[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2458 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 2458

   To impose sanctions on foreign persons exporting certain goods or 
technology that would enhance Iran's ability to extract, refine, store, 
        process, or transport petroleum products or natural gas.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 11, 1995

   Mr. Gilman (for himself, Mr. King, Mr. Shaw, Mr. Berman, and Mr. 
   Forbes) introduced the following bill; which was referred to the 
Committee on International Relations, and in addition to the Committees 
   on Ways and Means, Banking and Financial Services, Commerce, and 
   Government Reform and Oversight, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To impose sanctions on foreign persons exporting certain goods or 
technology that would enhance Iran's ability to extract, refine, store, 
        process, or transport petroleum products or natural gas.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Iran Foreign Oil Sanctions Act of 
1995''.

SEC. 2. FINDINGS.

    The Congress makes the following findings:
            (1) The efforts of the Government of Iran to acquire 
        weapons of mass destruction and the means to deliver them 
        endanger potentially the national security and foreign policy 
        interests of the United States and those countries with which 
        it shares common strategic and foreign policy objectives.
            (2) The objective of preventing the proliferation of 
        weapons of mass destruction through existing multilateral and 
        bilateral initiatives requires additional efforts to deny Iran 
        the financial means to sustain its nuclear, chemical, 
        biological, and missile weapons programs.

SEC. 3. DECLARATION OF POLICY.

    The Congress declares that it is the policy of the United States to 
deny Iran the ability to fund the development and acquisition of 
weapons of mass destruction and the means to deliver them by preventing 
Iran from acquiring equipment that would enhance Iran's ability to 
extract, refine, process, store, or transport petroleum, petroleum 
products, or natural gas.

SEC. 4. IMPOSITION OF SANCTIONS ON FOREIGN PERSONS EXPORTING CERTAIN 
              GOODS OR TECHNOLOGY TO IRAN.

    (a) In General.--The President shall impose the mandatory sanctions 
described in section 5(1) and may impose one or more of the 
discretionary sanctions described in section 5(2), if the President 
determines that a foreign person has, with requisite knowledge, on or 
after the date of the enactment of this Act, exported, transferred, or 
released to Iran, nationals of Iran, or entities owned or controlled by 
Iran or nationals of Iran any goods or technology identified on the 
List of Petroleum and Natural Gas-Related Goods and Technology 
established under section 9 (hereafter in this Act referred to as the 
``List'')--
            (1) through the export from the United States of any goods 
        or technology identified in the List, or
            (2) through the export from any other country or territory 
        of any goods or technology identified in the List, whether or 
        not the goods or technology is subject to the jurisdiction of 
        the United States.
    (b) Persons Against Which the Sanctions Are To Be Imposed.--The 
sanctions described in subsection (a) shall be imposed on--
            (1) the foreign person with respect to whom the President 
        makes the determination described in that subsection;
            (2) any successor entity to that foreign person;
            (3) any foreign person that is a parent or subsidiary of 
        that person if that parent or subsidiary with requisite 
        knowledge engaged in the activities which were the basis of 
        that determination; and
            (4) any foreign person that is an affiliate of that person 
        if that affiliate with requisite knowledge engaged in the 
        activities which were the basis of that determination and if 
        that affiliate is controlled in fact by that person.
For purposes of this Act, any person or entity described in this 
subsection shall be referred to as a ``sanctioned foreign person''.

SEC. 5. DESCRIPTION OF SANCTIONS.

    The sanctions to be imposed on a sanctioned foreign person under 
section 4(a) are as follows:
            (1) Mandatory sanctions.--
                    (A) Procurement sanction.--The United States 
                Government shall not procure, or enter into any 
                contract for the procurement of, any goods or services 
                from the sanctioned foreign person.
                    (B) Export sanction.--The United States Government 
                shall not, for a period of 3 years, issue any license 
                or grant any other permission or authority to export 
                any goods or technology to a sanctioned foreign person 
                under--
                            (i) the Export Administration Act of 1979;
                            (ii) the Arms Export Control Act; or
                            (iii) the Atomic Energy Act of 1954.
                    (C) Prohibition against export-import bank 
                assistance for exports to foreign persons.--The Export-
                Import Bank of the United States may not guarantee, 
                insure, extend credit, or participate in the extension 
                of credit in connection with the export of any goods or 
                services to any sanctioned foreign person.
            (2) Discretionary sanctions.--
                    (A) Investment in the united states; authority to 
                review certain mergers, acquisitions, and takeovers.--
                The President may exercise his authority under section 
                721(d) of the Defense Production Act of 1950 (50 U.S.C. 
                App. 2170(d)) to investigate and prohibit mergers, 
                acquisitions, takeovers, and other similar investments 
                in the United States by persons engaged in interstate 
                commerce--
                            (i) if such actions involve any sanctioned 
                        foreign person; and
                            (ii) if the President finds, in addition to 
                        the requirements of section 721(e) of such Act, 
                        that the participation of any sanctioned 
                        foreign person in activities to assist, 
                        directly or indirectly, Iran to increase the 
                        revenue available to that government by 
                        extracting petroleum, petroleum products, 
                        natural gas, or engaging in other activities 
                        described in section 9(a)(1) threatens to 
                        impair the national security and foreign policy 
                        interests of the United States.
                    (B) Import sanction.--(i) The importation into the 
                United States of products produced by any sanctioned 
                foreign person may be prohibited.
                    (ii) Clause (i) includes application to--
                            (I) the entry of any finished product or 
                        component part, whether shipped directly by the 
                        sanctioned foreign person or by another entity; 
                        and
                            (II) the contracting with a sanctioned 
                        foreign person for the provision of services in 
                        the United States or abroad by United States 
                        persons and by foreign persons in the United 
                        States.
                    (C) Loans from united states financial 
                institutions.--The United States Government may 
                prohibit any United States financial institution from 
                making any loan or providing any credit to any 
                sanctioned foreign person unless such foreign person is 
                engaged in activities to relieve human suffering, 
                within the meaning of section 203(b)(2) of the 
                International Emergency Economic Powers Act (50 U.S.C. 
                1702(b)(2)).
                    (D) Prohibitions on foreign financial 
                institutions.--The following prohibitions may be 
                imposed against a sanctioned foreign person that is a 
                financial institution:
                            (i) Designation as primary dealer.--Neither 
                        the Board of Governors of the Federal Reserve 
                        System nor the Federal Reserve Bank of New York 
                        may designate, or permit the continuation of 
                        any prior designation of, such financial 
                        institution as a primary dealer in United 
                        States Government debt instruments.
                            (ii) Government funds.--Such financial 
                        institution shall not serve as agent of the 
                        United States Government or serve as repository 
                        for United States Government funds.
                            (iii) Restrictions on operations.--Such 
                        financial institutions shall not, directly or 
                        indirectly--
                                    (I) commence any line of business 
                                in the United States in which it was 
                                not engaged as of the date of the 
                                determination by the President under 
                                section 4(a) leading to the imposition 
                                of sanctions; or
                                    (II) conduct business from any 
                                location in the United States at which 
                                it did not conduct business as of the 
                                date of such determination by the 
                                President under section 4(a).

SEC. 6. WAIVER AUTHORITY REGARDING SANCTIONS AGAINST IRAN.

    The sanctions under section 5 shall not apply if the President 
determines and certifies to the appropriate congressional committees 
that Iran--
            (1) has substantially improved its adherence to 
        internationally recognized standards of human rights;
            (2) has ceased its efforts to design, develop, manufacture, 
        or acquire--
                    (A) a nuclear explosive device or related materials 
                and technology;
                    (B) chemical and biological weapons;
                    (C) missiles and missile launch technology; and
                    (D) any missile or other delivery system capable of 
                reaching the territory of a country the government of 
                which shares strategic interests with the United States 
                and is engaged in defense cooperation, including the 
                acquisition of items identified in the United States 
                Munitions List, with the United States; and
            (3) has ceased all forms of support for international 
        terrorism.

SEC. 7. WAIVER OF SANCTIONS AGAINST FOREIGN PERSONS.

    (a) Consultation With Foreign Governments.--
            (1) Consultations.--If the President makes a determination 
        described in section 4(a) with respect to a foreign person, the 
        Congress urges the President to initiate consultations 
        immediately with the foreign government with primary 
        jurisdiction over that foreign person with respect to the 
        imposition of the sanctions pursuant to this Act.
            (2) Actions by government of jurisdiction.--In order to 
        pursue such consultations with that government, the President 
        may delay imposition of the sanctions under section 5 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 the imposition of 
        appropriate penalties, to terminate the involvement of the 
        foreign person in the activities that resulted in the 
        imposition of sanctions against the foreign person.
            (3) Additional delay in imposition of sanctions.--The 
        President may delay the imposition of sanctions for up to an 
        additional 45 days if the President determines and certifies to 
        the Congress that the government with primary jurisdiction over 
        the foreign person is in the process of taking the actions 
        described in paragraph (2).
            (4) Report to congress.--Not later than 45 days after 
        making a determination under section 4(a), 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) that such government has 
        taken specific corrective actions.
    (b) Assurances From Foreign Persons.--The President may terminate 
the sanctions against a sanctioned foreign person, if the foreign 
person provides assurances to the Secretary that the actions that 
resulted in the determination to impose sanctions have been terminated 
and has provided specific assurances that it will neither directly nor 
indirectly, or through any other person, including subsidiaries and 
affiliates, direct or participate in any activity to provide to Iran 
items on the List.
    (c) Exceptions.--The President shall not be required to apply or 
maintain a sanction under section 4(a)--
            (1) in the case of procurement of defense articles or 
        defense services--
                    (A) under existing contracts or subcontracts, 
                including the exercise of options for production 
                quantities to satisfy requirements essential to the 
                national security of the United States;
                    (B) if the President determines in writing that the 
                person or other entity to which the sanction would 
                otherwise be applied is a sole source supplier of the 
                defense articles or services, that the defense articles 
                or services are essential, and that alternative sources 
                are not readily or reasonably available; or
                    (C) if the President determines in writing that 
                such articles or services are essential to the national 
                security under defense coproduction agreements;
            (2) to products or services provided under contracts 
        entered into before the date on which the President publishes 
        his intention to impose the sanction;
            (3) to--
                    (A) spare parts which are essential to United 
                States products or production;
                    (B) component parts, but not finished products, 
                essential to United States products or production; or
                    (C) routine servicing and maintenance of products, 
                to the extent that alternative sources are not readily 
                or reasonably available;
            (4) to information and technology essential to United 
        States products or production; or
            (5) to medicines, medical supplies, or other humanitarian 
        items.
    (d) Presidential National Security Waiver.--(1) The President may 
waive the requirement in section 4(a) to impose a sanction or sanctions 
on a foreign person in section 4(b), for an export, transfer, or 
release of goods or technology that are not subject to the jurisdiction 
of the United States, 15 days after the President determines and so 
reports to the appropriate congressional committees that it is 
essential to the national interest of the United States to exercise 
such waiver authority.
    (2) Any such report shall provide a specific and detailed rationale 
for such determination, including--
            (A) a description of the conduct, including the 
        identification of the goods or technology involved in the 
        violation, that resulted in the determination of a violation or 
        violations;
            (B) an explanation of the efforts to secure the cooperation 
        of the government with primary jurisdiction of the foreign 
        person committing the violation to terminate or penalize the 
        activities that resulted in the determination of a violation;
            (C) an estimate as to the significance of the goods or 
        technology exported to Iran on that country's ability to 
        extract, refine, process, store, or transport petroleum, 
        petroleum products, or natural gas; and
            (D) a statement as to the response of the United States in 
        the event that such foreign person engages in other activities 
        that under this Act would constitute an additional violation.

SEC. 8. TERMINATION OF SANCTIONS.

    (a) Duration of Sanctions.--The sanctions imposed pursuant to this 
Act shall apply for a period of not less than 12 months following the 
determination by the President under section 4(a) and shall cease to 
apply thereafter only if the President determines and certifies to the 
Congress that reliable information indicates that the foreign person 
with respect to which the determination was made under section 4(a) has 
ceased to aid or abet Iran, any national of Iran, or any entity owned 
or controlled by Iran or nationals of Iran, to acquire goods and 
technology on the List.
    (b) Waiver.--
            (1) Criterion for waiver.--The President may waive the 
        continued application of any sanction imposed on any foreign 
        person pursuant to this Act, after the end of the 12-month 
        period beginning on the date on which that sanction was imposed 
        on that person, if the President determines and certifies to 
        the Congress that the continued imposition of the sanction 
        would have a serious adverse effect on United States national 
        security.
            (2) Notification of and report to congress.--If the 
        President decides to exercise the waiver authority provided in 
        paragraph (1), the President shall so notify the Congress not 
        less than 30 days before the waiver takes effect. Such 
        notification shall include a report fully articulating the 
        rationale and circumstances which led the President to exercise 
        the waiver authority.

SEC. 9. GOODS AND TECHNOLOGY SUBJECT TO EXPORT CONTROL RESTRICTIONS.

    (a) Control List.--(1) For purposes of the determinations to be 
made pursuant to section 4(a), the President, in consultation with the 
Secretary of State and the Secretary of Energy, and the heads of other 
appropriate departments and agencies, shall establish and maintain the 
List of Petroleum and Natural Gas-Related Goods and Technology, 
consisting of goods or technology (including software and technical 
data) that the President determines would materially contribute to the 
extraction, refining, production, storage, or transportation of 
petroleum, petroleum products, or natural gas and the products thereof 
in or by Iran, including goods and technology that are required for the 
development, production, or use of facilities (including the repair, 
maintenance, or operation of equipment) for the petroleum and natural 
gas activities described in this subsection.
    (2) The President, within 60 days after the date of the enactment 
of this Act, shall cause the List to be published in the Federal 
Register, together with any regulations issued with respect thereto. 
Thereafter, any revisions to the List or amendments to the regulations 
shall be published in the same manner.
    (3) Not less than 30 days in advance of the publication of the 
List, it shall be provided to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and to the Committee on International 
Relations of the House of Representatives. The President shall consult 
with such Committees regarding the content of the List and shall 
respond to questions regarding the basis for the inclusion on, or 
exclusion from, the List of specified goods and technologies.
    (4) The President may delegate the functions of this subsection to 
the Secretary of Commerce.
    (b) Statutory Construction.--Nothing in this section prevents the 
inclusion on the List of any goods or technology that may be produced 
in and traded internationally by persons or entities in countries other 
than the United States.

SEC. 10. REGULATORY AUTHORITY.

    The President may issue such regulations as may be necessary to 
carry out this Act.

SEC. 11. REPORT REQUIRED.

    Beginning 60 days after the date of the enactment of this Act, and 
every 90 days thereafter, the President shall transmit to the 
appropriate congressional committees a report describing--
            (1) the nuclear and other military capabilities of Iran; 
        and
            (2) the support, if any, provided by Iran for acts of 
        international terrorism.

SEC. 12. DEFINITIONS.

    As used in this Act:
            (1) Act of international terrorism.--The term ``act of 
        international terrorism'' means an act--
                    (A) which is violent or dangerous to human life and 
                that is a violation of the criminal laws of the United 
                States or of any State or that would be a criminal 
                violation if committed within the jurisdiction of the 
                United States or any State; and
                    (B) which appears to be intended--
                            (i) to intimidate or coerce a civilian 
                        population;
                            (ii) to influence the policy of a 
                        government by intimidation or coercion; or
                            (iii) to affect the conduct of a government 
                        by assassination or kidnapping.
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means the Committees 
        on Banking, Housing and Urban Affairs and Foreign Relations of 
        the Senate and the Committee on International Relations of the 
        House of Representatives.
            (3) Component part.--The term ``component part'' has the 
        meaning given that term in section 11A(e)(1) of the Export 
        Administration Act of 1979 (50 U.S.C. App. 2410a(e)(1)).
            (4) Financial institution.--The term ``financial 
        institution'' includes--
                    (A) a depository institution (as defined in section 
                3(c)(1) of the Federal Deposit Insurance Act), 
                including a branch or agency of a foreign bank (as 
                defined in section 1(b)(7) of the International Banking 
                Act of 1978);
                    (B) a credit union;
                    (C) a securities firm, including a broker or 
                dealer;
                    (D) an insurance company, including an agency or 
                underwriter;
                    (E) any other company that provides financial 
                services; and
                    (F) any subsidiary of an entity described in any of 
                subparagraphs (A) through (E).
            (5) Finished product.--The term ``finished product'' has 
        the meaning given that term in section 11A(e)(2) of the Export 
        Administration Act of 1979 (50 U.S.C. App. 2410a(e)(2)).
            (6) Foreign person.--The term ``foreign person'' means--
                    (A) an individual who is not a United States 
                national or an alien admitted for permanent residence 
                to the United States; or
                    (B) a corporation, partnership, or other 
                nongovernment entity which is not a United States 
                national.
            (7) Goods and technology.--The terms ``goods'' and 
        ``technology'' have the meaning given those terms in section 16 
        of the Export Administration Act of 1979 (50 U.S.C. App. 2415).
            (8) Iran.--The term ``Iran'' includes any agency or 
        instrumentality of Iran.
            (9) Nuclear explosive device.--The term ``nuclear explosive 
        device'' means any device, whether assembled or disassembled, 
        that is designed to produce an instantaneous release of an 
        amount of nuclear energy from special nuclear material that is 
        greater than the amount of energy that would be released from 
        the detonation of one pound of trinitrotoluene (TNT).
            (10) Person.--
                    (A) The term ``person'' means a natural person, as 
                well as a corporation, business association, 
                partnership, society, trust, any other nongovernmental 
                entity, organization, or group, and any governmental 
                entity operating as a business enterprise, and any 
                successor of any such entity.
                    (B) In the case of a country where it may be 
                impossible to identify a specific governmental entity 
                referred to in subparagraph (A), the term ``person'' 
                means--
                            (i) all activities of the government of the 
                        country relating to the development or 
                        production of any missile equipment or 
                        technology; and
                            (ii) all activities of that government 
                        affecting the development or production of 
                        aircraft, electronics, and space systems or 
                        equipment.
            (11) Petroleum products.--The term ``petroleum products'' 
        means crude oil, residual fuel oil, and any refined petroleum 
        product.
            (12) Requisite knowledge.--The term ``requisite knowledge'' 
        means situations in which a person ``knows'', as ``knowing'' is 
        defined in section 104 of the Foreign Corrupt Practices Act of 
        1977 (15 U.S.C. 78dd-2).
            (13) 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.
            (14) United states national.--The term ``United States 
        national'' means--
                    (A) a natural person who is a citizen of the United 
                States or who owes permanent allegiance to the United 
                States;
                    (B) a corporation or other legal entity which is 
                organized under the laws of the United States, any 
                State or territory thereof, or the District of 
                Columbia, if natural persons who are nationals of the 
                United States own, directly or indirectly, more than 50 
                percent of the outstanding capital stock or other 
                beneficial interest in such legal entity; and
                    (C) any foreign subsidiary of a corporation or 
                other legal entity described in subparagraph (B).
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