the House of Representatives, the Committee finds the authority
for this legislation in article I, section 8 of the
Constitution.
New Advisory Committees
H.R. 2194 does not establish or authorize any new advisory
committees.
Congressional Accountability Act
H.R. 2194 does not apply to the Legislative Branch.
Earmark Identification
H.R. 2194 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(e), 9(f), or 9(g) of rule XXI.
Section-by-Section Analysis and Discussion
Section 1. Short Title.
This section provides that the short title of the Act is
the ``Iran Refined Petroleum Sanctions Act of 2009.''
Section 2. Findings; Sense of Congress; Statement of Policy.
This section articulates the findings, Sense of Congress;
and Statement of Policy that frame the basis for the additional
sanctions and the purpose of the bill.
Subsection (a) finds that Iran's illicit nuclear
activities--combined with its development of unconventional
weapons and ballistic missiles, and support for international
terrorism--represent a serious threat to the security of the
United States and U.S. allies in Europe, the Middle East, and
around the world.
Subsection (a) also finds: that the United States and other
responsible nations have a vital interest in working together
to prevent Iran from acquiring a nuclear weapons capability;
that the International Atomic Energy Agency has repeatedly
called attention to Iran's unlawful nuclear activities, and, as
a result, the United Nations Security Council has adopted a
range of sanctions designed to encourage Iran to suspend those
activities and comply with its obligations under the Treaty on
the Non-Proliferation of Nuclear Weapons (commonly known as the
``Nuclear Non-Proliferation Treaty,'' or ``NPT''); that, as a
Presidential candidate in 2008, then-Senator Barack Obama
stated that additional sanctions, especially those targeting
Iran's dependence on imported refined petroleum, may help to
persuade the Government of Iran to abandon its illicit nuclear
activities; that, on October 7, 2008, then-Senator Obama stated
that ``Iran right now imports gasoline, even though it's an oil
producer, because its oil infrastructure has broken down. If we
can prevent them from importing the gasoline that they need and
the refined petroleum products, that starts changing their
cost-benefit analysis. That starts putting the squeeze on
them.''; that, on June 4, 2008, then-Senator Obama stated, ``We
should work with Europe, Japan, and the Gulf states to find
every avenue outside the U.N. to isolate the Iranian regime--
from cutting off loan guarantees and expanding financial
sanctions, to banning the export of refined petroleum to
Iran.''; that major European allies, including the United
Kingdom, France, and Germany, have advocated that sanctions be
significantly toughened should international diplomatic efforts
fail to achieve verifiable suspension of Iran's uranium
enrichment program and an end to its nuclear weapons program
and other illicit nuclear activities; that the serious and
urgent nature of the threat from Iran demands that the United
States work together with U.S. allies to do everything
possible--diplomatically, politically, and economically--to
prevent Iran from acquiring a nuclear weapons capability; and
that the human rights situation in Iran has steadily
deteriorated in 2009, as punctuated by the transparent fraud
that occurred in the June 12 elections, the brutal repression
and murder, arbitrary arrests, and show trials of dissidents,
and ongoing suppression of freedom of expression.
Subsection (b) expresses the Sense of Congress that
international diplomatic efforts to address Iran's illicit
nuclear efforts, unconventional and ballistic missile
development programs, and support for international terrorism
are more likely to be effective if the President is empowered
with the explicit authority to impose additional sanctions on
the Government of Iran.
Subsection (b) also expresses the Sense of Congress: that
the concerns of the United States regarding Iran are strictly
the result of the actions of the Government of Iran; that the
revelation in September 2009 that Iran is developing a secret
uranium enrichment site on an Islamic Revolutionary Guard Corps
base near Qom, which appears to have no civilian application,
highlights the urgency for Iran to fully disclose the nature of
its nuclear program, including any other secret locations, and
provide the International Atomic Energy Agency (IAEA)
unfettered access to its facilities pursuant to Iran's legal
obligations under the NPT and Iran's Safeguards Agreement with
the IAEA; that, because of its involvement in Iran's nuclear
program and other destabilizing activities, the President
should impose sanctions, including the full range of sanctions
otherwise applicable to Iran, on any individual or entity that
is an agent, alias, front, instrumentality, representative,
official, or affiliate of the Islamic Revolutionary Guard Corps
or is an individual serving as a representative of the Islamic
Revolutionary Guard Corps, or on any person that has conducted
any commercial transaction or financial transaction with such
entities; that government-to-government agreements with Iran to
provide the regime with refined petroleum products, such as the
September 2009 agreement under which the Government of
Venezuela committed to provide 20,000 barrels of gasoline per
day to Iran, undermine efforts to pressure Iran to suspend its
nuclear weapons program and cease all enrichment activities;
and that the people of the United States have feelings of
friendship for the people of Iran and hold the people of Iran,
their culture, and their ancient and rich history in the
highest esteem.
Subsection (c) asserts that it shall be the policy of the
United States to prevent Iran from achieving the capability to
make nuclear weapons, including by supporting international
diplomatic efforts to halt Iran's uranium enrichment program.
Subsection (c) likewise asserts the following as United
States policies: to fully implement and enforce the Iran
Sanctions Act of 1996 as a means of encouraging foreign
governments to direct state-owned entities to cease all
investment in, and support of, Iran's energy sector and all
exports of refined petroleum products to Iran; to fully
implement and enforce the Iran Sanctions Act of 1996 as a means
of encouraging foreign governments to require private entities
based in their territories to cease all investment in, and
support of, Iran's energy sector and all exports of refined
petroleum products to Iran; to impose sanctions, including
through the use of Executive Orders 13224, 13382, and 13438 and
United Nations Security Council Resolutions 1737, 1747, 1803,
and 1835, on the Central Bank of Iran and any other Iranian
financial institution engaged in proliferation activities or
support of terrorist groups; to impose sanctions, including
through the use of Executive Orders 13224, 13382, and 13438 and
United Nations Security Council Resolutions 1737, 1747, 1803,
and 1835, on any financial institution that conducts financial
transactions with the Central Bank of Iran or with another
Iranian financial institution engaged in proliferation
activities or support of terrorist groups; to persuade U.S.
allies and other countries to take appropriate measures to deny
access to the international financial system by Iranian banks
and financial institutions involved in proliferation activities
or support of terrorist groups; to support all Iranian citizens
who embrace the values of freedom, human rights, civil
liberties, and rule of law; and for the Secretary of State to
make every effort to assist United States citizens held hostage
in Iran at any time during the period beginning on November 4,
1979, and ending on January 20, 1981, and their survivors in
matters of compensation related to such citizens' detention.
Section 3. Amendments to the Iran Sanctions Act of 1996.
Subsection (a) amends section 5(a) of the Iran Sanctions
Act of 1996 to restate the requirement that the President shall
impose two or more current sanctions under the Iran Sanctions
Act of 1996 if a person has knowingly made an investment of $20
million or more (or any combination of investments of at least
$5 million each, which in the aggregate equals or exceeds $20
million in any 12-month period) that directly and significantly
contributed to Iran's ability to develop its petroleum
resources. In the context of investment, H.R. 2194 amends
section 5(a) in two key ways: (1) H.R. 2194 shifts the mens rea
standard for investment in petroleum resources from `actual
knowledge' to ``knowingly,'' which includes actual knowledge
and having the constructive knowledge deemed to be possessed by
a reasonable individual who acts under similar circumstances.
In short, the new standard will expand the range of conduct
potentially subject to sanctions, thereby making it easier
implement sanctions under ISA; and (2) The Act also amends the
definition of petroleum resources to include items such as
liquefied natural gas, oil, or liquefied natural gas tankers,
the effect of which is to broaden sanctionable investments
under ISA.
Subsection (a) further amends section 5(a) of ISA to
require that the President impose mandatory sanctions described
in section 3(b) of the Act if a person: (1) knowingly sells,
leases, or provides to Iran any goods, services, technology,
information, or support, or enters into a contract for those
activities, that would allow Iran to maintain or expand its
domestic production of refined petroleum products, including
any assistance in the construction, modernization, or repair of
refineries that make refined petroleum products; or (2) if a
person knowingly provides Iran with refined petroleum products
or engages in an activity that could contribute to Iran's
ability to import refined petroleum resources by providing
ships, vehicles, or other means of transportation to deliver
refined petroleum products to Iran or insurance or financing
services for such activities.
The Act further establishes that the value of the goods,
services, technology, information, or support provided by such
activities must exceed $200,000 to be subject to the
requirement of Section 3(a). The combination of such sales,
leases, or provision of support in any 12-month period, or to
be provided under contracts entered into in any 12-month
period, must exceed $500,000.
Subsection (b) of the Act describes the sanctions and
establishes additional sanctions to Section 6 of ISA by
directing the President to prohibit foreign exchange, banking,
and property transactions with persons involved in activities
related to refined petroleum products, as specified in
paragraphs (1)(B) and (2) of section 5(a) of ISA, as amended.
Subsection 3(b) further amends ISA by adding a new section
which requires the head of each executive agency to ensure that
each contract with a person entered into by such executive
agency for the procurement of goods or services, or agreement
for the use of Federal funds as part of a grant, loan, or loan
guarantee to a person, includes a clause that requires the
person to certify to the contracting officer or other
appropriate official of such agency that the person does not
conduct any activity described in paragraph (1)(B) or (2) of
section 5(a) relating to the production or export of refined
petroleum products. The Act authorizes the head of an executive
agency that determines that a person has submitted a false
certification under paragraph (1) after the date on which the
Federal Acquisition Regulation is revised to implement the
requirements of this subsection, to terminate a contract or
agreement or debar or suspend such person from eligibility for
Federal contracts or such agreements for a period not to exceed
15 years. The Act requires the Administrator of General
Services to include on the List of Parties Excluded from
Federal Procurement and Nonprocurement Programs each person
that is debarred, suspended, proposed for debarment or
suspension, or declared ineligible by the head of an executive
agency on the basis of a determination of a false certification
under subparagraph (A) of section 3(c).
Subsection (c) amends section 5(b) of ISA to restrict
agreements for nuclear cooperation if a country that has
jurisdiction over a person that is subject to sanctions under
paragraph (1) of section 5(b) of ISA relating to the
acquisition or development of nuclear weapons or related
technologies or of missiles or other advanced conventional
weapons that are capable of delivering a nuclear weapon fails
to take effective actions to penalize such person and prevent a
reoccurrence of such activity in the future. The Committee
believes that a country that is, as a matter of policy or
through willful inaction, allowing its citizens or companies to
provide equipment, technology or materials to Iran that make a
material contribution to its nuclear capabilities should not at
the same time benefit from nuclear cooperation with the United
States.
Subsection (d)(1) requires that the President immediately
investigate a person upon receipt of credible information that
such person is engaged in sanctionable activity as described in
section 5. Subsection (d)(1) further requires the President,
not later than 180 days after an investigation is initiated, to
make a determination whether a person has engaged in
sanctionable activity described in section 5.
Subsection (d)(2) of the Act amends section 9(c)(1) of ISA
to authorize the President to waive the restriction on nuclear
agreements on a person or on a country described in section
5(b)(2)(A) if the President is unable to make the determination
that the country is taking the effective actions described in
section 5(b)(2)(A). Such actions may include prosecution of
persons or companies, suspension of export privileges,
financial measures, etc., that will effectively prevent a
reoccurrence of the activities subject to sanction.
Subsection (d)(2) amends the standard for the President to
waive sanctions under ISA to ``vital to the national security
interest of the United States'' as the standard for a
Presidential waiver of sanctions. Section (d)(2) further amends
ISA by authorizing the President to waive the restriction
relating to transfer of nuclear technology if the President is
unable to make the determination described in section
5(b)(2)(A) of ISA.
Subsection (d)(2) further amends the reporting requirements
of section 3(c)(2) of ISA relating to a waiver by requiring the
President to include an estimate of the significance of a
sanctioned action to Iran's ability to develop its petroleum
resources and other activities should the President waive the
required sanctions.
Subsection (e) amends ISA to require additional reporting
on Iran's use in the Middle East, the Western Hemisphere,
Africa, and other regions, of Iranian diplomats and
representatives of other government and military or quasi-
governmental institutions or proxies of Iran, including, but
not limited to, Hezbollah, to promote acts of international
terrorism or to develop or sustain Iran's nuclear, chemical,
biological and missile weapons programs.
Section (e) also directs the President to report to the
appropriate congressional committees within 90 days after the
date of enactment of this legislation, and every six months
thereafter, regarding any person who has: (1) provided Iran
with refined petroleum resources; (2) sold, leased, or provided
to Iran any goods, services, or technology that would allow
Iran to maintain or expand its domestic production of refined
petroleum resources; or (3) engaged in any activity that could
contribute to the enhancement of Iran's ability to import
refined petroleum resources. This subsection requires the
President to include in the report a list of any person that
the President determines is an agent, alias, front,
instrumentality, representative, official, or affiliate of the
Islamic Revolutionary Guard Corps, or is an individual serving
as a representative of the Islamic Revolutionary Guard Corps,
or provided material support or conducted any commercial or
financial transactions with such entities. The Committee does
not intend for this reporting requirement to in any way
conflict with or amend existing designations of persons
pursuant to the International Emergency Economic Powers Act (50
U.S.C. 1701, etc.).
Finally, this subsection requires the President to transmit
a report with respect to the immediately preceding 12-month
period after enactment of the Act, on the dollar value amount
of trade, including in the energy sector, between Iran and each
country maintaining membership in the Group of Twenty Finance
Ministers and Central Bank Governors.
Subsection (f) amends ISA to expand the definition of a
``person'' subject to sanctions to include a financial
institution, insurer, underwriter, guarantor, any other
business organization, including any foreign subsidiary,
parent, or affiliate of such a business organization, any other
nongovernmental entity, organization, or group, and any
governmental entity operating as a business enterprise, such as
an export credit agency.
Subsection (f) also defines the term ``knowingly'' to
include a person who has actual knowledge of sanctionable
activities or has constructive knowledge deemed to be possessed
by a reasonable individual who acts under similar
circumstances. The Committee intends to prevent persons from
evading sanctions by relying on a standard of ``actual
knowledge.''
Subsection (f) expands the term ``petroleum resources'' to
include petroleum, oil or liquefied natural gas, oil or
liquefied natural gas tankers, and products used to construct
or maintain pipelines used to transport oil or compressed or
liquefied natural gas.
Subsection (f) defines the term ``refined petroleum
products'' to include gasoline, kerosene, diesel fuel, residual
fuel oil, and distillates and other goods classified in
headings 2709 and 2710 of the Harmonized Tariff Schedule of the
United States.
Subsection (g) amends Section 8 of the ISA of 1996 to
provide that sanctions related to refined petroleum products,
as specified in paragraphs (1)(B) and (2) of section 5(a) and
section 6(b) shall terminate if the President determines and
certifies to the appropriate congressional committees that
Iran: (1) has ceased its efforts to design, develop,
manufacture, or acquire a nuclear explosive device or related
materials and technology; and (2) has ceased nuclear-related
activities, including uranium enrichment, that would facilitate
the efforts described in paragraph (1).
Subsection (g) also amends ISA to extend the operative date
of that legislation from 2011 to 2016.
Section 4. Effective Date; Rule of Construction.
Subsection (a) provides that the amendments to ISA made by
the Act shall take effect upon expiration of the 60-day period
beginning on the date of the enactment of this Act, except that
paragraphs (1) and (2) of section 5(a), section 5(b)(2), and
section 6(b), of ISA, as amended by this Act, shall apply to
conduct engaged in on or after October 28, 2009,
notwithstanding section 5(f)(3) of ISA. The purpose of this
exception is to prevent a ``rush to contracting'' subsequent to
the adoption of the Amendment in the Nature of a Substitute on
October 28, 2009.
Subsection (a) further provides that the amendments made by
subsection (d) of section (3) of the Act related to waiver and
investigations shall apply with respect to conduct engaged in
before, on, or after the date of the enactment of this Act.
Subsection (b) states that the amendments made by
subsections (a) and (b) of section 3 of this Act shall not be
construed to affect the requirements of section 5(a) of ISA as
in effect before the date of the enactment of this Act, and
such requirements continue to apply, on and after such date of
enactment, to conduct engaged in before October 28, 2009. The
purpose of this rule of construction is to confirm that
existing sanctions still apply notwithstanding amendments made
by this Act to ISA.
Subsection (b) further provides that the amendments made by
subsection (d) of section 3 of this Act shall not be construed
to affect any exercise of the authority under section 4(f) or
section 9(c) of ISA related to investigations and waiver
authority in effect on the day before the date of the enactment
of this Act.
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, existing law in which no change
is proposed is shown in roman):
IRAN SANCTIONS ACT OF 1996
* * * * * * *
SEC. 4. MULTILATERAL REGIME.
(a) * * *
(b) Reports to Congress.--The President shall report to the
appropriate congressional committees, not later than 1 year
after the date of the enactment of this Act, and periodically
thereafter, on the extent that diplomatic efforts described in
subsection (a) have been successful. Each report shall
include--
(1) * * *
(2) the countries that have not agreed to measures
described in paragraph (1), and, with respect to those
countries, other measures [(in addition to that
provided in subsection (d))] the President recommends
that the United States take to further the objectives
of section 3 with respect to Iran.
* * * * * * *
[(d) Enhanced Sanction.--
[(1) Sanction.--With respect to nationals of
countries except those with respect to which the
President has exercised the waiver authority of
subsection (c), at any time after the first report is
required to be submitted under subsection (b), section
5(a) shall be applied by substituting ``$20,000,000''
for ``$40,000,000'' each place it appears, and by
substituting ``$5,000,000'' for ``$10,000,000''.
[(2) Report to congress.--The President shall
report to the appropriate congressional committees any
country with respect to which paragraph (1) applies.]
[(e)] (d) Interim Report on Multilateral Sanctions;
Monitoring.--The President, not later than 90 days after the
date of the enactment of this Act, shall report to the
appropriate congressional committees on--
(1) * * *
* * * * * * *
[(f)] (e) Investigations.--
(1) In general.--The President [should initiate]
shall immediately initiate an investigation into the
possible imposition of sanctions under section 5(a) or
5(b) against a person upon receipt by the United States
of credible information indicating that such person is
engaged in investment activity in Iran [as described in
such section] as described in section 5(a)(1) or other
activity described in section 5(a)(2) or 5(b) (as the
case may be).
(2) Determination and notification.--Not later than
180 days after an investigation is initiated in
accordance with paragraph (1), the President [should
determine, pursuant to section 5(a), if a person has
engaged in investment activity in Iran as described in
such section] shall determine, pursuant to section 5(a)
or (b) (as the case may be), if a person has engaged in
investment activity in Iran as described in section
5(a)(1) or other activity described in section 5(a)(2)
or 5(b) (as the case may be) and shall notify the
appropriate congressional committees of the basis for
any such determination.
SEC. 5. IMPOSITION OF SANCTIONS.
[(a) Sanctions With Respect to the Development of Petroleum
Resources of Iran.--Except as provided in subsection (f), the
President shall impose 2 or more of the sanctions described in
paragraphs (1) through (6) of section 6 if the President
determines that a person has, with actual knowledge, on or
after the date of the enactment of this Act, made an investment
of $40,000,000 or more (or any combination of investments of at
least $10,000,000 each, which in the aggregate equals or
exceeds $40,000,000 in any 12-month period), that directly and
significantly contributed to the enhancement of Iran's ability
to develop petroleum resources of Iran.]
(a) Sanctions With Respect to the Development of Petroleum
Resources of Iran and Exportation of Refined Petroleum to
Iran.--
(1) Development of petroleum resources of iran.--
(A) Investment.--Except as provided in
subsection (f), the President shall impose 2 or
more of the sanctions described in paragraphs
(1) through (6) of section 6(a) if the
President determines that a person has
knowingly, on or after the date of the
enactment of this Act, made an investment of
$20,000,000 or more (or any combination of
investments of at least $5,000,000 each, which
in the aggregate equals or exceeds $20,000,000
in any 12-month period), that directly and
significantly contributed to the enhancement of
Iran's ability to develop petroleum resources
of Iran.
(B) Production of refined petroleum
products.--Except as provided in subsection
(f), the President shall impose the sanctions
described in section 6(b) if the President
determines that a person knowingly sells,
leases, or provides to Iran any goods,
services, technology, information, or support,
or enters into a contract to sell, lease, or
provide to Iran any goods, services,
technology, information, or support, that would
allow Iran to maintain or expand its domestic
production of refined petroleum products,
including any assistance in the construction,
modernization, or repair of refineries that
make refined petroleum products, if--
(i) the value of the goods,
services, technology, information, or
support provided in such sale, lease,
or provision, or to be provided in such
contract, exceeds $200,000; or
(ii) the value of the goods,
services, technology, information, or
support provided in any combination of
such sales, leases, or provision in any
12-month period, or to be provided
under contracts entered into in any 12-
month period, exceeds $500,000.
(2) Exportation of refined petroleum products to
iran.--
(A) In general.--Except as provided in
subsection (f), the President shall impose the
sanctions described in section 6(b) if the
President determines that a person knowingly
provides Iran with refined petroleum products
or engages in any of the activities described
in subparagraph (B), if--
(i) the value of such products or
of the goods, services, technology,
information, or support provided or to
be provided in connection with such
activity exceeds $200,000; or
(ii) the value of such products, or
of the goods, services, technology,
information, or support, provided or to
be provided in connection with any
combination of providing such products
or such activities, in any 12-month
period exceeds $500,000.
(B) Activities described.--The activities
referred to in subparagraph (A) are the
following:
(i) Providing ships, vehicles, or
other means of transportation to
deliver refined petroleum products to
Iran, or providing services relating to
the shipping or other transportation of
refined petroleum products to Iran.
(ii) Underwriting or otherwise
providing insurance or reinsurance for
an activity described in clause (i).
(iii) Financing or brokering an
activity described in clause (i).
(b) Mandatory Sanctions With Respect to Development of
Weapons of Mass Destruction or Other Military Capabilities.--
[The President shall impose]
(1) In general.--The President shall impose two or
more of the sanctions described in paragraphs (1)
through (6) of [section 6] section 6(a) if the
President determines that a person has, on or after the
date of the enactment of this Act, exported,
transferred, or otherwise provided to Iran any goods,
services, technology, or other items knowing that the
provision of such goods, services, technology, or other
items would contribute materially to the ability of
Iran to--
[(1)] (A) acquire or develop chemical,
biological, or nuclear weapons or related
technologies; or
[(2)] (B) acquire or develop destabilizing
numbers and types of advanced conventional
weapons.
(2) Additional sanction.--
(A) Restriction.--In any case in which a
person is subject to sanctions under paragraph
(1) because of an activity described in such
paragraph that relates to the acquisition or
development of nuclear weapons or related
technology or of missiles or other advanced
conventional weapons that are capable of
delivering a nuclear weapon, then
notwithstanding any other provision of law, the
following measures shall apply with respect to
the country that has jurisdiction over such
person, unless the President determines and
notifies the appropriate congressional
committees that the government of such country
has taken, or is taking, effective actions to
penalize such person and to prevent a
reoccurrence of such activity in the future:
(i) No agreement for cooperation
between the United States and the
government of such country may be
submitted to the President or to
Congress pursuant to section 123 of the
Atomic Energy Act of 1954 (42 U.S.C.
2153), or may enter into force.
(ii) No license may be issued for
the export, and no approval may be
given for the transfer or retransfer,
directly or indirectly, to such country
of any nuclear material, facilities,
components, or other goods, services,
or technology that would be subject to
an agreement to cooperation.
(B) Construction.--The restrictions in
subparagraph (A) shall apply in addition to all
other applicable procedures, requirements, and
restrictions contained in the Atomic Energy Act
of 1954 and other laws.
(C) Definition.--In this paragraph, the
term ``agreement for cooperation'' has the
meaning given that term in section 11 b. of the
Atomic Energy Act of 1954 (42 U.S.C. 2014(b)).
(c) Persons Against Which the Sanctions Are To Be
Imposed.--The sanctions described in subsections (a) and (b)
shall be imposed on--
(1) any person the President determines has carried
out the activities described in subsection (a) [or (b)]
or (b)(1); and
* * * * * * *
SEC. 6. DESCRIPTION OF SANCTIONS.
[The sanctions to be imposed on a sanctioned person under
section 5 are as follows:]
(a) In General.--The sanctions to be imposed on a
sanctioned person under subsections (a)(1)(A) and (b)(1) of
section 5 are as follows:
(1) * * *
* * * * * * *
(4) Prohibitions on financial institutions.--The
following prohibitions may be imposed against a
sanctioned person that is a financial institution:
(A) * * *
* * * * * * *
The imposition of either sanction under subparagraph
(A) or (B) shall be treated as 1 sanction for purposes
of [section 5] subsections (a)(1)(A) and (b) of section
5, and the imposition of both such sanctions shall be
treated as 2 sanctions for purposes of [section 5]
subsections (a)(1)(A) and (b) of section 5.
* * * * * * *
(b) Additional Mandatory Sanctions.--The sanctions to be
imposed on a sanctioned person under paragraphs (1)(B) and (2)
of section 5(a) are as follows:
(1) Foreign exchange.--The President shall prohibit
any transactions in foreign exchange by the sanctioned
person.
(2) Banking transactions.--The President shall
prohibit any transfers of credit or payments between,
by, through, or to any financial institution, to the
extent that such transfers or payments involve any
interest of the sanctioned person.
(3) Property transactions.--The President shall
prohibit any acquisition, holding, withholding, use,
transfer, withdrawal, transportation, importation, or
exportation of, dealing in, or exercising any right,
power, or privilege with respect to, or transactions
involving, any property in which the sanctioned person
has any interest by any person, or with respect to any
property, subject to the jurisdiction of the United
States.
(c) Additional Measure Relating to Refined Petroleum
Products.--
(1) In general.--The head of each executive agency
shall ensure that each contract with a person entered
into by such executive agency for the procurement of
goods or services, or agreement for the use of Federal
funds as part of a grant, loan, or loan guarantee to a
person, includes a clause that requires the person to
certify to the contracting officer or other appropriate
official of such agency that the person does not
conduct any activity described in paragraph (1)(B) or
(2) of section 5(a).
(2) Remedies.--
(A) In general.--If the head of the
executive agency determines that such person
has submitted a false certification under
paragraph (1) after the date on which the
Federal Acquisition Regulation is revised to
implement the requirements of this subsection,
the head of an executive agency may terminate a
contract, or agreement described in paragraph
(1), with such person or debar or suspend such
person from eligibility for Federal contracts
or such agreements for a period not to exceed
15 years.
(B) Inclusion on list of parties excluded
from federal procurement and nonprocurement
programs.--The Administrator of General
Services shall include on the List of Parties
Excluded from Federal Procurement and
Nonprocurement Programs maintained by the
Administrator under part 9 of the Federal
Acquisition Regulation issued under section 25
of the Office of Federal Procurement Policy Act
(41 U.S.C. 421) each person that is debarred,
suspended, proposed for debarment or
suspension, or declared ineligible by the head
of an executive agency on the basis of a
determination of a false certification under
subparagraph (A).
(C) Rule of construction.--This subsection
shall not be construed to limit the use of
other remedies available to the head of an
executive agency or any other official of the
Federal Government on the basis of a
determination of a false certification under
paragraph (1).
(3) Implementation through the federal acquisition
regulation.--Not later than 120 days after the date of
the enactment of the Iran Refined Petroleum Sanctions
Act of 2009, the Federal Acquisition Regulation issued
pursuant to section 25 of the Office of Federal
Procurement Policy Act (41 U.S.C. 421) shall be revised
to provide for the implementation of the requirements
of this subsection.
* * * * * * *
SEC. 8. TERMINATION OF SANCTIONS.
[The requirement under section 5(a)] (a) Sanctions Relating
to Investment.--The requirement under section 5(a)(1)(A) to
impose sanctions shall no longer have force or effect [with
respect to Iran] if the President determines and certifies to
the appropriate congressional committees that Iran--
(1) * * *
* * * * * * *
(b) Refined Petroleum Products.--The requirements under
paragraphs (1)(B) and (2) of section 5(a) and section 6(b) to
impose sanctions shall no longer have force or effect if the
President determines and certifies to the appropriate
congressional committees that Iran--
(1) has ceased its efforts to design, develop,
manufacture, or acquire a nuclear explosive device or
related materials and technology; and
(2) has ceased nuclear-related activities,
including uranium enrichment, that would facilitate the
efforts described in paragraph (1).
SEC. 9. DURATION OF SANCTIONS; PRESIDENTIAL WAIVER.
(a) Delay of Sanctions.--
(1) Consultations.--If the President makes a
determination described in section 5(a) [or 5(b)] or
5(b)(1) with respect to a foreign person, the Congress
urges the President to initiate consultations
immediately with the government with primary
jurisdiction over that foreign person with respect to
the imposition of sanctions under this Act.
(2) Actions by government of jurisdiction.--In
order to pursue consultations under paragraph (1) with
the government concerned, the President may delay
imposition of sanctions under this Act for up to 90
days. Following such consultations, the President shall
immediately impose sanctions unless the President
determines and certifies to the Congress that the
government has taken specific and effective actions,
including, as appropriate, the imposition of
appropriate penalties, to terminate the involvement of
the foreign person in the activities that resulted in
the determination by the President under section 5(a)
[or 5(b)] or 5(b)(1) concerning such person.
* * * * * * *
(4) Report to congress.--Not later than 90 days
after making a determination under section 5(a) [or
5(b)] or 5(b)(1), the President shall submit to the
appropriate congressional committees a report on the
status of consultations with the appropriate foreign
government under this subsection, and the basis for any
determination under paragraph (3).
* * * * * * *
(c) Presidential Waiver.--
(1) Authority.--The President may waive the
requirement in section 5 to impose a sanction or
sanctions on a person described in section 5(c), or on
a country described in section 5(b)(2)(A) (if the
President certifies to the appropriate congressional
committees that the President is unable to make the
determination described in such section 5(b)(2)(A) with
respect to the government of that country), and may
waive the continued imposition of a sanction or
sanctions under subsection (b) of this section, 30 days
or more after the President determines and so reports
to the appropriate congressional committees that it is
[important to the national interest of the United
States] vital to the national security interest of the
United States to exercise such waiver authority.
(2) Contents of report.--Any report under paragraph
(1) shall provide a specific and detailed rationale for
the determination under paragraph (1), including--
(A) a description of the conduct that
resulted in the determination under section
5(a) [or (b)] or (b)(1), as the case may be;
(B) in the case of a foreign person, an
explanation of the efforts to secure the
cooperation of the government with primary
jurisdiction over the sanctioned person to
terminate or, as appropriate, penalize the
activities that resulted in the determination
under section 5(a) [or (b)] or (b)(1), as the
case may be;
[(C) an estimate of the significance of the
provision of the items described in section
5(a) or section 5(b) to Iran's ability to,
respectively, develop its petroleum resources
or its weapons of mass destruction or other
military capabilities; and]
(C) an estimate of the significance of the
provision of the items described in paragraph
(1) or (2) of section 5(a) or section 5(b)(1)
to Iran's ability to develop its petroleum
resources, to maintain or expand its domestic
production of refined petroleum products, to
import refined petroleum products, or to
develop its weapons of mass destruction or
other military capabilities (as the case may
be); and
(D) a statement as to the response of the
United States in the event that the person
concerned engages in other activities that
would be subject to section 5(a) [or (b)] or
(b)(1).
* * * * * * *
SEC. 10. REPORTS REQUIRED.
(a) Report on Certain International Initiatives.--Not later
than 6 months after the date of the enactment of this Act, and
every 6 months thereafter, the President shall transmit a
report to the appropriate congressional committees describing--
(1) * * *
* * * * * * *
[(4) Iran's use of Iranian diplomats and
representatives of other government and military or
quasi-governmental institutions of Iran to promote acts
of international terrorism or to develop or sustain
Iran's nuclear, chemical, biological, and missile
weapons programs.]
(4) Iran's use in the Middle East, the Western
Hemisphere, Africa, and other regions, of Iranian
diplomats and representatives of other government and
military or quasi-governmental institutions or proxies
of Iran, including, but not limited to, Hezbollah, to
promote acts of international terrorism or to develop
or sustain Iran's nuclear, chemical, biological, and
missile weapons programs.
* * * * * * *
(d) Reports on Certain Business and Other Transactions
Relating to Iran.--
(1) In general.--Not later than 90 days after the
date of the enactment of the Iran Refined Petroleum
Sanctions Act of 2009, and every 6 months thereafter,
the President shall submit a report to the appropriate
congressional committees regarding any person who has--
(A) provided Iran with refined petroleum
products;
(B) sold, leased, or provided to Iran any
goods, services, or technology that would allow
Iran to maintain or expand its domestic
production of refined petroleum products; or
(C) engaged in any activity that could
contribute to the enhancement of Iran's ability
to import refined petroleum products.
(2) Description.--For each activity set forth in
subparagraphs (A) through (C) of paragraph (1), the
President shall provide a complete and detailed
description of such activity, including--
(A) the date or dates of such activity;
(B) the name of any persons who
participated or invested in or facilitated such
activity;
(C) the United States domiciliary of the
persons referred to in subparagraph (B);
(D) any Federal Government contracts to
which the persons referred to in subparagraph
(B) are parties; and
(E) the steps taken by the United States to
respond to such activity.
(3) Additional information.--The report required by
this subsection shall also include a list of--
(A) any person that the President
determines is an agent, alias, front,
instrumentality, representative, official, or
affiliate of the Islamic Revolutionary Guard
Corps or is an individual serving as a
representative of the Islamic Revolutionary
Guard Corps;
(B) any person that the President
determines has knowingly provided material
support to the Islamic Revolutionary Guard
Corps or an agent, alias, front,
instrumentality, representative, official, or
affiliate of the Islamic Revolutionary Guard
Corps; and
(C) any person who has conducted any
commercial transaction or financial transaction
with the Islamic Revolutionary Guards Corps or
an agent, alias, front, instrumentality,
representative, official, or affiliate of the
Islamic Revolutionary Guard Corps.
(4) Form of reports; publication.--The reports
required under this subsection shall be--
(A) submitted in unclassified form, but may
contain a classified annex; and
(B) published in the Federal Register.
(e) Reports on Global Trade Relating to Iran.--Not later
than one year after the date of the enactment of the Iran
Refined Petroleum Sanctions Act of 2009 and annually
thereafter, the President shall submit to the appropriate
congressional committees a report, with respect to the
immediately preceding 12-month period, on the dollar value
amount of trade, including in the energy sector, between Iran
and each country maintaining membership in the Group of Twenty
Finance Ministers and Central Bank Governors.
* * * * * * *
SEC. 13. EFFECTIVE DATE; SUNSET.
(a) * * *
(b) Sunset.--This Act shall cease to be effective on
December 31, [2011] 2016.
SEC. 14. DEFINITIONS.
As used in this Act:
(1) * * *
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the
Committee on Finance, the Committee on Banking,
Housing, and Urban Affairs, and the Committee on
Foreign Relations of the Senate and the Committee on
Ways and Means, the Committee on Banking and Financial
Services, and the Committee on [International
Relations] Foreign Affairs of the House of
Representatives.
* * * * * * *
(13) Person.--The term ``person'' means--
(A) * * *
(B) a corporation, business association,
partnership, society, trust, financial
institution, insurer, underwriter, guarantor,
any other business organization, including any
foreign subsidiary, parent, or affiliate of
such a business organization, any other
nongovernmental entity, organization, or group,
and any governmental entity operating as a
business enterprise, such as an export credit
agency; and
* * * * * * *
[(14) Petroleum resources.--The term ``petroleum
resources'' includes petroleum and natural gas
resources.]
(14) Knowingly.--The term ``knowingly'' means--
(A) having actual knowledge; or
(B) having the constructive knowledge
deemed to be possessed by a reasonable
individual who acts under similar
circumstances.
(15) Petroleum resources.--The term ``petroleum
resources'' includes petroleum, oil or liquefied
natural gas, oil or liquefied natural gas tankers, and
products used to construct or maintain pipelines used
to transport oil or compressed or liquefied natural
gas.
(16) Refined petroleum products.--The term
``refined petroleum products'' means gasoline,
kerosene, diesel fuel, residual fuel oil, and
distillates and other goods classified in headings 2709
and 2710 of the Harmonized Tariff Schedule of the
United States.
[(15)] (17) United states or state.--The term
``United States'' or ``State'' means the several
States, the District of Columbia, the Commonwealth of
Puerto Rico, the Commonwealth of the Northern Mariana
Islands, American Samoa, Guam, the United States Virgin
Islands, and any other territory or possession of the
United States.
[(16)] (18) United states person.--The term
``United States person'' means--
(A) * * *
* * * * * * *