[Congressional Record Volume 141, Number 158 (Thursday, October 12, 1995)]
[Extensions of Remarks]
[Pages E1929-E1931]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



[[Page E 1929]]


                 IRAN FOREIGN OIL SANCTIONS ACT OF 1995

                                 ______


                        HON. BENJAMIN A. GILMAN

                              of new york

                    in the house of representatives

                       Thursday, October 12, 1995

  Mr. GILMAN. Mr. Speaker, I rise today to introduce H.R. 2458 a bill 
that would impose sanctions on foreign entities who provide oilfield 
equipment and technology to Iran. The Iran Foreign Oil Sanctions Act of 
1995 declares that Iran's efforts to acquire weapons of mass 
destruction endanger the security of the United States and its allies 
and that we should prevent Iran from earning the hard currency they 
need to purchase these weapons.
  By requiring the President to ban United States Government 
procurement, export licenses and Eximbank assistance to companies 
providing Iran with assistance in developing its oil fields, this bill 
will help the United States develop a comprehensive policy designed to 
deter Iran from supporting international terrorism and developing 
nuclear weapons and the means to deliver them.
  The measure would permit the President to impose additional financial 
and investment sanctions if he deemed them necessary to accomplish 
these critically important goals. It would also provide the 
administration with the flexibility to delay the imposition of any 
sanctions on foreign companies and would provide for a general waiver 
in the event that the President determines it is essential to our 
national security interests.
  If enacted, this bill would ensure that Iran does not succeed in 
circumventing President Clinton's 3-month-old trade embargo against 
Iran. That embargo ended United States companies' purchases of Iranian 
crude oil.
  As long as our trading partners continue business as usual with this 
terrorist country, our own embargo will have little longterm effect on 
its policies. Iran has invited several prominent Japanese and European 
companies to invest more than $6 billion in 12 new oil and gas projects 
and will hold a major investment conference in November. Congress can 
and must ensure that these companies pay a price for their 
participation.
  Perhaps the most eloquent statement endorsing the goals of this 
legislation was made by Secretary of State Warren Christopher on 
September 25 in a speech before the 50th session of the United Nations 
General Assembly. The following is an excerpt from that address:

       States that sponsor terrorists should feel the full weight 
     of sanctions that can be imposed by the international 
     community. Let us not deceive ourselves: Every dollar that 
     goes into the coffers of a state sponsor of terrorism makes 
     its secret quest for weapons of mass destruction even more 
     alarming. We must stand together to prevent Iran from 
     acquiring such threatening capabilities.

  I would also like to acknowledge the leadership role of my New York 
colleague, Senator Alfonse D'Amato, in sponsoring a very similar 
measure in the other body. I would also like to pay tribute to my 
International Relations Committee colleague, Peter King, for his 
legislative efforts earlier this year to begin the process of imposing 
sanctions by the international community against this outlaw State.
  At this point, I would request that the full text of my bill be 
inserted in the Record for review by my colleagues:

                               H.R. 2458

       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 ``Iran Foreign Oil Sanctions 
     Act of 1995''.

     SEC. 2. FINDINGS.

       The Congress makes the following findings:
       (1) The efforts of the Government of Iran to acquire 
     weapons of mass destruction and the means to deliver them 
     endanger potentially the national security and foreign policy 
     interests of the United States and those countries with which 
     it shares common strategic and foreign policy objectives.
       (2) The objective of preventing the proliferation of 
     weapons of mass destruction through existing multilateral and 
     bilateral initiatives requires additional efforts to deny 
     Iran the financial means to sustain its nuclear, chemical, 
     biological, and missile weapons programs.

     SEC. 3. DECLARATION OF POLICY.

       The Congress declares that it is the policy of the United 
     States to deny Iran the ability to fund the development and 
     acquisition of weapons of mass destruction and the means to 
     deliver them by preventing Iran from acquiring equipment that 
     would enhance Iran's ability to extract, refine, process, 
     store, or transport petroleum, petroleum products, or natural 
     gas.

     SEC. 4. IMPOSITION OF SANCTIONS ON FOREIGN PERSONS EXPORTING 
                   CERTAIN GOODS OR TECHNOLOGY TO IRAN.

       (a) In General.--The President shall impose the mandatory 
     sanctions described in section 5(1) and may impose one or 
     more of the discretionary sanctions described in section 
     5(2), if the President determines that a foreign person has, 
     with requisite knowledge, on or after the date of the 
     enactment of this Act, exported, transferred, or released to 
     Iran, nationals of Iran, or entities owned or controlled by 
     Iran or nationals of Iran any goods or technology identified 
     on the List of Petroleum and Natural Gas-Related Goods and 
     Technology established under section 9 (hereafter in this Act 
     referred to as the ``List'')--
       (1) through the export from the United States of any goods 
     or technology identified in the List, or
       (2) through the export from any other country or territory 
     of any goods or technology identified in the List, whether or 
     not the goods or technology is subject to the jurisdiction of 
     the United States.
       (b) Persons Against Which the Sanctions Are To Be 
     Imposed.--The sanctions described in subsection (a) shall be 
     imposed on--
       (1) the foreign person with respect to whom the President 
     makes the determination described in that subsection;
       (2) any successor entity to that foreign person;
       (3) any foreign person that is a parent or subsidiary of 
     that person if that parent or subsidiary with requisite 
     knowledge engaged in the activities which were the basis of 
     that determination; and
       (4) any foreign person that is an affiliate of that person 
     if that affiliate with requisite knowledge engaged in the 
     activities which were the basis of that determination and if 
     that affiliate is controlled in fact by that person.

     For purposes of this Act, any person or entity described in 
     this subsection shall be referred to as a ``sanctioned 
     foreign person''.

     SEC. 5. DESCRIPTION OF SANCTIONS.

       The sanctions to be imposed on a sanctioned foreign person 
     under section 4(a) are as follows:
       (1) Mandatory sanctions.--
       (A) Procurement sanction.--The United States Government 
     shall not procure, or enter into any contract for the 
     procurement of, any goods or services from the sanctioned 
     foreign person.
       (B) Export sanction.--The United States Government shall 
     not, for a period of 3 years, issue any license or grant any 
     other permission or authority to export any goods or 
     technology to a sanctioned foreign person under--
       (i) the Export Administration Act of 1979;
       (ii) the Arms Export Control Act; or
       (iii) the Atomic Energy Act of 1954.
       (C) Prohibition against export-import bank assistance for 
     exports to foreign persons.--The Export-Import Bank of the 
     United States may not guarantee, insure, extend credit, or 
     participate in the extension of credit in connection with the 
     export of any goods or services to any sanctioned foreign 
     person.
       (2) Discretionary sanctions.--
       (A) Investment in the united states; authority to review 
     certain mergers, acquisitions, and takeovers.--The President 
     may exercise his authority under section 721(d) of the 
     Defense Production Act of 1950 (50 U.S.C. App. 2170(d)) to 
     investigate and prohibit mergers, acquisitions, takeovers, 
     and other similar investments in the United States by persons 
     engaged in interstate commerce--
       (i) if such actions involve any sanctioned foreign person; 
     and
       (ii) if the President finds, in addition to the 
     requirements of section 721(e) of such Act, that the 
     participation of any sanctioned foreign person in activities 
     to assist, directly or indirectly, Iran to increase the 
     revenue available to that government by extracting petroleum, 
     petroleum products, natural gas, or engaging in other 
     activities described in section 9(a)(1) threatens to impair 
     the national security and foreign policy interests of the 
     United States.
       (B) Import sanction.--(i) The importation into the United 
     States of products produced by any sanctioned foreign person 
     may be prohibited.
       (ii) Clause (i) includes application to--
       (I) the entry of any finished product or component part, 
     whether shipped directly by the sanctioned foreign person or 
     by another entity; and
       (II) the contracting with a sanctioned foreign person for 
     the provision of services in the United States or abroad by 
     United States persons and by foreign persons in the United 
     States.

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       (C) Loans from united states financial institutions.--The 
     United States Government may prohibit any United States 
     financial institution from making any loan or providing any 
     credit to any sanctioned foreign person unless such foreign 
     person is engaged in activities to relieve human suffering, 
     within the meaning of section 203(b)(2) of the International 
     Emergency Economic Powers Act (50 U.S.C. 1702(b)(2)).
       (D) Prohibitions on foreign financial institutions.--The 
     following prohibitions may be imposed against a sanctioned 
     foreign person that is a financial institution:
       (i) Designation as primary dealer.--Neither the Board of 
     Governors of the Federal Reserve System nor the Federal 
     Reserve Bank of New York may designate, or permit the 
     continuation of any prior designation of, such financial 
     institution as a primary dealer in United States Government 
     debt instruments.
       (ii) Government funds.--Such financial institution shall 
     not serve as agent of the United States Government or serve 
     as repository for United States Government funds.
       (iii) Restrictions on operations.--Such financial 
     institutions shall not, directly or indirectly--

       (I) commence any line of business in the United States in 
     which it was not engaged as of the date of the determination 
     by the President under section 4(a) leading to the imposition 
     of sanctions; or
       (II) conduct business from any location in the United 
     States at which it did not conduct business as of the date of 
     such determination by the President under section 4(a).

     SEC. 6. WAIVER AUTHORITY REGARDING SANCTIONS AGAINST IRAN.

       The sanctions under section 5 shall not apply if the 
     President determines and certifies to the appropriate 
     congressional committees that Iran--
       (1) has substantially improved its adherence to 
     internationally recognized standards of human rights;
       (2) has ceased its efforts to design, develop, manufacture, 
     or acquire--
       (A) a nuclear explosive device or related materials and 
     technology;
       (B) chemical and biological weapons;
       (C) missiles and missile launch technology; and
       (D) any missile or other delivery system capable of 
     reaching the territory of a country the government of which 
     shares strategic interests with the United States and is 
     engaged in defense cooperation, including the acquisition of 
     items identified in the United States Munitions List, with 
     the United States; and
       (3) has ceased all forms of support for international 
     terrorism.

     SEC. 7. WAIVER OF SANCTIONS AGAINST FOREIGN PERSONS.

       (a) Consultation With Foreign Governments.--
       (1) Consultations.--If the President makes a determination 
     described in section 4(a) with respect to a foreign person, 
     the Congress urges the President to initiate consultations 
     immediately with the foreign government with primary 
     jurisdiction over that foreign person with respect to the 
     imposition of the sanctions pursuant to this Act.
       (2) Actions by government of jurisdiction.--In order to 
     pursue such consultations with that government, the President 
     may delay imposition of the sanctions under section 5 for up 
     to 90 days. Following such consultations, the President shall 
     immediately impose sanctions unless the President determines 
     and certifies to the Congress that the government has taken 
     specific and effective actions, including the imposition of 
     appropriate penalties, to terminate the involvement of the 
     foreign person in the activities that resulted in the 
     imposition of sanctions against the foreign person.
       (3) Additional delay in imposition of sanctions.--The 
     President may delay the imposition of sanctions for up to an 
     additional 45 days if the President determines and certifies 
     to the Congress that the government with primary jurisdiction 
     over the foreign person is in the process of taking the 
     actions described in paragraph (2).
       (4) Report to congress.--Not later than 45 days after 
     making a determination under section 4(a), the President 
     shall submit to the appropriate congressional committees a 
     report on the status of consultations with the appropriate 
     foreign government under this subsection, and the basis for 
     any determination under paragraph (3) that such government 
     has taken specific corrective actions.
       (b) Assurances From Foreign Persons.--The President may 
     terminate the sanctions against a sanctioned foreign person, 
     if the foreign person provides assurances to the Secretary 
     that the actions that resulted in the determination to impose 
     sanctions have been terminated and has provided specific 
     assurances that it will neither directly nor indirectly, or 
     through any other person, including subsidiaries and 
     affiliates, direct or participate in any activity to provide 
     to Iran items on the List.
       (c) Exceptions.--The President shall not be required to 
     apply or maintain a sanction under section 4(a)--
       (1) in the case of procurement of defense articles or 
     defense services--
       (A) under existing contracts or subcontracts, including the 
     exercise of options for production quantities to satisfy 
     requirements essential to the national security of the United 
     States;
       (B) if the President determines in writing that the person 
     or other entity to which the sanction would otherwise be 
     applied is a sole source supplier of the defense articles or 
     services, that the defense articles or services are 
     essential, and that alternative sources are not readily or 
     reasonably available; or
       (C) if the President determines in writing that such 
     articles or services are essential to the national security 
     under defense coproduction agreements;
       (2) to products or services provided under contracts 
     entered into before the date on which the President publishes 
     his intention to impose the sanction;
       (3) to--
       (A) spare parts which are essential to United States 
     products or production;
       (B) component parts, but not finished products, essential 
     to United States products or production; or
       (C) routine servicing and maintenance of products, to the 
     extent that alternative sources are not readily or reasonably 
     available;
       (4) to information and technology essential to United 
     States products or production; or
       (5) to medicines, medical supplies, or other humanitarian 
     items.
       (d) Presidential National Security Waiver.--(1) The 
     President may waive the requirement in section 4(a) to impose 
     a sanction or sanctions on a foreign person in section 4(b), 
     for an export, transfer, or release of goods or technology 
     that are not subject to the jurisdiction of the United 
     States, 15 days after the President determines and so reports 
     to the appropriate congressional committees that it is 
     essential to the national interest of the United States to 
     exercise such waiver authority.
       (2) Any such report shall provide a specific and detailed 
     rationale for such determination, including--
       (A) a description of the conduct, including the 
     identification of the goods or technology involved in the 
     violation, that resulted in the determination of a violation 
     or violations;
       (B) an explanation of the efforts to secure the cooperation 
     of the government with primary jurisdiction of the foreign 
     person committing the violation to terminate or penalize the 
     activities that resulted in the determination of a violation;
       (C) an estimate as to the significance of the goods or 
     technology exported to Iran on that country's ability to 
     extract, refine, process, store, or transport petroleum, 
     petroleum products, or natural gas; and
       (D) a statement as to the response of the United States in 
     the event that such foreign person engages in other 
     activities that under this Act would constitute an additional 
     violation.

     SEC. 8. TERMINATION OF SANCTIONS.

       (a) Duration of Sanctions.--The sanctions imposed pursuant 
     to this Act shall apply for a period of not less than 12 
     months following the determination by the President under 
     section 4(a) and shall cease to apply thereafter only if the 
     President determines and certifies to the Congress that 
     reliable information indicates that the foreign person with 
     respect to which the determination was made under section 
     4(a) has ceased to aid or abet Iran, any national of Iran, or 
     any entity owned or controlled by Iran or nationals of Iran, 
     to acquire goods and technology on the List.
       (b) Waiver.--
       (1) Criterion for waiver.--The President may waive the 
     continued application of any sanction imposed on any foreign 
     person pursuant to this Act, after the end of the 12-month 
     period beginning on the date on which that sanction was 
     imposed on that person, if the President determines and 
     certifies to the Congress that the continued imposition of 
     the sanction would have a serious adverse effect on United 
     States national security.
       (2) Notification of and report to congress.--If the 
     President decides to exercise the waiver authority provided 
     in paragraph (1), the President shall so notify the Congress 
     not less than 30 days before the waiver takes effect. Such 
     notification shall include a report fully articulating the 
     rationale and circumstances which led the President to 
     exercise the waiver authority.

     SEC. 9. GOODS AND TECHNOLOGY SUBJECT TO EXPORT CONTROL 
                   RESTRICTIONS.

       (a) Control List.--(1) For purposes of the determinations 
     to be made pursuant to section 4(a), the President, in 
     consultation with the Secretary of State and the Secretary of 
     Energy, and the heads of other appropriate departments and 
     agencies, shall establish and maintain the List of Petroleum 
     and Natural Gas-Related Goods and Technology, consisting of 
     goods or technology (including software and technical data) 
     that the President determines would materially contribute to 
     the extraction, refining, production, storage, or 
     transportation of petroleum, petroleum products, or natural 
     gas and the products thereof in or by Iran, including goods 
     and technology that are required for the development, 
     production, or use of facilities (including the repair, 
     maintenance, or operation of equipment) for the petroleum and 
     natural gas activities described in this subsection.
       (2) The President, within 60 days after the date of the 
     enactment of this Act, shall cause the List to be published 
     in the Federal Register, together with any regulations issued 
     with respect thereto. Thereafter, any revisions to the List 
     or amendments to the regulations shall be published in the 
     same manner.

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       (3) Not less than 30 days in advance of the publication of 
     the List, it shall be provided to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and to the Committee 
     on International Relations of the House of Representatives. 
     The President shall consult with such Committees regarding 
     the content of the List and shall respond to questions 
     regarding the basis for the inclusion on, or exclusion from, 
     the List of specified goods and technologies.
       (4) The President may delegate the functions of this 
     subsection to the Secretary of Commerce.
       (b) Statutory Construction.--Nothing in this section 
     prevents the inclusion on the List of any goods or technology 
     that may be produced in and traded internationally by persons 
     or entities in countries other than the United States.

     SEC. 10. REGULATORY AUTHORITY.

       The President may issue such regulations as may be 
     necessary to carry out this Act.

     SEC. 11. REPORT REQUIRED.

       Beginning 60 days after the date of the enactment of this 
     Act, and every 90 days thereafter, the President shall 
     transmit to the appropriate congressional committees a report 
     describing--
       (1) the nuclear and other military capabilities of Iran; 
     and
       (2) the support, if any, provided by Iran for acts of 
     international terrorism.

     SEC. 12. DEFINITIONS.

       As used in this Act:
       (1) Act of international terrorism.--The term ``act of 
     international terrorism'' means an act--
       (A) which is violent or dangerous to human life and that is 
     a violation of the criminal laws of the United States or of 
     any State or that would be a criminal violation if committed 
     within the jurisdiction of the United States or any State; 
     and
       (B) which appears to be intended--
       (i) to intimidate or coerce a civilian population;
       (ii) to influence the policy of a government by 
     intimidation or coercion; or
       (iii) to affect the conduct of a government by 
     assassination or kidnapping.
       (2) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means the Committees 
     on Banking, Housing and Urban Affairs and Foreign Relations 
     of the Senate and the Committee on International Relations of 
     the House of Representatives.
       (3) Component part.--The term ``component part'' has the 
     meaning given that term in section 11A(e)(1) of the Export 
     Administration Act of 1979 (50 U.S.C. App. 2410a(e)(1)).
       (4) Financial institution.--The term ``financial 
     institution'' includes--
       (A) a depository institution (as defined in section 3(c)(1) 
     of the Federal Deposit Insurance Act), including a branch or 
     agency of a foreign bank (as defined in section 1(b)(7) of 
     the International Banking Act of 1978);
       (B) a credit union;
       (C) a securities firm, including a broker or dealer;
       (D) an insurance company, including an agency or 
     underwriter;
       (E) any other company that provides financial services; and
       (F) any subsidiary of an entity described in any of 
     subparagraphs (A) through (E).
       (5) Finished product.--The term ``finished product'' has 
     the meaning given that term in section 11A(e)(2) of the 
     Export Administration Act of 1979 (50 U.S.C. App. 
     2410a(e)(2)).
       (6) Foreign person.--The term ``foreign person'' means--
       (A) an individual who is not a United States national or an 
     alien admitted for permanent residence to the United States; 
     or
       (B) a corporation, partnership, or other nongovernment 
     entity which is not a United States national.
       (7) Goods and technology.--The terms ``goods'' and 
     ``technology'' have the meaning given those terms in section 
     16 of the Export Administration Act of 1979 (50 U.S.C. App. 
     2415).
       (8) Iran.--The term ``Iran'' includes any agency or 
     instrumentality of Iran.
       (9) Nuclear explosive device.--The term ``nuclear explosive 
     device'' means any device, whether assembled or disassembled, 
     that is designed to produce an instantaneous release of an 
     amount of nuclear energy from special nuclear material that 
     is greater than the amount of energy that would be released 
     from the detonation of one pound of trinitrotoluene (TNT).
       (10) Person.--
       (A) The term ``person'' means a natural person, as well as 
     a corporation, business association, partnership, society, 
     trust, any other nongovernmental entity, organization, or 
     group, and any governmental entity operating as a business 
     enterprise, and any successor of any such entity.
       (B) In the case of a country where it may be impossible to 
     identify a specific governmental entity referred to in 
     subparagraph (A), the term ``person'' means--
       (i) all activities of the government of the country 
     relating to the development or production of any missile 
     equipment or technology; and
       (ii) all activities of that government affecting the 
     development or production of aircraft, electronics, and space 
     systems or equipment.
       (11) Petroleum products.--The term ``petroleum products'' 
     means crude oil, residual fuel oil, and any refined petroleum 
     product.
       (12) Requisite knowledge.--The term ``requisite knowledge'' 
     means situations in which a person ``knows'', as ``knowing'' 
     is defined in section 104 of the Foreign Corrupt Practices 
     Act of 1977 (15 U.S.C. 78dd-2).
       (13) United states or state.--The term ``United States'' or 
     ``State'' means the several States, the District of Columbia, 
     the Commonwealth of Puerto Rico, the Commonwealth of the 
     Northern Mariana Islands, American Samoa, Guam, the United 
     States Virgin Islands, and any other territory or possession 
     of the United States.
       (14) United states national.--The term ``United States 
     national'' means--
       (A) a natural person who is a citizen of the United States 
     or who owes permanent allegiance to the United States;
       (B) a corporation or other legal entity which is organized 
     under the laws of the United States, any State or territory 
     thereof, or the District of Columbia, if natural persons who 
     are nationals of the United States own, directly or 
     indirectly, more than 50 percent of the outstanding capital 
     stock or other beneficial interest in such legal entity; and
       (C) any foreign subsidiary of a corporation or other legal 
     entity described in subparagraph (B).

                          ____________________