Short title; table of contents

(a)

Short title

This Act may be cited as the

Iran Sanctions Act of 2008

. (b)

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 3. Sense of Congress.

Sec. 4. Construction with respect to use of military force.

Sec. 5. Definitions.

Sec. 6. Expansion of definition of person in the Iran Sanctions Act of 1996.

Sec. 7. Russia nuclear cooperation.

Sec. 8. Economic sanctions relating to Iran.

Sec. 9. Liability of parent companies for violations of sanctions by foreign entities.

Sec. 10. Mandatory investigations into the imposition of sanctions.

Sec. 11. Modification of certain tax incentives for oil companies investing in Iran.

Sec. 12. World Bank loans to Iran.

Sec. 13. Increased capacity for efforts to combat unlawful or terrorist financing.

Sec. 14. Exchange programs with the people of Iran.

Sec. 15. Sense of Congress on radio broadcasting to Iran.

Sec. 16. Sense of Congress regarding the international regime for the assured supply of nuclear fuel for peaceful means.

Sec. 17. Reporting requirements.

Sec. 18. Waiver authority.

Sec. 19. Termination.

Findings

Congress makes the following findings: (1)For more than 20 years, Iran has pursued a secret nuclear program that is intended to produce a nuclear weapons capability for Iran. (2)The Government of Iran has consistently misled the United Nations, the International Atomic Energy Agency, and the United States as to the objectives and scope of its nuclear activities. (3)Iran has refused to comply with United Nations Security Council Resolutions 1737 (2006), 1747 (2007), and 1803 (2008), which called for the suspension of all uranium enrichment-related and reprocessing activities, and is advancing work at its largest nuclear facility. (4)The International Atomic Energy Agency is unable to verify the absence of undeclared nuclear material and activities in Iran and its Director General has stated that Iran could be 6 months to a year away from acquiring the material necessary to make a nuclear weapon. (5)The Government of Iran possessing a nuclear weapons capability would pose a grave threat to the security of the United States and its allies around the world. (6)It is in the national security interests of the United States to prevent Iran from acquiring a nuclear weapons capability. (7)The United States should use all political, economic, and diplomatic tools at its disposal to prevent Iran from acquiring a nuclear weapons capability.

Sense of Congress

The following is the sense of Congress: (1)The United States should pursue vigorously all measures in the international financial sector to restrict Iran's ability to conduct international financial transactions, including prohibiting banks in the United States from handling indirect transactions with Iran’s state-owned banks and prohibiting financial institutions from engaging in dollar transactions with Iranian institutions. (2)Iran should comply fully with its obligations under United Nations Security Council Resolutions 1737, 1747, and 1803, and any subsequent United Nations resolutions related to Iran's nuclear program, and in particular the requirement to suspend without delay all uranium enrichment-related and reprocessing activities, including research and development, and all work on all heavy water-related nuclear activities, including research and development. (3)The United Nations Security Council should take further measures beyond Resolutions 1737, 1747, and 1803 to tighten sanctions on Iran, including preventing new investment in Iran's energy sector, as long as Iran fails to comply with the international community's demand to halt its uranium enrichment campaign. (4)The United States should encourage foreign governments to direct state-owned entities to cease all investment in Iran's energy sector and all exports to and imports from Iran of refined petroleum products and to persuade, and, where possible, require private entities based in their territories to cease all investment in Iran's energy sector and all exports to and imports from Iran of refined petroleum products. (5)Administrators of Federal and State pension plans should divest all assets or holdings from foreign companies and entities that have invested or invest in the future in Iran’s energy sector.

Construction with respect to use of military force

Nothing in this Act shall be construed as giving the President the authority to use military force against Iran.

Definitions

In this Act: (1)

Agricultural commodity

The term agricultural commodity has the meaning given that term in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602). (2)

Appropriate congressional committees

The term appropriate congressional committees has the meaning given that term in section 14(2) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note). (3)

Executive agency

The term executive agency has the meaning given the term in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403). (4)

Family member

The term family member means, with respect to an individual, the spouse, children, grandchildren, or parents of the individual. (5)

Investment

The term investment has the meaning given that term in section 14(9) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note). (6)

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 has the meaning given that term in section 14(11) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note). (7)

Medical device

The term medical device has the meaning given the term device in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321). (8)

Medicine

The term medicine has the meaning given the term drug in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).

Expansion of definition of person in the Iran Sanctions Act of 1996

Section 14(13)(B) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note) is amended to read as follows:

(B)(i)(I)a corporation, business association, partnership, society, trust, financial institution, insurer, underwriter, guarantor, or any other business organization, including any foreign subsidiary, parent, or affiliate of one of the foregoing; or (II)any other nongovernmental entity, organization, or group; and (ii)any governmental entity operating as a business enterprise, including an export credit agency; and

Russia nuclear cooperation

(a)

In general

Notwithstanding any other provision of law, and in addition to any other sanction in effect, beginning on the date that is 15 days after the date of the enactment of this Act, the policies described in subsection (b) shall apply with respect to Russia, unless the President makes a certification to Congress described in subsection (c). (b)

Policies

The policies described in this subsection are the following: (1)

Agreements

The United States may not enter into an agreement for cooperation with Russia pursuant to section 123 of the Atomic Energy Act (42 U.S.C. 2153). (2)

Licenses to export nuclear material, facilities, or components

The United States may not issue a license to export directly or indirectly to Russia any nuclear material, facilities, components, or other goods, services, or technology that would be subject to an agreement under section 123 of the Atomic Energy Act (42 U.S.C. 2153). (3)

Transfers of nuclear material, facilities, or components

The United States may not approve the transfer or retransfer directly or indirectly to Russia of any nuclear material, facilities, components, or other goods, services, or technology that would be subject to an agreement under section 123 of the Atomic Energy Act (42 U.S.C. 2153). (c)

Certification

The certification described in this subsection means a certification made by the President to Congress on or after the date that is 15 days after the date of the enactment of this Act that the President has determined that— (1)Russia has suspended all nuclear assistance to Iran and all transfers of advanced conventional weapons and missiles to Iran; or (2)Iran has completely, verifiably, and irreversibly dismantled all nuclear enrichment-related and reprocessing-related programs. (d)

Termination of policies

The policies described in subsection (b) shall remain in effect until such time as the President makes the certification to Congress described in subsection (c).

Economic sanctions relating to Iran

(a)

In general

Notwithstanding any other provision of law, and in addition to any other sanction in effect, beginning on the date that is 15 days after the date of the enactment of this Act, the economic sanctions described in subsection (b) shall apply with respect to Iran. (b)

Sanctions

The sanctions described in this subsection are the following: (1)

Prohibition on imports

No article of Iranian origin may be imported directly or indirectly into the United States. (2)

Prohibition on exports

(A)

In general

Except as provided in subparagraph (B), no article that is of United States origin may be exported directly or indirectly to Iran. (B)

Exceptions

(i)

In general

The prohibition in subparagraph (A) does not apply to exports to Iran of— (I)agricultural commodities; (II)medicine or medical devices; or (III)other articles exported to Iran to provide humanitarian assistance to the people of Iran. (ii)

Informational materials

(I)

In general

The President may not regulate or prohibit the exportation, directly or indirectly, to Iran of informational materials, including publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact discs, CD ROMs, artworks, and news wire feeds that are classifiable under headings 9701, 9702, or 9703 of the Harmonized Tariff Schedule of the United States. (II)

Exception

The limitation on regulation or prohibition of exportation under subclause (I) does not apply to informational materials the exportation of which are otherwise controlled— (aa)under section 5 of the Export Administration Act of 1979 (50 U.S.C. App. 2404) (as in effect pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)); or (bb)under section 6 of that Act (50 U.S.C. App. 2405), to the extent that such controls promote the nonproliferation or antiterrorism policies of the United States or with respect to which acts are prohibited by chapter 37 of title 18, United States Code. (3)

Accession to WTO

The United States Trade Representative or any other Federal official may not take any action that would extend preferential trade treatment to, or lead to the accession to the World Trade Organization of, Iran. (4)

Freezing assets

(A)

In general

At such time as the United States has access to the names of Iranian diplomats and representatives of other government and military or quasi-governmental institutions of Iran that are subject to sanctions imposed under the authority of the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) or any other provision of law relating to the imposition of sanctions with respect to Iran, the President shall take such action as may be necessary to freeze immediately the funds and other assets belonging to anyone so named and any family members or associates of those so named to whom assets or property of those so named were transferred on or after January 1, 2008. The action described in the preceding sentence includes requiring any United States financial institution that holds funds and assets of a person so named to report promptly to the Office of Foreign Assets Control information regarding such funds and assets. (B)

Asset reporting requirement

Not later than 14 days after a decision is made to freeze the property or assets of any person under this paragraph, the President shall report the name of such person to the appropriate congressional committees. (5)

United States Government contracts

The head of an executive agency may not procure, or enter into a contract for the procurement of, any goods or services from a person that meets the criteria for the imposition of sanctions under section 5(a) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note).

Liability of parent companies for violations of sanctions by foreign entities

(a)

In general

In any case in which an entity, the parent company of which is a United States person, engages in an act outside the United States that, if committed in the United States or by a United States person, would violate the provisions of Executive Order 12959 (50 U.S.C. 1701 note) or Executive Order 13059 (50 U.S.C. 1701 note), or any other prohibition on transactions with respect to Iran imposed under the authority of the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) or any other provision of law, the parent company of the entity shall be subject to the penalties for the act if the parent company knowingly participates in the act. (b)

Effective date

(1)

In general

Subsection (a) shall take effect on the date of the enactment of this Act and apply with respect to acts described in that subsection that are— (A)commenced on or after the date of the enactment of this Act; or (B)except as provided in paragraph (2), commenced before such date of enactment, if such acts continue on or after such date of enactment. (2)

Exception

Subsection (a) shall not apply with respect to an act described in paragraph (1)(B) by an entity if the parent company of the entity divests or terminates its business with that entity not later than 90 days after such date of enactment. (c)

Definitions

In this section: (1)

Entity

The term entity means a partnership, association, trust, joint venture, corporation, or other organization. (2)

Parent company

The term parent company means an entity— (A)that is a United States person; and (B)(i)that owns, directly or indirectly, more than 50 percent of the equity interest by vote or value in another entity; (ii)board members or employees of which hold a majority of the seats on the board of directors of another entity; or (iii)that otherwise controls or is able to control the actions, policies, or personnel decisions of another entity. (3)

United States person

The term United States person means— (A)a natural person who is a citizen, resident, or national of the United States; and (B)an entity that 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 entity.

10.

Mandatory investigations into the imposition of sanctions

(a)

In general

Section 4(f) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note) is amended— (1)in paragraph (1), by striking should and inserting shall; (2)in paragraph (2), by striking should and inserting shall; and (3)by adding at the end the following:

(3)

Extension of time for investigations

The President may extend the time period for making a determination under paragraph (2) by not more than an additional 180 days if the President determines that the President will be unable to make a determination during the time period required under paragraph (2).

(b)

Effective date

The amendments made by subsection (a) shall apply with respect to investigations initiated based on information indicating that a person is engaged in investment activity described in section 5(a) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note) that is received by the United States on or after the date that is 90 days after the date of the enactment of this Act.

11.

Modification of certain tax incentives for oil companies investing in Iran

(a)

In general

Subsection (h) of section 167 of the Internal Revenue Code of 1986 (relating to amortization of geological and geophysical expenditures) is amended by adding at the end the following new paragraph:

(6)

Longer amortization period when Iran sanctions in effect

(A)

In general

In the case of geological and geophysical expenses paid or incurred during any taxable year ending during a sanction period with respect to the taxpayer— (i)paragraphs (1) and (4) shall be applied by substituting 10-year for 24-month, and (ii)paragraph (5)(A) shall be applied by substituting 10-year for 7-year. (B)

Special rule for unamortized expenses as of beginning of sanction period

In the case of geological and geophysical expenses paid or incurred after December 31, 2008, and remaining unamortized as of the beginning of the first taxable year ending during a sanction period with respect to the taxpayer, such unamortized expenses shall be treated as having been paid or incurred during such first taxable year for purposes of applying subparagraph (A). (C)

Special rule for unamortized expenses as of end of sanction period

In the case of geological and geophysical expenses paid or incurred after December 31, 2008, and remaining unamortized as of the beginning of the first taxable year ending after the last day of a sanction period, the taxpayer may elect to treat such unamortized expenses as having been paid or incurred during such first taxable year for purposes of applying this subsection. (D)

Sanction period

For purposes of this paragraph, the term sanction period means, with respect to any taxpayer, any period during which sanctions under section 5(a) of the Iran Sanctions Act of 1996 or section 8 of the Iran Sanctions Act of 2008 (relating to sanctions with respect to the development of petroleum resources of Iran)— (i)are imposed on the taxpayer, or (ii)are imposed on any other member of the expanded affiliated group which includes the taxpayer, or would be so imposed if such other member were a domestic corporation. (E)

Expanded affiliated group

For purposes of this paragraph— (i)

In general

The term expanded affiliated group means an affiliated group as defined in section 1504(a), determined— (I)by substituting more than 50 percent for at least 80 percent each place it appears, and (II)without regard to paragraphs (2), (3), and (4) of section 1504(b). (ii)

Other affiliated entities

Under regulations prescribed by the Secretary, the term expanded affiliated group shall include entities other than corporations which, based on principles similar to the principles which apply in the case of clause (i), are members of the same affiliated group.

(b)

Effective date

The amendment made by subsection (a) shall apply to expenses paid or incurred on or after January 1, 2009.

12.

World Bank loans to Iran

(a)

Report

Not later than 180 days after the date of the enactment of this Act, and every 180 days thereafter, the Secretary of the Treasury shall submit to the appropriate congressional committees a report on— (1)the number of loans provided by the World Bank to entities in Iran and for projects or activities in Iran; (2)the dollar amount of such loans; and (3)the voting record of each member of the World Bank on such loans. (b)

Reduction of contribution of the United States

If the World Bank extends any new loans to entities in Iran, or for projects and activities in Iran, after December 31, 2008, the President shall reduce the total amount otherwise payable on behalf of the United States to the World Bank for fiscal year 2010 and each fiscal year thereafter by an amount that bears the same ratio to the total amount otherwise payable as— (1)the total of the amounts provided by the Bank to entities in Iran, and for projects and activities in Iran, in the preceding fiscal year, bears to (2)the total of the amounts provided by the Bank to all entities, and for all projects and activities, in the preceding fiscal year. (c)

Allocation of amounts not contributed to the World Bank

There is authorized to be appropriated to the United States Agency for International Development for fiscal year 2010 and each fiscal year thereafter an amount equal to the amount made available as a result of the application of subsection (b). Funds appropriated pursuant to this subsection shall be made available for the Child Survival and Health Programs Fund to carry out programs relating to maternal and child health, vulnerable children, and infectious diseases other than HIV/AIDS.

13.

Increased capacity for efforts to combat unlawful or terrorist financing

(a)

Findings

The work of the Office of Terrorism and Financial Intelligence of the Department of the Treasury, which includes the Office of Foreign Assets Control and the Financial Crimes Enforcement Network, is critical to ensuring that the international financial system is not used for purposes of supporting terrorism and developing weapons of mass destruction. (b)

Authorization of appropriations for Office of Terrorism and Financial Intelligence

There is authorized to be appropriated to the Secretary of the Treasury for the Office of Terrorism and Financial Intelligence— (1)$61,712,000 for fiscal year 2009; and (2)such sums as may be necessary for each of the fiscal years 2010 and 2011. (c)

Authorization of appropriations for Financial Crimes Enforcement Network

Section 310(d)(1) of title 31, United States Code, is amended by striking such sums as may be necessary for fiscal years 2002, 2003, 2004, and 2005 and inserting $91,335,000 for fiscal year 2009 and such sums as may be necessary for each of the fiscal years 2010 and 2011.

14.

Exchange programs with the people of Iran

(a)

Sense of Congress

It is the sense of Congress that the United States should seek to enhance its friendship with the people of Iran, particularly by identifying young people of Iran to come to the United States under United States exchange programs. (b)

Exchange programs authorized

The President is authorized to carry out exchange programs with the people of Iran, particularly the young people of Iran. To the extent practicable, such programs shall be carried out in a manner consistent with the requirements for eligibility for assistance specified in section 302(b) of the Iran Freedom Support Act (Public Law 109–293; 120 Stat. 1348). (c)

Authorization of appropriations

Of the amounts available under the heading Educational and Cultural Exchange Programs, under the heading Administration of Foreign Affairs, under title IV of the Science, State, Justice, Commerce, and Related Agencies Appropriations Act, 2006 (Public Law 109–108; 119 Stat. 2321), there are authorized to be appropriated to the President to carry out this section $15,000,000 for fiscal year 2009.

15.

Sense of Congress on radio broadcasting to Iran

It is the sense of Congress that the Broadcasting Board of Governors should devote a greater proportion of the programming of the Radio Farda service to programs offering news and analysis to further the open communication of information and ideas to Iran.

16.

Sense of Congress regarding the international regime for the assured supply of nuclear fuel for peaceful means

(a)

Policy

It is the policy of the United States to support the establishment of an international regime for the assured supply of nuclear fuel for peaceful means under a multilateral authority, such as the International Atomic Energy Agency. (b)

Sense of Congress on an international regime for the assured supply of nuclear fuel

It is the sense of Congress that— (1)the Concept for a Multilateral Mechanism for Reliable Access to Nuclear Fuel, proposed by the United States, France, the Russian Federation, the Federal Republic of Germany, the United Kingdom, and the Netherlands on May 31, 2006, is welcome and should be expanded upon at the earliest possible opportunity; (2)the proposal by the Government of the Russian Federation to bring one of its uranium enrichment facilities under international management and oversight is also a welcome development and should be encouraged by the United States; (3)the offer by the Nuclear Threat Initiative of $50,000,000 in funds to support the creation of an international nuclear fuel bank by the International Atomic Energy Agency is also welcome, and the United States and other member states of the International Atomic Energy Agency should pledge collectively at least an additional $100,000,000 in matching funds to fulfill the proposal made by the Nuclear Threat Initiative; and (4)the Global Nuclear Energy Partnership, initiated by President George W. Bush in January 2006, is intended to provide a reliable fuel supply throughout the fuel cycle and promote the nonproliferation goals of the United States. (c)

Sense of Congress on contributions to IAEA To establish an international nuclear fuel bank

(1)

In general

It is the sense of Congress that the President should determine the appropriateness of making voluntary contributions on a grant basis to the International Atomic Energy Agency (in this subsection referred to as the IAEA) to support the establishment of an international nuclear fuel bank to maintain a reserve of low-enriched uranium for the production of reactor fuel to be provided to eligible countries in the case of a disruption in the supply of reactor fuel by normal market mechanisms. (2)

Determinations

It is the sense of Congress that, in making a determination under paragraph (1), the President should consider whether— (A)the IAEA has received pledges in a total amount of not less than $100,000,000 from other governments or entities for the purpose of supporting the establishment of the international nuclear fuel bank referred to in paragraph (1); (B)the international nuclear fuel bank referred to in paragraph (1) will be under the oversight of the IAEA or another multilateral authority; and (C)the international nuclear fuel bank will provide nuclear reactor fuel to a country only if— (i)at the time of the request for nuclear reactor fuel, the country is in full compliance with its IAEA safeguards agreement and has an additional protocol for safeguards in force; (ii)in the case of a country that at any time prior to the request for nuclear reactor fuel has been determined to be in noncompliance with its IAEA safeguards agreement, the IAEA Board of Governors determines that the country has taken all necessary actions to satisfy any concerns of the IAEA Director General regarding the activities that led to the prior determination of noncompliance; (iii)the country agrees to use the nuclear reactor fuel in accordance with its IAEA safeguards agreement; and (iv)the country does not operate uranium enrichment or spent-fuel reprocessing facilities of any scale. (3)

Authorization of appropriations

There are authorized to be appropriated $50,000,000 to carry out this section for fiscal year 2009. Amounts appropriated pursuant to this section shall remain available until September 30, 2011.

17.

Reporting requirements

(a)

Foreign investment in Iran

Not later than 180 days after the date of the enactment of this Act, and every 180 days thereafter, the Secretary of the Treasury shall submit to the appropriate congressional committees a report on— (1)any foreign investments made in Iran’s energy sector on or after January 1, 2008; and (2)the determination of the President on whether each such investment qualifies as a sanctionable offense under section 5(a) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note). (b)

Investment by United States companies in Iran

Not later than 180 days after the date of the enactment of this Act, and annually thereafter, the Secretary of the Treasury shall report to the appropriate congressional committees the names of persons that have operations or conduct business in the United States that have invested in Iran and the dollar amount of each such investment. (c)

Establishment of international regime

Not later than 180 days after the date of the enactment of this Act, the President shall submit to the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate a report on the activities of the United States to support the establishment of an international regime for the assured supply of nuclear fuel for peaceful means under a multilateral authority, such as the International Atomic Energy Agency. (d)

Export credits

Not later than 90 days after the date of the enactment of this Act, and every 90 days thereafter, the Secretary of the Treasury shall report to the appropriate congressional committees on the export credits issued by foreign banks to persons investing in the energy sector of Iran, and any fines, restrictions, or other actions taken by the President to discourage or prevent the issuance of such export credits. (e)

Sense of congress on investment by the Federal Thrift Savings Plan in Iran

It is the sense of Congress that not later than 180 days after the date of the enactment of this Act, and annually thereafter, the Executive Director of the Federal Retirement Thrift Investment Board should report to the appropriate congressional committees on any investment in entities that invest in Iran from the Thrift Savings Fund established under section 8437 of title 5, United States Code.

18.

Waiver authority

The President may waive the imposition of sanctions under section 8, 9, or 12 if the President— (1)determines that such a waiver is in the national interest of the United States; and (2)submits to the appropriate congressional committees a report describing the reasons for the determination.

19.

Termination

Except as provided in section 7, the provisions of, and amendments made by, this Act shall terminate on the earlier of— (1)the date on which the President determines and certifies to the appropriate congressional committees that Iran has completely, verifiably, and irreversibly dismantled all uranium enrichment-related and reprocessing-related programs; or (2)the date that is 5 years after the date of the enactment of this Act.