[Congressional Record Volume 156, Number 95 (Wednesday, June 23, 2010)]
[House]
[Pages H4751-H4770]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     CONFERENCE REPORT ON H.R. 2194, COMPREHENSIVE IRAN SANCTIONS, 
               ACCOUNTABILITY, AND DIVESTMENT ACT OF 2010

  Mr. BERMAN (during the Special Order of Mr. Akin) submitted the 
following conference report and statement on the bill (H.R. 2194) to 
amend the Iran Sanctions Act of 1996 to enhance United States 
diplomatic efforts with respect to Iran by expanding economic sanctions 
against Iran:

                  Conference Report (H. Rept. 111-512)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H. R. 
     2194), to amend the Iran Sanctions Act of 1996 to enhance 
     United States diplomatic efforts with respect to Iran by 
     expanding economic sanctions against Iran, having met, after 
     full and free conference, have agreed to

[[Page H4752]]

     recommend and do recommend to their respective Houses as 
     follows:
       That the House recede from its disagreement to the 
     amendment of the Senate and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the Senate 
     amendment, insert the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Comprehensive Iran Sanctions, Accountability, and 
     Divestment Act of 2010''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Sense of Congress regarding the need to impose additional 
              sanctions with respect to Iran.

                           TITLE I--SANCTIONS

Sec. 101. Definitions.
Sec. 102. Expansion of sanctions under the Iran Sanctions Act of 1996.
Sec. 103. Economic sanctions relating to Iran.
Sec. 104. Mandatory sanctions with respect to financial institutions 
              that engage in certain transactions.
Sec. 105. Imposition of sanctions on certain persons who are 
              responsible for or complicit in human rights abuses 
              committed against citizens of Iran or their family 
              members after the June 12, 2009, elections in Iran.
Sec. 106. Prohibition on procurement contracts with persons that export 
              sensitive technology to Iran.
Sec. 107. Harmonization of criminal penalties for violations of 
              sanctions.
Sec. 108. Authority to implement United Nations Security Council 
              resolutions imposing sanctions with respect to Iran.
Sec. 109. Increased capacity for efforts to combat unlawful or 
              terrorist financing.
Sec. 110. Reports on investments in the energy sector of Iran.
Sec. 111. Reports on certain activities of foreign export credit 
              agencies and of the Export-Import Bank of the United 
              States.
Sec. 112. Sense of Congress regarding Iran's Revolutionary Guard Corps 
              and its affiliates.
Sec. 113. Sense of Congress regarding Iran and Hezbollah.
Sec. 114. Sense of Congress regarding the imposition of multilateral 
              sanctions with respect to Iran.
Sec. 115. Report on providing compensation for victims of international 
              terrorism.

    TITLE II--DIVESTMENT FROM CERTAIN COMPANIES THAT INVEST IN IRAN

Sec. 201. Definitions.
Sec. 202. Authority of State and local governments to divest from 
              certain companies that invest in Iran.
Sec. 203. Safe harbor for changes of investment policies by asset 
              managers.
Sec. 204. Sense of Congress regarding certain ERISA plan investments.
Sec. 205. Technical corrections to Sudan Accountability and Divestment 
              Act of 2007.

  TITLE III--PREVENTION OF DIVERSION OF CERTAIN GOODS, SERVICES, AND 
                          TECHNOLOGIES TO IRAN

Sec. 301. Definitions.
Sec. 302. Identification of countries of concern with respect to the 
              diversion of certain goods, services, and technologies to 
              or through Iran.
Sec. 303. Destinations of Diversion Concern.
Sec. 304. Report on expanding diversion concern system to address the 
              diversion of United States origin goods, services, and 
              technologies to certain countries other than Iran.
Sec. 305. Enforcement authority.

                      TITLE IV--GENERAL PROVISIONS

Sec. 401. General provisions.
Sec. 402. Determination of budgetary effects.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The illicit nuclear activities of the Government of 
     Iran, combined with its development of unconventional weapons 
     and ballistic missiles and its support for international 
     terrorism, represent a threat to the security of the United 
     States, its strong ally Israel, and other allies of the 
     United States around the world.
       (2) The United States and other responsible countries have 
     a vital interest in working together to prevent the 
     Government of Iran from acquiring a nuclear weapons 
     capability.
       (3) The International Atomic Energy Agency has repeatedly 
     called attention to Iran's illicit nuclear activities and, as 
     a result, the United Nations Security Council has adopted a 
     range of sanctions designed to encourage the Government of 
     Iran to suspend those activities and comply with its 
     obligations under the Treaty on the Non-Proliferation of 
     Nuclear Weapons, done at Washington, London, and Moscow July 
     1, 1968, and entered into force March 5, 1970 (commonly known 
     as the ``Nuclear Non-Proliferation Treaty'').
       (4) The serious and urgent nature of the threat from Iran 
     demands that the United States work together with its allies 
     to do everything possible--diplomatically, politically, and 
     economically--to prevent Iran from acquiring a nuclear 
     weapons capability.
       (5) The United States and its major European allies, 
     including the United Kingdom, France, and Germany, have 
     advocated that sanctions be strengthened should international 
     diplomatic efforts fail to achieve verifiable suspension of 
     Iran's uranium enrichment program and an end to its nuclear 
     weapons program and other illicit nuclear activities.
       (6) The Government of Iran continues to engage in serious, 
     systematic, and ongoing violations of human rights, including 
     suppression of freedom of expression and religious freedom, 
     illegitimately prolonged detention, torture, and executions. 
     Such violations have increased in the aftermath of the 
     fraudulent presidential election in Iran on June 12, 2009.
       (7) The Government of Iran has been unresponsive to 
     President Obama's unprecedented and serious efforts at 
     engagement, revealing that the Government of Iran is not 
     interested in a diplomatic resolution, as made clear, for 
     example, by the following:
       (A) Iran's apparent rejection of the Tehran Research 
     Reactor plan, generously offered by the United States and its 
     partners, of potentially great benefit to the people of Iran, 
     and endorsed by Iran's own negotiators in October 2009.
       (B) Iran's ongoing clandestine nuclear program, as 
     evidenced by its work on the secret uranium enrichment 
     facility at Qom, its subsequent refusal to cooperate fully 
     with inspectors from the International Atomic Energy Agency, 
     and its announcement that it would build 10 new uranium 
     enrichment facilities.
       (C) Iran's official notification to the International 
     Atomic Energy Agency that it would enrich uranium to the 20 
     percent level, followed soon thereafter by its providing to 
     that Agency a laboratory result showing that Iran had indeed 
     enriched some uranium to 19.8 percent.
       (D) A February 18, 2010, report by the International Atomic 
     Energy Agency expressing ``concerns about the possible 
     existence in Iran of past or current undisclosed activities 
     related to the development of a nuclear payload for a 
     missile. These alleged activities consist of a number of 
     projects and sub-projects, covering nuclear and missile 
     related aspects, run by military-related organizations.''.
       (E) A May 31, 2010, report by the International Atomic 
     Energy Agency expressing continuing strong concerns about 
     Iran's lack of cooperation with the Agency's verification 
     efforts and Iran's ongoing enrichment activities, which are 
     contrary to the longstanding demands of the Agency and the 
     United Nations Security Council.
       (F) Iran's announcement in April 2010 that it had developed 
     a new, faster generation of centrifuges for enriching 
     uranium.
       (G) Iran's ongoing arms exports to, and support for, 
     terrorists in direct contravention of United Nations Security 
     Council resolutions.
       (H) Iran's July 31, 2009, arrest of 3 young citizens of the 
     United States on spying charges.
       (8) There is an increasing interest by State governments, 
     local governments, educational institutions, and private 
     institutions, business firms, and other investors to 
     disassociate themselves from companies that conduct business 
     activities in the energy sector of Iran, since such business 
     activities may directly or indirectly support the efforts of 
     the Government of Iran to achieve a nuclear weapons 
     capability.
       (9) Black market proliferation networks continue to 
     flourish in the Middle East, allowing countries like Iran to 
     gain access to sensitive dual-use technologies.
       (10) Economic sanctions imposed pursuant to the provisions 
     of this Act, the Iran Sanctions Act of 1996, as amended by 
     this Act, and the International Emergency Economic Powers Act 
     (50 U.S.C. 1701 et seq.), and other authorities available to 
     the United States to impose economic sanctions to prevent 
     Iran from developing nuclear weapons, are necessary to 
     protect the essential security interests of the United 
     States.

     SEC. 3. SENSE OF CONGRESS REGARDING THE NEED TO IMPOSE 
                   ADDITIONAL SANCTIONS WITH RESPECT TO IRAN.

       It is the sense of Congress that--
       (1) international diplomatic efforts to address Iran's 
     illicit nuclear efforts and support for international 
     terrorism are more likely to be effective if strong 
     additional sanctions are imposed on the Government of Iran;
       (2) the concerns of the United States regarding Iran are 
     strictly the result of the actions of the Government of Iran;
       (3) the revelation in September 2009 that Iran is 
     developing a secret uranium enrichment site on a base of 
     Iran's Revolutionary Guard Corps near Qom, which appears to 
     have no civilian application, highlights the urgency that 
     Iran--
       (A) disclose the full nature of its nuclear program, 
     including any other secret locations; and
       (B) provide the International Atomic Energy Agency 
     unfettered access to its facilities pursuant to Iran's legal 
     obligations under the Treaty on the Non-Proliferation of 
     Nuclear Weapons, done at Washington, London, and Moscow July 
     1, 1968, and entered into force March 5, 1970 (commonly known 
     as the ``Nuclear Non-Proliferation Treaty'') and Iran's 
     safeguards agreement with the International Atomic Energy 
     Agency;
       (4) because of the involvement of Iran's Revolutionary 
     Guard Corps in Iran's nuclear program, international 
     terrorism, and domestic human rights abuses, the President 
     should impose the full range of applicable sanctions on--
       (A) any individual or entity that is an agent, alias, 
     front, instrumentality, representative, official, or 
     affiliate of Iran's Revolutionary Guard Corps; and
       (B) any individual or entity that has conducted any 
     commercial transaction or financial transaction with an 
     individual or entity described in subparagraph (A);
       (5) additional measures should be adopted by the United 
     States to prevent the diversion of sensitive dual-use 
     technologies to Iran;
       (6) the President should--
       (A) continue to urge the Government of Iran to respect the 
     internationally recognized human rights and religious 
     freedoms of its citizens;

[[Page H4753]]

       (B) identify the officials of the Government of Iran and 
     other individuals who are responsible for continuing and 
     severe violations of human rights and religious freedom in 
     Iran; and
       (C) take appropriate measures to respond to such 
     violations, including by--
       (i) prohibiting officials and other individuals the 
     President identifies as being responsible for such violations 
     from entry into the United States; and
       (ii) freezing the assets of the officials and other 
     individuals described in clause (i);
       (7) additional funding should be provided to the Secretary 
     of State to document, collect, and disseminate information 
     about human rights abuses in Iran, including serious abuses 
     that have taken place since the presidential election in Iran 
     on June 12, 2009;
       (8) with respect to nongovernmental organizations based in 
     the United States--
       (A) many of such organizations are essential to promoting 
     human rights and humanitarian goals around the world;
       (B) it is in the national interest of the United States to 
     allow responsible nongovernmental organizations based in the 
     United States to establish and carry out operations in Iran 
     to promote civil society and foster humanitarian goodwill 
     among the people of Iran; and
       (C) the United States should ensure that the organizations 
     described in subparagraph (B) are not unnecessarily hindered 
     from working in Iran to provide humanitarian, human rights, 
     and people-to-people assistance, as appropriate, to the 
     people of Iran;
       (9) the United States should not issue a license pursuant 
     to an agreement for cooperation (as defined in section 11 b. 
     of the Atomic Energy Act of 1954 (42 U.S.C. 2014(b))) for the 
     export of nuclear material, facilities, components, or other 
     goods, services, or technology that are or would be subject 
     to such an agreement to a country that is providing similar 
     nuclear material, facilities, components, or other goods, 
     services, or technology to another country that is not in 
     full compliance with its obligations under the Nuclear Non-
     Proliferation Treaty, including its obligations under the 
     safeguards agreement between that country and the 
     International Atomic Energy Agency, unless the President 
     determines that the provision of such similar nuclear 
     material, facilities, components, or other goods, services, 
     or technology to such other country does not undermine the 
     nonproliferation policies and objectives of the United 
     States; and
       (10) the people of the United States--
       (A) have feelings of friendship for the people of Iran;
       (B) regret that developments in recent decades have created 
     impediments to that friendship; and
       (C) hold the people of Iran, their culture, and their 
     ancient and rich history in the highest esteem.

                           TITLE I--SANCTIONS

     SEC. 101. DEFINITIONS.

       In this title:
       (1) Agricultural commodity.--The term ``agricultural 
     commodity'' has the meaning given that term in section 102 of 
     the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
       (2) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' has the meaning 
     given that term in section 14 of the Iran Sanctions Act of 
     1996 (Public Law 104-172; 50 U.S.C. 1701 note), as amended by 
     section 102 of this Act.
       (3) Executive agency.--The term ``executive agency'' has 
     the meaning given that term in section 4 of the Office of 
     Federal Procurement Policy Act (41 U.S.C. 403).
       (4) Family member.--The term ``family member'' means, with 
     respect to an individual, a spouse, child, parent, sibling, 
     grandchild, or grandparent of the individual.
       (5) Iranian diplomats and representatives of other 
     government and military or quasi-governmental institutions of 
     iran.--The term ``Iranian diplomat or representative of 
     another government or military or quasi-governmental 
     institution of Iran'' means any of the Iranian diplomats and 
     representatives of other government and military or quasi-
     governmental institutions of Iran (as that term is defined in 
     section 14 of the Iran Sanctions Act of 1996 (Public Law 104-
     172; 50 U.S.C. 1701 note)).
       (6) Knowingly.--The term ``knowingly'', with respect to 
     conduct, a circumstance, or a result, means that a person has 
     actual knowledge, or should have known, of the conduct, the 
     circumstance, or the result.
       (7) Medical device.--The term ``medical device'' has the 
     meaning given the term ``device'' in section 201 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).
       (8) Medicine.--The term ``medicine'' has the meaning given 
     the term ``drug'' in section 201 of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 321).
       (9) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Commonwealth of the Northern Mariana Islands, 
     American Samoa, Guam, the United States Virgin Islands, and 
     any other territory or possession of the United States.
       (10) United states person.--The term ``United States 
     person'' means--
       (A) a natural person who is a citizen or resident of the 
     United States or a national of the United States (as defined 
     in section 101(a) of the Immigration and Nationality Act (8 
     U.S.C. 1101(a)); and
       (B) an entity that is organized under the laws of the 
     United States or any State.

     SEC. 102. EXPANSION OF SANCTIONS UNDER THE IRAN SANCTIONS ACT 
                   OF 1996.

       (a) In General.--Section 5 of the Iran Sanctions Act of 
     1996 (Public Law 104-172; 50 U.S.C. 1701 note) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Sanctions With Respect to the Development of 
     Petroleum Resources of Iran, Production of Refined Petroleum 
     Products in Iran, and Exportation of Refined Petroleum 
     Products to Iran.--
       ``(1) Development of petroleum resources of iran.--
       ``(A) In general.--Except as provided in subsection (f), 
     the President shall impose 3 or more of the sanctions 
     described in section 6(a) with respect to a person if the 
     President determines that the person knowingly, on or after 
     the date of the enactment of the Comprehensive Iran 
     Sanctions, Accountability, and Divestment Act of 2010--
       ``(i) makes an investment described in subparagraph (B) of 
     $20,000,000 or more; or
       ``(ii) makes a combination of investments described in 
     subparagraph (B) in a 12-month period if each such investment 
     is of at least $5,000,000 and such investments equal or 
     exceed $20,000,000 in the aggregate.
       ``(B) Investment described.--An investment described in 
     this subparagraph is an investment that directly and 
     significantly contributes to the enhancement of Iran's 
     ability to develop petroleum resources.
       ``(2) Production of refined petroleum products.--
       ``(A) In general.--Except as provided in subsection (f), 
     the President shall impose 3 or more of the sanctions 
     described in section 6(a) with respect to a person if the 
     President determines that the person knowingly, on or after 
     the date of the enactment of the Comprehensive Iran 
     Sanctions, Accountability, and Divestment Act of 2010, sells, 
     leases, or provides to Iran goods, services, technology, 
     information, or support described in subparagraph (B)--
       ``(i) any of which has a fair market value of $1,000,000 or 
     more; or
       ``(ii) that, during a 12-month period, have an aggregate 
     fair market value of $5,000,000 or more.
       ``(B) Goods, services, technology, information, or support 
     described.--Goods, services, technology, information, or 
     support described in this subparagraph are goods, services, 
     technology, information, or support that could directly and 
     significantly facilitate the maintenance or expansion of 
     Iran's domestic production of refined petroleum products, 
     including any direct and significant assistance with respect 
     to the construction, modernization, or repair of petroleum 
     refineries.
       ``(3) Exportation of refined petroleum products to iran.--
       ``(A) In general.--Except as provided in subsection (f), 
     the President shall impose 3 or more of the sanctions 
     described in section 6(a) with respect to a person if the 
     President determines that the person knowingly, on or after 
     the date of the enactment of the Comprehensive Iran 
     Sanctions, Accountability, and Divestment Act of 2010--
       ``(i) sells or provides to Iran refined petroleum 
     products--

       ``(I) that have a fair market value of $1,000,000 or more; 
     or
       ``(II) that, during a 12-month period, have an aggregate 
     fair market value of $5,000,000 or more; or

       ``(ii) sells, leases, or provides to Iran goods, services, 
     technology, information, or support described in subparagraph 
     (B)--

       ``(I) any of which has a fair market value of $1,000,000 or 
     more; or
       ``(II) that, during a 12-month period, have an aggregate 
     fair market value of $5,000,000 or more.

       ``(B) Goods, services, technology, information, or support 
     described.--Goods, services, technology, information, or 
     support described in this subparagraph are goods, services, 
     technology, information, or support that could directly and 
     significantly contribute to the enhancement of Iran's ability 
     to import refined petroleum products, including--
       ``(i) except as provided in subparagraph (C), underwriting 
     or entering into a contract to provide insurance or 
     reinsurance for the sale, lease, or provision of such goods, 
     services, technology, information, or support;
       ``(ii) financing or brokering such sale, lease, or 
     provision; or
       ``(iii) providing ships or shipping services to deliver 
     refined petroleum products to Iran.
       ``(C) Exception for underwriters and insurance providers 
     exercising due diligence.--The President may not impose 
     sanctions under this paragraph with respect to a person that 
     provides underwriting services or insurance or reinsurance if 
     the President determines that the person has exercised due 
     diligence in establishing and enforcing official policies, 
     procedures, and controls to ensure that the person does not 
     underwrite or enter into a contract to provide insurance or 
     reinsurance for the sale, lease, or provision of goods, 
     services, technology, information, or support described in 
     subparagraph (B).'';
       (2) in subsection (b)--
       (A) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively, and moving such 
     subparagraphs, as so redesignated, 2 ems to the right;
       (B) by striking ``The President shall impose'' and 
     inserting the following:
       ``(1) In general.--The President shall impose''; and
       (C) in paragraph (1), as redesignated by subparagraph (B) 
     of this paragraph, by striking ``two or more'' and all that 
     follows through ``of this Act'' and inserting ``3 or more of 
     the sanctions described in section 6(a) if the President 
     determines that a person has, on or after the date of the 
     enactment of the Comprehensive Iran Sanctions, 
     Accountability, and Divestment Act of 2010''; and
       (D) by adding at the end the following:
       ``(2) Additional mandatory sanctions relating to transfer 
     of nuclear technology.--

[[Page H4754]]

       ``(A) In general.--Except as provided in subparagraphs (B) 
     and (C), in any case in which a person is subject to 
     sanctions under paragraph (1) because of an activity 
     described in that paragraph that relates to the acquisition 
     or development of nuclear weapons or related technology or of 
     missiles or advanced conventional weapons that are designed 
     or modified to deliver a nuclear weapon, no license may be 
     issued for the export, and no approval may be given for the 
     transfer or retransfer, directly or indirectly, to the 
     country the government of which has primary jurisdiction over 
     the person, of any nuclear material, facilities, components, 
     or other goods, services, or technology that are or would be 
     subject to an agreement for cooperation between the United 
     States and that government.
       ``(B) Exception.--The sanctions described in subparagraph 
     (A) shall not apply with respect to a country the government 
     of which has primary jurisdiction over a person that engages 
     in an activity described in that subparagraph if the 
     President determines and notifies the appropriate 
     congressional committees that the government of the country--
       ``(i) does not know or have reason to know about the 
     activity; or
       ``(ii) has taken, or is taking, all reasonable steps 
     necessary to prevent a recurrence of the activity and to 
     penalize the person for the activity.
       ``(C) Individual approval.--Notwithstanding subparagraph 
     (A), the President may, on a case-by-case basis, approve the 
     issuance of a license for the export, or approve the transfer 
     or retransfer, of any nuclear material, facilities, 
     components, or other goods, services, or technology that are 
     or would be subject to an agreement for cooperation, to a 
     person in a country to which subparagraph (A) applies (other 
     than a person that is subject to the sanctions under 
     paragraph (1)) if the President--
       ``(i) determines that such approval is vital to the 
     national security interests of the United States; and
       ``(ii) not later than 15 days before issuing such license 
     or approving such transfer or retransfer, submits to the 
     Committee on Foreign Affairs of the House of Representatives 
     and the Committee on Foreign Relations of the Senate the 
     justification for approving such license, transfer, or 
     retransfer.
       ``(D) Construction.--The restrictions in subparagraph (A) 
     shall apply in addition to all other applicable procedures, 
     requirements, and restrictions contained in the Atomic Energy 
     Act of 1954 and other related laws.
       ``(E) Definition.--In this paragraph, the term `agreement 
     for cooperation' has the meaning given that term in section 
     11 b. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2014(b)).
       ``(F) Applicability.--The sanctions under subparagraph (A) 
     shall apply only in a case in which a person is subject to 
     sanctions under paragraph (1) because of an activity 
     described in that paragraph in which the person engages on or 
     after the date of the enactment of the Comprehensive Iran 
     Sanctions, Accountability, and Divestment Act of 2010.'';
       (3) in subsection (c)--
       (A) by striking ``(b)'' each place it appears and inserting 
     ``(b)(1)''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2) any person that--
       ``(A) is a successor entity to the person referred to in 
     paragraph (1);
       ``(B) owns or controls the person referred to in paragraph 
     (1), if the person that owns or controls the person referred 
     to in paragraph (1) had actual knowledge or should have known 
     that the person referred to in paragraph (1) engaged in the 
     activities referred to in that paragraph; or
       ``(C) is owned or controlled by, or under common ownership 
     or control with, the person referred to in paragraph (1), if 
     the person owned or controlled by, or under common ownership 
     or control with (as the case may be), the person referred to 
     in paragraph (1) knowingly engaged in the activities referred 
     to in that paragraph.''; and
       (4) in subsection (f)--
       (A) in the matter preceding paragraph (1), by striking 
     ``(b)'' and inserting ``(b)(1)''; and
       (B) in paragraph (2), by striking ``section 301(b)(1) of 
     that Act (19 U.S.C. 2511(b)(1))'' and inserting ``section 
     301(b) of that Act (19 U.S.C. 2511(b))''.
       (b) Description of Sanctions.--Section 6 of such Act is 
     amended--
       (1) by striking ``The sanctions to be imposed'' and 
     inserting the following:
       ``(a) In General.--The sanctions to be imposed'';
       (2) in subsection (a), as redesignated by paragraph (1)--
       (A) by redesignating paragraph (6) as paragraph (9); and
       (B) by inserting after paragraph (5) the following:
       ``(6) Foreign exchange.--The President may, pursuant to 
     such regulations as the President may prescribe, prohibit any 
     transactions in foreign exchange that are subject to the 
     jurisdiction of the United States and in which the sanctioned 
     person has any interest.
       ``(7) Banking transactions.--The President may, pursuant to 
     such regulations as the President may prescribe, prohibit any 
     transfers of credit or payments between financial 
     institutions or by, through, or to any financial institution, 
     to the extent that such transfers or payments are subject to 
     the jurisdiction of the United States and involve any 
     interest of the sanctioned person.
       ``(8) Property transactions.--The President may, pursuant 
     to such regulations as the President may prescribe, prohibit 
     any person from--
       ``(A) acquiring, holding, withholding, using, transferring, 
     withdrawing, transporting, importing, or exporting any 
     property that is subject to the jurisdiction of the United 
     States and with respect to which the sanctioned person has 
     any interest;
       ``(B) dealing in or exercising any right, power, or 
     privilege with respect to such property; or
       ``(C) conducting any transaction involving such 
     property.''; and
       (3) by adding at the end the following:
       ``(b) Additional Measure Relating to Government 
     Contracts.--
       ``(1) Modification of federal acquisition regulation.--Not 
     later than 90 days after the date of the enactment of the 
     Comprehensive Iran Sanctions, Accountability, and Divestment 
     Act of 2010, the Federal Acquisition Regulation issued 
     pursuant to section 25 of the Office of Federal Procurement 
     Policy Act (41 U.S.C. 421) shall be revised to require a 
     certification from each person that is a prospective 
     contractor that the person, and any person owned or 
     controlled by the person, does not engage in any activity for 
     which sanctions may be imposed under section 5.
       ``(2) Remedies.--
       ``(A) In general.--If the head of an executive agency 
     determines that a person has submitted a false certification 
     under paragraph (1) on or after the date on which the 
     revision of the Federal Acquisition Regulation required by 
     this subsection becomes effective, the head of that executive 
     agency shall terminate a contract with such person or debar 
     or suspend such person from eligibility for Federal contracts 
     for a period of not more than 3 years. Any such debarment or 
     suspension shall be subject to the procedures that apply to 
     debarment and suspension under the Federal Acquisition 
     Regulation under subpart 9.4 of part 9 of title 48, Code of 
     Federal Regulations.
       ``(B) Inclusion on list of parties excluded from federal 
     procurement and nonprocurement programs.--The Administrator 
     of General Services shall include on the List of Parties 
     Excluded from Federal Procurement and Nonprocurement Programs 
     maintained by the Administrator under part 9 of the Federal 
     Acquisition Regulation issued pursuant to section 25 of the 
     Office of Federal Procurement Policy Act (41 U.S.C. 421) each 
     person that is debarred, suspended, or proposed for debarment 
     or suspension by the head of an executive agency on the basis 
     of a determination of a false certification under 
     subparagraph (A).
       ``(3) Clarification regarding certain products.--The 
     remedies set forth in paragraph (2) shall not apply with 
     respect to the procurement of eligible products, as defined 
     in section 308(4) of the Trade Agreements Act of 1974 (19 
     U.S.C. 2518(4)), of any foreign country or instrumentality 
     designated under section 301(b) of that Act (19 U.S.C. 
     2511(b)).
       ``(4) Rule of construction.--This subsection shall not be 
     construed to limit the use of other remedies available to the 
     head of an executive agency or any other official of the 
     Federal Government on the basis of a determination of a false 
     certification under paragraph (1).
       ``(5) Waivers.--The President may on a case-by-case basis 
     waive the requirement that a person make a certification 
     under paragraph (1) if the President determines and certifies 
     in writing to the appropriate congressional committees, the 
     Committee on Armed Services of the Senate, and the Committee 
     on Armed Services of the House of Representatives, that it is 
     in the national interest of the United States to do so.
       ``(6) Executive agency defined.--In this subsection, the 
     term `executive agency' has the meaning given that term in 
     section 4 of the Office of Federal Procurement Policy Act (41 
     U.S.C. 403).
       ``(7) Applicability.--The revisions to the Federal 
     Acquisition Regulation required under paragraph (1) shall 
     apply with respect to contracts for which solicitations are 
     issued on or after the date that is 90 days after the date of 
     the enactment of the Comprehensive Iran Sanctions, 
     Accountability, and Divestment Act of 2010.''.
       (c) Presidential Waiver.--Section 9 of such Act is 
     amended--
       (1) in subsection (a), by striking ``5(b)'' each place it 
     appears and inserting ``5(b)(1)''; and
       (2) in subsection (c)--
       (A) by striking ``section 5(a) or (b)'' each place it 
     appears and inserting ``section 5(a) or 5(b)(1)'';
       (B) in paragraph (1), by striking ``important to the 
     national interest'' and inserting ``necessary to the national 
     interest''; and
       (C) in paragraph (2), by striking subparagraph (C) and 
     inserting the following:
       ``(C) an estimate of the significance of the conduct of the 
     person in contributing to the ability of Iran to, as the case 
     may be--
       ``(i) develop petroleum resources, produce refined 
     petroleum products, or import refined petroleum products; or
       ``(ii) acquire or develop--

       ``(I) chemical, biological, or nuclear weapons or related 
     technologies; or
       ``(II) destabilizing numbers and types of advanced 
     conventional weapons; and''.

       (d) Reports on Global Trade Relating to Iran.--Section 10 
     of such Act is amended by adding at the end the following:
       ``(d) Reports on Global Trade Relating to Iran.--Not later 
     than 90 days after the date of the enactment of the 
     Comprehensive Iran Sanctions, Accountability, and Divestment 
     Act of 2010, and annually thereafter, the President shall 
     submit to the appropriate congressional committees a report, 
     with respect to the most recent 12-month period for which 
     data are available, on the dollar value amount of trade, 
     including in the energy sector, between Iran and each country 
     maintaining membership in the Group of 20 Finance Ministers 
     and Central Bank Governors.''.
       (e) Extension of Iran Sanctions Act of 1996.--Section 13(b) 
     of such Act is amended by striking ``December 31, 2011'' and 
     inserting ``December 31, 2016''.

[[Page H4755]]

       (f) Clarification and Expansion of Definitions.--Section 14 
     of such Act is amended--
       (1) in paragraph (2), by striking ``the Committee on 
     Banking and Financial Services, and the Committee on 
     International Relations'' and inserting ``the Committee on 
     Financial Services, and the Committee on Foreign Affairs'';
       (2) in paragraph (9), in the flush text following 
     subparagraph (C), by striking ``The term `investment' does 
     not include'' and all that follows through ``technology.'';
       (3) by redesignating paragraphs (12), (13), (14), (15), and 
     (16) as paragraphs (13), (14), (15), (17), and (18), 
     respectively;
       (4) by inserting after paragraph (11) the following:
       ``(12) Knowingly.--The term `knowingly', with respect to 
     conduct, a circumstance, or a result, means that a person has 
     actual knowledge, or should have known, of the conduct, the 
     circumstance, or the result.'';
       (5) in paragraph (14), as redesignated by paragraph (3) of 
     this subsection--
       (A) by redesignating subparagraphs (A), (B), and (C) as 
     clauses (i), (ii), and (iii), respectively, and moving such 
     clauses, as so redesignated, 2 ems to the right;
       (B) by striking ``The term `person' means--'' and inserting 
     the following:
       ``(A) In general.--The term `person' means--'';
       (C) in subparagraph (A), as redesignated by this 
     paragraph--
       (i) in clause (ii), by inserting ``financial institution, 
     insurer, underwriter, guarantor, and any other business 
     organization,'' after ``trust,''; and
       (ii) in clause (iii), by striking ``subparagraph (B)'' and 
     inserting ``clause (ii)''; and
       (D) by adding at the end the following:
       ``(B) Application to governmental entities.--The term 
     `person' does not include a government or governmental entity 
     that is not operating as a business enterprise.'';
       (6) in paragraph (15), as redesignated by paragraph (3) of 
     this subsection, by striking ``petroleum and natural gas 
     resources'' and inserting ``petroleum, refined petroleum 
     products, oil or liquefied natural gas, natural gas 
     resources, oil or liquefied natural gas tankers, and products 
     used to construct or maintain pipelines used to transport oil 
     or liquefied natural gas''; and
       (7) by inserting after paragraph (15), as so redesignated, 
     the following:
       ``(16) Refined petroleum products.--The term `refined 
     petroleum products' means diesel, gasoline, jet fuel 
     (including naphtha-type and kerosene-type jet fuel), and 
     aviation gasoline.''.
       (g) Waiver for Certain Persons in Certain Countries; 
     Mandatory Investigations and Reporting; Conforming 
     Amendments.--Section 4 of such Act is amended--
       (1) in subsection (b)(2), by striking ``(in addition to 
     that provided in subsection (d))'';
       (2) in subsection (c)--
       (A) in paragraph (1)--
       (i) by striking ``The President may'' and inserting the 
     following:
       ``(A) General waiver.--The President may''; and
       (ii) by adding at the end the following:
       ``(B) Waiver with respect to persons in countries that 
     cooperate in multilateral efforts with respect to iran.--The 
     President may, on a case by case basis, waive for a period of 
     not more than 12 months the application of section 5(a) with 
     respect to a person if the President, at least 30 days before 
     the waiver is to take effect--
       ``(i) certifies to the appropriate congressional committees 
     that--

       ``(I) the government with primary jurisdiction over the 
     person is closely cooperating with the United States in 
     multilateral efforts to prevent Iran from--

       ``(aa) acquiring or developing chemical, biological, or 
     nuclear weapons or related technologies; or
       ``(bb) acquiring or developing destabilizing numbers and 
     types of advanced conventional weapons; and

       ``(II) such a waiver is vital to the national security 
     interests of the United States; and

       ``(ii) submits to the appropriate congressional committees 
     a report identifying--

       ``(I) the person with respect to which the President waives 
     the application of sanctions; and
       ``(II) the actions taken by the government described in 
     clause (i)(I) to cooperate in multilateral efforts described 
     in that clause.''; and

       (B) by striking paragraph (2) and inserting the following:
       ``(2) Subsequent renewal of waiver.--At the conclusion of 
     the period of a waiver under subparagraph (A) or (B) of 
     paragraph (1), the President may renew the waiver--
       ``(A) if the President determines, in accordance with 
     subparagraph (A) or (B) of that paragraph (as the case may 
     be), that the waiver is appropriate; and
       ``(B)(i) in the case of a waiver under subparagraph (A) of 
     paragraph (1), for subsequent periods of not more than six 
     months each; and
       ``(ii) in the case of a waiver under subparagraph (B) of 
     paragraph (1), for subsequent periods of not more than 12 
     months each.'';
       (3) by striking subsection (d);
       (4) by redesignating subsections (e) and (f) as subsections 
     (d) and (e), respectively; and
       (5) in subsection (e), as redesignated by paragraph (4) of 
     this subsection--
       (A) in paragraph (1)--
       (i) by striking ``should initiate'' and inserting ``shall 
     initiate''; and
       (ii) by striking ``investment activity in Iran as'' and 
     inserting ``an activity'';
       (B) in paragraph (2)--
       (i) by striking ``should determine'' and inserting ``shall 
     (unless paragraph (3) applies) determine''; and
       (ii) by striking ``investment activity in Iran as'' and 
     inserting ``an activity''; and
       (C) by adding at the end the following:
       ``(3) Special rule.--The President need not initiate an 
     investigation, and may terminate an investigation, under this 
     subsection if the President certifies in writing to the 
     appropriate congressional committees that--
       ``(A) the person whose activity was the basis for the 
     investigation is no longer engaging in the activity or has 
     taken significant verifiable steps toward stopping the 
     activity; and
       ``(B) the President has received reliable assurances that 
     the person will not knowingly engage in an activity described 
     in section 5(a) in the future.''.
       (h) Effective Date.--
       (1) In general.--The amendments made by this section 
     shall--
       (A) take effect on the date of the enactment of this Act; 
     and
       (B) except as provided in this subsection or section 
     6(b)(7) of the Iran Sanctions Act of 1996, as amended by 
     subsection (b) of this section, apply with respect to an 
     investment or activity described in subsection (a) or (b) of 
     section 5 of the Iran Sanctions Act of 1996, as amended by 
     this section, that is commenced on or after such date of 
     enactment.
       (2) Applicability to ongoing investments prohibited under 
     prior law.--A person that makes an investment described in 
     section 5(a) of the Iran Sanctions Act of 1996, as in effect 
     on the day before the date of the enactment of this Act, that 
     is commenced before such date of enactment and continues on 
     or after such date of enactment, shall, except as provided in 
     paragraph (4), be subject to the provisions of the Iran 
     Sanctions Act of 1996, as in effect on the day before such 
     date of enactment.
       (3) Applicability to ongoing activities relating to 
     chemical, biological, or nuclear weapons or related 
     technologies.--A person that, before the date of the 
     enactment of this Act, commenced an activity described in 
     section 5(b) of the Iran Sanctions Act of 1996, as in effect 
     on the day before such date of enactment, and continues the 
     activity on or after such date of enactment, shall be subject 
     to the provisions of the Iran Sanctions Act of 1996, as 
     amended by this Act.
       (4) Applicability of mandatory investigations to 
     investments.--The amendments made by subsection (g)(5) of 
     this section shall apply on and after the date of the 
     enactment of this Act--
       (A) with respect to an investment described in section 
     5(a)(1) of the Iran Sanctions Act of 1996, as amended by 
     subsection (a) of this section, that is commenced on or after 
     such date of enactment; and
       (B) with respect to an investment described in section 5(a) 
     of the Iran Sanctions Act of 1996, as in effect on the day 
     before the date of the enactment of this Act, that is 
     commenced before such date of enactment and continues on or 
     after such date of enactment.
       (5) Applicability of mandatory investigations to activities 
     relating to petroleum.--
       (A) In general.--Except as provided in subparagraph (B), 
     the amendments made by subsection (g)(5) of this section 
     shall apply on and after the date that is 1 year after the 
     date of the enactment of this Act with respect to an activity 
     described in paragraph (2) or (3) of section 5(a) of the Iran 
     Sanctions Act of 1996, as amended by subsection (a) of this 
     section, that is commenced on or after the date that is 1 
     year after the date of the enactment of this Act or the date 
     on which the President fails to submit a certification that 
     is required under subparagraph (B) (whichever is applicable).
       (B) Special rule for delay of effective date.--
       (i) Reporting requirement.--Not later than 30 days before 
     the date that is 1 year after the date of the enactment of 
     this Act, the President shall submit to the appropriate 
     congressional committees a report describing--

       (I) the diplomatic and other efforts of the President--

       (aa) to dissuade foreign persons from engaging in 
     activities described in paragraph (2) or (3) of section 5(a) 
     of the Iran Sanctions Act of 1996, as amended by subsection 
     (a) of this section; and
       (bb) to encourage other governments to dissuade persons 
     over which those governments have jurisdiction from engaging 
     in such activities;

       (II) the successes and failures of the efforts described in 
     subclause (I); and
       (III) each investigation under section 4(e) of the Iran 
     Sanctions Act of 1996, as amended by subsection (g)(5) of 
     this section and as in effect pursuant to subparagraph (C) of 
     this paragraph, or any other review of an activity described 
     in paragraph (2) or (3) of section 5(a) of the Iran Sanctions 
     Act of 1996, as amended by subsection (a) of this section, 
     that is initiated or ongoing during the period beginning on 
     the date of the enactment of this Act and ending on the date 
     on which the President is required to submit the report.

       (ii) Certification.--If the President submits to the 
     appropriate congressional committees, with the report 
     required by clause (i), a certification that there was a 
     substantial reduction in activities described in paragraphs 
     (2) and (3) of section 5(a) of the Iran Sanctions Act of 
     1996, as amended by subsection (a) of this section, during 
     the period described in clause (i)(III), the effective date 
     provided for in subparagraph (A) shall be delayed for a 180-
     day period beginning after the date provided for in that 
     subparagraph.
       (iii) Subsequent reports and delays.--The effective date 
     provided for in subparagraph (A) shall be delayed for 
     additional 180-day periods occurring after the end of the 
     180-day period provided for under clause (ii), if, not later 
     than 30 days before the 180-day period preceding such 
     additional 180-day period expires, the President

[[Page H4756]]

     submits to the appropriate congressional committees--

       (I) a report containing the matters required in the report 
     under clause (i) for the period beginning on the date on 
     which the preceding report was required to be submitted under 
     clause (i) or this clause (as the case may be) and ending on 
     the date on which the President is required to submit the 
     most recent report under this clause; and
       (II) a certification that, during the period described in 
     subclause (I), there was (as compared to the period for which 
     the preceding report was submitted under this subparagraph) a 
     progressive reduction in activities described in paragraphs 
     (2) and (3) of section 5(a) of the Iran Sanctions Act of 
     1996, as amended by subsection (a) of this section.

       (iv) Consequence of failure to certify.--If the President 
     does not make a certification at a time required by this 
     subparagraph--

       (I) the amendments made by subsection (g)(5) of this 
     section shall apply on and after the date on which the 
     certification was required to be submitted by this 
     subparagraph, with respect to an activity described in 
     paragraph (2) or (3) of section 5(a) of the Iran Sanctions 
     Act of 1996, as amended by subsection (a) of this section, 
     that--

       (aa) is referenced in the most recent report required to be 
     submitted under this subparagraph; or
       (bb) is commenced on or after the date on which such most 
     recent report is required to be submitted; and

       (II) not later than 45 days after the date on which the 
     certification was required to be submitted by this 
     subparagraph, the President shall make a determination under 
     paragraph (2) or (3) of section 5(a) of the Iran Sanctions 
     Act of 1996 (as the case may be), as amended by subsection 
     (a) of this section, with respect to relevant activities 
     described in subclause (I)(aa).
       (C) Applicability of permissive investigations.--During the 
     1-year period beginning on the date of the enactment of this 
     Act and during any 180-day period during which the effective 
     date provided for in subparagraph (A) is delayed pursuant to 
     subparagraph (B), section 4(e) of the Iran Sanctions Act of 
     1996, as amended by subsection (g)(5) of this section, shall 
     be applied, with respect to an activity described in 
     paragraph (2) or (3) of section 5(a) of the Iran Sanctions 
     Act of 1996, as amended by subsection (a) of this section, by 
     substituting ``should'' for ``shall'' each place it appears.
       (6) Waiver authority.--The amendments made by subsection 
     (c) shall not be construed to affect any exercise of the 
     authority under section 9(c) of the Iran Sanctions Act of 
     1996, as in effect on the day before the date of the 
     enactment of this Act.

     SEC. 103. ECONOMIC SANCTIONS RELATING TO IRAN.

       (a) In General.--Notwithstanding section 101 of the Iran 
     Freedom Support Act (Public Law 109-293; 120 Stat. 1344), and 
     in addition to any other sanction in effect, beginning on the 
     date that is 90 days after the date of the enactment of this 
     Act, the economic sanctions described in subsection (b) shall 
     apply with respect to Iran.
       (b) Sanctions.--The sanctions described in this subsection 
     are the following:
       (1) Prohibition on imports.--
       (A) In general.--Except as provided in subparagraph (B), no 
     good or service of Iranian origin may be imported directly or 
     indirectly into the United States.
       (B) Exceptions.--The exceptions provided for in section 
     203(b) of the International Emergency Economic Powers Act (50 
     U.S.C. 1702(b)), including the exception for information and 
     informational materials, shall apply to the prohibition in 
     subparagraph (A) of this paragraph to the same extent that 
     such exceptions apply to the authority provided under section 
     203(a) of that Act.
       (2) Prohibition on exports.--
       (A) In general.--Except as provided in subparagraph (B), no 
     good, service, or technology of United States origin may be 
     exported to Iran from the United States or by a United States 
     person, wherever located.
       (B) Exceptions.--
       (i) Personal communications; articles to relieve human 
     suffering; information and informational materials; 
     transactions incident to travel.--The exceptions provided for 
     in section 203(b) of the International Emergency Economic 
     Powers Act (50 U.S.C. 1702(b)), including the exception for 
     information and informational materials, shall apply to the 
     prohibition in subparagraph (A) of this paragraph to the same 
     extent that such exceptions apply to the authority provided 
     under section 203(a) of that Act.
       (ii) Food; medicine; humanitarian assistance.--The 
     prohibition in subparagraph (A) shall not apply to the 
     exportation of--

       (I) agricultural commodities, food, medicine, or medical 
     devices; or
       (II) articles exported to Iran to provide humanitarian 
     assistance to the people of Iran.

       (iii) Internet communications.--The prohibition in 
     subparagraph (A) shall not apply to the exportation of--

       (I) services incident to the exchange of personal 
     communications over the Internet or software necessary to 
     enable such services, as provided for in section 560.540 of 
     title 31, Code of Federal Regulations (or any corresponding 
     similar regulation or ruling);
       (II) hardware necessary to enable such services; or
       (III) hardware, software, or technology necessary for 
     access to the Internet.

       (iv)  Goods, services, or technologies necessary to ensure 
     the safe operation of commercial aircraft.--The prohibition 
     in subparagraph (A) shall not apply to the exportation of 
     goods, services, or technologies necessary to ensure the safe 
     operation of commercial aircraft produced in the United 
     States or commercial aircraft into which aircraft components 
     produced in the United States are incorporated, if the 
     exportation of such goods, services, or technologies is 
     approved by the Secretary of the Treasury, in consultation 
     with the Secretary of Commerce, pursuant to regulations 
     issued by the Secretary of the Treasury regarding the 
     exportation of such goods, services, or technologies, if 
     appropriate.
       (v) Goods, services, or technologies exported to support 
     international organizations.--The prohibition in subparagraph 
     (A) shall not apply to the exportation of goods, services, or 
     technologies that--

       (I) are provided to the International Atomic Energy Agency 
     and are necessary to support activities of that Agency in 
     Iran; or
       (II) are necessary to support activities, including the 
     activities of nongovernmental organizations, relating to 
     promoting democracy in Iran.

       (vi) Exports in the national interest.--The prohibition in 
     subparagraph (A) shall not apply to the exportation of goods, 
     services, or technologies if the President determines the 
     exportation of such goods, services, or technologies to be in 
     the national interest of the United States.
       (3) Freezing assets.--
       (A) In general.--At such time as the President determines 
     that a person in Iran, including an Iranian diplomat or 
     representative of another government or military or quasi-
     governmental institution of Iran (including 
     Iran's Revolutionary Guard Corps and its affiliates), 
     satisfies the criteria for designation with respect to the 
     imposition of sanctions under the authority of the 
     International Emergency Economic Powers Act (50 U.S.C. 
     1701 et seq.), the President shall take such action as may 
     be necessary to freeze, as soon as possible--
       (i) the funds and other assets belonging to that person; 
     and
       (ii) any funds or other assets that person transfers, on or 
     after the date on which the President determines the person 
     satisfies such criteria, to any family member or associate 
     acting for or on behalf of the person.
       (B) Reports to the office of foreign assets control.--The 
     action described in subparagraph (A) includes requiring any 
     United States financial institution that holds funds or 
     assets of a person described in that subparagraph or funds or 
     assets that person transfers to a family member or associate 
     described in that subparagraph to report promptly to the 
     Office of Foreign Assets Control information regarding such 
     funds and assets.
       (C) Reports to congress.--Not later than 14 days after a 
     decision is made to freeze the funds or assets of any person 
     under subparagraph (A), the President shall report the name 
     of the person to the appropriate congressional committees. 
     Such a report may contain a classified annex.
       (D) Termination.--The President shall release assets or 
     funds frozen under subparagraph (A) if the person to which 
     the assets or funds belong or the person that transfers the 
     assets or funds as described in subparagraph (A)(ii) (as the 
     case may be) no longer satisfies the criteria for designation 
     with respect to the imposition of sanctions under the 
     authority of the International Emergency Economic Powers Act 
     (50 U.S.C. 1701 et seq.).
       (E) United states financial institution defined.--In this 
     paragraph, the term ``United States financial institution'' 
     means a financial institution (as defined in section 14 of 
     the Iran Sanctions Act of 1996 (Public Law 104-172; 50 U.S.C. 
     1701 note)) that is a United States person.
       (c) Penalties.--The penalties provided for in subsections 
     (b) and (c) of section 206 of the International Emergency 
     Economic Powers Act (50 U.S.C. 1705) shall apply to a person 
     that violates, attempts to violate, conspires to violate, or 
     causes a violation of this section or regulations prescribed 
     under this section to the same extent that such penalties 
     apply to a person that commits an unlawful act described in 
     section 206(a) of that Act.
       (d) Regulatory Authority.--
       (1) In general.--The President shall prescribe regulations 
     to carry out this section, which may include regulatory 
     exceptions to the sanctions described in subsection (b).
       (2) Applicability of certain regulations.--No exception to 
     the prohibition under subsection (b)(1) may be made for the 
     commercial importation of an Iranian origin good described in 
     section 560.534(a) of title 31, Code of Federal Regulations 
     (as in effect on the day before the date of the enactment of 
     this Act), unless the President--
       (A) prescribes a regulation providing for such an exception 
     on or after the date of the enactment of this Act; and
       (B) submits to the appropriate congressional committees--
       (i) a certification in writing that the exception is in the 
     national interest of the United States; and
       (ii) a report describing the reasons for the exception.

     SEC. 104. MANDATORY SANCTIONS WITH RESPECT TO FINANCIAL 
                   INSTITUTIONS THAT ENGAGE IN CERTAIN 
                   TRANSACTIONS.

       (a) Findings.--Congress makes the following findings:
       (1) The Financial Action Task Force is an intergovernmental 
     body whose purpose is to develop and promote national and 
     international policies to combat money laundering and 
     terrorist financing.
       (2) Thirty-three countries, plus the European Commission 
     and the Cooperation Council for the Arab States of the Gulf, 
     belong to the Financial Action Task Force. The member 
     countries of the Financial Action Task Force include the 
     United States, Canada, most countries in western Europe, 
     Russia, the People's Republic of China, Japan, South Korea, 
     Argentina, and Brazil.
       (3) In 2008 the Financial Action Task Force extended its 
     mandate to include addressing ``new and emerging threats such 
     as proliferation

[[Page H4757]]

     financing'', meaning the financing of the proliferation of 
     weapons of mass destruction, and published ``guidance 
     papers'' for members to assist them in implementing various 
     United Nations Security Council resolutions dealing with 
     weapons of mass destruction, including United Nations 
     Security Council Resolutions 1737 (2006) and 1803 (2008), 
     which deal specifically with proliferation by Iran.
       (4) The Financial Action Task Force has repeatedly called 
     on members--
       (A) to advise financial institutions in their jurisdictions 
     to give special attention to business relationships and 
     transactions with Iran, including Iranian companies and 
     financial institutions;
       (B) to apply effective countermeasures to protect their 
     financial sectors from risks relating to money laundering and 
     financing of terrorism that emanate from Iran;
       (C) to protect against correspondent relationships being 
     used by Iran and Iranian companies and financial institutions 
     to bypass or evade countermeasures and risk-mitigation 
     practices; and
       (D) to take into account risks relating to money laundering 
     and financing of terrorism when considering requests by 
     Iranian financial institutions to open branches and 
     subsidiaries in their jurisdictions.
       (5) At a February 2010 meeting of the Financial Action Task 
     Force, the Task Force called on members to apply 
     countermeasures ``to protect the international financial 
     system from the ongoing and substantial money laundering and 
     terrorist financing (ML/TF) risks'' emanating from Iran.
       (b) Sense of Congress Regarding the Imposition of Sanctions 
     on the Central Bank of Iran.--Congress--
       (1) acknowledges the efforts of the United Nations Security 
     Council to impose limitations on transactions involving 
     Iranian financial institutions, including the Central Bank of 
     Iran; and
       (2) urges the President, in the strongest terms, to 
     consider immediately using the authority of the President to 
     impose sanctions on the Central Bank of Iran and any other 
     Iranian financial institution engaged in proliferation 
     activities or support of terrorist groups.
       (c) Prohibitions and Conditions With Respect to Certain 
     Accounts Held by Foreign Financial Institutions.--
       (1) In general.--Not later than 90 days after the date of 
     the enactment of this Act, the Secretary of the Treasury 
     shall prescribe regulations to prohibit, or impose strict 
     conditions on, the opening or maintaining in the United 
     States of a correspondent account or a payable-through 
     account by a foreign financial institution that the Secretary 
     finds knowingly engages in an activity described in paragraph 
     (2).
       (2) Activities described.--A foreign financial institution 
     engages in an activity described in this paragraph if the 
     foreign financial institution--
       (A) facilitates the efforts of the Government of Iran 
     (including efforts of Iran's Revolutionary Guard Corps or any 
     of its agents or affiliates)--
       (i) to acquire or develop weapons of mass destruction or 
     delivery systems for weapons of mass destruction; or
       (ii) to provide support for organizations designated as 
     foreign terrorist organizations under section 219(a) of the 
     Immigration and Nationality Act (8 U.S.C. 1189(a)) or support 
     for acts of international terrorism (as defined in section 14 
     of the Iran Sanctions Act of 1996 (Public Law 104-172; 50 
     U.S.C. 1701 note));
       (B) facilitates the activities of a person subject to 
     financial sanctions pursuant to United Nations Security 
     Council Resolution 1737 (2006), 1747 (2007), 1803 (2008), or 
     1929 (2010), or any other resolution that is agreed to by the 
     Security Council and imposes sanctions with respect to Iran;
       (C) engages in money laundering to carry out an activity 
     described in subparagraph (A) or (B);
       (D) facilitates efforts by the Central Bank of Iran or any 
     other Iranian financial institution to carry out an activity 
     described in subparagraph (A) or (B); or
       (E) facilitates a significant transaction or transactions 
     or provides significant financial services for--
       (i) Iran's Revolutionary Guard Corps or any of its agents 
     or affiliates whose property or interests in property are 
     blocked pursuant to the International Emergency Economic 
     Powers Act (50 U.S.C. 1701 et seq.); or
       (ii) a financial institution whose property or interests in 
     property are blocked pursuant to that Act in connection 
     with--

       (I) Iran's proliferation of weapons of mass destruction or 
     delivery systems for weapons of mass destruction; or
       (II) Iran's support for international terrorism.

       (3) Penalties.--The penalties provided for in subsections 
     (b) and (c) of section 206 of the International Emergency 
     Economic Powers Act (50 U.S.C. 1705) shall apply to a person 
     that violates, attempts to violate, conspires to violate, or 
     causes a violation of regulations prescribed under paragraph 
     (1) of this subsection to the same extent that such penalties 
     apply to a person that commits an unlawful act described in 
     section 206(a) of that Act.
       (d) Penalties for Domestic Financial Institutions for 
     Actions of Persons Owned or Controlled by Such Financial 
     Institutions.--
       (1) In general.--Not later than 90 days after the date of 
     the enactment of this Act, the Secretary of the Treasury 
     shall prescribe regulations to prohibit any person owned or 
     controlled by a domestic financial institution from knowingly 
     engaging in a transaction or transactions with or benefitting 
     Iran's Revolutionary Guard Corps or any of its agents or 
     affiliates whose property or interests in property are 
     blocked pursuant to the International Emergency Economic 
     Powers Act (50 U.S.C. 1701 et seq.).
       (2) Penalties.--The penalties provided for in section 
     206(b) of the International Emergency Economic Powers Act (50 
     U.S.C. 1705(b)) shall apply to a domestic financial 
     institution to the same extent that such penalties apply to a 
     person that commits an unlawful act described in section 
     206(a) of that Act if--
       (A) a person owned or controlled by the domestic financial 
     institution violates, attempts to violate, conspires to 
     violate, or causes a violation of regulations prescribed 
     under paragraph (1) of this subsection; and
       (B) the domestic financial institution knew or should have 
     known that the person violated, attempted to violate, 
     conspired to violate, or caused a violation of such 
     regulations.
       (e) Requirements for Financial Institutions Maintaining 
     Accounts for Foreign Financial Institutions.--
       (1) In general.--The Secretary of the Treasury shall 
     prescribe regulations to require a domestic financial 
     institution maintaining a correspondent account or payable-
     through account in the United States for a foreign financial 
     institution to do one or more of the following:
       (A) Perform an audit of activities described in subsection 
     (c)(2) that may be carried out by the foreign financial 
     institution.
       (B) Report to the Department of the Treasury with respect 
     to transactions or other financial services provided with 
     respect to any such activity.
       (C) Certify, to the best of the knowledge of the domestic 
     financial institution, that the foreign financial institution 
     is not knowingly engaging in any such activity.
       (D) Establish due diligence policies, procedures, and 
     controls, such as the due diligence policies, procedures, and 
     controls described in section 5318(i) of title 31, United 
     States Code, reasonably designed to detect whether the 
     Secretary of the Treasury has found the foreign financial 
     institution to knowingly engage in any such activity.
       (2) Penalties.--The penalties provided for in sections 
     5321(a) and 5322 of title 31, United States Code, shall apply 
     to a person that violates a regulation prescribed under 
     paragraph (1) of this subsection, in the same manner and to 
     the same extent as such penalties would apply to any person 
     that is otherwise subject to such section 5321(a) or 5322.
       (f) Waiver.--The Secretary of the Treasury may waive the 
     application of a prohibition or condition imposed with 
     respect to a foreign financial institution pursuant to 
     subsection (c) or the imposition of a penalty under 
     subsection (d) with respect to a domestic financial 
     institution on and after the date that is 30 days after the 
     Secretary--
       (1) determines that such a waiver is necessary to the 
     national interest of the United States; and
       (2) submits to the appropriate congressional committees a 
     report describing the reasons for the determination.
       (g) Procedures for Judicial Review of Classified 
     Information.--
       (1) In general.--If a finding under subsection (c)(1), a 
     prohibition, condition, or penalty imposed as a result of any 
     such finding, or a penalty imposed under subsection (d), is 
     based on classified information (as defined in section 1(a) 
     of the Classified Information Procedures Act (18 U.S.C. 
     App.)) and a court reviews the finding or the imposition of 
     the prohibition, condition, or penalty, the Secretary of the 
     Treasury may submit such information to the court ex parte 
     and in camera.
       (2) Rule of construction.--Nothing in this subsection shall 
     be construed to confer or imply any right to judicial review 
     of any finding under subsection (c)(1), any prohibition, 
     condition, or penalty imposed as a result of any such 
     finding, or any penalty imposed under subsection (d).
       (h) Consultations in Implementation of Regulations.--In 
     implementing this section and the regulations prescribed 
     under this section, the Secretary of the Treasury--
       (1) shall consult with the Secretary of State; and
       (2) may, in the sole discretion of the Secretary of the 
     Treasury, consult with such other agencies and departments 
     and such other interested parties as the Secretary considers 
     appropriate.
       (i) Definitions.--
       (1) In general.--In this section:
       (A) Account; correspondent account; payable-through 
     account.--The terms ``account'', ``correspondent account'', 
     and ``payable-through account'' have the meanings given those 
     terms in section 5318A of title 31, United States Code.
       (B) Agent.--The term ``agent'' includes an entity 
     established by a person for purposes of conducting 
     transactions on behalf of the person in order to conceal the 
     identity of the person.
       (C) Financial institution.--The term ``financial 
     institution'' means a financial institution specified in 
     subparagraph (A), (B), (C), (D), (E), (F), (G), (H), (I), 
     (J), (M), or (Y) of section 5312(a)(2) of title 31, United 
     States Code.
       (D) Foreign financial institution; domestic financial 
     institution.--The terms ``foreign financial institution'' and 
     ``domestic financial institution'' shall have the meanings of 
     those terms as determined by the Secretary of the Treasury.
       (E) Money laundering.--The term ``money laundering'' means 
     the movement of illicit cash or cash equivalent proceeds 
     into, out of, or through a country, or into, out of, or 
     through a financial institution.
       (2) Other definitions.--The Secretary of the Treasury may 
     further define the terms used in this section in the 
     regulations prescribed under this section.

[[Page H4758]]

     SEC. 105. IMPOSITION OF SANCTIONS ON CERTAIN PERSONS WHO ARE 
                   RESPONSIBLE FOR OR COMPLICIT IN HUMAN RIGHTS 
                   ABUSES COMMITTED AGAINST CITIZENS OF IRAN OR 
                   THEIR FAMILY MEMBERS AFTER THE JUNE 12, 2009, 
                   ELECTIONS IN IRAN.

       (a) In General.--The President shall impose sanctions 
     described in subsection (c) with respect to each person on 
     the list required by subsection (b).
       (b) List of Persons Who Are Responsible for or Complicit in 
     Certain Human Rights Abuses.--
       (1) In general.--Not later than 90 days after the date of 
     the enactment of this Act, the President shall submit to the 
     appropriate congressional committees a list of persons who 
     are officials of the Government of Iran or persons acting on 
     behalf of that Government (including members of paramilitary 
     organizations such as Ansar-e-Hezbollah and Basij-e 
     Mostaz'afin), that the President determines, based on 
     credible evidence, are responsible for or complicit in, or 
     responsible for ordering, controlling, or otherwise 
     directing, the commission of serious human rights abuses 
     against citizens of Iran or their family members on or after 
     June 12, 2009, regardless of whether such abuses occurred in 
     Iran.
       (2) Updates of list.--The President shall submit to the 
     appropriate congressional committees an updated list under 
     paragraph (1)--
       (A) not later than 270 days after the date of the enactment 
     of this Act and every 180 days thereafter; and
       (B) as new information becomes available.
       (3) Form of report; public availability.--
       (A) Form.--The list required by paragraph (1) shall be 
     submitted in unclassified form but may contain a classified 
     annex.
       (B) Public availability.--The unclassified portion of the 
     list required by paragraph (1) shall be made available to the 
     public and posted on the websites of the Department of the 
     Treasury and the Department of State.
       (4) Consideration of data from other countries and 
     nongovernmental organizations.--In preparing the list 
     required by paragraph (1), the President shall consider 
     credible data already obtained by other countries and 
     nongovernmental organizations, including organizations in 
     Iran, that monitor the human rights abuses of the 
     Government of Iran.
       (c) Sanctions Described.--The sanctions described in this 
     subsection are ineligibility for a visa to enter the United 
     States and sanctions pursuant to the International Emergency 
     Economic Powers Act (50 U.S.C. 1701 et seq.), including 
     blocking of property and restrictions or prohibitions on 
     financial transactions and the exportation and importation of 
     property, subject to such regulations as the President may 
     prescribe, including regulatory exceptions to permit the 
     United States to comply with the Agreement between the United 
     Nations and the United States of America regarding the 
     Headquarters of the United Nations, signed June 26, 1947, and 
     entered into force November 21, 1947, and other applicable 
     international obligations.
       (d) Termination of Sanctions.--The provisions of this 
     section shall terminate on the date on which the President 
     determines and certifies to the appropriate congressional 
     committees that the Government of Iran has--
       (1) unconditionally released all political prisoners, 
     including the citizens of Iran detained in the aftermath of 
     the June 12, 2009, presidential election in Iran;
       (2) ceased its practices of violence, unlawful detention, 
     torture, and abuse of citizens of Iran while engaging in 
     peaceful political activity;
       (3) conducted a transparent investigation into the 
     killings, arrests, and abuse of peaceful political activists 
     that occurred in the aftermath of the June 12, 2009, 
     presidential election in Iran and prosecuted the individuals 
     responsible for such killings, arrests, and abuse; and
       (4) made public commitments to, and is making demonstrable 
     progress toward--
       (A) establishing an independent judiciary; and
       (B) respecting the human rights and basic freedoms 
     recognized in the Universal Declaration of Human Rights.

     SEC. 106. PROHIBITION ON PROCUREMENT CONTRACTS WITH PERSONS 
                   THAT EXPORT SENSITIVE TECHNOLOGY TO IRAN.

       (a) In General.--Except as provided in subsection (b), and 
     pursuant to such regulations as the President may prescribe, 
     the head of an executive agency may not enter into or renew a 
     contract, on or after the date that is 90 days after the date 
     of the enactment of this Act, for the procurement of goods or 
     services with a person that exports sensitive technology to 
     Iran.
       (b) Authorization to Exempt Certain Products.--The 
     President is authorized to exempt from the prohibition under 
     subsection (a) only eligible products, as defined in section 
     308(4) of the Trade Agreements Act of 1979 (19 U.S.C. 
     2518(4)), of any foreign country or instrumentality 
     designated under section 301(b) of that Act (19 U.S.C. 
     2511(b)).
       (c) Sensitive Technology Defined.--
       (1) In general.--The term ``sensitive technology'' means 
     hardware, software, telecommunications equipment, or any 
     other technology, that the President determines is to be used 
     specifically--
       (A) to restrict the free flow of unbiased information in 
     Iran; or
       (B) to disrupt, monitor, or otherwise restrict speech of 
     the people of Iran.
       (2) Exception.--The term ``sensitive technology'' does not 
     include information or informational materials the 
     exportation of which the President does not have the 
     authority to regulate or prohibit pursuant to section 
     203(b)(3) of the International Emergency Economic Powers Act 
     (50 U.S.C. 1702(b)(3)).
       (d) Government Accountability Office Report on Effect of 
     Procurement Prohibition.--Not later than 1 year after the 
     date of the enactment of this Act, the Comptroller General of 
     the United States shall submit to the appropriate 
     congressional committees, the Committee on Armed Services of 
     the Senate, and the Committee on Armed Services of the House 
     of Representatives, a report assessing the extent to which 
     executive agencies would have entered into or renewed 
     contracts for the procurement of goods or services with 
     persons that export sensitive technology to Iran if the 
     prohibition under subsection (a) were not in effect.

     SEC. 107. HARMONIZATION OF CRIMINAL PENALTIES FOR VIOLATIONS 
                   OF SANCTIONS.

       (a) In General.--
       (1) Violations of united nations security council 
     resolutions imposing sanctions.--Section 5(b) of the United 
     Nations Participation Act of 1945 (22 U.S.C. 287c(b)) is 
     amended--
       (A) by striking ``find not more than $10,000'' and 
     inserting ``fined not more than $1,000,000''; and
       (B) by striking ``ten years'' and all that follows and 
     inserting ``20 years, or both.''.
       (2) Violations of controls on exports and imports of 
     defense articles and defense services.--Section 38(c) of the 
     Arms Export Control Act (22 U.S.C. 2778(c)) is amended by 
     striking ``ten years'' and inserting ``20 years''.
       (3) Violations of prohibition on transactions with 
     countries that support acts of international terrorism.--
     Section 40(j) of the Arms Export Control Act (22 U.S.C. 
     2780(j)) is amended by striking ``10 years'' and inserting 
     ``20 years''.
       (4) Violations of the trading with the enemy act.--Section 
     16(a) of the Trading with the enemy Act (50 U.S.C. App. 
     16(a)) is amended by striking ``if a natural person'' and all 
     that follows and inserting ``if a natural person, be 
     imprisoned for not more than 20 years, or both.''.
       (b) Study by United States Sentencing Commission.--Not 
     later than 1 year after the date of the enactment of this 
     Act, the United States Sentencing Commission, pursuant to the 
     authority under sections 994 and 995 of title 28, United 
     States Code, and the responsibility of the United States 
     Sentencing Commission to advise Congress on sentencing policy 
     under section 995(a)(20) of title 28, United States Code, 
     shall study and submit to Congress a report on the impact and 
     advisability of imposing a mandatory minimum sentence for 
     violations of--
       (1) section 5(a) of the United Nations Participation Act of 
     1945 (22 U.S.C. 287c(a));
       (2) sections 38, 39, and 40 of the Arms Export Control Act 
     (22 U.S.C. 2778, 2779, and 2780); and
       (3) the Trading with the enemy Act (50 U.S.C. App. 1 et 
     seq.).

     SEC. 108. AUTHORITY TO IMPLEMENT UNITED NATIONS SECURITY 
                   COUNCIL RESOLUTIONS IMPOSING SANCTIONS WITH 
                   RESPECT TO IRAN.

       In addition to any other authority of the President with 
     respect to implementing resolutions of the United Nations 
     Security Council, the President may prescribe such 
     regulations as may be necessary to implement a resolution 
     that is agreed to by the United Nations Security Council and 
     imposes sanctions with respect to Iran.

     SEC. 109. INCREASED CAPACITY FOR EFFORTS TO COMBAT UNLAWFUL 
                   OR TERRORIST FINANCING.

       (a) Findings.--Congress finds the following:
       (1) The work of the Office of Terrorism and Financial 
     Intelligence of the Department of the Treasury, which 
     includes the Office of Foreign Assets Control and the 
     Financial Crimes Enforcement Network, is critical to ensuring 
     that the international financial system is not used for 
     purposes of supporting terrorism and developing weapons of 
     mass destruction.
       (2) The Secretary of the Treasury has designated, including 
     most recently on June 16, 2010, various Iranian individuals 
     and banking, military, energy, and shipping entities as 
     proliferators of weapons of mass destruction pursuant to 
     Executive Order 13382 (50 U.S.C. 1701 note), thereby blocking 
     transactions subject to the jurisdiction of the United States 
     by those individuals and entities and their supporters.
       (3) The Secretary of the Treasury has also identified an 
     array of entities in the insurance, petroleum, and 
     petrochemicals industries that the Secretary has determined 
     to be owned or controlled by the Government of Iran and added 
     those entities to the list contained in Appendix A to part 
     560 of title 31, Code of Federal Regulations (commonly known 
     as the ``Iranian Transactions Regulations''), thereby 
     prohibiting transactions between United States persons and 
     those entities.
       (b) Authorization of Appropriations for Office of Terrorism 
     and Financial Intelligence.--There are authorized to be 
     appropriated to the Secretary of the Treasury for the Office 
     of Terrorism and Financial Intelligence--
       (1) $102,613,000 for fiscal year 2011; and
       (2) such sums as may be necessary for each of the fiscal 
     years 2012 and 2013.
       (c) Authorization of Appropriations for the Financial 
     Crimes Enforcement Network.--Section 310(d)(1) of title 31, 
     United States Code, is amended by striking ``such sums as may 
     be necessary for fiscal years 2002, 2003, 2004, and 2005'' 
     and inserting ``$100,419,000 for fiscal year 2011 and such 
     sums as may be necessary for each of the fiscal years 2012 
     and 2013''.
       (d) Authorization of Appropriations for Bureau of Industry 
     and Security of the Department of Commerce.--There are 
     authorized to be appropriated to the Secretary of Commerce 
     for the Bureau of Industry and Security of the Department of 
     Commerce--
       (1) $113,000,000 for fiscal year 2011; and
       (2) such sums as may be necessary for each of the fiscal 
     years 2012 and 2013.

[[Page H4759]]

     SEC. 110. REPORTS ON INVESTMENTS IN THE ENERGY SECTOR OF 
                   IRAN.

       (a) Initial Report.--
       (1) In general.--Not later than 90 days after the date of 
     the enactment of this Act, the President shall submit to the 
     appropriate congressional committees a report--
       (A) on investments in the energy sector of Iran that were 
     made during the period described in paragraph (2); and
       (B) that contains--
       (i) an estimate of the volume of energy-related resources 
     (other than refined petroleum), including ethanol, that Iran 
     imported during the period described in paragraph (2); and
       (ii) a list of all significant known energy-related joint 
     ventures, investments, and partnerships located outside Iran 
     that involve Iranian entities in partnership with entities 
     from other countries, including an identification of the 
     entities from other countries; and
       (iii) an estimate of--

       (I) the total value of each such joint venture, investment, 
     and partnership; and
       (II) the percentage of each such joint venture, investment, 
     and partnership owned by an Iranian entity.

       (2) Period described.--The period described in this 
     paragraph is the period beginning on January 1, 2006, and 
     ending on the date that is 60 days after the date of the 
     enactment of this Act.
       (b) Updated Reports.--Not later than 180 days after 
     submitting the report required by subsection (a), and every 
     180 days thereafter, the President shall submit to the 
     appropriate congressional committees a report containing the 
     matters required in the report under subsection (a)(1) for 
     the 180-day period beginning on the date that is 30 days 
     before the date on which the preceding report was required to 
     be submitted by this section.

     SEC. 111. REPORTS ON CERTAIN ACTIVITIES OF FOREIGN EXPORT 
                   CREDIT AGENCIES AND OF THE EXPORT-IMPORT BANK 
                   OF THE UNITED STATES.

       (a) Report on Certain Activities of Export Credit Agencies 
     of Foreign Countries.--
       (1) In general.--Not later than 90 days after the date of 
     the enactment of this Act, the President shall submit to the 
     appropriate congressional committees a report on any activity 
     of an export credit agency of a foreign country that is an 
     activity comparable to an activity described in subsection 
     (a) or (b) of section 5 of the Iran Sanctions Act of 1996, as 
     amended by section 102 of this Act.
       (2) Updates.--The President shall update the report 
     required by paragraph (1) as new information becomes 
     available with respect to the activities of export credit 
     agencies of foreign countries.
       (b) Report on Certain Financing by the Export-Import Bank 
     of the United States.--Not later than 30 days (or, in 
     extraordinary circumstances, not later than 15 days) before 
     the Export-Import Bank of the United States approves 
     cofinancing (including loans, guarantees, other credits, 
     insurance, and reinsurance) in which an export credit agency 
     of a foreign country identified in the report required by 
     subsection (a) will participate, the President shall submit 
     to the appropriate congressional committees a report 
     identifying--
       (1) the export credit agency of the foreign country; and
       (2) the beneficiaries of the financing.

     SEC. 112. SENSE OF CONGRESS REGARDING IRAN'S REVOLUTIONARY 
                   GUARD CORPS AND ITS AFFILIATES.

       It is the sense of Congress that the United States should--
       (1) persistently target Iran's Revolutionary Guard Corps 
     and its affiliates with economic sanctions for its support 
     for terrorism, its role in proliferation, and its oppressive 
     activities against the people of Iran;
       (2) identify, as soon as possible--
       (A) any foreign individual or entity that is an agent, 
     alias, front, instrumentality, official, or affiliate of 
     Iran's Revolutionary Guard Corps;
       (B) any individual or entity that--
       (i) has provided material support to any individual or 
     entity described in subparagraph (A); or
       (ii) has conducted any financial or commercial transaction 
     with any such individual or entity; and
       (C) any foreign government that--
       (i) provides material support to any such individual or 
     entity; or
       (ii) conducts any commercial transaction or financial 
     transaction with any such individual or entity; and
       (3) immediately impose sanctions, including travel 
     restrictions, sanctions authorized pursuant to this Act or 
     the Iran Sanctions Act of 1996, as amended by section 102 of 
     this Act, and the full range of sanctions available to the 
     President under the International Emergency Economic Powers 
     Act (50 U.S.C. 1701 et seq.), on the individuals, entities, 
     and governments described in paragraph (2).

     SEC. 113. SENSE OF CONGRESS REGARDING IRAN AND HEZBOLLAH.

       It is the sense of Congress that the United States should--
       (1) continue to counter support received by Hezbollah from 
     the Government of Iran and other foreign governments in 
     response to Hezbollah's terrorist activities and the threat 
     Hezbollah poses to Israel, the democratic sovereignty of 
     Lebanon, and the national security interests of the United 
     States;
       (2) impose the full range of sanctions available to the 
     President under the International Emergency Economic Powers 
     Act (50 U.S.C. 1701 et seq.) on Hezbollah, affiliates and 
     supporters of Hezbollah designated for the imposition of 
     sanctions under that Act, and persons providing Hezbollah 
     with commercial, financial, or other services;
       (3) urge the European Union, individual countries in 
     Europe, and other countries to classify Hezbollah as a 
     terrorist organization to facilitate the disruption of 
     Hezbollah's operations; and
       (4) renew international efforts to disarm Hezbollah and 
     disband its militias in Lebanon, as called for by United 
     Nations Security Council Resolutions 1559 (2004) and 1701 
     (2006).

     SEC. 114. SENSE OF CONGRESS REGARDING THE IMPOSITION OF 
                   MULTILATERAL SANCTIONS WITH RESPECT TO IRAN.

       It is the sense of Congress that--
       (1) in general, effective multilateral sanctions are 
     preferable to unilateral sanctions in order to achieve 
     desired results from countries such as Iran; and
       (2) the President should continue to work with allies of 
     the United States to impose such sanctions as may be 
     necessary to prevent the Government of Iran from acquiring a 
     nuclear weapons capability.

     SEC. 115. REPORT ON PROVIDING COMPENSATION FOR VICTIMS OF 
                   INTERNATIONAL TERRORISM.

       Not later than 180 days after the date of the enactment of 
     this Act, the President shall submit to the appropriate 
     congressional committees a report on equitable methods for 
     providing compensation on a comprehensive basis to victims of 
     acts of international terrorism who are citizens or residents 
     of the United States or nationals of the United States (as 
     defined in section 101(a) of the Immigration and Nationality 
     Act (8 U.S.C. 1101(a)).

    TITLE II--DIVESTMENT FROM CERTAIN COMPANIES THAT INVEST IN IRAN

     SEC. 201. DEFINITIONS.

       In this title:
       (1) Energy sector of iran.--The term ``energy sector of 
     Iran'' refers to activities to develop petroleum or natural 
     gas resources or nuclear power in Iran.
       (2) Financial institution.--The term ``financial 
     institution'' has the meaning given that term in section 14 
     of the Iran Sanctions Act of 1996 (Public Law 104-172; 50 
     U.S.C. 1701 note).
       (3) Iran.--The term ``Iran'' includes the Government of 
     Iran and any agency or instrumentality of Iran.
       (4) Person.--The term ``person'' means--
       (A) a natural person, corporation, company, business 
     association, partnership, society, trust, or any other 
     nongovernmental entity, organization, or group;
       (B) any governmental entity or instrumentality of a 
     government, including a multilateral development institution 
     (as defined in section 1701(c)(3) of the International 
     Financial Institutions Act (22 U.S.C. 262r(c)(3))); and
       (C) any successor, subunit, parent entity, or subsidiary 
     of, or any entity under common ownership or control with, any 
     entity described in subparagraph (A) or (B).
       (5) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Commonwealth of the Northern Mariana Islands, 
     American Samoa, Guam, the United States Virgin Islands, and 
     any other territory or possession of the United States.
       (6) State or local government.--The term ``State or local 
     government'' includes--
       (A) any State and any agency or instrumentality thereof;
       (B) any local government within a State, and any agency or 
     instrumentality thereof;
       (C) any other governmental instrumentality of a State or 
     locality; and
       (D) any public institution of higher education within the 
     meaning of the Higher Education Act of 1965 (20 U.S.C. 1001 
     et seq.).

     SEC. 202. AUTHORITY OF STATE AND LOCAL GOVERNMENTS TO DIVEST 
                   FROM CERTAIN COMPANIES THAT INVEST IN IRAN.

       (a) Sense of Congress.--It is the sense of Congress that 
     the United States should support the decision of any State or 
     local government that for moral, prudential, or reputational 
     reasons divests from, or prohibits the investment of assets 
     of the State or local government in, a person that engages in 
     investment activities in the energy sector of Iran, as long 
     as Iran is subject to economic sanctions imposed by the 
     United States.
       (b) Authority to Divest.--Notwithstanding any other 
     provision of law, a State or local government may adopt and 
     enforce measures that meet the requirements of subsection (d) 
     to divest the assets of the State or local government from, 
     or prohibit investment of the assets of the State or local 
     government in, any person that the State or local government 
     determines, using credible information available to the 
     public, engages in investment activities in Iran described in 
     subsection (c).
       (c) Investment Activities Described.--A person engages in 
     investment activities in Iran described in this subsection if 
     the person--
       (1) has an investment of $20,000,000 or more in the energy 
     sector of Iran, including in a person that provides oil or 
     liquified natural gas tankers, or products used to construct 
     or maintain pipelines used to transport oil or liquified 
     natural gas, for the energy sector of Iran; or
       (2) is a financial institution that extends $20,000,000 or 
     more in credit to another person, for 45 days or more, if 
     that person will use the credit for investment in the energy 
     sector of Iran.
       (d) Requirements.--Any measure taken by a State or local 
     government under subsection (b) shall meet the following 
     requirements:
       (1) Notice.--The State or local government shall provide 
     written notice to each person to which a measure is to be 
     applied.
       (2) Timing.--The measure shall apply to a person not 
     earlier than the date that is 90 days after the date on which 
     written notice is provided to the person under paragraph (1).

[[Page H4760]]

       (3) Opportunity for hearing.--The State or local government 
     shall provide an opportunity to comment in writing to each 
     person to which a measure is to be applied. If the person 
     demonstrates to the State or local government that the person 
     does not engage in investment activities in Iran described in 
     subsection (c), the measure shall not apply to the person.
       (4) Sense of congress on avoiding erroneous targeting.--It 
     is the sense of Congress that a State or local government 
     should not adopt a measure under subsection (b) with respect 
     to a person unless the State or local government has made 
     every effort to avoid erroneously targeting the person and 
     has verified that the person engages in investment activities 
     in Iran described in subsection (c).
       (e) Notice to Department of Justice.--Not later than 30 
     days after adopting a measure pursuant to subsection (b), a 
     State or local government shall submit written notice to the 
     Attorney General describing the measure.
       (f) Nonpreemption.--A measure of a State or local 
     government authorized under subsection (b) or (i) is not 
     preempted by any Federal law or regulation.
       (g) Definitions.--In this section:
       (1) Assets.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``assets'' refers to public monies and includes any 
     pension, retirement, annuity, or endowment fund, or similar 
     instrument, that is controlled by a State or local 
     government.
       (B) Exception.--The term ``assets'' does not include 
     employee benefit plans covered by title I of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1001 et 
     seq.).
       (2) Investment.--The ``investment'' includes--
       (A) a commitment or contribution of funds or property;
       (B) a loan or other extension of credit; and
       (C) the entry into or renewal of a contract for goods or 
     services.
       (h) Effective Date.--
       (1) In general.--Except as provided in paragraph (2) or 
     subsection (i), this section applies to measures adopted by a 
     State or local government before, on, or after the date of 
     the enactment of this Act.
       (2) Notice requirements.--Except as provided in subsection 
     (i), subsections (d) and (e) apply to measures adopted by a 
     State or local government on or after the date of the 
     enactment of this Act.
       (i) Authorization for Prior Enacted Measures.--
       (1) In general.--Notwithstanding any other provision of 
     this section or any other provision of law, a State or local 
     government may enforce a measure (without regard to the 
     requirements of subsection (d), except as provided in 
     paragraph (2)) adopted by the State or local government 
     before the date of the enactment of this Act that provides 
     for the divestment of assets of the State or local government 
     from, or prohibits the investment of the assets of the State 
     or local government in, any person that the State or local 
     government determines, using credible information available 
     to the public, engages in investment activities in Iran 
     (determined without regard to subsection (c)) or other 
     business activities in Iran that are identified in the 
     measure.
       (2) Application of notice requirements.--A measure 
     described in paragraph (1) shall be subject to the 
     requirements of paragraphs (1) and (2) and the first sentence 
     of paragraph (3) of subsection (d) on and after the date that 
     is 2 years after the date of the enactment of this Act.

     SEC. 203. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY 
                   ASSET MANAGERS.

       (a) In General.--Section 13(c)(1) of the Investment Company 
     Act of 1940 (15 U.S.C. 80a-13(c)(1)) is amended to read as 
     follows:
       ``(1) In general.--Notwithstanding any other provision of 
     Federal or State law, no person may bring any civil, 
     criminal, or administrative action against any registered 
     investment company, or any employee, officer, director, or 
     investment adviser thereof, based solely upon the investment 
     company divesting from, or avoiding investing in, securities 
     issued by persons that the investment company determines, 
     using credible information available to the public--
       ``(A) conduct or have direct investments in business 
     operations in Sudan described in section 3(d) of the Sudan 
     Accountability and Divestment Act of 2007 (50 U.S.C. 1701 
     note); or
       ``(B) engage in investment activities in Iran described in 
     section 202(c) of the Comprehensive Iran Sanctions, 
     Accountability, and Divestment Act of 2010.''.
       (b) SEC Regulations.--Not later than 120 days after the 
     date of the enactment of this Act, the Securities and 
     Exchange Commission shall issue any revisions the Commission 
     determines to be necessary to the regulations requiring 
     disclosure by each registered investment company that divests 
     itself of securities in accordance with section 13(c) of the 
     Investment Company Act of 1940 to include divestments of 
     securities in accordance with paragraph (1)(B) of such 
     section, as added by subsection (a) of this section.

     SEC. 204. SENSE OF CONGRESS REGARDING CERTAIN ERISA PLAN 
                   INVESTMENTS.

       It is the sense of Congress that a fiduciary of an employee 
     benefit plan, as defined in section 3(3) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1002(3)), 
     may divest plan assets from, or avoid investing plan assets 
     in, any person the fiduciary determines engages in investment 
     activities in Iran described in section 202(c) of this Act, 
     without breaching the responsibilities, obligations, or 
     duties imposed upon the fiduciary by subparagraph (A) or (B) 
     of section 404(a)(1) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1104(a)(1)), if--
       (1) the fiduciary makes such determination using credible 
     information that is available to the public; and
       (2) the fiduciary prudently determines that the result of 
     such divestment or avoidance of investment would not be 
     expected to provide the employee benefit plan with--
       (A) a lower rate of return than alternative investments 
     with commensurate degrees of risk; or
       (B) a higher degree of risk than alternative investments 
     with commensurate rates of return.

     SEC. 205. TECHNICAL CORRECTIONS TO SUDAN ACCOUNTABILITY AND 
                   DIVESTMENT ACT OF 2007.

       (a) ERISA Plan Investments.--Section 5 of the Sudan 
     Accountability and Divestment Act of 2007 (Public Law 110-
     174; 50 U.S.C. 1701 note) is amended--
       (1) by striking ``section 404 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1104)'' and inserting 
     ``subparagraph (A) or (B) of section 404(a)(1) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1104(a)(1))''; and
       (2) by striking paragraph (2) and inserting the following:
       ``(2) the fiduciary prudently determines that the result of 
     such divestment or avoidance of investment would not be 
     expected to provide the employee benefit plan with--
       ``(A) a lower rate of return than alternative investments 
     with commensurate degrees of risk; or
       ``(B) a higher degree of risk than alternative investments 
     with commensurate rates of return.''.
       (b) Safe Harbor for Changes of Investment Policies by Asset 
     Managers.--
       (1) In general.--Section 13(c)(2)(A) of the Investment 
     Company Act of 1940 (15 U.S.C. 80a-13(c)(2)(A)) is amended to 
     read as follows:
       ``(A) Rule of construction.--Nothing in paragraph (1) shall 
     be construed to create, imply, diminish, change, or affect in 
     any way whether or not a private right of action exists under 
     subsection (a) or any other provision of this Act.''.
       (2) Applicability.--The amendment made by paragraph (1) 
     shall apply as if included in the Sudan Accountability and 
     Divestment Act of 2007 (Public Law 110-174; 50 U.S.C. 1701 
     note).

  TITLE III--PREVENTION OF DIVERSION OF CERTAIN GOODS, SERVICES, AND 
                          TECHNOLOGIES TO IRAN

     SEC. 301. DEFINITIONS.

       In this title:
       (1) Allow.--The term ``allow'', with respect to the 
     diversion through a country of goods, services, or 
     technologies, means the government of the country knows or 
     has reason to know that the territory of the country is being 
     used for such diversion.
       (2) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means--
       (A) the Committee on Banking, Housing, and Urban Affairs, 
     the Committee on Foreign Relations, and the Select Committee 
     on Intelligence of the Senate; and
       (B) the Committee on Foreign Affairs and the Permanent 
     Select Committee on Intelligence of the House of 
     Representatives.
       (3) Commerce control list.--The term ``Commerce Control 
     List'' means the list maintained pursuant to part 774 of the 
     Export Administration Regulations (or any corresponding 
     similar regulation or ruling).
       (4) Divert; diversion.--The terms ``divert'' and 
     ``diversion'' refer to the transfer or release, directly or 
     indirectly, of a good, service, or technology to an end-user 
     or an intermediary that is not an authorized recipient of the 
     good, service, or technology.
       (5) End-user.--The term ``end-user'', with respect to a 
     good, service, or technology, means the person that receives 
     and ultimately uses the good, service, or technology.
       (6) Export administration regulations.--The term ``Export 
     Administration Regulations'' means subchapter C of chapter 
     VII of title 15, Code of Federal Regulations (or any 
     corresponding similar regulation or ruling).
       (7) Government.--The term ``government'' includes any 
     agency or instrumentality of a government.
       (8) Intermediary.--The term ``intermediary'' means a person 
     that receives a good, service, or technology while the good, 
     service, or technology is in transit to the end-user of the 
     good, service, or technology.
       (9) International traffic in arms regulations.--The term 
     ``International Traffic in Arms Regulations'' means 
     subchapter M of chapter I of title 22, Code of Federal 
     Regulations (or any corresponding similar regulation or 
     ruling).
       (10) Iran.--The term ``Iran'' includes the Government of 
     Iran and any agency or instrumentality of Iran.
       (11) Iranian end-user.--The term ``Iranian end-user'' means 
     an end-user that is the Government of Iran or a person in, or 
     an agency or instrumentality of, Iran.
       (12) Iranian intermediary.--The term ``Iranian 
     intermediary'' means an intermediary that is the Government 
     of Iran or a person in, or an agency or instrumentality of, 
     Iran.
       (13) State sponsor of terrorism.--The term ``state sponsor 
     of terrorism'' means any country the government of which the 
     Secretary of State has determined has repeatedly provided 
     support for acts of international terrorism pursuant to--
       (A) section 6(j)(1)(A) of the Export Administration Act of 
     1979 (50 U.S.C. App. 2405(j)(1)(A)) (or any successor 
     thereto);
       (B) section 40(d) of the Arms Export Control Act (22 U.S.C. 
     2780(d)); or
       (C) section 620A(a) of the Foreign Assistance Act of 1961 
     (22 U.S.C. 2371(a)).
       (14) United states munitions list.--The term ``United 
     States Munitions List'' means the list maintained pursuant to 
     part 121 of the International Traffic in Arms Regulations (or 
     any corresponding similar regulation or ruling).

[[Page H4761]]

     SEC. 302. IDENTIFICATION OF COUNTRIES OF CONCERN WITH RESPECT 
                   TO THE DIVERSION OF CERTAIN GOODS, SERVICES, 
                   AND TECHNOLOGIES TO OR THROUGH IRAN.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act, the Director of National 
     Intelligence shall submit to the President, the Secretary of 
     Defense, the Secretary of Commerce, the Secretary of State, 
     the Secretary of the Treasury, and the appropriate 
     congressional committees a report that identifies each 
     country the government of which the Director believes, based 
     on all information available to the Director, is allowing the 
     diversion through the country of goods, services, or 
     technologies described in subsection (b) to Iranian end-users 
     or Iranian intermediaries.
       (b) Goods, Services, and Technologies Described.--Goods, 
     services, or technologies described in this subsection are 
     goods, services, or technologies--
       (1) that--
       (A) originated in the United States;
       (B) would make a material contribution to Iran's--
       (i) development of nuclear, chemical, or biological 
     weapons;
       (ii) ballistic missile or advanced conventional weapons 
     capabilities; or
       (iii) support for international terrorism; and
       (C) are--
       (i) items on the Commerce Control List or services related 
     to those items; or
       (ii) defense articles or defense services on the United 
     States Munitions List; or
       (2) that are prohibited for export to Iran under a 
     resolution of the United Nations Security Council.
       (c) Updates.--The Director of National Intelligence shall 
     update the report required by subsection (a)--
       (1) as new information becomes available; and
       (2) not less frequently than annually.
       (d) Form.--The report required by subsection (a) and the 
     updates required by subsection (c) may be submitted in 
     classified form.

     SEC. 303. DESTINATIONS OF DIVERSION CONCERN.

       (a) Designation.--
       (1) In general.--The President shall designate a country as 
     a Destination of Diversion Concern if the President 
     determines that the government of the country allows 
     substantial diversion of goods, services, or technologies 
     described in section 302(b) through the country to Iranian 
     end-users or Iranian intermediaries.
       (2) Determination of substantial.--For purposes of 
     paragraph (1), the President shall determine whether the 
     government of a country allows substantial diversion of 
     goods, services, or technologies described in section 302(b) 
     through the country to Iranian end-users or Iranian 
     intermediaries based on criteria that include--
       (A) the volume of such goods, services, and technologies 
     that are diverted through the country to such end-users or 
     intermediaries;
       (B) the inadequacy of the export controls of the country;
       (C) the unwillingness or demonstrated inability of the 
     government of the country to control the diversion of such 
     goods, services, and technologies to such end-users or 
     intermediaries; and
       (D) the unwillingness or inability of the government of the 
     country to cooperate with the United States in efforts to 
     interdict the diversion of such goods, services, or 
     technologies to such end-users or intermediaries.
       (b) Report on Designation.--Upon designating a country as a 
     Destination of Diversion Concern under subsection (a), the 
     President shall submit to the appropriate congressional 
     committees a report--
       (1) notifying those committees of the designation of the 
     country; and
       (2) containing a list of the goods, services, and 
     technologies described in section 302(b) that the President 
     determines are diverted through the country to Iranian end-
     users or Iranian intermediaries.
       (c) Licensing Requirement.--Not later than 45 days after 
     submitting a report required by subsection (b) with respect 
     to a country designated as a Destination of Diversion Concern 
     under subsection (a), the President shall require a license 
     under the Export Administration Regulations or the 
     International Traffic in Arms Regulations (whichever is 
     applicable) to export to that country a good, service, or 
     technology on the list required under subsection (b)(2), with 
     the presumption that any application for such a license will 
     be denied.
       (d) Delay of Imposition of Licensing Requirement.--
       (1) In general.--The President may delay the imposition of 
     the licensing requirement under subsection (c) with respect 
     to a country designated as a Destination of Diversion Concern 
     under subsection (a) for a 12-month period if the President--
       (A) determines that the government of the country is taking 
     steps--
       (i) to institute an export control system or strengthen the 
     export control system of the country;
       (ii) to interdict the diversion of goods, services, or 
     technologies described in section 302(b) through the country 
     to Iranian end-users or Iranian intermediaries; and
       (iii) to comply with and enforce United Nations Security 
     Council Resolutions 1696 (2006), 1737 (2006), 1747 (2007), 
     1803 (2008), and 1929 (2010), and any other resolution that 
     is agreed to by the Security Council and imposes sanctions 
     with respect to Iran;
       (B) determines that it is appropriate to carry out 
     government-to-government activities to strengthen the export 
     control system of the country; and
       (C) submits to the appropriate congressional committees a 
     report describing the steps specified in subparagraph (A) 
     being taken by the government of the country.
       (2) Additional 12-month periods.--The President may delay 
     the imposition of the licensing requirement under subsection 
     (c) with respect to a country designated as a Destination of 
     Diversion Concern under subsection (a) for additional 12-
     month periods after the 12-month period referred to in 
     paragraph (1) if the President, for each such 12-month 
     period--
       (A) makes the determinations described in subparagraphs (A) 
     and (B) of paragraph (1) with respect to the country; and
       (B) submits to the appropriate congressional committees an 
     updated version of the report required by subparagraph (C) of 
     paragraph (1).
       (3) Strengthening export control systems.--If the President 
     determines under paragraph (1)(B) that is it appropriate to 
     carry out government-to-government activities to strengthen 
     the export control system of a country designated as a 
     Destination of Diversion Concern under subsection (a), the 
     United States shall initiate government-to-government 
     activities that may include--
       (A) cooperation by agencies and departments of the United 
     States with counterpart agencies and departments in the 
     country--
       (i) to develop or strengthen the export control system of 
     the country;
       (ii) to strengthen cooperation among agencies of the 
     country and with the United States and facilitate enforcement 
     of the export control system of the country; and
       (iii) to promote information and data exchanges among 
     agencies of the country and with the United States;
       (B) training officials of the country to strengthen the 
     export control systems of the country--
       (i) to facilitate legitimate trade in goods, services, and 
     technologies; and
       (ii) to prevent terrorists and state sponsors of terrorism, 
     including Iran, from obtaining nuclear, biological, and 
     chemical weapons, defense technologies, components for 
     improvised explosive devices, and other defense articles; and
       (C) encouraging the government of the country to 
     participate in the Proliferation Security Initiative, such as 
     by entering into a ship boarding agreement pursuant to the 
     Initiative.
       (e) Termination of Designation.--The designation of a 
     country as a Destination of Diversion Concern under 
     subsection (a) shall terminate on the date on which the 
     President determines, and certifies to the appropriate 
     congressional committees, that the country has adequately 
     strengthened the export control system of the country to 
     prevent the diversion of goods, services, and technologies 
     described in section 302(b) to Iranian end-users or Iranian 
     intermediaries.
       (f) Form of Reports.--A report required by subsection (b) 
     or (d) may be submitted in classified form.

     SEC. 304. REPORT ON EXPANDING DIVERSION CONCERN SYSTEM TO 
                   ADDRESS THE DIVERSION OF UNITED STATES ORIGIN 
                   GOODS, SERVICES, AND TECHNOLOGIES TO CERTAIN 
                   COUNTRIES OTHER THAN IRAN.

       (a) In General.--Not later than 1 year after the date of 
     the enactment of this Act, the President shall submit to the 
     appropriate congressional committees a report that--
       (1) identifies any country that the President determines is 
     allowing the diversion, in violation of United States law, of 
     items on the Commerce Control List or services related to 
     those items, or defense articles or defense services on the 
     United States Munitions List, that originated in the United 
     States to another country if such other country--
       (A) is seeking to obtain nuclear, biological, or chemical 
     weapons, or ballistic missiles; or
       (B) provides support for acts of international terrorism; 
     and
       (2) assesses the feasability and advisability of expanding 
     the system established under section 303 for designating 
     countries as Destinations of Diversion Concern to include 
     countries identified under paragraph (1).
       (b) Form.--The report required by subsection (a) may be 
     submitted in classified form.

     SEC. 305. ENFORCEMENT AUTHORITY.

       The Secretary of Commerce may designate any employee of the 
     Office of Export Enforcement of the Department of Commerce to 
     conduct activities specified in clauses (i), (ii), and (iii) 
     of section 12(a)(3)(B) of the Export Administration Act of 
     1979 (50 U.S.C. App. 2411(a)(3)(B)) when the employee is 
     carrying out activities to enforce--
       (1) the provisions of the Export Administration Act of 1979 
     (50 U.S.C. App. 2401 et seq.) (as in effect pursuant to the 
     International Emergency Economic Powers Act (50 U.S.C. 1701 
     et seq.));
       (2) the provisions of this title, or any other provision of 
     law relating to export controls, with respect to which the 
     Secretary of Commerce has enforcement responsibility; or
       (3) any license, order, or regulation issued under--
       (A) the Export Administration Act of 1979 (50 U.S.C. App. 
     2401 et seq.) (as in effect pursuant to the International 
     Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)); or
       (B) a provision of law referred to in paragraph (2).

                      TITLE IV--GENERAL PROVISIONS

     SEC. 401. GENERAL PROVISIONS.

       (a) Sunset.--The provisions of this Act (other than 
     sections 105 and 305 and the amendments made by sections 102, 
     107, 109, and 205) shall terminate, and section 13(c)(1)(B) 
     of the Investment Company Act of 1940, as added by section 
     203(a), shall cease to be effective, on the date that is 30 
     days after the date on which the President certifies to 
     Congress that--
       (1) the Government of Iran has ceased providing support for 
     acts of international terrorism and no longer satisfies the 
     requirements

[[Page H4762]]

     for designation as a state sponsor of terrorism (as defined 
     in section 301) under--
       (A) section 6(j)(1)(A) of the Export Administration Act of 
     1979 (50 U.S.C. App. 2405(j)(1)(A)) (or any successor 
     thereto);
       (B) section 40(d) of the Arms Export Control Act (22 U.S.C. 
     2780(d)); or
       (C) section 620A(a) of the Foreign Assistance Act of 1961 
     (22 U.S.C. 2371(a)); and
       (2) Iran has ceased the pursuit, acquisition, and 
     development of nuclear, biological, and chemical weapons and 
     ballistic missiles and ballistic missile launch technology.
       (b) Presidential Waivers.--
       (1) In general.--The President may waive the application of 
     sanctions under section 103(b), the requirement to impose or 
     maintain sanctions with respect to a person under section 
     105(a), the requirement to include a person on the list 
     required by section 105(b), the application of the 
     prohibition under section 106(a), or the imposition of the 
     licensing requirement under section 303(c) with respect to a 
     country designated as a Destination of Diversion Concern 
     under section 303(a), if the President determines that such a 
     waiver is in the national interest of the United States.
       (2) Reports.--
       (A) In general.--If the President waives the application of 
     a provision pursuant to paragraph (1), the President shall 
     submit to the appropriate congressional committees a report 
     describing the reasons for the waiver.
       (B) Special rule for report on waiving imposition of 
     licensing requirement under section 303(c).--In any case in 
     which the President waives, pursuant to paragraph (1), the 
     imposition of the licensing requirement under section 303(c) 
     with respect to a country designated as a Destination of 
     Diversion Concern under section 303(a), the President shall 
     include in the report required by subparagraph (A) of this 
     paragraph an assessment of whether the government of the 
     country is taking the steps described in subparagraph (A) of 
     section 303(d)(1).
       (c) Authorizations of Appropriations.--
       (1) Authorization of appropriations for the department of 
     state and the department of the treasury.--There are 
     authorized to be appropriated to the Secretary of State and 
     to the Secretary of the Treasury such sums as may be 
     necessary to implement the provisions of, and amendments made 
     by, titles I and III of this Act.
       (2) Authorization of appropriations for the department of 
     commerce.--There are authorized to be appropriated to the 
     Secretary of Commerce such sums as may be necessary to carry 
     out title III.

     SEC. 402. DETERMINATION OF BUDGETARY EFFECTS.

       The budgetary effects of this Act, for the purpose of 
     complying with the Statutory Pay-As-You-Go-Act of 2010, shall 
     be determined by reference to the latest statement titled 
     ``Budgetary Effects of PAYGO Legislation'' for this Act, 
     jointly submitted for printing in the Congressional Record by 
     the Chairmen of the House and Senate Budget Committees, 
     provided that such statement has been submitted prior to the 
     vote on passage in the House acting first on this conference 
     report or amendment between the Houses.
       And the Senate agree to the same.
     From the Committee on Foreign Affairs, for consideration of 
     the House bill and the Senate amendment, and modifications 
     committed to conference:
     Howard L. Berman,
     Gary L. Ackerman,
     Brad Sherman,
     Joseph Crowley,
     David Scott,
     Jim Costa,
     Ron Klein,
     Ileana Ros-Lehtinen,
     Dan Burton,
     Edward R. Royce,
     Mike Pence,
     From the Committee on Financial Services, for consideration 
     of secs. 3 and 4 of the House bill, and secs. 101-103, 106, 
     203, and 401 of the Senate amendment, and modifications 
     committed to conference:
     Barney Frank,
     Gregory W. Meeks,
     Scott Garrett,
     From the Committee on Ways and Means, for consideration of 
     secs. 3 and 4 of the House bill, and secs. 101-103 and 401 of 
     the Senate amendment, and modifications committed to 
     conference:
     Sander M. Levin,
     John S. Tanner,
     Dave Camp,
                                Managers on the Part of the House.

     Christopher J. Dodd,
     John F. Kerry,
     Joseph I. Lieberman,
     Robert Menendez,
     Richard C. Shelby,
     Robert F. Bennett,
     Richard G. Lugar,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendment of the Senate to the bill (H.R. 2194), to amend the 
     Iran Sanctions Act of 1996 to enhance United States 
     diplomatic efforts with respect to Iran by expanding economic 
     sanctions against Iran, submit the following joint statement 
     to the House and the Senate in explanation of the effect of 
     the action agreed upon by the managers and recommended in the 
     accompanying conference report:
       The Senate amendment struck all of the House bill after the 
     enacting clause and inserted a substitute text.
       The House recedes from its disagreement to the amendment of 
     the Senate with an amendment that is a substitute for the 
     House bill and the Senate amendment. The differences between 
     the House bill, the Senate amendment, and the substitute 
     agreed to in conference are noted below, except for clerical 
     corrections, conforming changes made necessary by agreements 
     reached by the conferees, and minor drafting and clerical 
     changes.

                          Summary and Purpose

       H.R. 2194, the Comprehensive Iran Sanctions, 
     Accountability, and Divestment Act of 2010, would strengthen 
     the underlying Iran Sanctions Act (ISA) by imposing an array 
     of tough new economic penalties aimed at persuading Iran to 
     change its conduct. The Act reinforces and goes far beyond 
     recently-enacted UN Sanctions. Targets of the Act range from 
     business entities involved in refined petroleum sales to Iran 
     or support for Iran's domestic refining efforts to 
     international banking institutions involved with Iran's 
     Islamic Revolutionary Guards Corps (IRGC) or with Iran's 
     illicit nuclear program or its support for terrorism.
       The Conference text would augment the sanctions regime 
     envisioned in the earlier versions of the Act passed by the 
     House and the Senate by supplementing the energy sanctions in 
     those versions with an additional, powerful set of banking 
     prohibitions. The Act would impose severe restrictions on 
     foreign financial institutions doing business with key 
     Iranian banks or the IRGC. In effect, the Act presents 
     foreign banks doing business with blacklisted Iranian 
     entities a stark choice--cease your activities or be denied 
     critical access to America's financial system. The Act also 
     would hold U.S. banks accountable for actions by their 
     foreign subsidiaries (U.S. companies have long been banned 
     from all the activities for which foreign entities will be 
     sanctionable under this Act).
       In addition to new financial sector and refined petroleum-
     focused sanctions, the Act would also provide a legal 
     framework by which U.S. states, local governments, and 
     certain other investors can divest their portfolios of 
     foreign companies involved in Iran's energy sector and 
     establishes a mechanism to address concerns about diversion 
     of sensitive technologies to Iran through other countries. 
     Sanctions under this Act are subject to several waivers with 
     varying thresholds. The sanctions could terminate either in 
     2016 or, as provided for in the Sunset clause of the 
     Conference text, could terminate once the President certifies 
     to Congress that Iran (1) has ceased its support for acts of 
     international terrorism and no longer satisfies the 
     requirements for designation as a state-sponsor of terrorism 
     under U.S. law; and (2) has ceased its efforts to develop or 
     acquire nuclear, biological, and chemical weapons and 
     ballistic missiles and ballistic-missile launch technology.
       The effectiveness of this Act will depend on its forceful 
     implementation. The Conferees urge the President to 
     vigorously impose the sanctions provided for in this Act.
       Conferees urge friends and allies of the United States to 
     follow the U.S. lead in cutting off key economic 
     relationships with Iran until Iran terminates its illicit 
     nuclear program. Few objective observers now dispute that 
     Iran's nuclear program represents a threat to global 
     stability. All concur that Iran is pursuing its nuclear 
     program in defiance of the demands of the international 
     community. Conferees believe it is time for responsible 
     actors to cease any economic involvement with Iran that 
     contributes to its ability to finance its nuclear weapons 
     capability.

                Background and Need for the Legislation

       Iran poses a significant threat to the United States and 
     its allies in the Middle East and elsewhere. A nuclear Iran 
     would intimidate its neighbors; be further emboldened in 
     pursuing terrorism abroad and oppression at home; represent 
     an imminent threat to Israel and other friends and allies of 
     the United States; and likely spark a destabilizing Middle 
     East arms race that would deal a major blow to U.S. and 
     international non-proliferation efforts and threaten vital 
     U.S. national security interests.
       Iran's persistent deception regarding its nuclear program, 
     its general unresponsiveness to diplomacy, and its rejection 
     of international community demands regarding its nuclear 
     program have deepened Congressional concerns about that 
     program. Since 2006 the UN Security Council has been calling 
     on Iran to suspend its uranium enrichment program and 
     increase its cooperation with the International Atomic Energy 
     Agency (IAEA)--to no avail.
       Notwithstanding the additional costs imposed on Iran as a 
     result of previous U.S. and UN Security Council sanctions, 
     Iran's development of its nuclear program continues. The 
     International Atomic Energy Agency (IAEA) now estimates that 
     Iran has produced and stockpiled sufficient low-enriched 
     uranium, if further enriched, for two nuclear explosive 
     devices. For these reasons, Conferees assess that additional 
     and tougher sanctions are needed in order to persuade Iran to 
     cease its nuclear program. Conferees believe that the 
     imminence and seriousness of the threat posed to U.S. 
     interests by Iran's nuclear weapons program warrants the 
     enactment of H.R. 2194.
       Conferees take note of and applaud recent adoption by the 
     U.N. Security Council of

[[Page H4763]]

     Resolution 1929 regarding Iran's nuclear program. Conferees 
     believe the resolution is a powerful statement of opposition 
     by the international community to Iran's ongoing illicit 
     nuclear activities and a critical step in strengthening the 
     multilateral sanctions regime intended to persuade Iran to 
     suspend those activities. Conferees believe this legislation 
     will complement UNSCR 1929 and will deepen efforts to thwart 
     Iran's efforts to obtain a nuclear weapons capability.

                       Background: U.S. Sanctions

       Iran's economy, and Iran's ability to fund its nuclear 
     program, is heavily dependent on the revenue derived from 
     energy exports. Accordingly, an important part of U.S. 
     efforts to prevent Iran from acquiring nuclear weapons has 
     focused on deterring investment in Iran's energy sector.
       U.S. individuals and companies have been prohibited from 
     investing in Iran's petroleum sector since Executive Order 
     12957 was issued on March 15, 1995, by President William J. 
     Clinton as a follow-on to his Administration's assessment 
     that ``the actions and policies of the Government of Iran 
     constitute an unusual and extraordinary threat to the 
     national security, foreign policy, and economy of the United 
     States.'' The White House spokesman at that time, Michael 
     McCurry, made clear that the objectionable activities were 
     Iran's pursuit of weapons of mass destruction, its support of 
     international terrorism, and its efforts to undermine the 
     Middle East peace process.
       A subsequent executive order, E.O. 12959, issued on May 8, 
     1995, banned all new investment in Iran by U.S. individuals 
     and companies. The same executive order banned virtually all 
     trade with Iran. In conjunction with the latter executive 
     order, then-Secretary of State Warren Christopher warned the 
     international community that the path Iran was following was 
     a mirror image of the steps taken by other nations that had 
     sought nuclear weapons capabilities. A trade embargo was thus 
     implemented in furtherance of the President's powers 
     exercised pursuant to the International Emergency Powers Act 
     (IEEPA, 50 U.S.C. 1701 et seq.), which authorizes the 
     President to block transactions and freeze assets to deal 
     with the ``unusual and extraordinary threat,'' in this case 
     posed by Iran.
       With the U.S. having voluntarily removed itself from the 
     Iran market, Congress in 1996 passed the Iran and Libya 
     Sanctions Act, P.L. 104-172 (`ILSA,' now usually referred to 
     as the Iran Sanctions Act, or `ISA,' following termination of 
     applicability of sanctions to Libya in 2006), to encourage 
     foreign persons to withdraw from the Iranian market. ILSA 
     authorized the President to impose sanctions on any foreign 
     entity that invested $20 million or more in Iran's energy 
     sector. ILSA was passed in 1996 for a five-year period and 
     has been renewed twice, in 2001 and 2006, for additional 
     five-year periods. (H.R. 2194 would extend ISA another five 
     years, through 2016.)
       Although ILSA was enacted more than a decade ago, no 
     Administration has sanctioned a foreign entity for investing 
     $20 million or more in Iran's energy sector, despite a number 
     of such investments. Indeed, on only one occasion, in 1998, 
     did the Administration make a determination regarding a 
     sanctions-triggering investment, but the Administration 
     waived sanctions against the offending persons. Conferees 
     believe that the lack of enforcement of relevant enacted 
     sanctions may have served to encourage rather than deter 
     Iran's efforts to pursue nuclear weapons.
       Despite successive Executive Branch failures to implement 
     ISA, the legislation has made a positive contribution to 
     United States national security. Arguably, the supply of 
     capital to the Iranian petroleum sector has been constrained 
     by the mere threat of sanctions. Further, by highlighting the 
     threat from Iran, ISA has emerged as a deterrent to 
     additional investment, and it has encouraged increased 
     international community involvement with the Iranian nuclear 
     issue.
       To further strengthen sanctions targeting foreign 
     investment in Iran's energy sector, Congress passed the `Iran 
     Freedom Support Act' (IFSA), a bill subsequently signed into 
     law (P.L. 109-293) by President George W. Bush in September 
     2006. Among other provisions, the IFSA strengthened sanctions 
     under ISA, including raising certain waiver thresholds to 
     `vital to the national security interests of the United 
     States,' enlarging the scope of those who might be subject to 
     sanctions, and enhancing tools for using financial means to 
     address Iran's activities of concern.
       In addition, in June 2007, the Senate passed the 
     International Emergency Powers Enhancement Act, with the 
     House following suit and the President's signing it into law 
     (P.L. 110-96) four months later. The Act greatly increased 
     penalties for violators of U.S. sanctions. As a result, U.S. 
     persons who illegally trade with Iran now face civil fines up 
     to $250,000 or twice the amount of the transaction. In 
     addition, the Act increased criminal penalties to $1 million 
     with a maximum jail sentence of 20 years. Unlike ISA, these 
     measures have been exercised extensively by the Department of 
     the Treasury's Office of Foreign Assets Control and the 
     Department of Justice to enforce the U.S. trade embargo on 
     Iran.


                     Multilateral Sanctions Efforts

       Conferees strongly support multilateral efforts aimed at 
     curbing Iran's nuclear program. The United Nations Security 
     Council (UNSC) has passed a number of resolutions condemning 
     Iran's nuclear activities and urging compliance with its 
     international obligations. For example, on December 23, 2006, 
     UNSC Resolution 1737 was unanimously approved, banning supply 
     of nuclear technology and equipment to Iran and freezing the 
     assets of organizations and individuals involved in Iran's 
     nuclear program, until Iran suspends enrichment of uranium 
     and halts Plutonium reprocessing-related activities. UNSC 
     Resolution 1747 was unanimously approved on March 24, 2007, 
     imposing a ban on Iranian arms sales, expanding the freeze on 
     assets, and setting a deadline for Iranian compliance two 
     months later.
       Absent compliance, further sanctions were adopted in UNSC 
     Resolution 1803 on March 3, 2008, including a ban on sales of 
     dual-use items; authorization of inspections of cargo 
     suspected of containing WMD-related goods; an expanded 
     Iranian travel-ban list; and a call to ban transactions with 
     Iran's Bank Melli and Bank Saderat. On August 7, 2008, the 
     European Union (EU) implemented the sanctions specified in 
     Resolution 1803, including an assertion of authority to 
     inspect suspect shipments, and called on its members to 
     refrain from providing new credit guarantees on exports to 
     Iran. On September 27, 2008, the Security Council adopted 
     Resolution 1835, calling on Iran to comply with previous 
     resolutions. On June 9, 2010, Resolution 1929 was adopted, 
     strengthening existing sanctions in a variety of ways, 
     including further targeting Iran's Revolutionary Guard Corps; 
     authorizing an inspection regime for ships suspected to be 
     carrying contraband to Iran; prohibiting countries from 
     allowing Iran to invest in uranium mining and related nuclear 
     technologies, or nuclear-capable ballistic missile 
     technology; banning sales of most heavy arms to Iran; 
     requiring countries to insist that their companies refrain 
     from doing business with Iran if there is reason to believe 
     that such business could further Iran's WMD programs; and 
     adopting other similar measures. Iran has contemptuously 
     dismissed all of these UNSC resolutions, with President 
     Ahmadinejad labeling them ``illegal.''

                         Contents of H.R. 2194

       H.R. 2194 contains four Titles: Title I (Sanctions), Title 
     II (Divestment from Certain Companies That Invest in Iran); 
     Title III (Prevention of Diversion of Certain Goods, 
     Services, and Technologies to Iran); and Title IV (General 
     Provisions).


                           Title I: Sanctions

       Title I of H.R. 2194 strengthens the U.S. sanctions regime 
     by requiring severe limitations on U.S. correspondent banking 
     for foreign financial institutions doing business with 
     relevant Iranian banks. The Act further strengthens existing 
     legislation by broadening the categories of transactions that 
     trigger sanctions, increasing the number of sanctions the 
     President can impose on foreign companies whose activities 
     trigger sanctions, and requiring the President to investigate 
     reports of sanctionable activities to determine whether 
     sanctionable activity has indeed occurred.
       In broadening the categories of transactions that trigger 
     sanctions, the bill focuses on sales to Iran of refined 
     petroleum and assistance to Iran for its own domestic 
     refining capacity. Under H.R. 2194, companies engaged in 
     either of these activities would be subject to the same 
     sanctions as companies that invest $20 million or more in 
     Iran's energy sector (the original category of sanctionable 
     activity established under ISA). Despite being one of the 
     world's leading oil producers, Iran reportedly imports 
     between 25 and 40 percent of its refined oil needs, due to 
     its limited domestic refining capacity. Accordingly, 
     Conferees believe that imposition of refined-petroleum-
     related sanctions could have a powerful impact on Iran's 
     economy and, as a result, on its decision-making regarding 
     its nuclear program.
       The bill likewise imposes sanctions on companies that sell 
     Iran goods, services, or know-how that assist it in 
     developing its energy sector. As is the case with refined-
     petroleum-related sanctions, companies that engage in such 
     transactions would be subject to the same sanctions as 
     companies that invest $20 million or more in Iran's energy 
     sector. Furthermore, energy investment now covers the sale of 
     petroleum-related goods, services, and technology to Iran, 
     which was a category of activity that was not previously 
     covered by the U.S. sanctions regime.
       The bill also expands in other ways the universe of 
     activities to be considered sanctionable.
       H.R. 2194 establishes three new sanctions, in addition to 
     the menu of six sanctions that already exists under ISA. The 
     three new sanctions are, respectively, a prohibition on 
     access to foreign exchange in the U.S., a prohibition on 
     access to the U.S. banking system, and a prohibition on 
     property transactions in the United States. H.R. 2194 
     requires the President to impose at least three of the nine 
     sanctions on a company involved in sanctionable activity, in 
     addition to other mandatory sanctions.
       The bill also toughens the sanctions regime by requiring 
     the President (a) to investigate any report of sanctionable 
     activity for which there is credible evidence; and (b) to 
     make a determination in writing to Congress whether such 
     activity has indeed occurred. The President would then be 
     expected either to impose or waive sanctions. Under current 
     law, the President is authorized to investigate and make a 
     determination but is not required to do so. In fact, the 
     President has

[[Page H4764]]

     made only one determination under current law, despite at 
     least two dozen credible reports of sanctionable activity. 
     That determination, in 1998, was made for the purpose of 
     waiving sanctions.
       H.R. 2194 is designed to impose considerable additional 
     pressure on Iran by mandating a new financial sanction that, 
     if implemented appropriately, will substantially reduce 
     Iran's access to major segments of the global financial 
     system. The Act requires the Secretary of the Treasury to 
     prohibit or impose strict conditions on U.S. banks' 
     correspondent relationships with foreign financial 
     institutions that (1) engage in financial transactions that 
     facilitate Iranian efforts to develop WMD or promote 
     terrorist activities, including through money-laundering or 
     through enabling an Iranian financial institution--including 
     the Central Bank of Iran, for example--to facilitate such 
     efforts; (2) facilitate or otherwise contribute to a 
     transaction or provides financial services for a financial 
     institution that the Office of Foreign Assets Control at 
     the Department of the Treasury has designated to be 
     supporting the proliferation of weapons of mass 
     destruction or financing of international terrorism; or 
     (3) involve the Islamic Revolutionary Guard Corps (IRGC) 
     or its affiliates or agents. In addition, H.R. 2194 
     prohibits any US financial institution or its foreign 
     subsidiaries from engaging in any financial transaction 
     with IRGC entities.
       Indeed, the IRGC, its affiliates, and agents have 
     reportedly extended their reach heavily into various parts of 
     the Iranian economy, dominating critical financial services, 
     construction, energy, shipping, telecommunications, and 
     certain manufacturing sectors throughout the country. Thus, 
     in addition to playing pivotal roles in Tehran's 
     proliferation of weapons of mass destruction, financing of 
     international terrorism, and gross human rights abuses, the 
     IRGC is now a key source of wealth for the Iranian regime. 
     Conferees join the administration and international community 
     in seeking to combat the IRGC's growing power, and to curb 
     the IRGC's access to capital, which is used to further 
     Tehran's various ambitions.
       Other major measures in Title I include:
       --visa, property, and financial sanctions on Iranians the 
     President determines to be complicit in serious human rights 
     abuses against other Iranians on or after June 12, 2009, the 
     date of Iran's most recent Presidential election;
       --a ban on U.S. government procurement contracts for any 
     company that exports to Iran technology used to restrict the 
     free flow of information or to disrupt, monitor, or otherwise 
     restrict freedom of speech;
       --an authorization for the President to prescribe 
     regulations for the purpose of implementing Iran-related 
     sanctions in UN Security Council resolutions; and
       --an authorization for FY 2011 appropriations of slightly 
     more than $100 million each to the Secretary of the Treasury 
     for the Office of Terrorism and Financial Intelligence; to 
     the Secretary of the Treasury for the Financial Crimes 
     Enforcement Network; and to the Secretary of Commerce for the 
     Bureau of Industry and Security, for the purposes of 
     reinforcing the U.S. trade embargo, combating diversion of 
     sensitive technology to Iran, and preventing the 
     international financial system from being used to support 
     terrorism or develop WMD.


    Title II: Divestment from Certain Companies That Invest in Iran

       State and local divestment efforts.--In recent years, there 
     has been increasing interest by U.S. state and local 
     governments, educational institutions, and private 
     institutions to divest from companies and financial 
     institutions that directly or indirectly provide support for 
     the Government of Iran. Financial advisors, policy-makers, 
     and fund managers may find prudential or reputational reasons 
     to divest from companies that accept the business risk of 
     operating in countries subject to international economic 
     sanctions or that have business relationships with countries, 
     governments, or entities with which any United States company 
     would be prohibited from dealing because of economic 
     sanctions imposed by the United States.
       In addition to the wide range of diplomatic and economic 
     sanctions that have been imposed by the U.N. Security 
     Council, the U.S. and other national governments, many U.S. 
     states and localities have begun to enact measures 
     restricting their agencies' economic transactions with firms 
     that do business with, or in, Iran. More than twenty states 
     and the District of Columbia have already enacted some form 
     of divestment legislation or otherwise adopted divestment 
     measures, and legislation is pending in additional state 
     legislatures. Other states and localities have taken 
     administrative action to facilitate divestment. Also joining 
     this movement are colleges and universities, large cities, 
     non-profit organizations, and pension and mutual funds.
       Conferees concluded that Congress and the President have 
     the constitutional power to authorize states to enact 
     divestment measures and that Federal consent removes any 
     doubt as to the constitutionality of those measures. Thus, 
     the Act explicitly states the sense of Congress that the 
     United States should support the decisions of state and local 
     governments to divest from firms conducting business 
     operations in Iran's energy sector and clearly authorizes 
     divestment decisions made consistent with the standards the 
     legislation articulates. It also provides a `safe harbor' for 
     changes of investment policies by private asset managers, and 
     it expresses the sense of Congress that certain divestments, 
     or avoidance of investment, do not constitute a breach of 
     fiduciary duties under the Employee Retirement Income 
     Security Act (ERISA). With regard to pre-emption, the 
     legislation supports state and local efforts to divest from 
     companies conducting business operations in Iran by clearly 
     stating that these efforts are not pre-empted by any Federal 
     law or regulation.


  Title III: Prevention of Diversion of Certain Goods, Services, and 
                          Technologies to Iran

       In recent years, studies by the Government Accountability 
     Office, the Commerce Department, and others have asserted 
     that Iran continues to circumvent sanctions and receive 
     sensitive equipment, including some of U.S. origin. This 
     equipment, which facilitates Iran's nuclear activities, may 
     be trans-shipped illegally to Iran via other countries.
       Title III is meant to disrupt international black-market 
     proliferation networks that have reportedly thrived for 
     years, even after the discovery and subsequent arrest of 
     notorious weapons technology peddler A. Q. Khan. This 
     provision requires the Director of National Intelligence to 
     report to the President and Congress as to which governments 
     he believes are allowing the re-export, trans-shipment, 
     transfer, re-transfer, or diversion to Iranians of key goods, 
     services, or technologies that could be used for weapons of 
     mass destruction proliferation or acts of terrorism. 
     Following receipt of that report, the President may designate 
     a country a Destination of Diversion Concern. Such a 
     designation would provide for the U.S. to work with the host 
     government of that country to help it strengthen its export 
     control system. If the President determines that the 
     government of that country is unresponsive or otherwise fails 
     to strengthen its export control system so that substantial 
     re-export, trans-shipment, transfer, re-transfer, or 
     diversion of certain goods, services, or technologies 
     continues, the President shall impose severe restrictions on 
     U.S. exports to that country.


                      Title IV: General Provisions

       The Act will terminate once the President certifies to 
     Congress that Iran both (1) has ceased its support for acts 
     of international terrorism and no longer satisfies the 
     requirements for designation as a state-sponsor of terrorism 
     under U.S. law; and (2) has ceased its efforts to develop or 
     acquire nuclear, biological, and chemical weapons, as well as 
     ballistic missiles and ballistic-missile launch technology. 
     The Act also provides various waivers related to economic 
     sanctions and exchange of technology. Finally, the Act 
     authorizes such sums as may be necessary for the Departments 
     of State, Treasury, and Commerce to implement the Act.

               Section-by-Section Analysis and Discussion

     Section 2. Findings
       This section articulates the findings that frame the basis 
     for the additional sanctions and the purpose of the bill. The 
     findings in section 2 draw from both S. 2799 and H.R. 2194.
       Subsection (1) finds that the illicit nuclear activities of 
     the Government of Iran, combined with its development of 
     unconventional weapons and ballistic missiles and its support 
     for international terrorism, represent a threat to the 
     security of the United States, its strong ally Israel, and 
     other allies of the United States around the world.
       Subsection (2) asserts that the United States and other 
     responsible countries have a vital interest in working 
     together to prevent the Iranian regime from acquiring a 
     nuclear weapons capability.
       Subsection (3) finds that the International Atomic Energy 
     Agency has repeatedly called attention to Iran's illicit 
     nuclear activities and, as a result, the United Nations 
     Security Council has adopted a range of sanctions designed to 
     encourage the Government of Iran to suspend those activities 
     and comply with its obligations under the Treaty on Non-
     Proliferation of Nuclear Weapons, done at Washington, London, 
     and Moscow July 1, 1968, and entered into force March 5, 1970 
     (commonly known as the ``Nuclear Non-Proliferation Treaty'').
       Subsection (4) finds that the serious and urgent nature of 
     the threat from Iran demands that the United States work 
     together with its allies to do everything possible--
     diplomatically, politically, and economically--to prevent 
     Iran from acquiring a nuclear weapons capability.
       Subsection (5) finds the United States and its major 
     European allies, including the United Kingdom, France, and 
     Germany, have advocated that sanctions be strengthened should 
     international diplomatic efforts fail to achieve verifiable 
     suspension of Iran's uranium enrichment program and an end to 
     its nuclear weapons program and other illicit nuclear 
     activities.
       Subsection (6) finds that the Government of Iran continues 
     to engage in serious, systematic, and ongoing violations of 
     human rights, including suppression of freedom of expression 
     and religious freedom, illegitimately prolonged detention, 
     torture, and executions. Such violations have increased in 
     the aftermath of the fraudulent presidential election in Iran 
     on June 12, 2009.
       Subsection (7) finds that the Iranian regime has been 
     unresponsive to President Obama's unprecedented and serious 
     efforts at engagement, revealing that the Government

[[Page H4765]]

     of Iran does not appear to be interested in a diplomatic 
     resolution, as made clear by its recent actions detailed in 
     this section.
       Subsection (8) finds that there is an increasing interest 
     by State governments, local governments, educational 
     institutions, and private institutions, business firms, and 
     other investors to disassociate themselves from companies 
     that conduct business activities in the energy sector of 
     Iran, since such business activities may directly or 
     indirectly support the efforts of the Government of Iran to 
     achieve a nuclear weapons capability.
       Subsection (9) finds that black market proliferation 
     networks continue to flourish in the Middle East, allowing 
     countries like Iran to gain access to sensitive dual-use 
     technologies.
       Subsection (10) finds that economic sanctions imposed 
     pursuant to the provisions of this Act, the Iran Sanctions 
     Act of 1996, as amended by this Act, and the International 
     Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), and 
     other authorities available to the United States to impose 
     economic sanctions to prevent Iran from developing nuclear 
     weapons, are necessary to protect the essential security 
     interest of the United States.
       Section 3--Sense of Congress Regarding Illicit Nuclear 
     Activities and Violations of Human Rights in Iran. Section 3 
     of the Senate bill expresses the Sense of Congress regarding 
     Iran's continuing illicit nuclear activities and ongoing 
     violations of human rights in Iran. The House bill contains 
     no such provision. The House recedes.
       Paragraph (1) states that international diplomatic efforts 
     to address Iran's illicit nuclear efforts and support for 
     international terrorism are more likely to be effective if 
     strong additional sanctions are imposed on the Government of 
     Iran.
       Paragraph (2) states that concerns of the United States 
     regarding Iran are strictly the result of the Government of 
     Iran's behavior.
       Paragraph (3) states that the revelation in September 2009 
     that Iran is developing a secret uranium enrichment site on a 
     base of Iran's Revolutionary Guard Corps near Qom, which 
     appears to have no civilian application, highlights the 
     urgency for Iran to disclose fully the nature of its nuclear 
     program, including any other secret locations; to provide the 
     International Atomic Energy Agency unfettered access to its 
     facilities pursuant to Iran's legal obligations under the 
     Nuclear Non-Proliferation Treaty and Iran's Safeguards 
     Agreement with the International Atomic Energy Agency.
       Paragraph (4) states that due to the Iranian Revolutionary 
     Guard Corps' involvement in Iran's nuclear program, 
     international terrorism activities, and domestic human rights 
     abuses, the President should impose the full range of 
     applicable sanctions against them. Those liable for sanctions 
     would include any individual or entity that is an agent, 
     alias, front, instrumentality, representative, official, or 
     affiliate of Iran's Revolutionary Guard Corps, and any 
     individual or entity that has conducted any commercial or 
     financial transaction with such an individual or entity.
       Paragraph (5) states that additional measures should be 
     adopted by the United States to prevent the diversion and 
     transshipment of sensitive dual-use technologies to Iran.
       Paragraph (6) outlines Congress' view of appropriate 
     Executive Branch responses to the human rights situation in 
     Iran. It states that the President should continue to press 
     the Government of Iran to respect the internationally-
     recognized human rights and religious freedoms of its 
     citizens, and identify the officials of the Government of 
     Iran that are responsible for continuing and severe 
     violations of human rights and religious freedom in Iran. The 
     paragraph also urges the President to take appropriate 
     measures to respond to such violations by prohibiting 
     officials the President identifies as being responsible for 
     such violations from entry into the United States and 
     freezing the assets of those officials.
       Paragraph (7) states that additional funding should be 
     provided to the Secretary of State to document, collect, and 
     disseminate information about human rights abuses in Iran, 
     including serious abuses that have taken place since the 
     presidential election in Iran conducted on June 12, 2009.
       Paragraph (8) states that it is in the national interest of 
     the United States for responsible nongovernmental 
     organizations based in the United States to establish and 
     carry out operations in Iran to promote civil society and 
     foster humanitarian goodwill among the people of Iran and the 
     United States should ensure that such nongovernmental 
     organizations are not unnecessarily hindered from working in 
     Iran.
       Paragraph (9) states that the United States should not 
     issue a license pursuant to an agreement for cooperation (a 
     ``123 agreement'' for civil nuclear cooperation) for the 
     export of nuclear material, facilities, components, or other 
     goods, services, or technology that are or would be subject 
     to such an agreement to a country that is providing similar 
     nuclear material, facilities, components, or other goods, 
     services, or technology to another country that is not in 
     full compliance with its obligations under the Nuclear Non-
     Proliferation Treaty.
       Paragraph (10) states that the people of the United States 
     have feelings of friendship for the people of Iran; regret 
     that developments in recent decades have created impediments 
     to that friendship; and hold the people of Iran, their 
     culture, and their ancient and rich history in the highest 
     esteem.


                           TITLE I--SANCTIONS

       Section 101. Definitions. S. 2799 included definitions for 
     sanctions. H.R. 2194 contained no such provisions. Reflecting 
     the approach in S. 2799, this section defines terms used in 
     this title, including: agricultural commodity, executive 
     agency, family member, knowingly, appropriate Congressional 
     Committees, information and informational materials, 
     investment, Iranian diplomats and representatives of other 
     government and military or quasi-governmental institutions of 
     Iran, United States person, U.S. state, medical device, and 
     medicine.
       Section 102. Expansion of Sanctions under the Iran 
     Sanctions Act of 1996.
       Summary. The amendments to the ISA in this section address 
     the major role of Iran's oil and gas industry in generating 
     revenue for the regime's proliferation and international 
     terrorism activities; they require the President to impose at 
     least three out of a menu of nine sanctions on `persons' that 
     knowingly engage in activities related to Iran's refined 
     petroleum industry, in addition to other mandatory sanctions. 
     These activities include making an `investment' of more than 
     $20 million annually in Iran's energy sector; selling, 
     leasing or providing to Iran goods, services, or other 
     support to facilitate Iran's domestic oil production of 
     refined petroleum; or providing Iran with refined petroleum 
     products with an aggregate fair market value of $5 million. 
     The sanctions (Section 6 of the ISA) include the following 
     underlying six sanctions: (1) denial of any guarantee, 
     insurance, or extension of credit from the U.S. Export-Import 
     Bank; (2) denial of licenses for the U.S. export of military 
     or militarily-useful technology to the entity; (3) denial of 
     U.S. bank loans exceeding $10 million in one year to the 
     entity; (4) if the entity is a financial institution, a 
     prohibition on its service as a primary dealer in U.S. 
     government bonds; and/or a prohibition on its serving as a 
     repository for U.S. government funds (each counts as one 
     sanction); (5) prohibition on U.S. government procurement 
     from the entity; and (6) restriction on imports from the 
     entity, in accordance with the International Emergency 
     Economic Powers Act (IEEPA, 50 U.S.C. 1701). The Act would 
     provide for three new sanctions: (1) prohibitions on any 
     transactions in foreign exchange that are subject to the 
     jurisdiction of the United States and in which a sanctioned 
     person has any interest; (2) prohibitions on any transfers of 
     credit or payments between, by, through, or to any financial 
     institution, to the extent such transfers or payments are 
     subject to the jurisdiction of the United States and involve 
     any interest of the sanctioned person; and (3) restrictions 
     on property transactions with respect to which a sanctioned 
     person has any interest. The President may waive the 
     sanctions if he determines that it is necessary to the 
     national interest of the U.S. to do so.
       Development of Petroleum Resources of Iran. Subsection (a) 
     amends section 5(a) of the Iran Sanctions Act of 1996 (ISA) 
     by requiring the President to impose three or more sanctions 
     under ISA if a person has knowingly made an investment of $20 
     million or more (or any combination of investments of at 
     least $5 million each, which in the aggregate equals or 
     exceeds $20 million in any 12-month period) that directly and 
     significantly contributed to Iran's ability to develop its 
     petroleum resources.
       In the context of investment, the House-passed legislation 
     amends section 5(a) by shifting the mens rea standard for 
     investment in petroleum resources from `actual knowledge' to 
     `knowingly.' The Senate amendment contained no such 
     provision. The Senate recedes to the House language. The new 
     standard will expand the range of conduct potentially subject 
     to sanctions, thereby making it easier to implement sanctions 
     under ISA.
       Production and Exportation of Refined Petroleum Products. 
     Subsection (a) further amends section 5(a) of ISA to require 
     that the President impose three or more mandatory sanctions 
     described in section 6(a) of the Act if a person: (1) 
     knowingly sells, leases, or provides to Iran any goods, 
     services, technology, information, or support, that could 
     directly and significantly facilitate the maintenance or 
     expansion of Iran's domestic production of refined petroleum 
     products, including any direct and significant assistance 
     with respect to construction, modernization, or repair of 
     petroleum refineries; or (2) if a person knowingly 
     provides Iran with refined petroleum products or provides 
     goods, services, technology, information, or support that 
     could directly and significantly contribute to Iran's 
     ability to refine petroleum or import refined petroleum 
     resources, including providing ships, vehicles, or other 
     means of transportation to deliver refined petroleum 
     products to Iran or providing insurance or financing 
     services for such activities.
       Subsection (a) of the Act further clarifies the categories 
     of persons against which sanctions are to be imposed to 
     include the parent and foreign subsidiary of a person 
     determined by the President to be engaged in sanctionable 
     activities. The Act further amends the mens rea standard for 
     a parent by: (1) requiring sanctions to be imposed on a 
     parent that either had actual knowledge or ``should have 
     known'' that its affiliate or subsidiary engaged in the 
     sanctionable activities described in section 5(a); and (2) 
     requiring sanctions to be imposed on an affiliate or a 
     subsidiary of a person determined to be carrying out 
     sanctionable activities if the affiliate or subsidiary 
     knowingly engaged in sanctionable activities.

[[Page H4766]]

       The Act provides a ``safe harbor'' for a person that 
     provides underwriting services or insurance or reinsurance, 
     if that person exercises due diligence to ensure it does not 
     provide insurance or reinsurance for the sale, lease, or 
     provision of goods, services, technology, information, or 
     support that could directly and significantly contribute to 
     the enhancement of Iran's ability to import refined petroleum 
     products. Such due diligence would include procedures and 
     controls to prevent such underwriting or the entry into 
     contracts for such purposes, and the designation of an 
     official with responsibility for enforcing the policy. The 
     Act further establishes that the fair market value of the 
     goods, services, technology, information, or support provided 
     by such activities must exceed $1 million to be subject to 
     the requirement of Section 102(a). The combination of such 
     sales, leases, or provision of support in any 12-month 
     period, or to be provided under contracts entered into in any 
     12-month period, must exceed $5 million.
       Subsection (a) also prohibits the issuance of export 
     licenses pursuant to an agreement for peaceful civil nuclear 
     cooperation for any country whose nationals have engaged in 
     activities with Iran relating to the acquisition or 
     development of nuclear weapons or related technology, or of 
     missiles or other advanced conventional weapons that have 
     been designed or modified to deliver a nuclear weapon.
       This prohibition can be set aside for a government if the 
     President determines and notifies the appropriate 
     Congressional committees that such government does not know 
     or have reason to know about the activity, or has taken, or 
     is taking, all reasonable steps necessary to prevent a 
     recurrence of the activity and penalize the person(s) 
     involved. Further, notwithstanding the prohibition on 
     issuance of export licenses, the President may, on a case-by-
     case basis, approve the issuance of a license for the export, 
     or approve the transfer or retransfer, of any nuclear 
     material, facilities, components, or other goods, services, 
     or technology that are or would be subject to an agreement 
     for cooperation, to a person in a country otherwise 
     restricted by this paragraph (except to a person that is 
     subject to sanctions under paragraph (1)) if the President 
     determines that such approval is vital to U.S. national 
     security interests and pre-notifies Congress not less than 15 
     days before approving the license, transfer, or retransfer. 
     This sanction would apply only in a case in which a person is 
     subject to sanctions for an activity engaged on or after the 
     date of enactment of the Act.
       The Conferees believe that as a general principle, the 
     United States cannot and should not reward any country with 
     U.S. civil nuclear trade if that country's nationals are able 
     to advance Iran's nuclear weapons programs and/or their means 
     of delivery.
       Subsection 102(b) of the Act adds three new, sweeping 
     sanctions to the now nine possible sanctions from which the 
     President must choose three. If invoked, the sanctions would 
     prohibit, respectively, foreign exchange, banking, and 
     property transactions with persons involved in activities 
     related to refined petroleum products, as specified in 
     section 5(a) of the ISA, as amended. The Act clarifies that 
     the prohibition on banking activities extends solely to those 
     transfers or payments that are subject to the jurisdiction of 
     the United States and involve any interest of the sanctioned 
     person. The banking sanction in the Act will complement 
     restrictions on financial institutions available in the 
     underlying ISA, including a prohibition on US financial 
     institutions from making loans or providing credits to any 
     sanctioned person totaling more than $10 million in any 12 
     month period.
       Finally, subsection 102(b) amends ISA by adding a new 
     section which requires each prospective contractor submitting 
     a bid to the Federal Government to certify that the 
     contractor or a person owned or controlled by the contractor 
     does not conduct any activity for which sanctions may be 
     imposed under section (5). Conferees believe that exercising 
     control as a ``parent company'' over subsidiaries or 
     affiliates should be considered in functional terms, as the 
     ability to exercise certain powers over important matters 
     affecting an entity. ``Control'' may also be defined 
     according to ownership of a majority or a dominant minority 
     of the total outstanding voting interest in an entity, board 
     representation, proxy voting, a special share, or contractual 
     arrangements, to direct important matters affecting an 
     entity. The prospective contractor, when making the 
     certification pursuant to this subsection, must certify that 
     it is not engaged in any activity sanctionable under section 
     5 of ISA. The Act mandates the head of an executive agency 
     that determines that a person has submitted a false 
     certification under paragraph (1) after the date on which the 
     Federal Acquisition Regulation is revised to implement the 
     requirements of this subsection, to terminate a contract or 
     agreement or debar or suspend such person from eligibility 
     for Federal contracts or such agreements for a period not to 
     exceed 3 years. The Act requires the Administrator of General 
     Services to include on the List of Parties Excluded from 
     Federal Procurement and Nonprocurement Programs each person 
     that is debarred, suspended, proposed for debarment, or 
     declared ineligible by the head of an executive agency on the 
     basis of a determination of a false certification. The Act 
     authorizes the President to waive the certification 
     requirement on a case-by-case basis if the President 
     determines and certifies that it is in the national interest 
     to do so. Conferees believe that one of the instances where 
     the President may exercise the waiver is where a company has 
     demonstrated that it is taking steps to extricate itself from 
     all sanctionable activities with Iran.
       Subsection 102(c) amends the standard for the President to 
     waive sanctions under ISA to `necessary to the national 
     interest of the United States'. The Senate recedes to the 
     House in elevating the waiver standard. Subsection (c) 
     further amends the reporting requirements of section 9(c)(2) 
     of ISA relating to a waiver by requiring the President to 
     include (1) an estimate of the significance of a sanctioned 
     action to Iran's ability to develop its petroleum 
     resources, produce refined petroleum products, or import 
     refined petroleum products; or (2) acquire or develop 
     chemical, biological, or nuclear weapons or related 
     technologies or destabilizing numbers and types of 
     advanced conventional weapons.
       Subsection 102(d) incorporates a reporting requirement in 
     H.R. 2194 on the dollar value amount of trade, including in 
     the energy sector, between Iran and each country maintaining 
     membership in the Group of Twenty Finance Ministers and 
     Central Bank Governors.
       Consistent with subsection (h) of section 3 of the House 
     bill, Subsection 102(e) amends ISA to extend the operative 
     date of that legislation from 2011 to 2016. The Senate bill 
     has no such provision. The Senate recedes. ISA was initially 
     passed for a five-year period. It was extended for five years 
     in 2001 and again in 2006. Given the urgency of the Iranian 
     nuclear problem and the conviction of Conferees that this 
     problem will persist beyond 2011 and that Iran almost 
     certainly will not meet the criteria for terminating ISA in 
     2011, Conferees have decided to extend the law for another 
     five years.
       Finally, subsection (f) amends ISA to expand the definition 
     of a `person' subject to sanctions to include a financial 
     institution, insurer, underwriter, guarantor, any other 
     business organization, including any foreign subsidiary, 
     parent, or affiliate of such a business organization, any 
     other nongovernmental entity, organization, or group, and any 
     governmental entity operating as a business enterprise. The 
     term ``person'' does not include a government or governmental 
     entity that is not operating as a business enterprise.
       Subsection (f) also defines the term ``knowingly'' to 
     include a person who has actual knowledge of sanctionable 
     activities or should have known, of the conduct, the 
     circumstance, or the result. The Conferees intend to prevent 
     persons from evading sanctions by relying on the prior 
     standard of ``actual knowledge.'' This prior standard might 
     otherwise be used to enable certain persons to deliberately 
     avoid knowledge of sanctionable activities.
       Subsection (f) amends the definition of ``investment'' in 
     the underlying ISA to include entry into, performance, or 
     financing of a contract to sell or purchase goods, services, 
     or technology. The Conferees believe that expanding the 
     definition of investment to include the activities above, 
     will deter persons from doing business in the Iranian energy 
     sector. Based on the expanded definition of ``investment'' 
     and ``petroleum resources,'' the Conferees intend that, for 
     example, sales of technology for natural gas would now be 
     considered a sanctionable offense falling into the category 
     of ``investment,'' provided such a sale reached the $20 
     million threshold.
       Subsection (f) expands the term `petroleum resources' to 
     include petroleum, refined petroleum products, oil or 
     liquefied natural gas, natural gas resources, oil or 
     liquefied natural gas tankers, and products used to construct 
     or maintain pipelines used to transport oil or liquefied 
     natural gas.
       The House version of H.R. 2194 defines the term `refined 
     petroleum products' to include gasoline, kerosene, diesel 
     fuel, residual fuel oil, and distillates and other goods 
     classified in headings 2709 and 2710 of the Harmonized Tariff 
     Schedule of the United States. The Senate bill defines 
     ``refined petroleum products'' as ``diesel, gasoline, jet 
     fuel (including naphtha-type and kerosene-type jet fuel), and 
     aviation gasoline.
       The House recedes.
     Section 102(g) Waiver for certain persons in certain 
         countries, mandatory investigations and reporting; 
         conforming amendments
       Waiver for Certain Persons in Certain Countries. The 
     conference agreement amends subsection (c) of Section 4 of 
     the Iran Sanctions Act to provide an additional exception to 
     the underlying requirement that the President impose 
     sanctions for certain activities. Under this additional 
     exception, the President would be authorized to waive 
     sanctions for a period not longer than 12 months (as opposed 
     to the 6 months now authorized) on a case by case basis for 
     persons under the jurisdiction of governments that are 
     closely cooperating with the United States in multilateral 
     efforts to prevent Iran from acquiring or developing 
     chemical, biological, or nuclear weapons or related 
     technologies, including ballistic missiles or delivery 
     systems; or acquiring or developing destabilizing numbers and 
     types of conventional weapons. The President must further 
     certify that the waiver is vital to the national security 
     interests of the United States and submit a report to the 
     appropriate congressional committees. It is the understanding 
     of the Conferees that this waiver would not be available as a 
     preemptive waiver; rather, in

[[Page H4767]]

     order to exercise the waiver, the President must initiate an 
     investigation and make a determination pursuant to section 
     4(f).
       To utilize this exception, the President would have to 
     provide advance notice to Congress and provide a 
     certification of the person with respect to which the 
     President will waive the application of sanctions; the 
     actions taken by the government cooperating in multilateral 
     efforts; and that the waiver is vital to the national 
     security interests of the United States. ``Cooperating 
     actions'' must include a substantial number of the following 
     types of actions:
       --restricting Iran's access to the global financial system;
       --limiting Iran's import of refined petroleum products and 
     refinery equipment;
       --strictly enforcing UN sanctions
       --prohibiting commercial activities with the Iran 
     Revolutionary Guard Corps;
       --cooperating with U.S. anti-terrorism initiatives against 
     the IRGC and other Iranian elements;
       --taking concrete, verifiable steps to impede Iran's WMD 
     programs and its support for international terrorism;
       --restricting trade with Iran, including provision of 
     export credits.
       The President may renew the waiver in six month increments 
     if the President determines that the waiver threshold is met.
       Investigations. H.R. 2194 requires that the President shall 
     immediately investigate a person upon receipt of credible 
     information that such person is engaged in sanctionable 
     activity as described in section 5. The House-passed bill 
     further requires the President, not later than 180 days after 
     an investigation is initiated, to make a determination 
     whether a person has engaged in sanctionable activity 
     described in section 5. The Senate-passed bill contained no 
     such language. The Senate recedes. The Conferees believe that 
     a statutory mandate is required to ensure sanctionable 
     entities are pursued and prosecuted. By not enforcing current 
     sanctions law, the United States has sent mixed messages to 
     the corporate world when it comes to doing business in 
     Iran by rewarding companies whose commercial interests 
     conflict with American security goals.
       Special Rule. However, in order to provide an incentive for 
     companies that are withdrawing from Iran, the Act provides 
     that the President need not initiate an investigation, and 
     may terminate an investigation, if the President certifies 
     that the person whose activities were the basis for the 
     investigation is no longer engaging in such activities; and 
     the President has received reliable, verifiable assurances 
     that the person will not knowingly engage in such activities 
     in the future.
       The Conferees provided this Special Rule to allow firms to 
     avoid sanction for activities described in the revised 
     Section 5 of the Iran Sanctions Act by taking steps to 
     curtail and eventually eliminate such activities. Ideally, in 
     order to benefit, a firm would provide the President the 
     required assurances that it will not undertake Section 5 
     activity in the future, and any other assurances required by 
     the president, in writing. Such assurances should be credible 
     and transparently verifiable by the United States government. 
     Firms should also be strongly encouraged to provide the 
     President a detailed catalog of their existing activity in 
     Iran, and a plan for winding down any activity covered by 
     Section 5 as soon as possible. The goal of this measure is to 
     facilitate their withdrawal from such activities.
       To the extent a person benefitting from the special rule 
     continues activities described in section 5, such continuing 
     activities should be pursuant solely to a contract or other 
     legally binding commitment. Conferees expect that any firm 
     seeking to take advantage of this special rule will commit to 
     refuse any expansion or extension of business or investment 
     pursuant to a clause in a contract that allows the firm to 
     elect to do so. Binding commitments should be narrowly 
     construed and any firm seeking to benefit from this rule 
     should be encouraged to provide assurances that it will do 
     only the minimum required by an agreement involving Iran. The 
     Conferees intend to evaluate carefully any certifications 
     under this Special Rule.
       Section 102(h). Effective Date. In order to clarify the 
     timing of application of the Act, subsection 102(h) further 
     provides that the provisions of section 102 shall take effect 
     on the date of enactment of the Act. Investments sanctionable 
     under the underlying ISA shall continue to be unlawful. 
     However, pursuant to subsection (g) of this section, the 
     President shall, in the context of investment, commence an 
     investigation of a person which engaged in conduct prior to 
     the passage of this Act that would be sanctionable under ISA 
     and that continues after the date of enactment. This differs 
     from the underlying ISA by requiring the President to 
     commence an investigation of sanctionable activities. 
     Likewise, a person that conducts activities related to the 
     development of Iranian chemical, biological, or nuclear 
     weapons or related technologies shall be subject immediately 
     upon enactment of the Act to the new provisions under the 
     Act. With respect to refined petroleum-related activities 
     described in paragraph (2) or (3) of section 5(a) of ISA (as 
     amended by subsection 102(a) of the Act), the new requirement 
     to commence an investigation shall apply one year after the 
     date of enactment.
       Not later than 30 days before the date that is one year 
     after the date of enactment, the President shall issue a 
     report describing the President's efforts to dissuade foreign 
     persons from engaging in sanctionable activity described in 
     paragraphs (2) and (3) (facilitation of Iran's production and 
     import of refined petroleum), along with a list of each 
     investment under section 4(e) of ISA, that is initiated or 
     ongoing during the previous one-year period. If the President 
     certifies that there was a substantial reduction in the 
     sanctionable activities described in paragraphs (2) and (3) 
     of ISA, the requirement to commence an investigation shall be 
     delayed by six months. Conferees understand ``substantial 
     reduction'' to mean a roughly 20-30% reduction in such 
     activities, a similar reduction in the volume of refined 
     petroleum imported by Iran, and/or a similar reduction in the 
     amount of refined petroleum Iran produces domestically. The 
     President may continue to defer the requirement to commence 
     an investigation every six months by issuing a report 
     containing the above-mentioned items, along with a 
     certification regarding reduction of activities, for the 
     previous six-month period. If the President fails to make the 
     certification, the requirement to commence an investigation 
     shall apply on the date the certification was due, and he 
     would then be required to make a determination in 45 days.
     Section 103. Economic Sanctions Relating to Iran.
       The Senate bill contained a provision building on actions 
     taken under the Iran Freedom Support Act (IFSA) (P.L. 109-
     293) codifying critical restrictions on imports from and 
     exports to Iran, currently authorized by the President in 
     accordance with IEEPA. The House-passed bill contained no 
     such provision. The House recedes. This provision strengthens 
     the current trade embargo by eliminating certain import 
     exceptions for luxury and other goods from Iran made under 
     the Clinton administration. Consistent with IEEPA, exceptions 
     to the import ban are made for informational materials that 
     may be used, for example, in the conduct of news reporting, 
     or in mapping for air travel over land. Similarly, exceptions 
     to the export ban include food, medicine, humanitarian 
     assistance, informational materials, goods used to ensure 
     safety of flight for U.S.-made aircraft, aid necessary to 
     support IAEA efforts in Iran, and democracy promotion 
     initiatives. The exception related to internet communications 
     extends to personal communications, as provided for in 
     section 560.540 of the Code of Federal Regulations; it does 
     not apply to the Iranian Government or any affiliated 
     entities. Notwithstanding the exceptions, the standard 
     requirements pursuant to IEEPA to seek a license for such 
     activities remain in effect.
       Consistent with his existing regulatory authority, the 
     President is authorized to issue regulations, orders, and 
     licenses to implement these provisions. In addition, this 
     section requires asset freezes for persons, including 
     officials of Iranian agencies specified in ISA and certain of 
     their affiliates that have engaged in activities such as 
     terrorism or weapons proliferation under IEEPA sanction. To 
     limit sanctioned persons' ability to evade U.S. scrutiny and 
     penalty, this section further stipulates that the assets 
     freeze should extend to those assets which sanctioned persons 
     transfer to family members or associates. The Conferees 
     recognize that agencies involved in implementing these 
     measures will require time to prepare appropriate evidentiary 
     materials before executing corresponding sanctions, which 
     this section requires to be imposed as soon as possible.
       Section 104--Mandatory Sanctions with Respect to Financial 
     Institutions that Engage in Certain Transactions. Section 104 
     establishes a sanction in addition to those enumerated in 
     section 6(a) of ISA, as amended. The additional sanction 
     would require the Secretary of the Treasury to prohibit from 
     or impose strict sanctions on U.S. financial institutions 
     that establish, maintain, administer, or manage a 
     correspondent or payable-through account by a foreign 
     financial institution if that institution engages in certain 
     financial transactions. Targets of this provision include 
     foreign banks that: (A) Facilitate the Iranian 
     government's efforts to acquire weapons of mass 
     destruction (WMD) or to support international terrorism; 
     (B) Engage in dealings with Iranian companies sanctioned 
     by the U.N. Security Council; (C) Help launder money, to 
     aid Iran's WMD programs, to support Iran's sponsorship of 
     terrorism, or to support companies/persons under sanction 
     by the U.N. Security Council; (D) Facilitate efforts by 
     the Central Bank of Iran to aid Iran's WMD programs, to 
     support Iran's sponsorship of terrorism, or to support 
     companies sanctioned by the U.N. Security Council; or (E) 
     Conduct significant business with Iran's Revolutionary 
     Guard Corps, its front companies, or its affiliates, and 
     other key Iranian financial institutions currently 
     blacklisted by the U.S. Department of the Treasury. These 
     measures are roughly patterned after Section 311 of the 
     USA Patriot Act (31 U.S.C. 5318A), which Conferees 
     recognize as some of our government's most effective 
     targeted financial sanctions. However, while the USA 
     Patriot Act measures are generally regarded as defensive 
     of the U.S. financial system from special money laundering 
     concerns, these new sanctions are to be deployed in an 
     offensive fashion. Under the Comprehensive Iran Sanctions, 
     Accountability, and Divestment Act, the Department of the 
     Treasury is mandated to pursue relentlessly foreign banks 
     engaged in business with blacklisted Iranian entities. 
     Conferees

[[Page H4768]]

     expect any conditions imposed on U.S. correspondent 
     accounts under this Act to be stringent and temporary. 
     Most important, if foreign institutions do not cease their 
     business with blacklisted Iranian entities, after an 
     appropriate warning, the Treasury Department is to direct 
     U.S. banks to sever immediately their correspondent or 
     payable through account services with these foreign 
     institutions.
       Under the Act, U.S. banks maintaining correspondent or 
     payable through accounts for foreign financial institutions 
     will be required to take appropriate steps to ensure that 
     they remain in full compliance with this law, which may 
     include due diligence policies, procedures and controls. 
     Subsection (f) provides for a mechanism for domestic 
     financial institutions to conduct audits of their 
     correspondent or payable-through accounts report to the 
     Treasury Department on compliance, and certify that the 
     foreign financial institutions using such accounts are not 
     engaged in sanctionable activities. Subsection (g) authorizes 
     the Secretary of the Treasury to waive the application of 
     sanctions with respect to a foreign financial institution 
     opening a correspondent or payable-through account and with 
     respect to a domestic institution engaging in transactions 
     with the IRGC if the Secretary determines that such a waiver 
     is necessary to the national interest of the United States. 
     Those U.S. financial institutions that fail to comply with 
     the directives of the Department of the Treasury--imposing 
     strict conditions, prohibiting correspondent or payable 
     through accounts, following appropriate auditing, reporting, 
     due diligence, or certification measures--are to be subject 
     to the same penalties as U.S. banks that fail to comply with 
     Title III of the USA PATRIOT Act.
       Once the legislation is enacted, the Conferees expect 
     representatives of the Administration to take all necessary 
     actions to fully implement this section, including by 
     directly engaging the numerous foreign financial institutions 
     banking with Iranian financiers and supporters of WMD 
     proliferation and international terrorism. Severing U.S. 
     correspondent relations with these foreign financial 
     institutions is merely a means to an end. The goal is the 
     termination of international commerce with Iranian businesses 
     that threaten global peace and security.
       In general, subparagraph (c)(2)(A) is a conduct-based 
     prohibition. Thus, if the Secretary of the Treasury 
     determines that a foreign financial institution has engaged 
     in transactions that facilitate Iran's efforts to develop WMD 
     or support terrorism, among other activities, the Secretary 
     need not designate such entities before restricting that 
     entity's opening or maintaining a correspondent account or a 
     payable-through account in the United States. However, a 
     financial institution doing business with an entity on the 
     designated list pursuant to IEEPA would also be barred. 
     Subparagraph (c)(2)(E) further requires that the Secretary 
     prohibit or impose strict conditions on a foreign financial 
     institution that (1) facilitates a transaction involving the 
     IRGC, regardless of what the transaction was for; or (2) 
     facilitates a transaction with any entity on the designated 
     list maintained by the Department of Treasury pursuant to its 
     authority under IEEPA, regardless of the type or reason for 
     the transaction.
       Section 104 would further require the Secretary to prohibit 
     foreign subsidiaries of U.S. financial institutions from 
     engaging in any transaction involving Iran's Islamic 
     Revolutionary Guard Corps (IRGC), its agents or affiliates. 
     U.S. companies already face severe civil and criminal 
     penalties for doing business in Iran under IEEPA, as amended 
     by the International Emergency Economic Powers Enhancement 
     Act of 2007 (P.L. 110-96). This provision imposes similar 
     judicial procedures and penalties on U.S. banks if their 
     foreign subsidiaries are doing any business with the IRGC, 
     its front companies, or affiliates. Thus, companies and 
     financial institutions may be subjected to civil penalties of 
     as much as either $250,000 or an amount twice the value of 
     the actual transaction. Criminal penalties may be as high as 
     $1 million per transaction and/or entail prison sentences of 
     up to 20 years.
       Subsection (j) defines key terms, including 
     ``correspondent'' and ``payable-through'' account.
     Section 105--Imposition of sanctions on certain persons who 
         are complicit in human rights abuses committed against 
         citizens of Iran or their family members after the June 
         12, 2009, elections in Iran.
       Section 105 requires the President to impose sanctions on 
     persons who are citizens of Iran that the President 
     determines, based on credible evidence, are complicit in, or 
     responsible for ordering, controlling, or otherwise directing 
     the commission of serious human rights abuses against 
     citizens of Iran or their family members on or after the 
     Presidential elections of June 12, 2009, regardless of 
     whether such abuses occurred in Iran. The President is to do 
     so no later than 90 days after the date of enactment of this 
     legislation. The President will also provide appropriate 
     Congressional committees with a list of those persons the 
     President determines meet the criteria for sanctions, and the 
     President will also be required to submit to the appropriate 
     Congressional committees updates to the list of Iranian 
     citizens eligible for sanction not later than 270 days after 
     the date of enactment and every 180 days thereafter, and as 
     new information becomes available. Furthermore, the 
     unclassified portion of this list will be made available to 
     the public on the websites of the Department of the Treasury 
     and the Department of State. In addition, the President's 
     list must consider credible data already obtained by other 
     countries and non-governmental organizations, including in 
     Iran, that monitor the human rights abuses of the Government 
     of Iran.
       The President shall impose two sanctions on the Iranian 
     human rights violators listed in his report to the 
     appropriate Congressional committees. The first is a visa ban 
     making those human rights violators ineligible to enter the 
     United States. The second is financial sanctions 
     authorized under the International Emergency Economic 
     Powers Act (50 U.S.C. 1701 et seq.). These sanctions 
     include the blocking of property; restrictions or 
     prohibitions on financial transactions; and the 
     exportation and importation of property. This section 
     provides for regulatory exceptions, including those to 
     permit the United States to comply with the Agreement 
     between the United Nations and the United States of 
     America regarding the Headquarters of the United Nations, 
     signed June 26, 1947, and entered into force November 21, 
     1947, and other applicable international agreements.
       The President may waive the sanctions required by Section 
     105 if the President determines that such a waiver is in the 
     national interest of the United States and submits to the 
     appropriate Congressional committees a report describing the 
     reasons for the waiver determination.
       The provisions of Section 105 shall cease to have force and 
     effect on the date on which the President determines and 
     certifies to the appropriate Congressional committees that 
     the Government of Iran has unconditionally released all 
     political prisoners, including the citizens of Iran detained 
     in the aftermath of the June 12, 2009, presidential election 
     in Iran; ceased its practices of violence, unlawful 
     detention, torture, and abuse of citizens of Iran while 
     engaging in peaceful political activity; conducted a 
     transparent investigation into the killings, arrest, and 
     abuse of peaceful political activists in Iran and prosecuted 
     those responsible; and made progress toward establishing an 
     independent Judiciary and respecting internationally-
     recognized human rights.
       Section 106. Prohibition of procurement contracts with 
     persons that export sensitive technology to Iran. This 
     section would prohibit the head of any U.S. executive agency 
     from entering into procurement contracts with an entity that 
     the President determines has exported to Iran sensitive 
     communications technology to be used for monitoring, jamming, 
     or other disruption of communications by the people of Iran. 
     This section further requires the Comptroller General to 
     submit a report assessing the impact of sanctions on 
     executive agencies' procurement of goods of services with 
     persons that export sensitive technology to Iran.
       Section 107. Harmonization of Criminal Penalties for 
     Violations of Sanctions. This section harmonizes penalties 
     for violating export controls and U.S. sanctions across 
     various statutes with the strongest such penalty standards in 
     the U.S. Code, consistent with the International Emergency 
     Economic Powers Enhancement Act of 2007 (P.L. 110-96). The 
     section specifically increases criminal penalties for 
     violators of the provisions of the Arms Export Control Act, 
     Trading with the Enemy Act, and the United Nations 
     Participation Act to up to $1 million and 20 years in prison.
       Section 108. Authority to Implement United Nations Security 
     Council Resolutions Imposing Sanctions with Respect to Iran. 
     This section authorizes the President to prescribe 
     regulations as may be necessary to implement a resolution 
     imposing sanctions with respect to Iran agreed to by the 
     United National Security Council on or after the date of 
     enactment of this Act.
       Section 109. Increased capacity for efforts to combat 
     unlawful or terrorist financing. This section authorizes 
     funding of $102.6 million in fiscal year 2011 for the Office 
     of Terrorism and Financial Intelligence of the Department of 
     the Treasury, and such sums as may be necessary for each of 
     the fiscal years 2012 and 2013. This section also authorizes 
     $100.4 million for the Financial Crimes Enforcement Network 
     and $113 million for the Department of Commerce. This section 
     also acknowledges the Treasury Department's recent 
     designation of various Iranian individuals and banking, 
     military, energy, and shipping entities as proliferators of 
     weapons of mass destruction pursuant to Executive Order 13382 
     (50 U.S.C. 1701 note), along with designation of entities in 
     the insurance, petroleum, and petrochemicals industries that 
     the Secretary has determined to be owned or controlled by the 
     Government of Iran.
       Section 110. Reports on Investments in the Energy Sector of 
     Iran. The Act requires the President, within 90 days of 
     enactment of the bill and every 180 days thereafter, to 
     report to the appropriate congressional committees on an 
     estimate of the volume of energy-related resources (other 
     than refined petroleum) including ethanol, that Iran imported 
     since January 1, 2006, along with a list of all known energy-
     related joint ventures, investments, and partnerships located 
     outside Iran that involve Iranian entities in partnership 
     with entities from other countries. It is the intention of 
     the Conferees that the report be undertaken by the Secretary 
     of Energy and parallel the format of previous reports, 
     including one provided as recently as 2006, and

[[Page H4769]]

     should include updated information as provided by the Energy 
     Information Administration (EIA). The report shall also 
     include information on the effect of Iranian know-how in the 
     energy sector as a result of joint energy-related ventures 
     with other countries.
       Section 111. Reports on certain activities of foreign 
     export credit agencies and of the Export-Import Bank of the 
     United States. This section requires the President--90 days 
     after the date of enactment--to submit a report on any 
     activity of an export credit agency of a foreign country that 
     would be engaged in activities comparable to those which 
     would otherwise be sanctionable under subsection (a) or (b) 
     of section 5 of ISA, as amended by this Act. Not later than 
     30 days (or, in extraordinary circumstances, not later than 
     15 days) prior to the Export-Import Bank of the United States 
     approving cofinancing with an export credit agency of a 
     foreign country identified in the above-mentioned report, the 
     President shall inform Congress of such action and of the 
     beneficiaries of the financing. The Conferees intend to raise 
     awareness about which countries and persons are engaged in 
     activities comparable to those which would trigger U.S. 
     sanctions and which may benefit from financing provided by 
     the Export-Import Bank.
       Section 112. Sense of Congress on Iran's Revolutionary 
     Guard Corps (IRGC) and its Affiliates. Expresses the sense of 
     Congress that (1) the U.S. should persistently target with 
     sanctions Iran's Revolutionary Guard Corps, its supporters 
     and affiliates, and any foreign governments determined to be 
     providing material support for the IRGC; (2) identify any 
     foreign individual or entity that is an agent, alias, front, 
     instrumentality, official, or affiliate of Iran's 
     Revolutionary Guard Corps or providing material support to 
     the IRGC; and (3) immediately impose sanctions on the 
     individuals, entities, and governments described in paragraph 
     (2).
       Section 113. Sense of Congress Regarding Iran and 
     Hezbollah. Expresses the Sense of Congress that the U.S. 
     should continue to: (1) work to counter support for Hezbollah 
     from Iran and other foreign governments; (2) target with 
     sanctions Hezbollah, its affiliates and supporters; (3) 
     urge other nations to do the same; and (4) take steps to 
     renew international efforts to disarm Hezbollah.
       Section 114. Sense of Congress Regarding the Imposition of 
     Multilateral Sanctions with Respect to Iran. Expresses the 
     Sense of Congress that, in general, multilateral sanctions 
     are more effective than unilateral sanctions against 
     countries like Iran, and that the President should continue 
     to work with our allies to impose multilateral sanctions if 
     diplomatic efforts to end Iran's illicit nuclear activities 
     fail.
       Section 115. Report on Providing Compensation for Victims 
     of International Terrorism. This section requires the 
     President to submit a report within 180 days of enactment on 
     equitable methods for providing compensation on a 
     comprehensive basis to victims of acts of international 
     terrorism who are citizens or residents of the United States 
     or nationals of the United States. The Conferees intend to 
     address concerns presented by numerous plaintiffs groups that 
     have yet to gain compensation for terrorist attacks.


                          Title II--Divestment

       Section 201--Definitions. This section defines terms used 
     in this title including: energy sector, financial 
     institution, Iran, person, state, and state or local 
     government.
       Section 202--Authority of state and local governments to 
     divest from certain companies that invest in Iran. This 
     section authorizes States and localities to divest from 
     companies involved in investments of $20 million or more in 
     Iran's energy sector and sets standards for them to do so. 
     While not mandating divestment, this section authorizes State 
     and local governments, if they so choose, to divest public 
     assets from entities doing business in Iran. Authorization to 
     divest afforded under this Act does not extend to business 
     conducted under a license from the Office of Foreign Assets 
     Control, or that is expressly exempted under Federal law from 
     the requirement to be conducted under such a license. For 
     example, such licenses or exemptions might include 
     humanitarian trade in agricultural and medical products. In 
     its formulation of this section, the Conferees recognized 
     that divestment actions are being taken by investors for 
     prudential and economic reasons, as expressed in subsection 
     (a), including to address investor concerns about 
     reputational and financial risks associated with investment 
     in Iran and to sever indirect business ties to a government 
     that is subject to international sanctions.
       The Conferees require that a state or local government 
     provide notice to the Department of Justice when it enacts an 
     Iran-related divestment law. Persons are to be informed in 
     writing by the State or local government before divestment. 
     Persons then have at least 90 days to comment on that 
     decision.
       Subsection (i)--Authorization for Prior Enacted Measures. 
     Subsection (i) constitutes a ``grandfather clause''--it 
     authorizes a state or local government to enforce a 
     divestment measure without regard to the procedural 
     requirements and scope of this section up to two years after 
     the date of the enactment of the Act. After two years, if the 
     state or locality has complied with the procedural 
     requirements required by the Act regarding notice, the state 
     or locality may enforce a measure that provides for 
     divestment, notwithstanding any other provision of law. In 
     order to secure the protections of the Act, state and local 
     entities which have not enacted or adopted divestment 
     measures prior to the date of enactment must abide by both 
     the scope and procedural requirements it outlines.
       Section 203--Safe harbor for changes in investment policies 
     by asset managers. This section adds to measures authored by 
     the Senate and enacted last year authorizing divestment from 
     certain Sudan-related assets (Public Law 110-174), allowing 
     private asset managers, if they so choose, to divest from the 
     securities of companies investing $20 million or more in 
     Iran's energy sector, and provides a `safe harbor' for 
     divestment decisions made in accordance with the Act. A major 
     concern inhibiting divestment has been the possibility of a 
     breach of fiduciary responsibility by asset managers who 
     decide to divest. The Conferees thus find that fund managers 
     may have financial or reputational reasons to divest from 
     companies that accept the business risk of operating in 
     countries subject to international economic sanctions. Fund 
     managers will still be required to observe all other normal 
     fiduciary responsibilities. The Securities and Exchange 
     Commission is required to promulgate rules as necessary that 
     require fund managers to disclose their divestment decisions 
     made pursuant to Section 203 of this legislation in regular 
     periodic reports filed with the Commission.
       Section 204--Sense of Congress regarding certain ERISA Plan 
     investments. This section expresses the sense of Congress 
     affirming pension managers' rights to divest from companies 
     investing $20 million or more in Iran's energy sector if the 
     fiduciary makes the divestment decision based upon credible 
     public information, and determines that the action would not 
     provide a lower rate of return than alternate investments 
     with a commensurate degree of risk, or provides for a higher 
     degree of risk than alternate investments with commensurate 
     rates of return. Section 205 makes certain technical 
     corrections to Sudan Accountability and Divestment Act of 
     2007, to clarify the divestment standards contained in this 
     Act.
       Section 205--Technical Corrections to Sudan Accountability 
     and Divestment Act of 2007: This section is designed to 
     clarify that Congress did not intend, in the Sudan Divestment 
     legislation, to imply the creation of a new private right of 
     action under the Investment Company Act of 1940.


 Title III--Prevention of Diversion of Certain Origin Goods, Services, 
                        and Technologies to Iran

       Title III of the Senate version of the bill provides new 
     authority and imposes new responsibilities to stop the 
     diversion from the U.S. to Iran of critical goods through 
     other countries. The House recedes to the Senate. This 
     provision relates to (1) U.S.-origin goods, services and 
     technologies that are controlled for export from the United 
     States, and (2) items denied for export to Iran by a United 
     Nations Security Council resolution. The purpose is to shut 
     off Iran's clandestine acquisition of items and technologies 
     that would contribute to its weapons development programs, 
     its other defense capabilities and its support for 
     international terrorism. While U.S.-origin items do not make 
     a significant contribution to Iran's military or terrorism 
     capabilities, by utilizing U.S. global jurisdiction over our 
     export-controlled items, effective leverage can be utilized 
     to identify and shut down Iran's black-market technology 
     acquisition and proliferation around the world.
       Section 301--Definitions. This section defines terms used 
     in this title including: allow, Commerce List, end user, 
     entity owned or controlled by the Government of Iran, Export 
     Administration Regulations, government, Iran, state sponsor 
     of terrorism, as well as diversion.
       Section 302 requires the Director of National Intelligence 
     to identify, on an ongoing basis, those countries that allow 
     diversion to Iran, either directly or through indirect 
     routes, of U.S.-origin goods services and technologies and 
     items prohibited for Iran under a UN Security Council 
     resolution. The Director shall report such countries to the 
     President, relevant departments and the Congress.
       Section 303 requires the President to designate 
     Destinations of Diversion Concern and authorizes U.S.-
     provided training, technical assistance and law enforcement 
     support to strengthen other governments' capability to stop 
     diversions to Iran. For governments that take effective 
     action against diversion to Iran, the President removes the 
     designation. Specific standards are required to be met by a 
     country in halting diversions to Iran.
       Further under Section 303, for governments identified under 
     Section 302 that are deemed resistant to U.S. engagement, or 
     where U.S. assistance fails to secure cooperation, the 
     President must require a license, under the Export 
     Administration Regulations, for the export from the U.S. of 
     any good, service or technology that, if diverted to Iran, 
     would contribute to Iran's weapons programs, defense 
     capabilities or support of terrorism. There would be a 
     presumption of denial for all applications for such licenses. 
     The requirement for a license could be delayed during efforts 
     by the U.S. to assist a country to take effective action to 
     stop diversions to Iran.
       Section 304 requires a report to Congress by the President 
     on other countries that may be allowing diversion of certain 
     U.S.-origin

[[Page H4770]]

     items to other countries, aside from Iran, that may be 
     seeking nuclear and other weapons of mass destruction, other 
     defense technologies, or other capabilities for terrorist 
     support.
       Section 305 clarifies and reinforces the statutory law 
     enforcement authority for agents of the enforcement division 
     of the Commerce Department's Bureau of Industry and Security, 
     so that they can fully carry out the expanded duties required 
     by enactment of this legislation.


                      TITLE IV. General Provisions

       Sunset. The House-passed bill contained a ``sunset'' 
     provision specifying the conditions for termination of 
     petroleum-specific sanctions. The Senate contained no such 
     provision. Adopting the House approach, section 105(a) 
     provides that--except for several provisions--the provisions 
     of the Act shall terminate if the President determines and 
     certifies to the appropriate congressional committees that 
     Iran: (1) has ceased providing support for acts of 
     international terrorism and is no longer a state sponsor of 
     terrorism; and (2) has ceased the pursuit, acquisition, and 
     development of nuclear, biological, and chemical weapons and 
     ballistic missiles and ballistic missile launch technology.
       Waiver. Subsection (b) provides that the President may 
     waive the application of sanctions under section 103(b), the 
     requirement to impose or maintain sanctions with respect to a 
     person under section 105(a), the requirement to include a 
     person on the list required by section 105(b), the 
     application of the prohibition under section 106(a), or the 
     imposition of the licensing requirement under section 303(c) 
     with respect to a country designated as a Destination of 
     Diversion Concern under section 303(a) if the President 
     determines that such a waiver is in the national interest of 
     the United States. If the President does elect to use the 
     waiver of 303(c) rather than delay imposition of export 
     restrictions, he must provide an assessment to Congress of 
     the steps being taken by the country to institute or 
     strengthen an export control system; to interdict the 
     diversion of goods, services, or technologies described in 
     section 302(b) through the country to Iranian end-users or 
     Iranian intermediaries; and to comply with and enforce 
     appropriate U.N. Security Council Resolutions. The Conferees 
     intend that the waiver authority in this section shall be 
     case by case and shall not be used as a general waiver.
       Authorization of Appropriations. Subsection (c) provides 
     that there are authorized to be appropriated to the Secretary 
     of State and the Secretary of the Treasury such sums as may 
     be necessary to carry out Titles I and III of this Act. 
     Further, the Act authorizes to be appropriated to the 
     Secretary of Commerce such sums as may be necessary to carry 
     out Title III.

                  Compliance With Clause 9 of Rule XXI

       Pursuant to clause 9 of rule XXI of the Rules of the House 
     of Representatives, neither this conference report nor the 
     accompanying joint statement of managers contains any 
     congressional earmarks, limited tax benefits, or limited 
     tariff benefits as defined in clause 9 of rule XXI.

 CBO ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS FOR THE CONFERENCE REPORT TO ACCOMPANY H.R. 2194, THE COMPREHENSIVE IRAN SANCTIONS, ACCOUNTABILITY,
                                   AND DIVESTMENT ACT OF 2010, AS PROVIDED TO CBO ON JUNE 23, 2010 (FILENAME MAR10519)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year in millions of dollars--
                                         ---------------------------------------------------------------------------------------------------------------
                                           2010    2011    2012    2013    2014    2015    2016    2017    2018    2019    2020    2010-2015   2010-2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact..........       0       0       0       0       0       0       0       0       0       0       0           0           0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: H.R. 2194 would ban certain imports from Iran and impose sanctions on certain entities that conduct business with Iran. The act would reduce
  customs duties and impose civil and criminal penalties, but CBO estimates those effects would not be significant in any year.

     From the Committee on Foreign Affairs, for consideration of 
     the House bill and the Senate amendment, and modifications 
     committed to conference:
     Howard L. Berman,
     Gary L. Ackerman,
     Brad Sherman,
     Joseph Crowley,
     David Scott,
     Jim Costa,
     Ron Klein,
     Ileana Ros-Lehtinen,
     Dan Burton,
     Edward R. Royce,
     Mike Pence,
     From the Committee on Financial Services, for consideration 
     of secs. 3 and 4 of the House bill, and secs. 101-103, 106, 
     203, and 401 of the Senate amendment, and modifications 
     committed to conference:
     Barney Frank,
     Gregory W. Meeks,
     Scott Garrett,
     From the Committee on Ways and Means, for consideration of 
     secs. 3 and 4 of the House bill, and secs. 101-103 and 401 of 
     the Senate amendment, and modifications committed to 
     conference:
     Sander M. Levin,
     John S. Tanner,
     Dave Camp,
                                Managers on the Part of the House.

     Christopher J. Dodd,
     John F. Kerry,
     Joseph I. Lieberman,
     Robert Menendez,
     Richard C. Shelby,
     Robert F. Bennett,
     Richard G. Lugar,
     Managers on the Part of the Senate.

                          ____________________