[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1228 Introduced in Senate (IS)]

  1st Session
                                S. 1228

 To impose sanctions on foreign persons exporting petroleum products, 
              natural gas, or related technology to Iran.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            September 8 (legislative day, September 5), 1995

Mr. D'Amato (for himself, Mr. Inouye, Mr. Pressler, Mr. Faircloth, and 
   Mr. Kohl) introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To impose sanctions on foreign persons exporting petroleum products, 
              natural gas, or related technology to Iran.
    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 PETROLEUM 
              PRODUCTS, NATURAL GAS, OR RELATED TECHNOLOGY TO IRAN.

    (a) In General.--The President shall impose the mandatory sanctions 
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 subject to this section has, with requisite knowledge, 
on or after the date of enactment of this Act, exported, transferred, 
or released to Iran, its nationals, or entities controlled by Iran or 
its nationals any goods or technology identified on the List of 
Petroleum and Natural Gas-Related Goods and Technology established by 
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 that is subject to the 
        jurisdiction of the United States, or
            (2) through the export from any other country or territory 
        of any goods or technology identified in the List that would 
        be, if they were United States goods or technology, subject to 
        the jurisdiction of the United States and subject to the 
        restrictions set forth in this section.
    (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.

SEC. 5. DESCRIPTION OF SANCTIONS.

    The sanctions to be imposed on a 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 such sanctioned foreign person or any parent, 
                subsidiary, affiliate, or successor entity thereof, as 
                described in section 4(b).
                    (B) Export sanction.--(i) The United States 
                Government shall not 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;
                            (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 exportation 
                        of goods and services, or their re-export, to 
                        any foreign person designated by the President 
                        as violating this section.
                    (ii) Sanctioned foreign persons shall be included 
                within the Table of Denial Orders for general and 
                validated export licenses for a period of not less than 
                three years.
                    (C) Denial of entry of persons into the united 
                states.--Sanctioned natural persons, and senior 
                executive officers of sanctioned foreign persons that 
                are corporations or partnerships, shall be ineligible 
                to receive visas and shall be excluded from admission 
                into the United States.
            (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 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 foreign persons 
                        sanctioned under section 4(a); and
                            (ii) if the President finds, in addition to 
                        the requirements of section 721(e) of such Act, 
                        that the participation of foreign persons, 
                        sanctioned by the President under section 4(a), 
                        in activities to assist, directly or 
                        indirectly, Iran to increase the revenue 
                        available to that government by extracting 
                        petroleum, natural gas, or other activities 
                        related to these product sectors 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, including any parent, subsidiary, 
                affiliate, or successor entity thereof, may be 
                prohibited.
                    (ii) Clause (i) includes application to--
                            (I) the entry of any ``finished product'' 
                        or ``component part'', whether shipped directly 
                        by the manufacturer, or by another entity; and
                            (II) the contracting for the provision of 
                        services in the United States or abroad by 
                        United States persons and by foreign persons in 
                        the United States.
                    (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 foreign person that has been made 
                subject to the sanctions pursuant to section 4(a).
                    (D) 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 foreign 
                person sanctioned under section 4(a) 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.
                    (E) Prohibitions on foreign financial 
                institutions.--The following prohibitions may be 
                imposed against foreign financial institutions 
                sanctioned under section 4(a):
                            (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); or
                                    (II) conduct business from any 
                                location in the United States at which 
                                it did not conduct business as of the 
                                date of the determination by the 
                                President under section 4(a).

SEC. 6. WAIVER AUTHORITY REGARDING SANCTIONS AGAINST IRAN.

    The sanctions of 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; or
                    (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) Consultations.--If the President makes a determination 
described in section 4(a) with respect to foreign persons, 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 
section.
            (1) Actions by government of jurisdiction.--In order to 
        pursue such consultations with that government, the President 
        may delay imposition of the sanctions pursuant to this section 
        within 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.
            (2) 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 (1).
            (3) 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 (2) that such government has taken specific 
        corrective actions.
    (b) Assurances From Foreign Persons.--The President may terminate 
the sanctions against a foreign person, subject to a determination 
under section 4(a), if the foreign person provides assurances to the 
Secretary that the actions that resulted in the determination to impose 
sanctions have been terminated and have 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 goods or technology on the List.
    (c) Exceptions.--The President shall not be required to apply or 
maintain the sanctions 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 goods and technology that are 
not subject to the jurisdiction of the United States, 15 days 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 
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 and 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 to terminate or penalize the activities that resulted in 
        the determination of a violation;
            (C) an estimate as to the significance of the goods and 
        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 section would constitute an additional 
        violation.

SEC. 8. TERMINATION OF SANCTIONS.

    (a) Duration of Sanctions.--The sanctions imposed pursuant to this 
section 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, or any individual, group, or 
entity owned or controlled by 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 section, 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 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 (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 of the date of enactment of this 
Act shall cause the List to be published in the Federal Register, 
together with any regulations necessary 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 companies in countries with which the 
United States cooperates in controlling the export of goods and 
technology to prevent the proliferation of weapons of mass destruction 
and the means to deliver them, or in any other country.

SEC. 10. REPORT REQUIRED.

    Beginning 60 days after the date of 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. 11. 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 Committees on Banking and Financial Services 
        and International Relations of the House of Representatives.
            (3) Component parts.--The term ``component parts'' has the 
        meaning given the 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; or
                    (F) any subsidiary of such financial institution.
            (5) Finished products.--The term ``finished products'' has 
        the meaning given the 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) Iran.--The term ``Iran'' includes any agency or 
        instrumentality of Iran.
            (8) 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).
            (9) 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 of any such entity in the case of 
        countries where it may be impossible to identify a specific 
        government entity referred to in paragraph (2), the term 
        ``person'' means--
                    (A) all activities of that government relating to 
                the development or production of any missile equipment 
                or technology; and
                    (B) all activities of that government affecting the 
                development or production of aircraft, electronics, and 
                space systems or equipment.
            (10) Petroleum products.--As used in this section, the term 
        ``petroleum products'' means crude oil, residual fuel oil, or 
        any refined petroleum product.
            (11) Requisite knowledge.--For purposes of this subsection, 
        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).
            (12) Senior executive officers.--The term ``senior 
        executive officers'' includes officers of sanctioned foreign 
        persons, or their designees, who are in a position to direct 
        the conduct or implement the policies that resulted in the 
        determination by the President to impose sanctions against the 
        foreign person.
            (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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