[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 358 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  1st Session
                                 S. 358

 To establish a designation for jurisdictions permissive to terrorism 
  financing, to build the capacity of partner nations to investigate, 
    prosecute, and hold accountable terrorist financiers, to impose 
 restrictions on foreign financial institutions that provide financial 
     services for terrorist organizations, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 13, 2017

    Mr. Casey (for himself, Mr. Isakson, Mr. Rubio, and Ms. Warren) 
introduced the following bill; which was read twice and referred to the 
                     Committee on Foreign Relations

_______________________________________________________________________

                                 A BILL


 
 To establish a designation for jurisdictions permissive to terrorism 
  financing, to build the capacity of partner nations to investigate, 
    prosecute, and hold accountable terrorist financiers, to impose 
 restrictions on foreign financial institutions that provide financial 
     services for terrorist organizations, 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.

    This Act may be cited as the ``Stop Terrorist Operational Resources 
and Money Act''.

SEC. 2. FINDINGS; SENSE OF CONGRESS.

    (a) Findings.--Congress makes the following findings:
            (1) According to testimony by the Director of National 
        Intelligence before the Committee on Armed Services of the 
        Senate on February 9, 2016, ISIL, with its self-described 
        caliphate in Syria and Iraq, its affiliates and emerging 
        affiliates in other countries, and its increasing ability to 
        direct and inspire attacks against a wide range of targets 
        around the world, has been identified as the preeminent 
        terrorist threat to the United States.
            (2) On February 2, 2015, General John Allen, who was then 
        serving as the Special Presidential Envoy for the Global 
        Coalition to Counter ISIL--
                    (A) stated that the United States ``cannot defeat 
                ISIL through military efforts alone''; and
                    (B) highlighted the need to deprive the group of 
                access to financial resources.
            (3) The United States and its partners have committed to 
        curtailing ISIL's financial resources through--
                    (A) United Nations Security Council Resolution 
                2170, adopted August 15, 2014;
                    (B) Arab League Resolution 7804, adopted September 
                7, 2014;
                    (C) the Jeddah Communique, published September 11, 
                2014;
                    (D) United Nations Security Council Resolution 
                2199, adopted February 12, 2015;
                    (E) the statement of the International Syria 
                Support Group of November 14, 2015;
                    (F) United Nations Security Council Resolution 
                2249, adopted November 20, 2015; and
                    (G) United Nations Security Council Resolution 
                2253, adopted December 17, 2015.
            (4) Matthew Levitt of the Washington Institute has reported 
        that ISIL exploits many revenue streams in addition to oil 
        revenue and charitable donations. In a November 18, 2015, 
        article, Mr. Levitt states ``[ISIL] steals livestock; sells 
        foreign fighter passports; taxes minorities and farmers and 
        truckers; runs a sophisticated extortion racket; kidnaps 
        civilians for ransom payments; loots antiquities; and much 
        more.''.
            (5) The United States and 35 other countries and 
        multinational organizations have acted in concert through the 
        Counter-ISIL Finance Group--
                    (A) to cut off ISIL from the international 
                financial system;
                    (B) to counter the extortion and exploitation by 
                ISIL of economic assets and resources;
                    (C) to deny funding for ISIL from abroad; and
                    (D) to prevent ISIL from providing financial or 
                material support to foreign affiliates.
            (6) These actions have included--
                    (A) Coalition airstrikes on oil facilities, which 
                reduced ISIL oil revenue by 30 percent between November 
                2015 and January 2016;
                    (B) the designation of 30 ISIL-linked senior 
                leaders and financiers in 2015, which inhibited their 
                use of the international financial system and limited 
                the ability of ISIL to access revenue; and
                    (C) the unanimous adoption, on February 12, 2015, 
                of United Nations Security Council Resolution 2199, 
                which--
                            (i) warned that ISIL and other extremist 
                        groups were trafficking cultural heritage items 
                        from Iraq and Syria to fund their recruitment 
                        efforts and carry out terrorist attacks; and
                            (ii) called on all United Nations member 
                        states to prevent such trafficking.
            (7) The Financial Action Task Force, an intergovernmental 
        body established in 1989 to combat money laundering and 
        terrorist financing, has issued 40 recommendations to serve as 
        global standards--
                    (A) to protect the integrity of the international 
                financial system; and
                    (B) to enhance international cooperation on anti-
                money laundering and combating the financing of 
                terrorism measures.
            (8) On April 15, 2016, finance ministers from the Group of 
        Twenty (G20) called on the FATF to ``strengthen its work on 
        identifying and tackling loopholes and deficiencies that remain 
        in the financial system and ensure that the FATF standards are 
        effective and comprehensive, and fully implemented.''.
            (9) The February 2015 FATF report entitled ``Financing of 
        the Terrorist Organisation Islamic State in Iraq and the 
        Levant'' highlighted the use of money and value transfer 
        services (referred to in this paragraph as ``MVTS''), which 
        avoid the banking system by relying on trust-based 
        relationships with other MVTS providers to order payment or 
        receipt of hard currency over email, fax, or phone.
    (b) Sense of Congress.--It is the sense of Congress that--
            (1) it is in the interest of peace and stability for 
        regional members of the Global Coalition to Counter ISIL to 
        continue their commitment to, and increase their involvement 
        in, addressing the threat posed by ISIL;
            (2) all Coalition partners should prioritize action against 
        the financial and facilitation networks to deprive ISIL of 
        revenue as a key line of effort in degrading and ultimately 
        defeating ISIL;
            (3) the Department of Justice, the Department of State, and 
        the Department of the Treasury should appropriately increase 
        their efforts--
                    (A) to build the capacity of partner nations to 
                investigate, prosecute, and hold accountable terrorist 
                financiers;
                    (B) to exchange relevant information regarding 
                investigations of terrorist financiers and facilitators 
                operating in violation of United States sanctions; and
                    (C) to build the capacity to request extradition, 
                as appropriate;
            (4) countries in regions in which ISIL has a presence 
        should, as appropriate, regulate and shut down informal 
        exchange houses used by foreign fighters to funnel funds in and 
        out of territory held by ISIL;
            (5) Turkey and other countries in the region should take 
        steps to ensure that fighters, hard currency, energy resources, 
        cultural heritage items, agricultural commodities, and other 
        goods bound to or coming from ISIL are prevented from crossing 
        its border; and
            (6) the President, acting through the Secretary of the 
        Treasury, and in consultation with the Attorney General and the 
        Secretary of Homeland Security, should update the National 
        Money Laundering Strategy required under section 5341 of title 
        31, United States Code, which has not been updated since 2007.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Act of international terrorism.--The term ``act of 
        international terrorism'' has the meaning given the term in 
        section 14 of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 
        note).
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Foreign Relations of the 
                Senate;
                    (B) the Committee on Banking, Housing, and Urban 
                Affairs of the Senate;
                    (C) the Committee on Appropriations of the Senate;
                    (D) the Committee on Foreign Affairs of the House 
                of Representatives;
                    (E) the Committee on Financial Services of the 
                House of Representatives; and
                    (F) the Committee on Appropriations of the House of 
                Representatives.
            (3) Classified information.--The term ``classified 
        information'' has the meaning given the term in section 1(a) of 
        the Classified Information Procedures Act (18 U.S.C. App.).
            (4) Coalition.--The term ``Coalition'' means the Global 
        Coalition to Counter ISIL.
            (5) FATF.--The term ``FATF'' means the Financial Action 
        Task Force.
            (6) Foreign terrorist organization.--The term ``foreign 
        terrorist organization'' means an organization designated by 
        the Secretary of State, in consultation with the Secretary of 
        the Treasury and the Attorney General, as a foreign terrorist 
        organization under section 219(a) of the Immigration and 
        Nationality Act (8 U.S.C. 1189(a)).
            (7) ISIL.--The term ``ISIL'' means the Islamic State of 
        Iraq and the Levant.

SEC. 4. JURISDICTIONS OF TERRORISM FINANCING CONCERN.

    (a) Designation.--
            (1) In general.--The President may designate a country as a 
        ``Jurisdiction of Terrorism Financing Concern'' if the 
        President determines that government officials of the country 
        know, or should know, that activities take place within the 
        jurisdiction of the country that substantially finance the 
        operations of, or acts of international terrorism by, one or 
        more foreign terrorist organizations.
            (2) Determination of substantially finance.--In making a 
        determination under paragraph (1), the President shall evaluate 
        criteria, which may include--
                    (A) the extent to which funds, goods, materiel, and 
                other assets transferred into, out of, or through the 
                country are used, or intended to be used, to finance 
                the operations of, or acts of international terrorism 
                by, foreign terrorist organizations;
                    (B) the adequacy of the laws and regulations of the 
                country to prevent transfers described in subparagraph 
                (A) compared to the recommendations of the Financial 
                Action Task Force and other appropriate international 
                standards; or
                    (C) the unwillingness or demonstrated inability of 
                the government of the country--
                            (i) to prevent the use of its jurisdiction 
                        for activities that finance the operations of, 
                        or acts of international terrorism by, foreign 
                        terrorist organizations; and
                            (ii) to investigate, prosecute, and hold 
                        accountable individuals and entities that 
                        participate in activities that finance the 
                        operations of, or acts of international 
                        terrorism by, foreign terrorist organizations.
    (b) Report.--
            (1) In general.--Upon designating a country as a 
        Jurisdiction of Terrorism Financing Concern under subsection 
        (a), the President shall submit a report to the appropriate 
        congressional committees that--
                    (A) identifies the country that has been so 
                designated; and
                    (B) sets forth the information upon which the 
                President relied to make such designation, including 
                the criteria described in subsection (a)(2).
            (2) Form.--The report required under paragraph (1) shall be 
        submitted in an unclassified form, but may include a classified 
        annex.
    (c) Presidential Actions With Respect to Countries Designated as 
Jurisdictions of Terrorism Financing Concern.--
            (1) In general.--Not later than 90 days after each report 
        is submitted under subsection (b) with respect to a country 
        designated as a Jurisdiction of Terrorism Financing Concern, 
        the President shall carry out one or more of the actions 
        described in subparagraphs (A) through (G) of paragraph (2).
            (2) Description of presidential actions.--Except as 
        provided in subsections (d) and (e), the actions described in 
        this paragraph are--
                    (A) absent the permission of the relevant 
                congressional committees, with an additional 60 days of 
                notification beyond the period that would otherwise 
                apply to such a license or grant, ordering the heads of 
                the appropriate United States agencies not to issue any 
                specific licenses and not to grant any other specific 
                authority (or a specified number of authorities) to 
                export any goods, services, or technology worth more 
                than $5,000,000 over a 12-month period to the 
                government of a country designated under subsection 
                (a)(1) under--
                            (i) the Export Administration Act of 1979 
                        (50 U.S.C. 4601 et seq.);
                            (ii) the Arms Export Control Act (22 U.S.C. 
                        2751 et seq.);
                            (iii) the Atomic Energy Act of 1954 (42 
                        U.S.C. 2011 et seq.); or
                            (iv) any other statute that requires the 
                        prior review and approval of the United States 
                        Government as a condition for the export or 
                        reexport of goods, services, or technology;
                    (B) withdrawing, limiting, or suspending United 
                States development assistance to the foreign 
                government;
                    (C) withdrawing, limiting, or suspending United 
                States security assistance to the foreign government;
                    (D) directing the Export-Import Bank of the United 
                States, the Overseas Private Investment Corporation, or 
                the Trade and Development Agency not to approve the 
                issuance of any (or a specified number of) guarantees, 
                insurance, extensions of credit, or participation in 
                the extension of credit with respect to the foreign 
                government;
                    (E) consistent with section 701 of the 
                International Financial Institutions Act of 1977 (22 
                U.S.C. 262(d)), directing the United States executive 
                directors of international financial institutions to 
                oppose and vote against loans primarily benefiting the 
                foreign government;
                    (F) prohibiting any United States financial 
                institution from making loans or providing credits 
                totaling more than $10,000,000 in any 12-month period 
                to the foreign government; and
                    (G) prohibiting the United States Government from 
                procuring, or entering into any contract for the 
                procurement of, any goods, services, or technology from 
                the foreign government.
    (d) Substitution of Agreements.--
            (1) In general.--Instead of carrying out an action under 
        subsection (c), the President may conclude an agreement with 
        the government of a country designated under subsection (a)(1). 
        The existence of an agreement under this subsection with a 
        foreign government may be considered by the President before 
        making any determination under subsection (a)(1) or carrying 
        out an action under subsection (c).
            (2) Agreements.--Subject to paragraph (3), the President 
        may enter into an agreement with a foreign government that 
        obligates the foreign government to more effectively counter 
        activities that finance the operations of, or acts of 
        international terrorism by, foreign terrorist organizations, 
        including engaging in government-to-government activities that 
        may include--
                    (A) cooperation between United States departments 
                and agencies and their foreign government 
                counterparts--
                            (i) to update the foreign government's laws 
                        and regulations relating to the prevention of 
                        activities that finance the operations of, or 
                        acts of international terrorism by, foreign 
                        terrorist organizations;
                            (ii) to strengthen cooperation among 
                        agencies of the foreign government and with the 
                        United States to facilitate the enforcement of 
                        the laws and regulations pertaining to 
                        activities that finance the operations of, or 
                        acts of international terrorism by, foreign 
                        terrorist organizations; and
                            (iii) to promote information exchanges 
                        among agencies of the foreign government and 
                        with the United States; and
                    (B) training officials of the foreign government to 
                prevent activities that finance the operations of, or 
                acts of international terrorism by, foreign terrorist 
                organizations--
                            (i) to facilitate the legitimate use of the 
                        financial system of the country; and
                            (ii) to prevent terrorists from abusing the 
                        financial system of the country to sustain 
                        their activities.
            (3) Congressional notification.--
                    (A) In general.--Not later than 30 days before an 
                agreement under this subsection is scheduled to take 
                effect, the President shall notify the appropriate 
                congressional committees of the terms of such 
                agreement.
                    (B) Form.--The notification required under 
                subparagraph (A) shall be submitted in an unclassified 
                form, but may include a classified annex.
                    (C) Nullification.--An agreement under this 
                subsection that has not yet taken effect may be 
                nullified by the enactment of a joint resolution of 
                Congress.
            (4) Certification to congress.--
                    (A) In general.--Except as provided in subparagraph 
                (C), not later than 1 year after the effective date of 
                an agreement with a foreign government under paragraph 
                (2), and not less frequently than annually thereafter, 
                for as long as such agreement is in effect, the 
                President shall certify to the appropriate 
                congressional committees that the foreign government--
                            (i) is in compliance with the terms of the 
                        agreement; and
                            (ii) is cooperating with the United States 
                        Government to remediate the deficiencies that 
                        led to its designation under subsection (a).
                    (B) Form.--The certification required under 
                subparagraph (A) shall be submitted in an unclassified 
                form, but may include a classified annex.
                    (C) Absence of certification.--If the President is 
                unable to make the certification required under 
                subparagraph (A), the President, not later than 90 days 
                after the date on which the certification is due, shall 
                carry out one or more of the actions described in 
                subparagraphs (A) through (G) of subsection (c)(2).
            (5) Statutory construction.--Nothing in this subsection may 
        be construed to authorize the United States to enter into an 
        agreement covering matters outside the scope of activities that 
        finance the operations of, or acts of international terrorism 
        by, foreign terrorist organizations.
    (e) Exceptions.--Any action taken under this section may not 
prohibit or restrict the provision of medicine, medical equipment or 
supplies, food, or other humanitarian assistance to a foreign country.
    (f) Termination of Designation.--A designation made under 
subsection (a) with respect to a country shall terminate on the earlier 
of--
            (1) the date on which the President certifies to the 
        appropriate congressional committees that the government of 
        such country has taken substantial and verifiable steps to 
        prevent substantial activities that finance the operations of, 
        or acts of international terrorism by, foreign terrorist 
        organizations within its jurisdiction;
            (2) the date on which the President certifies to the 
        appropriate congressional committees that the foreign 
        government has fulfilled its obligations under an agreement 
        under subsection (d), unless such action is expressly 
        reauthorized by law; or
            (3) the date on which the President--
                    (A) certifies to the appropriate congressional 
                committees that termination of the designation is in 
                the national security interests of the United States; 
                and
                    (B) submits a report to the appropriate 
                congressional committees that describes the reason for 
                such determination.
    (g) Termination of Presidential Actions and Agreements.--Any action 
taken under subsection (c) with respect to a country, and any agreement 
with a foreign government entered into under subsection (d), shall 
terminate on the date on which the President makes a certification 
under subsection (f).
    (h) Preclusion of Judicial Review.--No court shall have 
jurisdiction to review any Presidential determination or agency action 
under this Act or any amendment made by this Act.

SEC. 5. ASSISTANCE FOR COUNTERING TERRORISM FINANCE.

    (a) Findings.--Congress makes the following findings:
            (1) In many nations in which financial markets and 
        institutions are misused to finance the operations of, or acts 
        of international terrorism by, foreign terrorist organizations, 
        there are not adequate laws or regulations, or the enforcement 
        of such laws or regulations, to effectively prevent such 
        misuse.
            (2) In providing foreign assistance, the United States 
        should prioritize--
                    (A) the promotion and development of laws and 
                regulations that prevent misuse of financial markets 
                and institutions to finance the operations of, or acts 
                of international terrorism by, foreign terrorist 
                organizations; and
                    (B) the enhancement of enforcement capabilities of 
                such laws and regulations.
    (b) Allocation of Funds for Countering Terrorism Financing.--
Section 129(b) of the Foreign Assistance Act of 1961 (22 U.S.C. 
2151aa(b)) is amended--
            (1) in paragraph (1), by inserting ``and to counter 
        financial crimes and material support to terrorism'' after 
        ``private sector growth''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (D), by striking ``and'' at the 
                end;
                    (B) in subparagraph (E), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(F) the capability to investigate, prosecute, and 
                hold accountable individuals and entities that finance 
                the operations of, or acts of international terrorism 
                by, groups designated by the Secretary of State, in 
                consultation with the Secretary of the Treasury and the 
                Attorney General, as foreign terrorist organizations 
                under section 219(a) of the Immigration and Nationality 
                Act (8 U.S.C. 1189(a)).''.

SEC. 6. SECONDARY SANCTIONS ON FINANCIAL INSTITUTIONS.

    (a) Prohibitions and Conditions With Respect to Certain Accounts 
Held by Foreign Financial Institutions.--
            (1) In general.--Not later than 120 days after the date of 
        the enactment of this Act, the President shall prescribe 
        regulations to prohibit, or impose strict conditions on, the 
        opening or maintaining in the United States of a correspondent 
        account or a payable-through account by a foreign financial 
        institution that the President determines, on or after such 
        date of enactment, engages in an activity described in 
        paragraph (2).
            (2) Activities described.--A foreign financial institution 
        engages in an activity described in this paragraph by--
                    (A) knowingly facilitating a significant 
                transaction or transactions for ISIL or its affiliates;
                    (B) knowingly facilitating a significant 
                transaction or transactions of a person identified on 
                the list of specially designated nationals and blocked 
                persons maintained by the Office of Foreign Assets 
                Control of the Department of the Treasury if the 
                property and interests in property of such person are 
                blocked pursuant to the International Emergency 
                Economic Powers Act (50 U.S.C. 1701 et seq.) for acting 
                on behalf of, acting at the direction of, or being 
                owned or controlled by, ISIL or its affiliates;
                    (C) knowingly engaging in money laundering to carry 
                out an activity described in subparagraph (A) or (B); 
                or
                    (D) knowingly facilitating a significant 
                transaction or transactions or providing significant 
                financial services to carry out an activity described 
                in subparagraph (A), (B), or (C).
            (3) Penalties.--The penalties under subsections (b) and (c) 
        of section 206 of the International Emergency Economic Powers 
        Act (50 U.S.C. 1705) shall apply to a person who violates, 
        attempts to violate, conspires to violate, or causes a 
        violation of regulations prescribed under this subsection to 
        the same extent that such penalties apply to a person who 
        commits an unlawful act described in subsection (a) of such 
        section 206.
            (4) Procedures for judicial review of classified 
        information.--
                    (A) In general.--The President may submit 
                classified information to a court ex parte and in 
                camera if--
                            (i) a finding under this subsection, or a 
                        prohibition, condition, or penalty imposed as a 
                        result of any such finding, is based on such 
                        information; and
                            (ii) the court reviews the finding or the 
                        imposition of the prohibition, condition, or 
                        penalty.
                    (B) Rule of construction.--Nothing in this 
                paragraph may be construed to confer or imply any right 
                to judicial review of any finding under this subsection 
                or any prohibition, condition, or penalty imposed as a 
                result of any such finding.
    (b) Waiver.--
            (1) In general.--The President may waive, on a case-by-case 
        basis, the application of a prohibition or condition imposed 
        with respect to a foreign financial institution pursuant to 
        subsection (a) for a period of not more than 180 days, and may 
        renew such waiver for additional periods of not more than 180 
        days, on and after the date on which the President--
                    (A) determines that such a waiver is in the 
                national security interests of the United States; and
                    (B) submits a report to the appropriate 
                congressional committees that describes the reasons for 
                such determination.
            (2) Form.--The report required under paragraph (1)(B) shall 
        be submitted in unclassified form, but may contain a classified 
        annex.
    (c) Special Rule To Allow for Termination of Sanctionable 
Activity.--The President shall not be required to apply sanctions to a 
foreign financial institution described in subsection (a) if the 
President certifies in writing to the appropriate congressional 
committees that--
            (1) the foreign financial institution--
                    (A) is no longer engaging in the activity described 
                in subsection (a)(2); or
                    (B) has taken and is continuing to take significant 
                verifiable steps toward terminating the activity 
                described in that subsection; and
            (2) the President has received reliable assurances from the 
        government with primary jurisdiction over the foreign financial 
        institution that the foreign financial institution will not 
        engage in any activity described in subsection (a)(2) in the 
        future.
    (d) Definitions.--In this section:
            (1) Account; correspondent account; payable-through 
        account.--The terms ``account'', ``correspondent account'', and 
        ``payable-through account'' have the meanings given such terms 
        in section 5318A(e) of title 31, United States Code.
            (2) Financial institution.--The term ``financial 
        institution'' means a financial institution described in 
        subparagraph (A), (B), (C), (D), (E), (F), (G), (H), (I), (J), 
        (K), (M), (N), (P), (R), (T), (Y), or (Z) of section 5312(a)(2) 
        of title 31, United States Code.
            (3) Foreign financial institution.--The term ``foreign 
        financial institution'' has the meaning given such term in 
        section 1010.605 of title 31, Code of Federal Regulations.
            (4) ISIL.--The term ``ISIL'' means--
                    (A) the entity known as the Islamic State of Iraq 
                and the Levant and designated by the Secretary of State 
                as a foreign terrorist organization pursuant to section 
                219(a) of the Immigration and Nationality Act (8 U.S.C. 
                1189(a)); or
                    (B) any person--
                            (i) the property or interests in property 
                        of which are blocked pursuant to the 
                        International Emergency Economic Powers Act (50 
                        U.S.C. 1701 et seq.); and
                            (ii) who is identified on the specially 
                        designated nationals list as an agent, 
                        instrumentality, or affiliate of the entity 
                        described in subparagraph (A).
            (5) Money laundering.--The term ``money laundering'' 
        includes the movement of illicit cash or cash equivalent 
        proceeds into, out of, or through a country or a financial 
        institution.
            (6) Specially designated nationals list.--The term 
        ``specially designated nationals list'' means the list of 
        specially designated nationals and blocked persons maintained 
        by the Office of Foreign Assets Control of the Department of 
        the Treasury.

SEC. 7. INCLUSION OF FINANCING ACTIVITIES IN REPORTS ON TERRORISM.

    Section 140 of the Foreign Relations Authorization Act, Fiscal 
Years 1988 and 1989 (22 U.S.C. 2656f) is amended--
            (1) in subsection (a)(1)--
                    (A) in subparagraph (A)(iii), by striking ``and'' 
                at the end;
                    (B) in subparagraph (B), by adding ``and'' at the 
                end; and
                    (C) by adding at the end the following:
                    ``(C) detailed assessments with respect to each 
                foreign country in which activities that finance the 
                operations of, or acts of international terrorism by, 
                groups designated by the Secretary of State, in 
                consultation with the Secretary of the Treasury and the 
                Attorney General, as foreign terrorist organizations 
                under section 219(a) of the Immigration and Nationality 
                Act (8 U.S.C. 1189(a)) are taking place;''; and
            (2) in subsection (b)--
                    (A) in paragraph (1)(C)(iv), by adding ``and'' at 
                the end;
                    (B) by redesignating paragraphs (3) and (4) (as 
                added by section 701(a)(2)(C) of the Intelligence 
                Authorization Act for Fiscal Year 2005 (Public Law 108-
                487)) as paragraphs (7) and (8), respectively;
                    (C) by redesignating paragraphs (3), (4), and (5) 
                as paragraphs (4), (5), and (6), respectively;
                    (D) by inserting after paragraph (2) the following:
            ``(3) with respect to subsection (a)(1)(C)--
                    ``(A) activities within the jurisdiction of the 
                foreign government that substantially finance the 
                operations of, or acts of international terrorism by, 
                groups designated by the Secretary of State, in 
                consultation with the Secretary of the Treasury and the 
                Attorney General, as foreign terrorist organizations 
                under section 219(a) of the Immigration and Nationality 
                Act (8 U.S.C. 1189(a));
                    ``(B) deficiencies in the laws and regulations of 
                the country in prohibiting such activities;
                    ``(C) the extent and effectiveness of efforts to 
                enforce such laws and regulations; and
                    ``(D) where possible, the systemic source of the 
                foreign government's inability to prevent the 
                activities described in subparagraph (A);'';
                    (E) in paragraph (5)(D), as redesignated, by 
                striking ``and'' at the end; and
                    (F) in paragraph (6), as redesignated, by striking 
                the period at the end and inserting a semicolon.
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