[Congressional Record Volume 153, Number 148 (Tuesday, October 2, 2007)]
[House]
[Pages H11085-H11087]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INTERNATIONAL EMERGENCY ECONOMIC POWERS ENHANCEMENT ACT
Mr. SHERMAN. Mr. Speaker, I move to suspend the rules and pass the
Senate bill (S. 1612) to amend the penalty provisions in the
International Emergency Economic Powers Act, and for other purposes.
The Clerk read the title of the Senate bill.
The text of the Senate bill is as follows:
S. 1612
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 ``International Emergency
Economic Powers Enhancement Act''.
SEC. 2. INCREASED PENALTIES FOR VIOLATIONS OF IEEPA.
(a) In General.--Section 206 of the International Emergency
Economic Powers Act (50 U.S.C. 1705) is amended to read as
follows:
``SEC. 206. PENALTIES.
``(a) Unlawful Acts.--It shall be unlawful for a person to
violate, attempt to violate, conspire to violate, or cause a
violation of any license, order, regulation, or prohibition
issued under this title.
``(b) Civil Penalty.--A civil penalty may be imposed on any
person who commits an unlawful act described in subsection
(a) in an amount not to exceed the greater of--
``(1) $250,000; or
``(2) an amount that is twice the amount of the transaction
that is the basis of the violation with respect to which the
penalty is imposed.
``(c) Criminal Penalty.--A person who willfully commits,
willfully attempts to commit, or willfully conspires to
commit, or aids or abets in the commission of, an unlawful
act described in subsection (a) shall, upon conviction, be
fined not more than $1,000,000, or if a natural person, may
be imprisoned for not more than 20 years, or both.''.
(b) Effective Date.--
(1) Civil penalties.--Section 206(b) of the International
Emergency Economic Powers Act, as amended by subsection (a),
shall apply to violations described in section 206(a) of such
Act with respect to which enforcement action is pending or
commenced on or after the date of the enactment of this Act.
(2) Criminal penalties.--Section 206(c) of the
International Emergency Economic Powers Act, as amended by
subsection (a), shall apply to violations described in
section 206(a) of such Act with respect to which enforcement
action is commenced on or after the date of the enactment of
this Act.
``(c) Criminal Penalty.--A person who willfully commits,
willfully attempts to commit, or willfully conspires to
commit, or aids or abets in the commission of, an unlawful
act described in subsection (a) shall, upon conviction, be
fined not more than $1,000,000, or if a natural person, may
be imprisoned for not more than 20 years, or both.''.
(b) Effective Date.--The amendment made by subsection (a)
applies to violations described in section 206 of the
International Emergency Economic Powers Act (50 U.S.C. 1705)
with respect to which enforcement action is pending or
commenced on or after the date of the enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
California (Mr. Sherman) and the gentleman from Illinois (Mr. Manzullo)
each will control 20 minutes.
The Chair recognizes the gentleman from California.
General Leave
Mr. SHERMAN. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days 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 California?
There was no objection.
Mr. SHERMAN. Mr. Speaker, I rise in strong support of this bill, and
yield myself such time as I may consume.
Mr. Speaker, the International Emergency Economic Powers Act, IEEPA,
has over the years enabled the United States on various occasions to
impose significant economic sanctions and limitations on terrorists,
terrorist groups and their supporters, on financiers and on some of the
worst rogue regimes in the world. It has allowed three Presidents to
keep the U.S. dual-use export control system in operation against the
efforts of states like Iran and North Korea to require sensitive dual-
use technology and equipment.
IEEPA has accomplished this goal, even though Congress has been
unable to reauthorize the long-expired Export Administration Act, and I
hope that later in this Congress we do reauthorize the Export
Administration Act. That act was the original basis for the system of
export control which is now handled through IEEPA.
Immediately after 9/11, IEEPA authority was used to freeze the assets
of terrorist, terrorist organizations and their supporters and to
hobble the international terrorist network that sought and still seeks
to kill and maim innocent Americans. Yet the penalties for violating
IEEPA's provisions are lighter than they should be. Send $1 million as
a gift to Osama bin Laden and you get as a maximum penalty a $50,000
fine and 10 years in prison under the act. The same is true for
unlawful exports of sensitive commercial technology, equipment and
components that have military applications that are controlled for
national security purposes.
{time} 1115
If you send a milling machine for shaping nuclear warhead cores to
either Iran or North Korea, the same maximum fine and prison terms
under the act apply.
This bill increases the penalties to a level that I think is
consistent with the importance of making sure that Americans do not,
whether for ideological reasons or financial gain, deliberately violate
our efforts to control terrorism and to prevent the spread of weapons
of mass destruction.
S. 1612 increases civil penalties from $50,000 up to $250,000, or to
an amount that is twice the amount of the transaction that is the basis
of the violation with respect to which the penalty is imposed. It also
increases criminal penalties for willful violations from $50,000 up to
$1 million and/or imprisonment for not more than 20 years. This
increase in penalties is appropriate given the importance of the
International Emergency Economic Powers Act to our national security. I
urge my colleagues to support this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. MANZULLO. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of S. 1612. S. 1612 is legislation
which significantly increases the enforcement and deterrent effects of
sanctions and export control violations imposed under the International
Emergency Economic Powers Act, otherwise known as IEEPA.
Through this law, the President may respond to unusual and
extraordinary threats originating in substantial part outside of the
United States by, among other things, prohibiting transactions
associated with particular entities or countries.
In other words, IEEPA authorizes the President to impose economic and
financial sanctions against certain foreign threats to the U.S. and our
interests around the world. An example of success was the use of these
tools to bring North Korea back to the bargaining table to eliminate
their nuclear program.
IEEPA is also vital to U.S. national security because it continues
the expired Export Administration Act in full force, allowing the
Department of Commerce to carry out its mission of ensuring sensitive
goods and technologies do not fall into the hands of our adversaries.
It is important to keep the EAA in force so violators do not escape the
penalties of the law on a mere technicality.
I would like to take the time to respectfully remind the
administration that IEEPA brings the entire Export Administration Act
into force, not just certain provisions.
Mr. Speaker, this legislation would remove existing barriers to
meaningful enforcement of U.S. sanctions against terrorist financers,
proliferators of weapons of mass destruction, Iran, Sudan, and other
threats under IEEPA.
Current penalties under IEEPA do not constitute an effective
deterrent to entities that violate the law by engaging in prohibited
transactions.
The legislation will remedy that problem by increasing civil
penalties from $50,000 to $250,000 and increasing criminal penalties
for willful violations to $1 million with a maximum jail sentence of 20
years.
Mr. Speaker, while I strongly support this increase in penalties to
willful and
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knowing violators, I have expressed concern that these increased
penalties may be applied without taking into account unintentional,
accidental, or inadvertent violations by companies that are trying to
comply with the law.
I have since been assured by the Departments of Treasury and Commerce
that they will not abuse this new authority, and I include for the
Record the letter sent to me by Under Secretary of Commerce Mancuso.
Department of Commerce,
Washington, DC, September 26, 2007.
Hon. Donald A. Manzullo,
House of Representatives,
Washington, DC.
Dear Representative Manzullo: Thank you for your letter of
September 24, 2007, to Secretary Carlos Gutierrez expressing
your concerns over S. 2000, the Export Enhancement Act of
2007 (EEA), and S. 1612, the International Emergency Economic
Powers Enhancement Act, Secretary Gutierrez asked me to
respond to you on his behalf.
We share a concern for ensuring the vitality of American
businesses--small, medium and large, while keeping the most
sensitive U.S. goods and technologies out of the hands of
those who would do us harm. The Department of Commerce,
including the Bureau of Industry and Security (BIS), welcomes
your leadership in promoting the role of America's
manufacturing sector in sustaining our country's industrial
innovation and global competitiveness.
BIS is focused on ensuring that penalties for violations of
the dual-use export control laws and regulations are
appropriate. These penalties must not bear disproportionately
on small businesses that may have committed a minor,
inadvertent violation. With these goals in common, we can
work together to protect businesses while protecting America.
Passage of the EEA is an important step toward this goal,
and for this reason is a high priority of the Secretary.
Although you point out that S. 2000 would substantially
increase penalty levels for civil and criminal violations, we
believe that such levels are necessary to make these
penalties a more effective deterrent to companies that would
intentionally violate the law. Given the national security
issues involved, such as WMD proliferation, terrorism, and
military diversions, we must do all we can to make our export
controls effective.
Our intent is not to punish any business unfairly for
minor, accidental violations. As you know, BIS has
implemented a system that mitigates the penalty if certain
elements are met in each case of a violation. It is through
this system, as articulated in the BIS Penalty Guidelines
published in the Code of Federal Regulations in July 2007 (a
copy of which is enclosed for your review), that BIS ensures
that the penalty assessed is commensurate with the
infraction.
In civil cases, the published Penalty Guidelines set forth
several factors that may be considered when deciding ultimate
penalty amounts to be imposed, including;
1. whether or not the respondent submitted a voluntary
self-disclosure in the case;
2. whether the respondent had an export compliance program
in place at the time of the violation;
3. whether the respondent has a prior conviction for export
control violations; and
4. how cooperative the respondent is with the investigation
by export enforcement officials.
These, and other factors, are taken into consideration by
BIS when imposing penalties to ensure the punishment fits the
violation. Further, the Penalty Guidelines are drafted to
allow BIS to take into account company size and the nature of
the specific violations in a way that would warrant smaller
penalty amounts.
Additionally, BIS frequently conducts outreach to large and
small businesses to aid in the assessment of their export
compliance programs, and to address general compliance
questions. These visits and outreach programs provide
significant opportunities for the federal government and
exporters to have a dialogue on export controls, penalties,
and compliance concerns. To that end, I would like to offer
to visit your Congressional District and hold roundtable
discussions with business leaders and entrepreneurs.
We are working to create, administer and improve an
effective and flexible system of export controls that
recognize the unique situations that U.S. businesses,
particularly small businesses, encounter. Please do not
hesitate to contact me or Bill Houston on my staff at 202-
482-6002 at anytime. I value our relationship and look
forward to working together in the future.
Sincerely,
Mario Mancuso,
Under Secretary for Industry and Security.
Mr. Speaker, I have also expressed concern about the lack of
understanding that most small businesses have concerning export
controls and sanctions. Our sanctions and export control laws are the
most complex in the world. I believe if we are truly to keep goods and
services from embargoed countries, small businesses must have a better
understanding of what those prohibited items are.
Educated self-governance by small businesses would greatly enhance
IEEPA as a deterrent, far more than some of the minimal fines that are
currently imposed.
Mr. Speaker, I look forward to working with the Departments of
Treasury and Commerce to make certain that small businesses clearly
understand the law. IEEPA is an important tool in the effort to combat
terrorist financing and other illicit activity, such as the
proliferation of weapons of mass destruction.
I want to thank Chairman Lantos, Ranking Member Ros-Lehtinen and
obviously Subcommittee Chairman Sherman for the bipartisan way they
have moved this measure. They have worked with the administration to
address my concerns. I support passage of this critical improvement to
our economic sanctions law.
Mr. Speaker, I reserve the balance of my time.
Mr. SHERMAN. Mr. Speaker, I yield myself 3 minutes.
Mr. Speaker, I thank the gentleman for his support of the bill. I
thank Chairman Lantos and our ranking member, Ms. Ros-Lehtinen, for
their work in bringing this bill to the floor.
IEEPA is but one part of an overall effort to use the economic power
of the United States to prevent terrorism and the spread of nuclear
weapons. I think we have adequately covered in today's debate the
importance of this bill to strengthen IEEPA; but I now would like to
put IEEPA into overall context and take a look at some of the other
economic measures that we should also be employing in our effort to
stop the spread of nuclear weapons.
This House passed H.R. 1400 designed to improve the Iran Sanctions
Act. We need to press our colleagues in the Senate to pass that bill as
well. But even more important, we need to press the administration to
enforce the Iran Sanctions Act.
Many of us know that as the Iran-Libya Sanctions Act, or ILSA. What
happened is both the last administration and this administration
applied those sanctions to investments in the Libyan oil sector. That
was effective. Gaddafi changed his policies, and so we had to rename
the bill the Iran Sanctions Act, as we lifted sanctions from Libya.
Unfortunately, both the last administration and now this
administration have been unwilling to enforce what is now the Iran
Sanctions Act, which would be our best tool to put pressure on the
regime in Tehran.
We need to close Iranian access to the U.S. financial system. I
applaud the Treasury Department for blocking access to the New York
Federal Reserve Board branch in New York to two major Iranian banks,
which begs the question: Why not the others as well?
We need to stop World Bank loans to Iran. We need to urge upon our
colleagues in the Senate that they pass H.R. 2337, known in their house
as S. 1430, to allow American pension plans to divest from those
companies doing business in Iran, and we need to urge the Senate to
pass similar legislation already passed through this House doing the
same thing with regard to investments in Sudan.
Finally, we need to make sure that our procurement laws and our laws
for assisting businesses like the Ex-Im Bank and OPEC also require that
corporations stop investing in the oil sector of Iran if they want the
support of U.S. Government agencies.
It is time for us not to assume that the only possible response is
either to acquiesce in a nuclear Iran or to use military action. It is
time for us to get the message to Iranian elites and the Iranian people
that they face true economic isolation if they continue down the
current course. The way to do that is to muster all of the economic
power of the United States towards achieving our national security
objectives, and one small step in that direction is for us to pass S.
1612 today.
Mr. Speaker, I reserve the balance of my time.
Mr. MANZULLO. Mr. Speaker, I yield back the balance of my time.
Mr. SHERMAN. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from California (Mr. Sherman) that the House suspend the
rules and pass the Senate bill, S. 1612.
The question was taken; and (two-thirds being in the affirmative) the
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rules were suspended and the Senate bill was passed.
A motion to reconsider was laid on the table.
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