I 111th CONGRESS 1st Session H. R. 3922 IN THE HOUSE OF REPRESENTATIVES October 23, 2009 Mr. Klein of Florida (for himself, Mr. Mica, Ms. Harman, Mr. Pence, Mr. Peters, Mr. Kirk, Mr. Sherman, Mr. Wexler, Mr. Engel, Mr. Schock, Ms. Berkley, Mr. Bilirakis, Mr. Linder, Mr. Patrick J. Murphy of Pennsylvania, Mr. Hall of New York, Mr. Mack, Mr. Crowley, Mr. Waxman, Mr. Levin, Mr. Braley of Iowa, Mr. Inglis, Mr. Kagen, Mr. Larsen of Washington, Mr. Shuler, Mr. Carney, Mr. Lance, Mr. Israel, Ms. Kilroy, Mr. Hastings of Florida, Ms. Wasserman Schultz, Mr. Himes, Mr. Weiner, and Mr. Gutierrez) introduced the following bill; which was referred to the Committee on Oversight and Government Reform, and in addition to the Committees on Financial Services and Foreign Affairs, 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 ensure that companies operating in the United States that receive United States Government funds are not conducting business in Iran, and for other purposes.

1.

Short title

This Act may be cited as the Accountability for Business Choices in Iran Act.

2.

Findings

Congress makes the following findings: (1)The Islamic Republic of Iran is a party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and a member of the International Atomic Energy Agency (IAEA). (2)Since 1987, successive United States administrations have issued executive orders to ban imports of Iranian-origin goods and services, participation of United States persons or entities in the development of Iran’s energy sector and investment by and in Iranian banks in order to address the unusual and extraordinary threat to the national security, foreign policy and economy of the United States posed by an Iranian nuclear weapons program. (3)On August 5, 1996, the Iran and Libya Sanctions Act was signed into law. In 2006, the title of this law was changed to the Iran Sanctions Act (ISA). The ISA notes that the efforts of the Government of Iran to acquire weapons of mass destruction and the means to deliver them and its support of acts of international terrorism endanger the national security and foreign policy interests of the United States and those countries with which the United States shares common strategic and foreign policy objectives, and therefore requires the President to sanction United States and foreign companies if the President determines that such companies have invested in Iran’s petroleum or natural gas sectors. (4)On March 14, 2000, the Iran Nonproliferation Act was signed into law, to provide for the application of measures to foreign persons who transfer to Iran certain goods, services, or technology, and for other purposes.. (5)On September 30, 2006, the Iran Freedom Support Act (IFSA) was signed into law to hold the current regime in Iran accountable for its threatening behavior and recommended that the President initiate investigations upon the receipt of credible information that a United States or foreign person is investing in Iran’s petroleum or natural gas sector in violation of the ISA. The IFSA extended the ISA until December 31, 2011. (6)In response to its serious concern over Iran’s nuclear program, the United Nations Security Council (UNSC) has passed several resolutions calling on Iran to halt its uranium enrichment and reprocessing activities and instituting rounds of sanctions on Iran, taking all necessary measures to prevent the supply of certain goods or technologies that could contribute to Iran’s uranium enrichment, reprocessing, or heavy water-related activities, or to the development of a nuclear weapon. (7)Iran is in violation of these UNSC resolutions. (8)Effective November 10, 2008, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) revoked authorization for U-turn transfers involving Iran. As of that date, United States depository institutions are no longer authorized to process transfers involving Iran that originate and end with non-Iranian foreign banks. (9)According to a June 5, 2009, IAEA report, Iran has not suspended its enrichment related activities or its work on heavy water related projects as required by the Security Council, nor has Iran cooperated with the [IAEA] in connection with the remaining issues which give rise to concerns and which need to be clarified to exclude the possibility of military dimensions to Iran’s nuclear programme.. (10)On September 25, 2009, President Obama, British Prime Minister Brown, and French President Sarkozy revealed that Iran has been covertly enriching uranium in Qom, Iran. (11)Iran had concealed the existence and purpose of the Qom facility, and had not disclosed the Qom enrichment facility to the IAEA until September 21, 2009.

3.

Sense of Congress

It is the sense of Congress that— (1)the illicit nuclear activities of the Government of Iran—combined with its development of unconventional weapons and ballistic missiles, and support for international terrorism—represent a serious threat to the security of the United States and United States allies in Europe, the Middle East, and around the world; (2)the United States should continue to support diplomatic efforts in the International Atomic Energy Agency and the United Nations Security Council (UNSC) to end Iran’s illicit nuclear activities; (3)the United Nations Security Council should take further measures beyond UNSC Resolutions 1737, 1747, 1803, and 1835 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 nuclear enrichment campaign; (4)the United States should take all possible measures to discourage and, if possible, prevent foreign banks from providing export credits to foreign entities seeking to invest in the Iranian energy sector; (5)the United States should encourage foreign governments to direct state-owned entities to cease all investment in Iran’s energy sector and all exports of refined petroleum products to Iran 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 of refined petroleum products to Iran; (6)moderate Arab countries have a vital and perhaps existential interest in preventing Iran from acquiring nuclear arms, and therefore such countries, particularly countries with large oil deposits, should use their economic leverage to dissuade other countries, including the Russian Federation and the People’s Republic of China, from assisting Iran’s nuclear program directly or indirectly and to persuade other countries, including Russia and China, to be more forthcoming in supporting UNSC efforts to halt Iran’s nuclear program; (7)with Iran’s economy weakened, effective economic measures to isolate the regime may make the difference between a diplomatic resolution and a nuclear standoff; (8)to make a diplomatic solution possible, international firms doing business in Iran should not continue to provide the last crutch of support to the Iranian economy; and (9)this Act seeks to prohibit those entities that do business with the United States from doing business with Iran.

4.

Prohibition on United States Government contracts

(a)

Certification Requirement

The head of each executive agency shall ensure that each contract with a company entered into by such executive agency for the procurement of goods or services or agreement for the use of Federal funds as part of a grant, loan, or loan guarantee to a company, includes a clause that requires the company to certify to the contracting officer that the company does not conduct business operations in Iran described in section 7. (b)

Remedies

(1)

In general

The head of an executive agency may impose remedies as provided in this subsection if the head of the executive agency determines that the contractor has submitted a false certification under subsection (a) after the date the Federal Acquisition Regulation is revised pursuant to subsection (e) to implement the requirements of this section. (2)

Termination

The head of an executive agency may terminate a covered contract with a company upon the determination of a false certification under paragraph (1). (3)

Suspension and debarment

The head of an executive agency may debar or suspend a contractor from eligibility for Federal contracts upon the determination of a false certification under paragraph (1). The debarment period may not exceed 3 years. (4)

Inclusion on list of parties excluded from Federal procurement and nonprocurement programs

The Administrator of General Services shall include on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs maintained by the Administrator under part 9 of the Federal Acquisition Regulation issued under section 25 of the Office of Federal Procurement Policy Act (41 U.S.C. 421) each contractor that is debarred, suspended, proposed for debarment or suspension, or declared ineligible by the head of an executive agency on the basis of a determination of a false certification under paragraph (1). (5)

Rule of construction

This section shall not be construed to limit the use of other remedies available to the head of an executive agency or any other official of the Federal Government on the basis of a determination of a false certification under paragraph (1). (c)

Waiver

(1)

In general

The President may waive the requirement of subsection (a) on a case-by-case basis if the President determines and certifies in writing to the appropriate congressional committees that it is in the national interest to do so. (2)

Reporting requirement

Not later than 120 days after the date of the enactment of this Act and semi-annually thereafter, the Administrator for Federal Procurement Policy shall submit to the appropriate congressional committees a report on waivers granted under paragraph (1). (d)

Implementation Through the Federal Acquisition Regulation

Not later than 120 days after the date of the enactment of this Act, the Federal Acquisition Regulation issued pursuant to section 25 of the Office of Federal Procurement Policy Act (41 U.S.C. 421) shall be revised to provide for the implementation of the requirements of this section. (e)

Report

Not later than one year after the date the Federal Acquisition Regulation is revised pursuant to subsection (e) to implement the requirements of this section, the Administrator of General Services, with the assistance of other executive agencies, shall submit to the Office of Management and Budget and the appropriate congressional committees a report on the actions taken under this section.

5.

Authority of State and local governments to prohibit contracts

Notwithstanding any other provision of law, a State or local government may adopt and enforce measures to prohibit the State or local government, as the case may be, from entering into or renewing a contract for the procurement of goods or services with persons that are included pursuant to section 4(b)(4) on the most recently published list referred to in that section.

6.

Sunset

This Act shall terminate 30 days after the date on which— (1)the President has certified to Congress that the Government of Iran has ceased providing support for acts of international terrorism and no longer satisfies the requirements for designation as a state-sponsor of terrorism for purposes of section 6(j) of the Export Administration Act of 1979, section 620A of the Foreign Assistance Act of 1961, section 40 of the Arms Export Control Act, or any other provision of law; and (2)Iran has permanently ceased the pursuit, acquisition, and development of nuclear, biological, and chemical weapons and missiles.

7.

Definitions

In this Act: (1)

Company

The term company means— (A)a sole proprietorship, organization, association, corporation, partnership, limited liability company, venture, or other entity, its subsidiary or affiliate; and (B)includes a company owned or controlled, either directly or indirectly, by the government of a foreign country, that is established or organized under the laws of, or has its principal place of business in, such foreign country and includes United States subsidiaries of the same. (2)

Affiliate

The term affiliate means any individual or entity that directly or indirectly controls, is controlled by, or is under common control with, the company, including without limitation direct and indirect subsidiaries of the company. (3)

Entity

The term entity means a sole proprietorship, a partnership, limited liability corporation, association, trust, joint venture, corporation, or other organization. (4)

Federal funds

The term Federal funds means a sum of money or other resources derived from United States taxpayers, which the United States Government may provide to companies through government grants or loans, or through the terms of a contract with the Federal Government, or through the Emergency Economic Stabilization Act of 2008 Troubled Asset Relief Program or other similar and related transaction vehicles. (5)

Business operations

Business operations described in this Act are business operations that— (A)provide Iran with refined petroleum resources; (B)sell, lease, or provide to Iran any goods, services, or technology that would allow Iran to maintain or expand its domestic production of refined petroleum resources, including any assistance in refinery construction, modernization, or repair; (C)engage in any activity that could contribute to the enhancement of Iran’s ability to import refined petroleum resources, including providing ships or shipping services to deliver refined petroleum resources to Iran, underwriting or otherwise providing insurance or reinsurance for such activity, or financing or brokering such activity; (D)invest $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 contributes to the enhancement of Iran’s ability to develop petroleum resources of Iran; and (E)provides sensitive technology to the Government of Iran. (6)

Government of Iran

The term Government of Iran includes the Government of Iran, any political subdivision, agency, or instrumentality thereof, and any person owned or controlled by, or acting for or on behalf of, the Government of Iran. (7)

Petroleum resources

(A)

In general

The term petroleum resources includes petroleum, petroleum by-products, oil or liquefied natural gas, oil or liquefied natural gas tankers, and products used to construct or maintain pipelines used to transport oil or compressed or liquefied natural gas. (B)

Petroleum by-products

The term petroleum by-products means gasoline, kerosene, distillates, propane or butane gas, diesel fuel, residual fuel oil, and other goods classified in headings 2709 and 2710 of the Harmonized Tariff Schedule of the United States. (8)

Sensitive technology

The term sensitive technology means hardware, software, telecommunications equipment, or any other technology that the President determines may be used by the Government of Iran— (A)to restrict the free flow of unbiased information in Iran; or (B)to disrupt, monitor, or otherwise restrict speech by the people of Iran. (9)

Appropriate congressional committees

The term appropriate congressional committees means— (A)the Committee on Banking, Housing, and Urban Affairs, the Committee on Foreign Relations, and the Select Committee on Intelligence of the Senate; and (B)the Committee on Financial Services, the Committee on Foreign Affairs, and the Permanent Select Committee on Intelligence of the House of Representatives. (10)

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).