[Congressional Record Volume 151, Number 147 (Tuesday, November 8, 2005)]
[Senate]
[Pages S12532-S12534]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD (for himself and Mr. Kyl):
  S. 1976. A bill to make amendments to the Iran Nonproliferation Act 
of 2000; to the Committee on Foreign Relations.
  Mr. FEINGOLD. Mr. President, I rise today to express my deep concern 
about the almost daily series of alarming developments in Iran and 
Syria. Both are state sponsors of terrorism. Both have worked to 
undermine our rebuilding efforts in Iraq. Tehran and Damascus both have 
a history of refusing to comply with global nonproliferation standards, 
and experts routinely cite disturbing trends that suggest these 
governments are aggressively pursuing programs to develop weapons of 
mass destruction. Iran clearly has the intention to develop nuclear 
weapons and is well on its way to doing so. It has been belligerent and 
dishonest in its dealings with the International Atomic Energy Agency 
and our European partners who are negotiating with Tehran. This led to 
the historic vote on September 24 of this year, when the IAEA Board of 
Governors found that Iran had breached its obligations under the 
Nuclear Non-Proliferation Treaty and noted Iran's policy of concealing 
its nuclear work and facilities. What was Tehran's response to the 
international community? More defiance and the outrageous comments by 
Iranian President Mahmoud Ahmadinejad calling for Israel to be ``wiped 
off the map.''
  Since coming into office, this administration has mostly allowed 
these problems with Iran and Syria to fester while its focus was 
elsewhere. It has paid only intermittent attention when crises flare up 
and has not formulated a long-term and comprehensive strategy for 
dealing with the proliferation threat presented by these regimes. The 
situation has deteriorated to such an extent--with the rapid nuclear 
developments in Iran, the increasing proliferation risk that it and 
Syria pose, the undermining of our work in Iraq, and the extreme 
statements and actions recently taken by both Tehran and Damascus--that 
we must take immediate action.
  Congress took action to augment the U.S. nonproliferation regime in 
2000 when it overwhelmingly passed the Iran Nonproliferation Act, INA, 
in response to repeated transfers of ballistic missile technology and 
know-how from Russia and other countries to Iran. Known and suspected 
assistance from Russia, China, and Pakistan has also helped Iran make 
progress in its nuclear program. I believe that the 2000 legislation 
has winnowed the pool of transgressors by highlighting the most 
egregious among them; however, determined governments, industries, and 
individuals continue to find it a worthwhile risk to trade in goods and 
technology that can contribute to an Iranian WMD program. Clearly, it 
is time to strengthen the INA to prevent these transactions. A more 
robust INA can also serve as a model for curbing proliferation 
involving other countries--starting with Syria, whose policies may 
still be influenced by such determined and effective measures.
  Congress is on the cusp of adopting some important changes to the INA 
with S. 1713. If enacted, the reporting and sanctions provisions of the 
statute would also apply to transactions involving Syria. In addition, 
the law would also target exports of WMD and missile technology from 
these two countries. The revamped Iran and Syria Nonproliferation Act, 
ISNA, would be a positive step. However, we must do more.
  Today, I along with my colleague from Arizona, Mr. Kyl, introduce the 
Iran Nonproliferation Enhancement Act of 2005. This bill would 
intensify and broaden the sanctions provisions in the INA. First, it 
requires mandatory sanctions for violators, an approach that Congress 
favored overwhelmingly when it passed the Iran Missile Proliferation 
Sanctions Act of 1997. Second, it requires a more detailed 
justification from the President if he chooses to exercise a national 
security waiver. Third, it introduces requirements that make parent 
companies subject to INA sanctions, in addition to their proliferator 
subsidiaries. And fourth, it expands the list of sanctions to include 
prohibitions on U.S. investment, financing, and financial assistance 
for proliferators, in addition to the current arms and dual use export 
prohibitions.
  The current sanctions mechanism is too weak. Under the INA, sanctions 
are authorized rather than required. Since 2000, the administration has 
chosen to impose INA sanctions on foreign companies or individuals on 
65 occasions, with some entities having been sanctioned several times. 
The State Department has not revealed in unclassified form how many 
entities were reported but not sanctioned and why they were not 
sanctioned.
  If we accept that a successful Iranian or Syrian WMD program poses a 
major threat, then we must get serious about our sanctions and make 
them mandatory. Our bill does just that. Making sanctions mandatory has 
precedents. As I previously noted, Congress overwhelmingly approved 
mandatory sanctions against foreign persons and entities engaged in 
missile proliferation to Iran as part of the Iran Missile Proliferation 
Sanctions Act of 1997. President Clinton vetoed the bill, however, 
largely because at that time his administration was engaged in 
negotiations with Russia over export controls. The sense was that the 
newly formed government needed time to develop its controls over 
Russian business. In the end, the administration exercised its 
Executive order authority to impose broad sanctions on several Russian 
companies. However, we must let the international community know that 
the threat from proliferation is great and that export controls must be 
in place and enforced. Making sanctions mandatory sends that message.

[[Page S12533]]

  Furthermore, nonproliferation legislation should ensure that national 
security waivers are issued only under the most compelling of 
circumstances. The current national security waiver is too broad, and 
the administration can simply classify the reason for the waiver in 
order to remove almost all scrutiny. The message sent to those 
assisting Iran and Syria with WMD development is that, even if the 
United States catches them, there is only a small chance that we will 
actually do anything about it. There are legitimate reasons for 
classifying parts of these responses and that is why our bill allows 
the administration to submit part of the waiver explanation in a 
classified annex. However, our bill requires the Administration to 
provide more detailed explanations for such waivers and an explanation 
of why a justification is classified.
  Currently, the INA sanctions restrict only U.S. arms and dual-use 
exports to violators, and an Executive order authorizes some additional 
restrictions. Our bill will ensure that all the significant tools in 
our sanctions arsenal are brought to bear on proliferators. It broadens 
INA sanctions to also include prohibitions on U.S. investment, 
financing, and financial assistance for violators, and if S. 1713 is 
enacted, also ban their imports into the United States. In an example 
identified by the Wisconsin Project on Nuclear Arms Control, China 
National Aero-Technology Import Export Corporation, CATIC, which was 
sanctioned under the INA in 2002 and 2004, has subsidiaries that export 
to the U.S. Under our bill, the investment sanction would prevent U.S. 
companies from making new capital investments in CATIC factories. It 
would also forbid the purchase by U.S. persons of shares of CATIC 
Shenzhen Holdings and CATIC International Holdings, two CATIC-
controlled companies that are listed on the Hong Kong Stock Exchange. 
The new import ban would block the sale of CATIC products in the United 
States, cutting off an important source of revenue. Put simply, this 
bill would make it clear for companies like CATIC that they must make a 
choice--profit from their dealings with the vast U.S. market or 
continue to assist Iran or Syria with their WMD and missile programs. 
It is long past due that companies make such a choice.
  Under the INA, parent companies can continue to do business with the 
U.S. and profit from our economy, even if their subsidiaries openly 
assist Iran with missile and WMD-related activities. Our bill attempts 
to end this aberration by expanding the scope of the sanctions to 
include the parent companies. The Wisconsin Project has identified 
serial proliferators who have flouted U.S. law because they know they 
cannot be touched by the current INA. China Aerospace Science and 
Technology Corporation, CASC, for example, has had three subsidiaries 
sanctioned--two of them repeatedly--for missile technology transfers to 
Iran. Meanwhile, CASC is marketing its commercial satellite launch 
program in our country. This amendment would force CASC to choose 
between selling missile technology to Iran and the business potential 
in future U.S. satellite launches. The bill's ban on investment would 
also affect the subsidiaries CASC has listed on the Hong Kong Stock 
Exchange. Similarly, the Chinese oil giant Sinopec has been selling 
glass-lined vessels useful for making poison gas to Iran through its 
subsidiaries. While INA sanctions were imposed on one of its 
subsidiaries, however, Sinopec remained free to raise billions of 
dollars on the New York Stock Exchange and even receive U.S. technology 
and U.S. foreign aid. This is absurd, and will no longer be possible if 
our bill becomes law.
  In conclusion, I want to emphasize the urgency of this matter. The 
intelligence community expects that Iran will be able to produce a 
nuclear weapon within a decade, and the CIA has highlighted concern 
about Iran's robust missile program. Iran has pursued various methods 
for enriching uranium and experimented with separating plutonium. 
Iran's WMD program is making news headlines again, and the IAEA Board 
of Governors found Iran in noncompliance with the NPT. The 
Congressional Research Service reported in its review of the INA that 
Iran's efforts to acquire foreign WMD technology seem to have continued 
unabated. Similarly, Syria continues to rely on technology and 
assistance from abroad to develop its ballistic missile program. 
According to recent unclassified CIA reports, Syria's chemical weapon 
program also depends on equipment and precursor chemicals it receives 
from foreign sources.
  We need to make a serious effort to inhibit WMD development by Iran 
and Syria. Strengthening the INA is one concrete way to do that for 
Iran, and when S. 1713 is enacted, also for Syria. We must make clear 
to the world that assisting Tehran and Damascus in developing the most 
dangerous weapons cannot and will not be tolerated. For example, China 
is a country with which we continue to build closer ties. However, a 
recent Rand study concluded that although China has improved its export 
control system on paper, it does not consistently and effectively 
implement these controls. Russia is also an important partner, but it 
has continued to provide Iran with nuclear technology. India is another 
nation with which the United States continues to grow closer, and the 
President has even committed to helping it with nuclear energy 
technology. Yet India also has very close ties to Iran. We must make 
clear to these nations and to the entire world that it is in the best 
interest of the international community that Iran and Syria do not 
expand their WMD capabilities. We must also make it crystal clear that 
if you assist these nations with their quest for weapons, there will be 
serious consequences for you in your relationship and dealings with the 
United States. Strengthening the INA as we suggest will make that 
message clear and further our national security goals.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1976

       Be it enacted by the Senate and House of Representative of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Iran Nonproliferation 
     Enforcement Act of 2005''.

     SEC. 2. SANCTIONS APPLICABLE UNDER THE IRAN NONPROLIFERATION 
                   ACT OF 2000.

       (a) Application of Certain Measures.--Section 3 of the Iran 
     Nonproliferation Act of 2000 (50 U.S.C. 1701 note) is 
     amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) Application of Measures.--Subject to sections 4 and 
     5, the President shall apply, for a period of not less than 2 
     years, the measures described in subsection (b) with respect 
     to--
       ``(1) each foreign person identified in a report submitted 
     pursuant to section 2(a);
       ``(2) all successors, subunits, and subsidiaries of each 
     such foreign person; and
       ``(3) any entity (if operating as a business enterprise) 
     that owns more than 50 percent of, or controls in fact, any 
     such foreign person and any successors, subunits, and 
     subsidiaries of such entity.'';
       (2) in subsection (b)--
       (A) by amending paragraph (1) to read as follows:
       ``(1) Executive order no. 12938 prohibitions.--The measures 
     set forth in subsections (b), (c), and (d) of section 4 of 
     Executive Order 12938.'';
       (B) in paragraph (2)--
       (i) by striking ``to that foreign person''; and
       (ii) by striking ``to that person'';
       (C) in paragraph (3), by striking ``to that person''; and
       (D) by adding at the end the following new paragraphs:
       ``(4) Investment prohibition.--Prohibition of any new 
     investment by a United States person in property, including 
     entities, owned or controlled by--
       ``(A) that foreign person;
       ``(B) any entity (if operating as a business enterprise) 
     that owns more than 50 percent of, or controls in fact, such 
     foreign person; or
       ``(C) any successor, subunit, or subsidiary of such entity.
       ``(5) Financing prohibition.--Prohibition of any approval, 
     financing, or guarantee by a United States person, wherever 
     located, of a transaction by--
       ``(A) that foreign person;
       ``(B) any entity (if operating as a business enterprise) 
     that owns more than 50 percent of, or controls in fact, such 
     foreign person; or
       ``(C) any successor, subunit, or subsidiary of such entity.
       ``(6) Financial assistance prohibition.--Denial by the 
     United States Government of any credit, credit guarantees, 
     grants, or other financial assistance by any department, 
     agency, or instrumentality of the United States Government 
     to--
       ``(A) that foreign person;
       ``(B) any entity (if operating as a business enterprise) 
     that owns more than 50 percent

[[Page S12534]]

     of, or controls in fact, such foreign person; and
       ``(C) any successor, subunit, or subsidiary of such 
     entity.''; and
       (3) by amending subsection (d) to read as follows:
       ``(d) Publication in Federal Register.--
       ``(1) In general.--The application of measures pursuant to 
     subsection (a) shall be announced by notice published in the 
     Federal Register.
       ``(2) Content.--Each notice published pursuant to paragraph 
     (1) shall include the name and address (where known) of each 
     person or entity to whom measures have been applied pursuant 
     to subsection (a).''.
       (b) National Security Waiver.--Section 4 of such Act is 
     amended to read as follows:

     ``SEC. 4. WAIVER ON BASIS OF NATIONAL SECURITY.

       ``(a) In General.--The President may waive the imposition 
     of any sanction that would otherwise be required under 
     section 3 on any person or entity 15 days after the President 
     determines and reports to the Committee on International 
     Relations of the House of Representatives and the Committee 
     on Foreign Relations of the Senate that such waiver is 
     essential to the national security of the United States.
       ``(b) Written Justification.--The determination and report 
     of the President under subsection (a) shall include a written 
     justification--
       ``(1) describing in detail the circumstances and rationale 
     supporting the President's conclusion that the waiver is 
     essential to the national security of the United States; and
       ``(2) identifying--
       ``(A) the name and address (where known) of the person or 
     entity to whom the waiver is applied pursuant to subsection 
     (a);
       ``(B) the specific goods, services, or technologies, the 
     transfer of which would have required the imposition of 
     measures pursuant to section 3 if the President had not 
     invoked the waiver authority under subsection (a); and
       ``(C) the name and address (where known) of the recipient 
     of such transfer.
       ``(c) Form.--The written justification shall be submitted 
     in unclassified form, but may contain a classified annex.''.
                                 ______