[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3107 Introduced in House (IH)]







104th CONGRESS
  2d Session
                                H. R. 3107

 To impose sanctions on persons exporting certain goods or technology 
 that would enhance Iran's ability to explore for, extract, refine, or 
   transport by pipeline petroleum resources, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 19, 1996

   Mr. Gilman (for himself, Mr. Berman, Mr. Gejdenson, Mr. Burton of 
 Indiana, Mr. King, Mr. Shaw, and Mr. Forbes) introduced the following 
 bill; which was referred to the Committee on International Relations, 
 and in addition to the Committees on Banking and Financial Services, 
Ways and Means, 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 persons exporting certain goods or technology 
 that would enhance Iran's ability to explore for, extract, refine, or 
   transport by pipeline petroleum resources, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Iran Oil Sanctions Act of 1996''.

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 and 
        its support of international terrorism 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 and international terrorism 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.
            (3) The Government of Iran uses its diplomatic facilities 
        and quasi-governmental institutions outside of Iran to promote 
        acts of international terrorism and assist 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 support international terrorism and to fund 
the development and acquisition of weapons of mass destruction and the 
means to deliver them by limiting the development of Iran's ability to 
explore for, extract, refine, or transport by pipeline petroleum 
resources of Iran.

SEC. 4. IMPOSITION OF SANCTIONS.

    (A) In General.--Except as provided in subsection (d), the 
President shall impose 2 or more of the sanctions described in 
paragraphs (1) through (5) of section 5 if the President determines 
that a person has, with actual knowledge or reason to know, on or after 
the date of the enactment of this Act--
            (1) 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 (in this Act referred to as the 
        ``List'') if the provision of such goods or technology would 
        significantly and materially enhance Iran's ability to develop 
        petroleum resources of Iran--
                    (A) whether or not the goods or technology is 
                exported from the United States; and
                    (B) whether or not the goods or technology is 
                subject to the jurisdiction of the United States; or
            (2) made an investment of $40,000,000 or more (or any 
        combination of investments of a least $10,000,000 each, which 
        in the aggregate equals or exceeds $40,000,000 in any 12-month 
        period), that directly contributed to the enhancement of Iran's 
        ability to develop petroleum resources of Iran.
    (b) Persons Against Which the Sanctions Are To Be Imposed.--The 
sanctions described in subsection (a) shall be imposed on--
            (1) the person with respect to whom the President makes the 
        determination subsection (a);
            (2) any successor entity to the person with respect to whom 
        the President makes the determination subsection (a);
            (3) any wholly owned subsidiary of the person with respect 
        to whom the President makes the determination subsection (a);
            (4) any other subsidiary of the person with respect to whom 
        the President makes the determination under subsection (a) if 
        that subsidiary, with actual knowledge or reason to know, 
        engaged in the activities which were the basis of that 
        determination;
            (5) any person that is a parent of the person with respect 
        to whom the President makes the determination under subsection 
        (a) if that parent had actual knowledge or reason to know of 
        the activities which were the basis of that determination; and
            (6) any person that is an affiliate of the person with 
        respect to whom the President makes the determination under 
        subsection (a) if that affiliate, with actual knowledge or 
        reason to know, engaged in the activities which were the basis 
        of that determination.
For purposes of this Act, any person or entity described in this 
subsection shall be referred to as a ``sanctioned person''.
    (c) Publication in Federal Register.--The President shall cause to 
be published in the Federal Register a current list of sanctioned 
persons. The removal of names from, and the addition of names to, the 
list, shall also be so published.
    (d) Exceptions.--The President shall not be required to apply or 
maintain the sanctions under subsection (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 to which the sanctions 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 sanctions;
            (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.

SEC. 5. DESCRIPTION OF SANCTIONS.

    The sanctions to be imposed on a sanctioned person under section 
4(a) are as follows:
            (1) Export-import bank assistance for exports to sanctioned 
        persons.--The President shall direct the Export-Import Bank of 
        the United States not to guarantee, insure, extend credit, or 
        participate in the extension of credit in connection with the 
        export of any goods or services to any sanctioned person.
            (2) Trade sanction.--The President shall both--
                    (A) order the United States Government not to issue 
                any specific license and not to grant any other 
                specific permission or authority to export any goods or 
                technology to a sanctioned person under--
                            (i) the Export Administration Act of 1979;
                            (ii) the Arms Export Control Act;
                            (iii) the Atomic Energy Act of 1954; or
                            (iv) any other statute that requires the 
                        prior review and approval of the United States 
                        Government as a condition for the export or re-
                        export of goods or services; and
                    (B) prohibit the importation into the United States 
                of products produced by any sanctioned person.
        Subparagraph (B) includes application to the importation of any 
        finished product or component part, whether shipped directly by 
        the sanctioned person or by another entity.
            (3) Loans from united states financial institutions.--The 
        United States Government shall prohibit any United States 
        financial institution from making any loan or providing any 
        credit to any sanctioned person in an amount exceeding 
        $10,000,000 (or two or more loans of more than $5,000,000 each 
        in any 12-month period) unless such person is engaged in 
        activities to relieve human suffering and the loan, loans, or 
        credit is provided for such activities.
            (4) Prohibitions on financial institutions.--The following 
        prohibitions shall be imposed against a sanctioned person that 
        is a financial institution:
                    (A) 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.
                    (B) Government funds.--Such financial institution 
                shall not serve as agent of the United States 
                Government or serve as repository for United States 
                Government funds.
            (5) Procurement sanction.--The United States Government 
        shall not procure, or enter into any contract for the 
        procurement of, any goods or services from a sanctioned person.

SEC. 6. ADVISORY OPINIONS.

    The Secretary of State may, upon the request of any person, issue 
an advisory opinion to that person as to whether a proposed activity by 
that person would subject that person to sanctions under this Act. Any 
person who relies in good faith on such an advisory opinion which 
states that the proposed activity would not subject a person to much 
sanctions, and any person who thereafter engages in such activity, may 
not be made subject to such sanctions on account of such activity.

SEC. 7. TERMINATION OF SANCTIONS.

    The requirement under section 4 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) a nuclear explosive device or related materials 
                and technology;
                    (B) chemical and biological weapons; and
                    (C) ballistic missiles and ballistic missile launch 
                technology; and
            (2) has been removed from the list of countries the 
        governments of which have been determined, for purposes of 
        section 6(j) of the Export Administration Act of 1979, to have 
        repeatedly provided support for acts of international 
        terrorism.

SEC. 8. DURATION OF SANCTIONS; PRESIDENTIAL WAIVER.

    (a) Delay of Sanctions.--
            (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 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 such consultations with the government, the President 
        may delay imposition of sanctions under this Act for up to 90 
        days. Following such consultation, 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 
        4(a) concerning such person.
            (3) Additional delay in imposition of sanctions.--The 
        President may delay the imposition of sanctions for up to an 
        additional 90 days if the President determines and certifies to 
        the Congress that the government with primary jurisdiction over 
        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 Committee on Banking, Housing, and Urban Affairs 
        of the Senate and the Committee on International Relations of 
        the House of Representatives a report on the status of 
        consultations with the appropriate foreign government under 
        this subsection, and the basis for any determination under 
        paragraph (3).
    (b) Duration of Sanctions.--The requirement to impose sanctions 
under section 4(a) shall remain in effect until the President 
determines that the sanctioned person is no longer engaging in the 
activity that led to the imposition of sanctions.
    (c) Presidential Waiver.--
            (1) Authority.--The President may waive the requirement in 
        section 4(a) to impose a sanction or sanctions on a person in 
        section 4(b), 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 Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on International Relations of the 
        House of Representatives that it is important to the national 
        interest of the United States to exercise such waiver 
        authority.
            (2) Contents of report.--Any such report shall provide a 
        specific and detailed rationale for such determination, 
        including--
                    (A) a description of the conduct that resulted in 
                the determination;
                    (B) in the case of a foreign person, an explanation 
                of the efforts to secure the cooperation of the 
                government with primary jurisdiction of the sanctioned 
                person to terminate or, as appropriate, penalize the 
                activities that resulted in the determination;
                    (C) an estimate as to the significance of the 
                investment or the provision of the goods or technology, 
                as the case may be, to Iran's ability to develop its 
                petroleum resources; and
                    (D) a statement as to the response of the United 
                States in the event that such person engages in other 
                activities that would be subject to section 4(a).
            (3) Effect of report on waiver.--If the President makes a 
        report under paragraph (1) with respect to a waiver of 
        sanctions on a person in section 4(b), sanctions need not be 
        imposed under section 4(a) on that person during the 30-day 
        period referred to in paragraph (1).

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

    (a) Control List.--
            (1) Contents of list.--For purposes of the determinations 
        to be made under 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. The List shall consist of--
                    (A) all items listed in the Annex to Resolution 883 
                of the Security Council of the United Nations, adopted 
                November 11, 1993, and all types of equipment, 
                supplies, and grants of licenses prohibited by 
                paragraph 5 of that resolution; and
                    (B) any other goods or technology (including 
                software and technical data) that the President 
                determines could significantly or materially contribute 
                to Iran's ability to develop its petroleum resources, 
                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 development of petroleum resources.
            (2) Publication.--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) Advance notice to congress.--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 
        Committee 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 technology.
    (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. 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) the efforts of the President to mount a multilateral 
        campaign to persuade all countries to pressure Iran to cease 
        its weapons of mass destruction programs and its support of 
        international terrorism;
            (2) the efforts of the President to persuade other 
        governments to ask Iran to reduce the presence of Iranian 
        diplomats and representatives of other government and military 
        or quasi-governmental institutions of Iran and to withdraw any 
        such diplomats or representatives who participated in the 
        takeover of the United States embassy in Tehran on November 4, 
        1979, or the subsequent holding of United States hostages for 
        444 days;
                    (3) the extent to which the International Atomic 
                Energy Agency has established regular inspections of 
                all nuclear facilities in Iran, including those 
                presently under construction; and
            (4) Iran's use of Iranian diplomats and representatives of 
        other government and military or quasi-governmental 
        institutions of Iran to promote acts of terrorism or to develop 
        or sustain Iran's nuclear, chemical, biological, and missile 
        weapons programs.
    (b) other Reports.--The President shall ensure the continued 
transmittal to the Congress of reports describing--
            (1) the nuclear and other military capabilities of Iran, as 
        required by section 601(a) of the Nuclear Non-Proliferation act 
        of 1978 and section 1607 of the National Defense Authorization 
        Act, Fiscal Year 1993; and
            (2) the support provided by Iran for acts of international 
        terrorism, as part of the Department of State's annual report 
        on international terrorism.

SEC. 11. APPLICATION OF THE ACT TO LIBYA.

    (a) In General.--The sanctions of this Act, including the terms and 
conditions for the imposition, duration, and termination of sanctions, 
shall apply to persons making investments with respect to the 
development of petroleum resources of Libya, or exporting, 
transferring, or releasing of certain goods or technology to Libya, 
nationals of Libya, or entities owned or controlled by Libya, in the 
same manner as those sanctions apply under this Act to persons making 
investments with respect to the development of petroleum resources of 
Iran, or exporting, transferring, or releasing of certain goods or 
technology to Iran, nationals of Iran, or entities owned or controlled 
by Iran.
    (b) Application of Specific Provisions.--In applying the provisions 
of this Act with respect to Libya under subsection (a) each reference 
to ``Iran'' shall be deemed to be a reference to ``Libya''.

SEC. 12. DETERMINATIONS NOT REVIEWABLE.

    A determination to impose sanctions under this Act shall not be 
reviewable in any court.

SEC. 13. 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) Affiliate.--For purposes of section 4(b), a person is 
        an ``affiliate'' of another person if more than 50 percent of 
        the outstanding capital stock or other beneficial interest in 
        both persons is owned by a third person or both persons are 
        otherwise controlled by a third person.
            (3) 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.
            (4) 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)).
            (5) Develop and development.--To ``develop'', or the 
        ``development'' of, petroleum resources means the exploration 
        for, or the extraction, refining, or transportation by pipeline 
        of, petroleum resources.
            (6) 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).
            (7) 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)).
            (8) Foreign person.--The term ``foreign person'' means--
                    (A) an individual who is not a United States person 
                or an alien lawfully admitted for permanent residence 
                into the United States; or
                    (B) a corporation, partnership, or other 
                nongovernment entity which is not a United States 
                person.
            (9) Goods and technology.--The terms ``goods'' and 
        ``technology'' have the meanings given those terms in section 
        16 of the Export Administration Act of 1979 (50 U.S.C. app. 
        2415).
            (10) Investment.--The term ``investment'' means--
                    (A) the entry into a contract that includes 
                responsibility for the development of petroleum 
                resources located in Iran or Libya (as the case may 
                be), or the entry into a contract providing for the 
                general supervision and guarantee of anther person's 
                performance of such a contract;
                    (B) the purchase of a share of ownership in that 
                development;
                    (C) the entry into a contract providing for the 
                participation in royalties, earnings, or profits in 
                that development, without regard to the form of the 
                participation; or
                    (D) the entry into or performance of--
                            (i) a contract for the financing of the 
                        development of petroleum resources located in 
                        Iran or Libya (as the case may be); or
                            (ii) a guaranty of another person's 
                        performance under such a contract.
            (11) Iran.--The term ``Iran'' means--
                    (A) the territory of Iran; and
                    (B) any territory or marine areas over which the 
                Government of Iran claims sovereignty, sovereign 
                rights, or jurisdiction, if the Government of Iran 
                exercises partial or de facto control over such 
                territory or areas or derives a benefit from economic 
                activity in the territory or area pursuant to an 
                international agreement.
            (12) Iranian diplomats and representatives of other 
        government and military or quasi-governmental institutions of 
        iran.--The term ``Iranian diplomats and representatives of 
        other government and military or quasi-governmental 
        institutions of Iran'' includes employees, representatives, or 
        affiliates of Iran's--
                    (A) Foreign Ministry;
                    (B) Ministry of Intelligence and Security;
                    (C) Revolutionary Guard Corps;
                    (D) Crusade for Reconstruction;
                    (E) Qods (Jerusalem) Forces;
                    (F) Interior Ministry;
                    (G) Foundation for the Oppressed and Disabled;
                    (H) Prophet's Foundation;
                    (I) June 5th Foundation;
                    (J) Martyr's Foundation;
                    (K) Islamic Propagation Organization; and
                    (L) Ministry of Islamic Guidance.
            (13) Libya.--The term ``Libya'' means--
                    (A) the territory of Libya; and
                    (B) any territory or marine areas over which the 
                Government of Libya claims sovereignty, sovereign 
                rights, or jurisdiction, if the Government of Libya 
                exercises partial or de facto control over such 
                territory or area or derives a benefit from economic 
                activity in the territory or area pursuant to an 
                international agreement.
            (14) 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 (as defined in section 11aa. of the Atomic Energy Act 
        of 1954) that is greater than the amount of energy that would 
        be released from the detonation of one pound of trinitrotoluene 
        (TNT).
            (15) Parent.--For purposes of section 4(b), a person is a 
        ``parent'' of another person if that person owns, directly or 
        indirectly, more than 50 percent of the outstanding capital 
        stock or other beneficial interest in that other person, or 
        otherwise controls that other person.
            (16) Person.--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 to any such entity.
            (18) Petroleum resources.--The term ``petroleum resources'' 
        includes petroleum and natural gas resources.
            (19) Subsidiary.--(A) For purposes of section 4(b), and 
        subject to subparagraph (B), a person is a ``subsidiary'' of 
        another person if that other person owns, directly or 
        indirectly, more than 50 percent of the outstanding capital 
        stock or other beneficial interest in that person, or otherwise 
        controls that person.
            (B) A person is a ``wholly owned'' subsidiary of another 
        person if all the outstanding capital stock or other beneficial 
        interests of that person are owned by that other person.
            (20) 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.
            (21) United states person.--The term ``United States 
        person'' means--
                    (A) a natural person who is a citizen of the United 
                States or who owes permanent allegiance to the United 
                States; and
                    (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 described in subparagraph 
                (A) own, directly or indirectly, more than 50 percent 
                of the outstanding capital stock or other beneficial 
                interest in such legal entity.
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