[Congressional Record Volume 153, Number 123 (Monday, July 30, 2007)]
[House]
[Pages H8866-H8868]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 IRAN SANCTIONS ACT OF 1996 AMENDMENTS

  Mr. FALEOMAVAEGA. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 957) to amend the Iran Sanctions Act of 1996 to expand 
and clarify the entities against which sanctions may be imposed, as 
amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows

                                H.R. 957

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

     SECTION 1. CLARIFICATION AND EXPANSION OF DEFINITIONS.

       (a) Person.--Section 14(13)(B) of the Iran Sanctions Act of 
     1996 (50 U.S.C. 1701 note) is amended to read as follows:
       ``(B)(i) a corporation, business association, partnership, 
     society, trust, financial institution, insurer, underwriter, 
     guarantor, and any other business organization;
       ``(ii) any foreign subsidiary of any entity described in 
     clause (i); and
       ``(iii) any governmental entity operating as a business 
     enterprise, such as an export credit agency; and''.
       (b) Petroleum Resources.--Section 14(14) of the Iran 
     Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended by 
     inserting after ``petroleum'' the second place it appears the 
     following: ``, petroleum refining capacity, liquefied natural 
     gas,''.
       (c) Construction.--The amendments made by this section 
     shall not be construed to require the imposition of any 
     measure under section 5 of the Iran Sanctions Act of 1996 
     against any natural person or other entity that is not 
     specifically described in section 14(13) of that Act, as 
     amended by this section.

     SEC. 2. APPLICATION TO SUBSIDIARIES.

       (a) In General.--Except as provided in subsection (b), in 
     any case in which an entity engages in an act outside the 
     United States which, if committed in the United States or by 
     a United States person, would violate Executive Order No. 
     12959 of May 6, 1995, Executive Order No. 13059 of August 19, 
     1997, or any other prohibition on transactions with respect 
     to Iran that is imposed under the International Emergency 
     Economic Powers Act (50 U.S.C. 1701 et seq.) and if that 
     entity was created or availed of for the purpose of engaging 
     in such an act, the parent company of that entity shall be 
     subject to the penalties for such violation to the same 
     extent as if the parent company had engaged in that act.
       (b) Exception.--Subsection (a) shall not apply to any act 
     carried out under a contract or other obligation of any 
     entity if--
       (1) the contract or obligation existed on May 22, 2007, 
     unless such contract or obligation is extended in time in any 
     manner or expanded to cover additional activities beyond the 
     terms of the contract or other obligation as it existed on 
     May 22, 2007; or
       (2) the parent company acquired that entity not knowing, 
     and not having reason to know, that such contract or other 
     obligation existed, unless such contract or other obligation 
     is extended in time in any manner or expanded to cover 
     additional activities beyond the terms of such contract or 
     other obligation as it existed at the time of such 
     acquisition.
       (c) Construction.--Nothing in this section shall be 
     construed as prohibiting the issuance of regulations, orders, 
     directives, or licenses under the Executive orders described 
     in subsection (a) or as being inconsistent with the 
     authorities under the International Emergency Economic Powers 
     Act.
       (d) Definitions.--In this section--
       (1) the term ``entity'' means a partnership, association, 
     trust, joint venture, corporation, or other organization;
       (2) an entity is a ``parent company'' of another entity if 
     it controls, directly or indirectly, that other entity and is 
     a United States person; and
       (3) the term ``United States person'' means any United 
     States citizen, any alien lawfully admitted for permanent 
     residence to the United States, any entity organized under 
     the laws of the United States, or any person in the United 
     States.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
American Samoa (Mr. Faleomavaega) and the gentlewoman from Florida (Ms. 
Ros-Lehtinen) each will control 20 minutes.
  The Chair recognizes the gentleman from American Samoa.


                             General Leave

  Mr. FALEOMAVAEGA. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days with which to revise and extend 
their remarks and include extraneous material on the bill under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from American Samoa?
  There was no objection.
  Mr. FALEOMAVAEGA. Mr. Speaker, I rise in strong support of this 
resolution and yield myself such time as I may consume.
  Mr. Speaker, I want to thank the distinguished chairman of the 
Foreign Affairs Committee, the gentleman from California (Mr. Lantos) 
and our distinguished senior ranking member, Ms. Ros-Lehtinen, for 
their sponsorship of this bipartisan measure and for their leadership 
on the issue of Iran.
  The dangerous Iranian regime presents us with the overriding long-
term issue facing the entire Middle East. The scoundrel, Mahmoud 
Ahmadinejad, and his theocratic cohorts are working to destabilize 
security worldwide with their nuclear weapons program. They are 
targeting Israel specifically through sponsorship of terror groups. And 
according to Tehran's own claims, several batteries of missiles.
  So the most important foreign policy security aim of the United 
States Government must be to prevent nuclear weapons from ever falling 
into the hands of Iran. It would destabilize the entire world. That is 
why the Foreign Affairs Committee has repeatedly passed bills to choke 
the regime in Tehran so it never gets to that point.
  If there is one long-term lesson of the Iraq war, Mr. Speaker, it is 
that all other means must be exhausted before military use is employed. 
This is what we aim to do in the Iran issue, tough sanctions, 
cooperation with our allies, and diplomacy.
  The amendment to the Iran Sanctions Act before the House today 
restores text that was in the original version of the Iran Sanctions 
legislation passed overwhelmingly by the House last session. 
Unfortunately, following White House negotiations with the Republican 
majority at the time, this provision was removed from a subsequent 
version of the bill that actually became law.
  This amendment plugs critical loopholes, actual and potential, for 
the current legislation that could allow Iran to conduct an end-around 
on our sanctions. The legislation is intended to truly and fully 
deprive Iran of revenue it needs to fuel its nuclear weapons program.
  The bill before us would fortify current law and enhance the ability 
of our government to deter foreign investment in Iran's energy 
industry. It expands the definition used to apply to businesses so that 
we may restrict anyone and everyone intending to help fuel Iran's sham 
of an energy industry.
  It is more than lamentable that the administration, in fact, has 
never once availed itself of the potent tools that the Iran Sanctions 
Act offers to deter such investment. But the administration can rest 
assured that we will hold its feet to the fire in this session.
  For the sake of U.S. interests and for world peace, both the 
executive branch and the Congress must do everything in its power to 
prevent the emergence of a nuclear-armed Iran. Congress cannot do it 
alone. So it is for these reasons that I again commend my dear friend, 
the ranking member, Ms. Ros-Lehtinen, for her cosponsorship of this 
bipartisan legislation and her leadership in the noble effort to 
prevent a fanatical regime from acquiring nuclear weapons has been 
outstanding.
  As a member of the Foreign Affairs Committee, I am proud to be part 
of that effort. I strongly support this legislation, and I urge my 
colleagues to support this bill.
  Mr. Speaker, I reserve the balance of my time.
  Ms. ROS-LEHTINEN. Mr. Speaker, I yield myself such time as I may 
consume.
  All of us know, Mr. Speaker, that Iran is a growing threat to the 
region and to U.S. national security interests.
  Iran's record for supporting Islamic extremists is dangerously 
supplemented by its continued violation of its nonproliferation 
obligations, its mockery of the International Atomic Energy Agency 
process, and its continued defiance of the United Nations Security 
Council's demands to halt its nuclear enrichment and reprocessing 
program.
  Just last week, Iran's chief nuclear negotiator, Ali Larijani, told 
Britain's newspapers, the Independent and the Guardian, that uranium 
enrichment was ``like breathing'' for his country, and that Iran would 
not halt the spinning centrifuges at its main enrichment plant at 
Natanz, even if the Bush

[[Page H8867]]

administration offered security guarantees.
  We could just wait for further action from the United Nations to 
counter the Iranian threat, but even the Iranian regime is aware of the 
influence of Russia and China at the U.N. Security Council and the 
refusal of some of our European and Asian allies to sacrifice 
commercial interests for the sake of nonproliferation.

                              {time}  1415

  Just last Wednesday, Iranian leader Ahmadinejad said that U.N. 
resolutions could not prevent Iran from obtaining nuclear technology. 
He stated, ``Let's say that they issue Resolution Number 300. What will 
happen? It should be remembered that Iran is obtaining nuclear 
technology. They will have to eventually accept that.''
  Well, for almost 5 years, Mr. Speaker, Iran has been manipulating the 
so-called international community buying time to expand, to strengthen 
and to hide its nuclear activities. In fact, recent public reports 
further document the construction of a major tunnel complex inside the 
mountain near the Iranian facility at Natans, near the fortified 
buildings where the Iranian uranium is reportedly being processed.
  This clearly illustrates the frenetic and advanced nature of that 
regime's nuclear weapon pursuit and should increase our sense of 
urgency. But the regime's pursuit of these destructive policies has one 
weakness: Iran's energy infrastructure. Iran's economy and its ability 
to influence events is heavily dependent on the revenues derived from 
energy exports. As such, recent U.S. efforts to prevent Iran from 
acquiring weapons of mass destruction have focused on deterring and 
prohibiting investments in Iran's petroleum sector.
  U.S. law prohibits American firms from investing in Iran. In 
addition, the Iran Sanctions Act seeks to influence responsible nations 
to stop their investment in Iran's energy sector, that is the economic 
lifeline of the regime, by calling for sanctions on those entities. 
Unfortunately, due to lack of enforcement, lack of commitment from some 
of our allies, foreign entities which fall outside of the jurisdiction 
of our country continue to invest in Iran, helping to fill the coffers, 
enabling the regime in Tehran to pursue not just a nuclear capability, 
but a chemical and biological program, long-range ballistic missiles 
and, as all of us know, they are a state sponsor of global Islamic 
extremism and terrorism.
  As part of their effort to isolate Iran and deprive it of its 
revenues, it needs to fund its nuclear weapons program. My 
distinguished colleague, Chairman Lantos, and I introduced the Iran 
Freedom Support Act, which was enacted into law in September of last 
year. This legislation strengthens sanctions against those who invest 
in Iran's petroleum sector, the economic lifeline of the Iranian 
regime. However, the final version of the law did not include language 
that would make export credit agencies, insurers and other financial 
institutions subject to sanctions for their facilitation of investments 
in Iran's oil industry.
  The bill before us, Mr. Speaker, H.R. 957 seeks to close this 
loophole. The imminent need to close this loophole and to compel 
responsible nations to do the right thing was clearly articulated in 
February of this year by Ambassador George Schulte, the chief U.S. 
representative to the International Atomic Energy Agency. Ambassador 
Schulte called on European governments to stop giving credits to 
subsidize exports to Iran and to take more measures to discourage 
investment and financial investment with Iran.
  It is my hope that, despite the clarifications included in the 
suspension text at the request of other committees, that H.R. 957 is 
applied vigorously against those governments that claim to support our 
efforts to stop Iran's nuclear pursuit but fail to take tangible 
actions to deny the regime the resources to continue along this 
destructive and dangerous path.
  H.R. 957 also seeks to expand the activities covered under the law to 
include petrochemicals and liquefied natural gas. Concerns were raised 
that existing law required the clarification that sanctions under the 
ISA should apply to certain foreign subsidiaries of U.S. companies; 
therefore, H.R. 957 expands and extends the applications to U.S. 
foreign subsidiaries as defined in the bill.
  This is a straightforward bill with a simple purpose: to enhance our 
ability to deprive Iran of the revenue it needs to fund its nuclear 
weapons and to secure greater cooperation from European, Asian, Russian 
and other allies to cut off the flow of funds to Iran. Responsible 
nations must immediately stop their multi-million, and in some cases 
billion, dollar investments in Iran's energy sector.
  Mr. Speaker, I strongly urge my colleagues to support this critical 
bipartisan measure to confront the Iranian threat.
  Mr. Speaker, I reserve the balance of my time.
  Mr. FALEOMAVAEGA. Mr. Speaker, I yield 4 minutes to my good friend, 
the gentleman from California (Mr. Sherman), one of the senior members 
of the House Foreign Affairs Committee and the chairman of the 
Subcommittee on Terrorism, Nonproliferation, and Trade
  Mr. SHERMAN. Mr. Speaker, we talked earlier today about the Iran 
Sanctions Enabling Act. The purpose of that bill and the purpose of 
this bill is to change the behavior of multinational corporations so as 
to change the behavior of the Iranian Government.
  This effort began perhaps with the Iran-Libya Sanctions Act over a 
decade ago. It worked so well vis-a-vis Libya, that we have renamed it 
the Iran Sanctions Act, as Libya has, indeed, changed its behavior. It 
is important that we clarify the law. The sponsor of the bill, the 
gentlelady from Florida indicated that this bill makes a number of 
important improvements to the Iran Sanctions Act.
  The first is to indicate that it covers financial institutions, 
insurers, LLCs and other business entities; second, that when we talk 
about investments in the petroleum sector, that term includes refining 
petroleum and it includes development of liquefied natural gas.
  Finally, I want to thank the gentlelady from Florida for including 
language in this bill that I had previously gotten into the Iran 
Freedom Support Act that was passed last year but which was dropped in 
conference. I want to thank her for putting it in this bill. That 
language deals with subsidiaries of U.S.-based multinationals. We 
currently have a ban on U.S. companies doing business with Iran, a ban 
on most transactions and investments. But some U.S.-based 
multinationals have used as a loophole through those regulations, 
through existing law, their foreign subsidiaries. What this bill would 
do is apply basic U.S. sanctions to all the entities controlled by 
multinational corporations based in the United States.
  As to contracts existing on May 22, 2007, those contacts would have 
to be wound up at the earliest opportunity and could not be extended to 
cover additional activities. We then face the issue of what happens 
when a U.S.-based multinational buys a company that is incorporated 
abroad and that company already has preexisting contracts with or in 
Iran.
  The activities of such subsidiaries would have to be wound up at 
their earlier possible opportunity, but furthermore, the U.S. buyer 
could not even buy that foreign company if the U.S. buyer knew that the 
company had contracts with the Government of Iran.
  The message is clear: If you are building a company abroad and you 
think you might want to sell it to a U.S.-based multinational, do not 
have that company do business with Iran; otherwise, it will not be a 
company that can be easily acquired by a U.S.-based multinational.
  This bill is an important part of an overall effort to put economic 
pressure on the Government of Iran and to let the Iranian elites and 
people know that they need to desist from their nuclear weapons 
program.
  Also coming before this Congress, I hope soon, will be H.R. 1400, the 
Iran Counterproliferation Act, which also strengthens the Iran 
Sanctions Act and whose sponsor is sitting right here with us, the 
chairman of the Foreign Affairs Committee, Mr. Lantos.
  We have to call upon the administration to actually enforce the Iran 
Sanctions Act. Since 1998, despite overwhelming evidence, no company 
has been identified by the United States

[[Page H8868]]

Department of State as having $20 million of investment in the Iranian 
oil sector which triggers the Iran Sanctions Act. It is time for the 
administration to stop ignoring existing law. It is time to strengthen 
existing law
  Ms. ROS-LEHTINEN. Mr. Speaker, I am pleased to yield such time as he 
may consume to my good friend from New Mexico (Mr. Pearce), a member of 
the Financial Services Committee.
  Mr. PEARCE. Mr. Speaker, I thank the gentlewoman from Florida for 
yielding, and the gentleman, the chairman, for his work on this 
important bill.
  Mr. Speaker, I would tell you that political pressure is one level of 
magnitude. But financial and business pressures are of another 
magnitude if we cannot get the attention of Iran in any other way when 
we should exert every means possible, but beginning with business 
pressures, they are certainly ones that we should consider.
  I was in Israel earlier this year, and an Israeli said, frankly and 
point-blankly, this was the minority party and the majority party both, 
separately, each said, the world needs to take care of the Iranian 
problem. They said that Iran, late in the summer, was going to pass 
points in their nuclear program that could not be gone back past, that 
once they passed those, then they have the capability to strike. They 
expressed deep reservations and deep concern about the inactivity of 
the entire world and urged us to come back and do things.
  It is, again, a very great bipartisan effort that we begin to ratchet 
the pressure up on the Iranian Government to say that you cannot act 
like this in the current world, it will just not be tolerated, and that 
the pressures will be extreme, we will increase those pressures. But I 
thank both the gentlewoman from Florida and the gentleman for their 
work on this important issue.
  Mr. Speaker, I urge all my colleagues to vote for this particular 
bill
  Mr. HERGER. Mr. Speaker, I rise in support of H.R. 957.
  On May 23, 2007, the International Atomic Energy Agency, IAEA, 
reported that Iran is continuing to enrich uranium in blatant defiance 
of three U.N. resolutions. The IAEA also concluded that Iran could 
develop nuclear weapons in as few as three years. Iran's President has 
called for Israel to be, and I quote, ``wiped off the map.'' The 
prospect of this extreme regime developing nuclear arms represents a 
grave threat to the United States and its allies in the Middle East, 
Europe, and globally.
  I believe the international community must stand united against Iran. 
We and our allies must do everything possible on a multilateral basis--
diplomatically, politically, and economically--to prevent Iran from 
acquiring nuclear arms capability. The United Nations, in particular, 
must adopt additional, stronger measures to stop this hostile regime 
dead in its tracks.
  Although I question the effectiveness of unilateral sanctions, I 
believe that drafted correctly, they can occasionally provide a useful 
supplement to multilateral efforts. H.R. 957 is one such occasion, as 
it maintains the President's discretion under IEEPA to consider on a 
situation-by-situation basis whether the imposition of unilateral 
sanctions would be the wisest course.
  For these reasons, I urge support of H.R. 957.
  Mr. FALEOMAVAEGA. Mr. Speaker, again, I want to commend the 
gentlewoman from Florida as the author of this bipartisan legislation.
  Mr. Speaker, I reserve the balance of my time.
  Ms. ROS-LEHTINEN. Mr. Speaker, I have no further requests for time, 
and I yield back the balance of my time.
  Mr. FALEOMAVAEGA. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from American Samoa (Mr. Faleomavaega) that the House suspend 
the rules and pass the bill, H.R. 957, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Ms. ROS-LEHTINEN. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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