[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3347 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 3347

To amend the Iran and Libya Sanctions Act of 1996 to prevent the direct 
     and indirect financing of the development of weapons of mass 
    destruction programs by Iran and Libya, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 20, 2003

 Ms. Ros-Lehtinen introduced the following bill; which was referred to 
   the Committee on International Relations, and in addition to the 
   Committees on Financial Services, Ways and Means, and Government 
 Reform, 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 amend the Iran and Libya Sanctions Act of 1996 to prevent the direct 
     and indirect financing of the development of weapons of mass 
    destruction programs by Iran and Libya, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``ILSA Enhancement 
and Compliance Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
    TITLE I--AMENDMENTS TO THE IRAN AND LIBYA SANCTIONS ACT OF 1996

Sec. 101. Multilateral regime.
Sec. 102. Imposition of sanctions.
Sec. 103. Description of sanctions.
Sec. 104. Termination of sanctions.
Sec. 105. Sunset.
Sec. 106. Definitions.
Sec. 107. Effective date.
TITLE II--OFFICE OF GLOBAL SECURITY RISK IN THE SECURITIES AND EXCHANGE 
                               COMMISSION

Sec. 201. Establishment of office.
Sec. 202. Reports.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) On September 16, 2003, the Under Secretary for Arms 
        Control and International Security, John R. Bolton, stated 
        before the Committee on International Relations of the House of 
        Representatives that: ``Without question, among rogue states, 
        those most aggressively seeking to acquire or develop weapons 
        of mass destruction and their means of delivery, and which are 
        therefore threats to our national security, are Iran and North 
        Korea, followed by Libya and Syria. It is also the case that 
        these states are among those we identify as state sponsors of 
        terrorism.''.
            (2) In his statement before the International Atomic Energy 
        Agency (IAEA) of the United Nations on September 8, 2003, 
        United States Ambassador Kenneth Brill denounced Iran's 
        patterns of deception regarding its nuclear program by 
        declaring Iran to be ``working in secret, going back into the 
        1980s, to develop sophisticated nuclear facilities; stalling, 
        stonewalling, and on a number of occasions first providing the 
        IAEA false information, and then changing its story when the 
        original version was revealed to be inaccurate; and attempting 
        to cover up traces of its activities to avoid detection by the 
        Agency''.
            (3) The Final Resolution of the Board of Governors of the 
        International Atomic Energy Agency on September 11, 2003, noted 
        with concern, ``that the agency environmental sampling at 
        Natanz has revealed the presence of two types of highly 
        enriched uranium, which requires additional work to enable the 
        Agency to arrive at a conclusion; that IAEA inspectors found 
        considerable modifications had been made to the premises at the 
        Kalaye Electric Company prior to inspections that may impact on 
        the accuracy of the environmental sampling; that some of Iran's 
        statements to the IAEA have undergone significant and material 
        changes, and that the number of outstanding issues has 
        increased since the report; and that despite the Board's 
        statement in June 2003 encouraging Iran as a confidence-
        building measure, not to introduce nuclear material into its 
        pilot centrifuge enrichment cascade at Natanz, Iran has 
        introduced such material''.
            (4) The Government of Iran, in a letter to the 
        International Atomic Energy Agency of August 19, 2003, 
        acknowledged that, in the early 1990s, there had been ``bench 
        scale'' uranium conversion experiments. Iran has indicated that 
        more time will be needed to find the people involved in these 
        experiments and to trace any other closed down facilities.
            (5) Iranian authorities have stated that none of the 
        imported uranium had been processed and specifically, that it 
        had not been used in any centrifuge tests. It was observed, 
        however, during IAEA verification in March 2003, that some of 
        the UF<INF>6</INF> was in fact missing from the two small 
        cylinders.
            (6)(A) Iranian authorities told the International Atomic 
        Energy Agency that the decision to launch a centrifuge 
        enrichment program had actually been taken in 1985 and that 
        Iran had received drawings of the centrifuge through a foreign 
        intermediary around 1987.
            (B) The Iranian authorities described the program as having 
        consisted of three phases: activities during the first phase, 
        from 1985 until 1997, had been located mainly at the Atomic 
        Energy Organization of Iran (AEOI) premises in Tehran; during 
        the second phase, between 1997 and 2002, the activities had 
        been concentrated at the Kalaye Electric Company in Tehran; 
        during the third phase, 2002 to the present, the research and 
        development and assembly activities were moved to the Natanz 
        facility.
            (7) In the August 19, 2003, letter from Iran, the 
        International Atomic Energy Agency was informed that, in the 
        past, apart from planned co-operation in laser fusion and laser 
        spectroscopy which never materialized, there had been a 
        research thesis on laser spectroscopy prepared by a university 
        student in co-operation with the laser division of the Atomic 
        Energy Organization of Iran. Such a study by the AEOI could 
        later prove to be relevant to the implementation of laser 
        enrichment programs in Iran.
            (8) In September 2003, Britain, France, and Germany 
        nevertheless offered western technology to Iran if it stopped 
its nuclear fuel enrichment program and accepted more intrusive United 
Nations inspections of its nuclear facilities, all in defiance of the 
United States efforts to achieve a united front to counter the 
burgeoning Iranian nuclear program.
            (9) European oil investment and credit provisions have 
        unquestionably helped the Iranian economy by enabling it to 
        build its nuclear program. The Iranians are boasting that as 
        much as $20,000,000,000 in oil agreements have been signed 
        between Iran and European Union countries since 1995.
            (10) France's Totalfina formed a multi-billion dollar 
        consortium to develop Iranian oil fields of South Pars in 1995 
        and has been adding to its development ever since. Britain has 
        issued credit guarantees to back up its oil investments in Iran 
        as well.
            (11) Germany is actively seeking to increase its exports to 
        Iran and in 2001 it quadrupled its export insurance to that 
        country. The French bank BNP Paribas has arranged 
        $2,230,000,000 in loans for Iran since 1990.
            (12) Europe has also been actively seeking a European 
        Union-Iran trade pact, formally giving the go-ahead to pursue 
        investments in Iran.
            (13) The Assistant Secretary of State for Nonproliferation, 
        John S. Wolf, in testimony before the Committee on Foreign 
        Relations of the Senate on March 19, 2003, stated that: ``Libya 
        has crossed the nuclear threshold and is among the list of 
        nuclear wannabees. These wannabees seek nuclear weapons 
        capabilities even though they are all parties to the [Treaty on 
        the Non-Proliferation of Nuclear Weapons].''.
            (14) In testimony before the Select Committee on 
        Intelligence of the Senate on February 10, 2003, the Director 
        of Central Intelligence, George J. Tenet, remarked: ``Libya 
        clearly intends to reestablish its offensive chemical weapons 
        capability and has produced at least 100 tons of chemical 
        agents at its Rabta facility.''.
            (15) In addition to manufacturing and possessing chemical 
        weapons, Libya has a history of employing them. According to 
        the Department of Defense, in 1987 Libya employed chemical 
        agents against troops from its neighboring country of Chad. 
        Libya has used missiles and aircraft in combat. Libya also 
        ``fired SCUD missiles at an Italian island in 1987'', according 
        to the 2001 Department of Defense ``Proliferation: Threat and 
        Response'' Report.
            (16) According to the same report, Libya may be capable of 
        producing small quantities of biological agents. And, ``with 
        the suspension of UN sanctions, Libya's ability to acquire 
        biological-related equipment and expertise will increase''.
            (17) The Government of Libya continues to seek ballistic 
        missile delivery systems that could be used for chemical or 
        nuclear warfare. On October 31, 2002, the director of the 
        United States Missile Defense Agency, Lieutenant General Ronald 
        Kadish, stated: ``The Libyans have been pretty active in trying 
        to get missile capability, and not just short-range. They have 
        enough money to buy it . . . We worry a lot about Libya in the 
        Missile Defense Agency.''.

    TITLE I--AMENDMENTS TO THE IRAN AND LIBYA SANCTIONS ACT OF 1996

SEC. 101. MULTILATERAL REGIME.

    (a) Multilateral Negotiations.--Section 4(a) of the Iran and Libya 
Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended--
            (1) by inserting ``and Libya'' after ``Iran''; and
            (2) by striking ``Iran's efforts'' and inserting ``the 
        efforts of both Iran and Libya''.
    (b) Reports to Congress.--Section 4(b) of the Iran and Libya 
Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended to read as 
follows:
    ``(b) Reports to Congress.--The President shall prepare and 
transmit to the appropriate congressional committees not later than 6 
months after the date of enactment of the ILSA Enhancement and 
Compliance Act, and once every 6 months thereafter, a report on the 
specific diplomatic efforts undertaken pursuant to subsection (a), the 
results of these efforts, and a description of proposed diplomatic 
efforts pursuant to such subsection. Each report shall include--
            ``(1) the countries that have agreed to undertake measures 
        to further the objectives of section 3 with respect to either 
        Iran or Libya;
            ``(2) a description of those measures, including--
                    ``(A) government actions with respect to public or 
                private entities (or their subsidiaries) located in 
                their territories, that are engaged in Iran or Libya;
                    ``(B) any decisions by the governments of these 
                countries to rescind or continue the provision of 
                credits, guarantees, or other governmental assistance 
                to these entities; and
                    ``(C) actions taken in international fora to 
                further the objectives of section 3; and
            ``(3) the countries that have not agreed to undertake 
        measures to further the objectives of section 3 with respect to 
        Iran or Libya, and the reasons therefor.''.
    (c) Suspension.--Section 4(c) of the Iran and Libya Sanctions Act 
of 1996 (50 U.S.C. 1701 note) is amended to read as follows:
    ``(c) Suspension.--The President may suspend the application of 
section 5(a) with respect to nationals of a country on a case by case 
basis for a period of not more than 6 months, if the President 
certifies to the appropriate congressional committees at least 30 days 
before the suspension is to take effect that--
            ``(1) the suspension is vital to the national security of 
        the United States; and
            ``(2) the country has undertaken substantial measures, 
        including economic sanctions, to prevent the acquisition and 
        development of weapons of mass destruction by the Government of 
        Iran or Libya, as the case may be, and to carry out activities 
        described in section 2 of this Act.''.
    (d) Investigations.--Section 4 of the Iran and Libya Sanctions Act 
of 1996 (50 U.S.C. 1701 note) is amended by adding at the end the 
following new subsection:
    ``(f) Investigations.--
            ``(1) In general.--Upon public or private disclosure of 
        activity related to investment in Iran or Libya as described in 
        this Act, the President shall direct the Secretary of the 
        Treasury to initiate an investigation into the possible 
        imposition of sanctions with respect to such activity and to 
        provide a recommendation to the President for such purposes.
            ``(2) Determination and notification.--Not later than 90 
        days after the date of the disclosure of activity described in 
        paragraph (1), the President shall make a determination whether 
        or not to impose sanctions with respect to the activity and 
        shall notify the appropriate congressional committees of the 
        basis for this determination.''.

SEC. 102. IMPOSITION OF SANCTIONS.

    (a) Sanctions With Respect to Development of Petroleum Resources.--
Section 5(a) of the Iran and Libya Sanctions Act of 1996 (50 U.S.C. 
1701 note) is amended--
            (1) in the heading, by striking ``to Iran'' and inserting 
        ``to Development of Petroleum Resources'';
            (2) by striking ``, with actual knowledge,''; and
            (3) by striking ``Iran's ability to develop petroleum 
        resources in Iran'' and inserting ``the ability of Iran or 
        Libya to develop petroleum resources, as the case may be''.
    (b) Sanctions With Respect to Development of Weapons of Mass 
Destruction or Other Military Capabilities.--Section 5(b) of the Iran 
and Libya Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended to 
read as follows:
    ``(b) Mandatory Sanctions With Respect to Development of Weapons of 
Mass Destruction or Other Military Capabilities.--Notwithstanding any 
other provision of law, 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, on or after the date of the 
enactment of this Act, exported, transferred, or otherwise provided to 
Iran or Libya any goods, services, technology, or other items the 
provision of which significantly and materially--
            ``(1) contributed to the ability of Iran or Libya to 
        acquire chemical, biological, or nuclear weapons or 
        destabilizing numbers and types of advanced conventional 
        weapons or enhanced the military or paramilitary capabilities 
        of Iran or Libya; or
            ``(2) contributed to the ability of Iran or Libya to 
        maintain its aviation capabilities.''.
    (c) Persons Against Which the Sanctions Are To Be Imposed.--Section 
5(c)(2) of the Iran and Libya Sanctions Act of 1996 (50 U.S.C. 1701 
note) is amended--
                    (A) in subparagraph (B), by striking ``or'' at the 
                end;
                    (B) in subparagraph (C), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) is a private or government lender, insurer, 
                underwriter, re-insurer, or guarantor of the person 
                referred to in paragraph (1).''.

SEC. 103. DESCRIPTION OF SANCTIONS.

    Paragraphs (1) through (6) of section 6 of the Iran and Libya 
Sanctions Act 1996 (50 U.S.C. 1701 note) is amended by striking ``may'' 
each place it occurs and inserting ``shall''.

SEC. 104. TERMINATION OF SANCTIONS.

    Section 8 of the Iran and Libya Sanctions Act 1996 (50 U.S.C. 1701 
note) is amended--
            (1) in subsection (a)--
                    (A) by striking the heading;
                    (B) in the introductory matter preceding paragraph 
                (1)--
                            (i) by inserting ``or Libya'' after 
                        ``Iran'' the first place it appears; and
                            (ii) by inserting ``or Libya, as the case 
                        may be'' after ``Iran'' the second place it 
                        appears;
                    (C) in paragraph (1)(C), by striking ``and'' at the 
                end;
                    (D) in paragraph (2), by striking the period at the 
                end and inserting ``; and''; and
                    (E) by adding at the end the following:
            ``(3) poses no threat to the national security of the 
        United States, its interests, or allies.''; and
            (2) by striking subsection (b).

SEC. 105. SUNSET.

    Section 13 of the Iran and Libya Sanctions Act of 1996 (50 U.S.C. 
1701 note) is hereby repealed.

SEC. 106. DEFINITIONS.

    (a) Investment.--Section 14(9) of the Iran and Libya Sanctions Act 
of 1996 (50 U.S.C. 1701 note) is amended in the last sentence by 
striking ``does not include'' and inserting ``includes''.
    (b) Person.--Section 14(14)(B) of the Iran and Libya Sanctions Act 
of 1996 (50 U.S.C. 1701 note) is amended--
            (1) by inserting after ``trust'' the following: ``, 
        financial institution, insurer, underwriter, re-insurer, 
        guarantors''; and
            (2) by striking ``operating as a business enterprise''.
    (c) Petroleum Resources.--Section 14(15) of the Iran and Libya 
Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended--
            (1) by striking ``and'' and inserting a comma; and
            (2) by inserting ``, and petroleum by-products'' after 
        ``resources''.

SEC. 107. EFFECTIVE DATE.

    The amendments made by sections 102 and 103 shall apply to 
investments made on or after the date of the enactment of this Act.

TITLE II--OFFICE OF GLOBAL SECURITY RISK IN THE SECURITIES AND EXCHANGE 
                               COMMISSION

SEC. 201. ESTABLISHMENT OF OFFICE.

    The Securities and Exchange Commission shall establish an Office of 
Global Security Risk within the Division of Corporation Finance. The 
duties of this office shall include, but will not be limited to:
            (1) Establishing a process by which the Commission 
        identifies all issuers (as defined in section 2(a)(7) of the 
        Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(a)(7))) that are 
        operating in countries, particularly Iran and Libya, the 
        governments of which the Secretary of State has determined, for 
        purposes of section 6(j)(1) of the Export Administration Act of 
        1979 (50 U.S.C. app. 2405(j)(1)), have repeatedly provided 
        support for acts of international terrorism.
            (2) Ensuring that all issuers operating in countries 
        described in paragraph (1) are disclosing to investors the 
        nature of their operations in such countries.
            (3) Implementing enhanced disclosure requirements based on 
        the asymmetric nature of the risk to corporate share value and 
        reputation stemming from business interests in these higher 
        risk countries.
            (4) Coordinating with other government agencies to ensure 
        the sharing of relevant information across the Federal 
        Government.
            (5) Initiating a global dialogue to ensure that foreign 
        corporations whose shares are traded in the United States are 
        properly disclosing their activities in countries described in 
        paragraph (1) to United States investors.

SEC. 202. REPORTS.

    The Commission shall provide the appropriate Congressional 
committees with quarterly reports on the activities of Office of Global 
Security Risk established pursuant to section 201.
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