I 111th CONGRESS 1st Session H. R. 1985 IN THE HOUSE OF REPRESENTATIVES April 21, 2009 Mr. Kirk (for himself, Mr. Sherman, Mr. Wexler, Mr. Klein of Florida, Mr. Blunt, Mr. McMahon, Mr. LoBiondo, Mr. Chaffetz, Mr. Linder, Ms. Kosmas, Mr. Schock, Mr. Burton of Indiana, Ms. Foxx, Mr. Sensenbrenner, Mr. Marchant, Mr. Lamborn, Mrs. Miller of Michigan, Ms. Berkley, Mr. Bilirakis, Mrs. Myrick, Mr. McHenry, Mr. Rehberg, Mr. Garrett of New Jersey, Mr. Platts, and Mr. Shimkus) introduced the following bill; which was referred to the Committee on Foreign Affairs, and in addition to the Committees on Financial Services, Oversight and Government Reform, and Ways and Means, 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 Sanctions Act of 1996 to enhance United States diplomatic efforts with respect to Iran by expanding economic sanctions against Iran to include refined petroleum, and for other purposes.

1.

Short title

This Act may be cited as the Iran Diplomatic Enhancement Act of 2009.

2.

Findings

The Congress finds the following: (1)The Islamic Republic of Iran is a party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). (2)Iran is a member of the International Atomic Energy Agency (IAEA). (3)On July 31, 2006, the United Nations Security Council (UNSC) adopted Resolution 1696, setting a deadline of August 31, 2006, for Iran’s full, unconditional, and immediate compliance with its obligations under the NPT. (4)Iran is in violation of UNSC Resolution 1696. (5)On December 23, 2006, the UNSC adopted Resolution 1737, issuing a legally binding order that Iran immediately suspend all enrichment-related and reprocessing activities and work on all heavy water-related projects, and imposing economic sanctions on Iran until such time as it has fully complied with its obligations. (6)Iran is in violation of UNSC Resolution 1737. (7)On March 24, 2007, the UNSC adopted Resolution 1747, imposing further economic sanctions on Iran for its noncompliance with previous UNSC resolutions. (8)Iran is in violation of UNSC Resolution 1747. (9)On March 3, 2008, the UNSC adopted Resolution 1803, imposing further economic sanctions on Iran for its noncompliance with previous UNSC resolutions. (10)Iran is in violation of UNSC Resolution 1803. (11)On September 27, 2008, the UNSC adopted Resolution 1835, demanding that Iran immediately comply with previous UNSC resolutions. (12)Iran is in violation of UNSC 1835. (13)According to the IAEA, Iran has installed 2 or 3 types of next-generation centrifuges at Natanz FEP, including the IR–2 and the IR–3. (14)On October 26, 2008, IAEA inspectors were unable to carry out a scheduled design information verification visit to the Arak Heavy Water Reactor. (15)According to the IAEA, as of January 31, 2009, Iran had produced a total of some 1,010 kilograms of low enriched uranium hexafluoride, which is 30 percent higher than IAEA estimates and sufficient for a nuclear weapons breakout capability. (16)According to the IAEA’s February 19, 2009, report, Iran had installed more than 5,400 centrifuges. (17)According to the IAEA’s February 19, 2009, report, Iran is producing fuel rods containing uranium pellets for its IR–40 heavy water reactor. (18)According to the IAEA, the IAEA sought and was denied permission by Iran to visit the reactor itself in February 2009, which, according to the IAEA, could adversely impact the IAEA’s ability to carry out effective safeguards at that facility. (19)As evidenced by the February 3, 2009, launch of the Omid satellite into space using the Safir 2-stage space launch vehicle, Iran continues to expand its development of ballistic missiles. (20)According to the IAEA, as of its February 19, 2009, report, Iran has not answered IAEA questions about possible military dimensions of Iran’s nuclear programme. (21)Up to 40 percent of Iranian gasoline comes from imports. (22)Over the course of the past year, Iran purchased nearly all of this gasoline from just six companies, five of them European (the Swiss firm Vitol; the Swiss/Dutch firm Trafigura; the French firm Total; the Swiss firm Glencore; British Petroleum) and one Indian company, Reliance Industries. (23)In February 2009, Vitol and Trafigura supplied some 80 percent of Iran’s gasoline imports, while Reliance Industries and British Petroleum reportedly did not supply gasoline to Iran that month. (24)In light of the extensive relationship between the United States and Switzerland, it is a matter of particular concern that Swiss firms supply more than 80 percent of Iran’s gasoline imports. (25)The majority of tankers carrying gasoline to Iran are insured by Lloyds of London. (26)An interruption or significant limiting of the supply of gasoline to Iran would considerably impact the Iranian economy. (27)An international restriction of gasoline exports to Iran would significantly bolster current diplomatic initiatives. (28)On June 4, 2008, then-Senator Barack Obama said, we should work with Europe, Japan, and the Gulf states to find every avenue outside the U.N. to isolate the Iranian regime—from cutting off loan guarantees and expanding financial sanctions, to banning the export of refined petroleum to Iran. (29)On October 7, 2008, then-Senator Barack Obama said, Iran right now imports gasoline … if we can prevent them from importing the gasoline that they need … that starts changing their cost-benefit analysis. That starts putting the squeeze on them..

3.

Amendments to the Iran Sanctions Act of 1996

(a)

Expansion of Sanctions to Refined Petroleum

Section 5(a) of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended to read as follows: (a)

Sanctions with respect to the development of petroleum resources of Iran and export of refined petroleum resources to Iran

Except as provided in subsection (f), 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, with actual knowledge— (1)(A)on or after the date of the enactment of this Act, made an investment of $40,000,000 or more (or any combination of investments of at least $10,000,000 each, which in the aggregate equals or exceeds $40,000,000 in any 12-month period), that directly and significantly contributed to the enhancement of Iran’s ability to develop petroleum resources of Iran; or (B)on or after the date of the enactment of the Iran Diplomatic Enhancement Act of 2009, made an investment of $20,000,000 or more (or any combination of investments of at least $5,000,000 each, which in the aggregate equals or exceeds $20,000,000 in any 12-month period), that directly and significantly contributed to the enhancement of Iran’s ability to develop petroleum resources of Iran; or (2)on or after the date of the enactment of the Iran Diplomatic Enhancement Act of 2009— (A)provided Iran with refined petroleum resources; (B)engaged in an activity, including production, brokerage, insurance, and tanker delivery services, that could contribute to Iran’s ability to import refined petroleum resources; or (C)provided Iran with goods, services, or technology for refining petroleum. . (b)

International policy

Section 4 of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended by adding at the end the following: (g)

United States policy toward Iran

It shall be the policy of the United States to encourage foreign governments— (1)to direct state-owned entities to cease all investment in Iran's energy sector and all exports of refined petroleum resources to Iran; and (2)to persuade, and, where possible, require private entities based in their territories to cease all investment in Iran's energy sector and all exports of refined petroleum resources to Iran. . (c)

Presidential Waiver

Section 9(c)(2)(C) of such Act is amended by striking section 5(a) or section 5(b) to Iran’s ability to, respectively, develop its petroleum resources or its weapons of mass destruction or other military capabilities and inserting section 5(a)(1), section 5(a)(2), or section 5(b) to Iran’s ability to, respectively, develop its petroleum resources, import refined petroleum resources or refine petroleum, or develop its weapons of mass destruction or other military capabilities. (d)

Reports on United States Efforts To Curtail the Export of Refined Petroleum to Iran

Section 10 of such Act is amended by adding at the end the following new subsection: (d)

Reports on Refined Petroleum Exports to Iran

(1)

Semiannual reports

Not later than 6 months after the date of the enactment of the Iran Diplomatic Enhancement Act of 2009, and every 6 months thereafter, the President shall transmit to the appropriate congressional committees a report describing, with respect to the preceding 6-month period— (A)any person that has provided Iran with refined petroleum resources, and the petroleum resources so provided; (B)any activity, including production, brokerage, insurance, and tanker delivery services, engaged in that could contribute to Iran’s ability to import refined petroleum resources; (C)any person that has provided Iran with goods, services, or technology for refining petroleum, and the goods, services, or technology so provided; and (D)steps taken by the President to carry out the policy set forth in section 4(g). (2)

Additional information

With respect to each matter reported under subparagraph (A), (B), or (C) of paragraph (1), the President shall describe the steps that the United States has taken to respond to the provision of refined petroleum resources described in paragraph (1)(A), the activity described in paragraph (1)(B), or the provision of goods, services, or technology described in paragraph (1)(C), as the case may be. .