[Congressional Record Volume 151, Number 11 (Monday, February 7, 2005)]
[Senate]
[Pages S1051-S1053]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN:
  S. 299. A bill to make information regarding certain investments in 
the energy sector in Iran available to the public, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.
  Mr. WYDEN. Mr. President, in his inaugural address and again in the 
state of the union President Bush promised to take on tyranny around 
the world. There's one corner of the world where tyranny is the 
currency of the realm, and where one country stands head and shoulders 
above the rest for its record of brutality towards its own people and 
hostility toward its neighbors. That country is Iran.
  The lifeblood of the Iranian economy is oil. Oil accounts for 80 
percent of Iran's export earnings, almost half of the government's 
budget and nearly one-fifth of the country's GDP. Every time the price 
of crude oil rises $1 a barrel, Iran gains about $900 million in export 
revenues. Crude oil prices rose around $15 over the course of 2004, 
giving Iran a hurricane-force revenue windfall last year.
  Although most U.S. energy companies ceased dealing with Iran when 
President Clinton imposed sanctions against the regime in 1995, some 
appear unable to resist the lure of investing in a country that holds 
10 percent of the world's proven oil reserves, is OPEC's second largest 
producer and has the world's second largest natural gas reserves, 
behind Russia.
  In June of last year, for example, a grand jury in the U.S. issued a 
subpoena to Halliburton seeking information on the work in Iran of its 
Cayman Islands subsidiary. The Department of Justice has an ongoing 
criminal investigation into whether Halliburton violated any laws by 
trading with Iran through a subsidiary. Just a few days ago, 
Halliburton's CEO announced the company would withdraw its employees 
from Iran and end its business activities there when it fulfills its 
ongoing contracts, including a $35 million gas drilling project it just 
won last month. GE just made a similar announcement about its 
subsidiary's activities in Iran.
  Foreign companies seeking profits from Iran's energy reserves do not 
have to worry about such impediments as economic sanctions. Indeed, 
their governments often bless and sometimes lend Them a hand to help 
win lucrative contracts. When U.S.-based Conoco had to terminate its 
$550 million contract to develop some offshore oil and gas fields in 
1995, France's Total and Malaysia's Petronas jumped in. In March 1999, 
France's Elf Aquitaine and Italy's Eni/Agip won a $1 billion contract 
for a secondary offshore recovery program. In April 1999, TotalFinaElf 
teamed up with Eni and Canada's Bow Valley Energy to develop an 
offshore oil field. Shell, BP and Lukoil are also frequently mentioned 
as being in the chase for Iranian oil and gas contracts. The Economist 
Intelligence Unit estimates Iran has attracted $15-$20 billion in 
combined foreign investment in hydrocarbons.
  Not only are foreign companies heavily invested in Iran's hydrocarbon 
sector, but Iran ships some 2.6 million barrels of oil a day to Japan, 
China, South Korea, Taiwan and Europe.
  If President Bush is serious about chasing down tyrants around the 
globe, he should use every possible means. The legislation I am 
introducing today, the Investor in Iran Accountability Act, would give 
the President a powerful tool by holding accountable those

[[Page S1052]]

who lend the Iranian regime crucial financial assistance by investing 
in its energy sector.
  First, the legislation would shine a spotlight on those American 
companies, like Halliburton, which have used the loophole in the Iran 
sanctions act to continue to do business with Iran in the energy 
sector. The bill would require the Treasury Secretary to publish a list 
of the United States companies whose subsidiaries continue to do energy 
deals with Iran. While I personally do not believe there should be any 
more backdoor deals with Iran, my view is that an informed American 
public is best equipped to hold these companies accountable.
  Second, the legislation would hold up to the light of public 
accountability those foreign companies that have more than $1 million 
invested in Iran's energy interests by requiring the Treasury 
Department to publish a list of those companies as well. Third, the 
legislation would give American investors for the first time an idea of 
those U.S. pension and retirement plans, mutual funds and other 
financial instruments that hold investments in these U.S. and foreign 
companies by requiring the Treasury Department to publish a list of all 
public and private U.S. financial interests that hold more than 
$100,000-worth of investment in these companies. Finally, because 
unilateral economic sanctions penalize American companies and open the 
field to foreign companies without inflicting any real economic pain on 
Iran, the bill directs the President to negotiate an end to foreign 
investment in Iran's energy sector with the appropriate foreign 
governments.
  Some of my colleagues will remember that in the late 1970s and 1980s 
Congress struggled with ways to force the South African regime to 
abandon apartheid. One of the most effective tools in that fight was a 
public armed with information about which companies were doing business 
there so that American shareholders could choose to place their money 
elsewhere. The movement by American investors to rid their portfolios 
of holdings in companies that persisted in doing business with the 
apartheid regime in South African proved to be one of the most potent 
tools in the fight to end apartheid. This legislation will arm American 
investors with knowledge about which U.S. and foreign companies are 
supporting Iran's critical energy sector and which U.S. entities hold 
investments in them. With this knowledge, it is my hope that American 
investors will choose not to aid and abet the Iranian regime by 
continuing to hold shares in companies or funds that invest in the 
Iranian oil and gas sector.
  The Iranian regime has made no secret of its desire to attract 
billions of dollars-worth of foreign investment, particularly to the 
energy sector. It even adopted a law in January 2003 specifically 
designed to attract foreign investors. Iran, which has recently 
discovered some new reserves of 30 billion barrels of crude oil, has 
ambitious plans to expand oil production from around 3.9 million 
barrels a day in 2004 to 5 million barrels a day in 2009. But with 
deteriorating equipment and the natural decline rate of existing wells, 
it simply cannot achieve those goals without significant foreign help.
  In closing, I would point out that the Securities and Exchange 
Commission has determined that significant corporate operations in 
countries subject to U.S. economic sanctions, such as Iran, can 
represent a material risk to United States investors and that such 
investments should be properly disclosed. My bill would make sure this 
information is disclosed to the American public.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 299

       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 ``Investor in Iran 
     Accountability Act of 2005''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The Department of State's Patterns of Global Terrorism 
     report for 2003 stated that ``Iran remained the most active 
     state sponsor of terrorism in 2003''.
       (2) That report further stated that--
       (A) Iran continues to provide funding, safehaven, training, 
     and weapons to known terrorist groups, including Hizballah, 
     HAMAS, the Palestine Islamic Jihad, and the Popular Front for 
     the Liberation of Palestine; and
       (B) the Government of Iran's poor human rights record 
     continues to worsen.
       (3) In 1979, in response to the Islamic Revolution in Iran 
     and the holding of United States citizens as hostages in 
     Iran, the United States imposed economic sanctions against 
     Iran that prohibit virtually all trade and investment 
     activities with Iran by citizens of the United States or 
     United States companies.
       (4) The United States does not prohibit foreign 
     subsidiaries of United States companies from investing in 
     Iran if the foreign subsidiary is independent of the United 
     States parent company.
       (5) A number of subsidiaries of United States companies 
     appear to be taking advantage of this condition and are 
     investing in the energy sector in Iran through such 
     subsidiaries.
       (6) According to the Energy Information Administration of 
     the Department of Energy, Iran is the second largest oil 
     producer in the Organization of the Petroleum Exporting 
     Countries (OPEC) and holds 10 percent of the world's proven 
     oil reserves.
       (7) According to the Energy Information Administration, the 
     economy of Iran relies heavily on revenues generated by the 
     export of oil and such revenues account for approximately 80 
     percent of Iran's total annual export earnings, nearly one-
     half of the annual budget of the Government of Iran, and as 
     much as one-fifth of the gross domestic product of Iran.
       (8) According to the Energy Information Administration, 
     Iran is actively seeking significant new foreign investment 
     in the energy sector and experts believe that with sufficient 
     investment Iran could increase its crude oil production 
     capacity significantly.
       (9) The Department of Justice is conducting a criminal 
     investigation into whether United States companies have 
     violated any law by trading or investing with Iran through a 
     subsidiary company that may not be completely independent of 
     the parent company.
       (10) The Securities and Exchange Commission has determined 
     that significant corporate operations in countries subject to 
     economic sanctions, such as Iran, can represent a material 
     risk to investors in the United States and that such 
     investments should be properly disclosed.

     SEC. 3. POLICY OF THE UNITED STATES.

       It is the policy of the United States--
       (1) to enforce fully existing economic sanctions imposed by 
     United States law against Iran, including sanctions imposed 
     under the Iran and Libya Sanctions Act of 1996 (50 U.S.C. 
     1701 note) on persons that make certain investments that 
     contribute to Iran's ability to develop and exploit its 
     petroleum and natural gas resources;
       (2) to make available to the public information regarding a 
     United States person or a person that is controlled in fact 
     by a United States person who maintains any direct or 
     indirect investment in the energy sector in Iran; and
       (3) to seek international cooperation in fully enforcing 
     economic sanctions against Iran and in prohibiting any direct 
     or indirect investment in Iran until Iran ceases to support 
     international terrorism.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Controlled in fact.--The term ``controlled in fact'' 
     includes--
       (A) with respect to a corporation, the holding of at least 
     50 percent (by vote or value) of the capital structure of the 
     corporation; and
       (B) with respect to a legal entity other than a 
     corporation, the holding of interests representing at least 
     50 percent of the capital structure of the entity.
       (2) Energy sector.--The term ``energy sector'' means any 
     research, exploration, development, production, sale, 
     distribution, or advertising of natural gas, oil, or 
     petroleum resources or nuclear power.
       (3) State.--The term ``State'' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, Guam, the Virgin Islands, and 
     other territories or possessions of the United States.
       (4) United states person.--The term ``United States 
     person'' means any citizen of the United States, permanent 
     resident alien, or entity organized under the laws of the 
     United States or of any State, wherever located (including 
     foreign branches).

     SEC. 5. PUBLICATION OF INFORMATION ON INVESTMENTS.

       (a) Requirement to Publish.--Not later than 120 days after 
     the date of enactment of this Act, the Secretary of the 
     Treasury shall publish in the Federal Register and make 
     available to the public on the Internet website of the 
     Department of the Treasury--
       (1) a list of each United States person or each person that 
     is controlled in fact by a United States person that 
     maintains any direct or indirect investment in the energy 
     sector in Iran;
       (2) a list of each foreign person that owned investments in 
     the energy sector in Iran with a total value of more than 
     $1,000,000 during the 12-month period ending on the date of 
     the publication in the Federal Register; and

[[Page S1053]]

       (3) a list of--
       (A) any United States person that holds the securities of a 
     person described in paragraph (1) or (2) valued at more than 
     $100,000;
       (B) any investment company registered under section 8 of 
     the Investment Company Act of 1940 that invests, reinvests, 
     or trades in the securities of a person described in 
     paragraph (1) or (2);
       (C) any pension plan or other Federal or State retirement 
     plan that invests in the securities of persons described in 
     paragraph (1) or (2); and
       (D) such other investors in the securities of persons 
     described in paragraph (1) or (2) as the Secretary determines 
     is appropriate to carry out the policy set out in section 3.
       (b) Requirement of Update.--The Secretary of the Treasury 
     shall update the lists described in paragraphs (1) through 
     (3) of subsection (a) at least once during each calendar 
     year. Such updates shall be published in the Federal Register 
     and made available to the public on the Internet website of 
     the Department of the Treasury.

     SEC. 6. INTERNATIONAL COOPERATION.

       The President, acting through the Secretary of the 
     Treasury, the Secretary of State, or the head of any other 
     appropriate Federal department or agency, shall undertake 
     negotiations with the government of a foreign country to 
     prohibit any direct or indirect investment in the energy 
     sector in Iran by any person that is controlled in fact by 
     that foreign country.

     SEC. 7. EXTENSION OF THE IRAN AND LIBYA SANCTIONS ACT OF 
                   1996.

       Section 13(b) of the Iran and Libya Sanctions Act of 1996 
     (50 U.S.C. 1701 note) is amended by striking ``10'' and 
     inserting ``15''.
                                 ______