[Congressional Record Volume 153, Number 68 (Thursday, April 26, 2007)]
[Senate]
[Page S5214]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LAUTENBERG (for himself and Mrs. Clinton):
  S. 1234. A bill to strengthen the liability of parent companies for 
violations of sanctions by foreign entities, and for other purposes; to 
the Committee on Banking, Housing, and Urban Affairs.
  Mr. LAUTENBERG. Mr. President, I am pleased to introduce the Stop 
Business With Terrorists Act of 2007. Senator Clinton is joining me as 
an original cosponsor of this important bill. This bill will shut down 
a source of revenue that flows to terrorists and rogue regimes that 
threaten our nation's security.
  President Bush has made the statement that money is the lifeblood of 
terrorist operations. He could not be more right. Amazingly, some of 
our corporations are providing revenue to terrorists by doing business 
with these rogue regimes. My bill is simple. It closes a loophole in 
the law that allows American companies to do business with our enemies.
  Our current sanctions laws prohibit United States companies from 
doing business directly with Iran, but the law contains a loophole. It 
enables an American company to create a foreign-based subsidiary that 
can do business with that prohibited country. As long as this loophole 
is in place, our sanctions laws have no teeth.
  My bill will close this loophole once and for all and will cut off a 
major source of revenue for terrorists. It will require foreign 
subsidiaries that are majority controlled by a U.S. parent company to 
follow U.S. sanctions laws. For those companies that would need to 
divest from such a situation, they would have 90 days to do so. This is 
a simple concept with significant impact.
  It is critical that we starve these rogue regimes and the terrorists 
they support at the source. Of the companies that are taking advantage 
of this loophole, the country that has benefited the most has been 
Iran. And as we know, Iran funds Hamas, Hezbollah, the Palestinian 
Islamic Jihad, and other terrorist organizations. We should not allow 
American-controlled companies to provide cash to Iran so that they can 
convert these funds into bullets and bombs to be used against us and 
our allies.
  It is inexcusable for American companies to engage in any business 
practice that provides revenues to terrorists, and we have to stop it. 
I urge my colleagues to support this bill and to close the terror 
funding loophole.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1234

       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 Business with 
     Terrorists Act of 2007''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Entity.--The term ``entity'' means a partnership, 
     association, trust, joint venture, corporation, or other 
     organization.
       (2) Parent company.--The term ``parent company'' means an 
     entity that is a United States person and--
       (A) the entity owns, directly or indirectly, more than 50 
     percent of the equity interest by vote or value in another 
     entity;
       (B) board members or employees of the entity hold a 
     majority of board seats of another entity; or
       (C) the entity otherwise controls or is able to control the 
     actions, policies, or personnel decisions of another entity.
       (3) United states person.--The term ``United States 
     person'' means--
       (A) a natural person who is a citizen of the United States 
     or who owes permanent allegiance to the United States; and
       (B) an entity that is organized under the laws of the 
     United States, any State or territory thereof, or the 
     District of Columbia, if natural persons described in 
     subparagraph (A) own, directly or indirectly, more than 50 
     percent of the outstanding capital stock or other beneficial 
     interest in such entity.

     SEC. 3. LIABILITY OF PARENT COMPANIES FOR VIOLATIONS OF 
                   SANCTIONS BY FOREIGN ENTITIES.

       (a) In General.--In any case in which an entity engages in 
     an act outside the United States that, if committed in the 
     United States or by a United States person, would violate the 
     provisions of Executive Order 12959 (50 U.S.C. 1701 note) or 
     Executive Order 13059 (50 U.S.C. 1701 note), or any other 
     prohibition on transactions with respect to Iran imposed 
     under the authority of the International Emergency Economic 
     Powers Act (50 U.S.C. 1701 et seq.), the parent company of 
     the entity shall be subject to the penalties for the act to 
     the same extent as if the parent company had engaged in the 
     act.
       (b) Applicability.--Subsection (a) shall not apply to a 
     parent company of an entity on which the President imposed a 
     penalty for a violation described in subsection (a) that was 
     in effect on the date of the enactment of this Act if the 
     parent company divests or terminates its business with such 
     entity not later than 90 days after such date of enactment.
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