[Congressional Record Volume 157, Number 70 (Thursday, May 19, 2011)]
[Senate]
[Pages S3179-S3182]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CARDIN (for himself, Mr. McCain, Ms. Ayotte, Mr. Begich, 
        Mr. Blumenthal, Mr. Durbin, Mr. Johanns, Mr. Kirk, Mr. Kyl, Mr. 
        Lieberman, Mr. Rubio, Mrs. Shaheen, Mr. Whitehouse, and Mr. 
        Wicker):
  S. 1039. A bill to impose sanctions on persons responsible for the 
detention, abuse, or death of Sergei Magnitsky, for the conspiracy to 
defraud the Russian Federation of taxes on corporate profits through 
fraudulent transactions and lawsuits against Hermitage, and for other 
gross violations of human rights in the Russian Federation, and for 
other purposes; to the Committee on Foreign Relations.
  Mr. CARDIN. Mr. President, I rise today to introduce the Sergei 
Magnitsky Rule of Law Accountability Act of 2011.
  While this bill bears Sergei Magnitsky's name in honor of his 
sacrifice, the language addresses the overall issue of the erosion of 
the rule of law and human rights in Russia. It offers hope to those who 
suffer in silence, whose cases may be less known or not known at all.
  While there are many aspects of Sergei's and other tragic cases which 
are difficult to pursue here in the United States, there are steps we 
can take and an obvious and easy one is to deny the privilege of 
visiting our country to individuals involved in gross violations of 
human rights. Visas are privileges not rights and we must be willing to 
see beyond the veil of sovereignty that kleptocrats often hide behind. 
They do this by using courts, prosecutors, and police as instruments of 
advanced corporate raiding and hope outsiders are given pause by their 
official trappings of office and lack of criminal records. Further, we 
must protect our strategic financial infrastructure from those who 
would use it to launder or shelter ill-gotten gains.
  Despite occasional rhetoric from the Kremlin, the Russian leadership 
has failed to follow through with any meaningful action to stem rampant 
corruption or bring the perpetrators of numerous and high-profile human 
rights abuses to justice.
  My legislation simply says if you commit gross violations of human 
rights don't expect to visit Disneyland, Aspen, or South Beach and 
expect your accounts to be frozen if you bank with us. This may not 
seem like much, but in Russia the richer and more powerful you get the 
more danger you are exposed to from others harboring designs on your 
fortune and future.
  Thus many are standing near the doors and we can certainly close at 
least one of those doors. I know that others, especially in Europe and 
Canada are working on similar sanctions.
  I first learned about Sergei Magnitsky while he was still alive

[[Page S3180]]

when his client William Browder, CEO of Hermitage Capital, testified at 
a hearing on Russia that I held as Chairman of the Commission on 
Security and Cooperation in Europe in June 2009.
  At the Helsinki Commission we hear so many heartbreaking stories of 
the human cost of trampling fundamental freedoms and it's a challenge 
not to give up hope and yield to the temptation of cynicism and become 
hardened to the suffering around us or to reduce a personal tragedy to 
yet another issue. While we use trends, numbers, and statistics to help 
us understand and deal with human rights issues, we must never forget 
the face of the individual person whose reality is the issue and the 
story of Sergei Magnitsky is as unforgettable as it is heartbreaking.
  Sergei Magnitsky was a young Russian tax lawyer employed by an 
American law firm in Moscow who blew the whistle on the largest known 
tax fraud in Russian history. After discovering this elaborate scheme, 
Sergei Magnitsky testified to the authorities detailing the conspiracy 
to defraud the Russian people of approximately $230 million and naming 
the names of those officials involved. Shortly after his testimony, 
Sergei was arrested by subordinates of the very law enforcement 
officers he had implicated in this crime. He was held in detention for 
nearly a year without trial under torturous conditions. He developed 
severe medical complications, which went deliberately untreated and he 
died in an isolation cell while prison doctors waited outside his door 
on November 16, 2009.
  Sadly, Sergei Magnitsky joins the ranks of a long list of Russian 
heroes who lost their lives because they stood up for principle and for 
truth. These ranks include Natalia Estemirova a brave human rights 
activist shot in the head and chest and stuffed into the trunk of a 
car, Anna Politkovskaya an intrepid reporter shot while coming home 
with an arm full of groceries, and too many others.
  Often in these killings there is a veil of plausible deniability, 
gunmen show up in the dark and slip away into the shadows, but Sergei, 
in inhuman conditions, managed to document in 450 complaints exactly 
who bears responsibility for his false arrest and death. We must honor 
his sacrifice and do all we can to learn from this tragedy that others 
may not share his fate.
  Few are made in the mold of Sergei Magnitsky, able to withstand 
barbaric deprivations and cruelty without breaking and certainly none 
of us would want to be put to the test. A man of such character is 
fascinating and in some ways disquieting because we suspect deep down 
that we might not have what it takes to stay loyal to the truth under 
such pressure. Magnitsky's life and tragic death remind us all that 
some things are more valuable than success, comfort, or even life 
itself--truth is one of those things. May his example be a rebuke to 
those whose greed or cowardice has blinded them to their duties, an 
inspiration to still greater integrity for those laboring quietly in 
the mundane yet necessary tasks of life, and a comfort to those wrongly 
accused.
  The Wall Street Journal described Sergei Magnitsky's death as a 
``slow-motion assassination,'' while the Moscow Prison Oversight 
Committee called it a ``murder to conceal a fraud.'' Pulitzer Prize-
winning reporter Ellen Barry writing in the New York Times stated that, 
``Magnitsky's death in pretrial detention at the age of 37 . . . sent 
shudders through Moscow's elite. They saw him--a post-Soviet young 
urban professional, as someone uncomfortably like themselves.''
  Outside the media, President of the European Parliament Jerzy Buzek 
noted that ``Sergei Magnitsky was a brave man, who in his fight against 
corruption was unjustifiably imprisoned under ruthless conditions and 
then died in jail without receiving appropriate medical care.'' While 
Transparency International observed that, ``Sergei did what to most 
people seems impossible: he battled as a lone individual against the 
power of an entire state. He believed in the rule of law and integrity, 
and died for his belief.''
  One might have thought that after the worldwide condemnation of 
Sergei Magnitsky's arrest, torture, and death in the custody, the 
Russian government would have identified and prosecuted those 
responsible for this heinous crime. Instead, the government has not 
prosecuted a single person and many of the key perpetrators went on to 
receive promotions and the highest state honors from the Russian 
Interior Ministry. Moreover, the officers involved feel such a sense of 
impunity that they are now using all instruments of the Russian state 
to pursue and punish Magnitsky's friends and colleagues who have been 
publicly fighting for justice in his case.
  They have forced the American founding partner of Magnitsky's firm, 
Jamison Firestone, to flee Russia in fear for his safety in the months 
following his colleague's death after learning that the same people 
were attempting to take control of an American client's Russian 
companies and commit a similar fraud. And they have used the same 
criminal case that was used to falsely arrest Magnitsky to indict 
Sergei's client Bill Browder. They have opened up retaliatory criminal 
cases against many of Hermitage's employees and all of its lawyers, who 
were forced to leave Russia to save their own lives. These attacks have 
only intensified since my colleague and friend Congressman Jim McGovern 
introduced the Justice for Sergei Magnitsky Act of 2011, a similar 
measure in the House of Representatives, last month.
  In the struggle for human rights we must never be indifferent. On 
this point, I am reminded of Elie Wiesel's hauntingly eloquent speech, 
The Perils of Indifference which he delivered at the White House in 
1999. On this ever-present danger and demoralizer he cautions us, 
``Indifference elicits no response. Indifference is not a response. 
Indifference is not a beginning, it is an end. And, therefore, 
indifference is always the friend of the enemy, for it benefits the 
aggressor--never his victim, whose pain is magnified when he or she 
feels forgotten. The political prisoner in his cell, the hungry 
children, the homeless refugees--not to respond to their plight, not to 
relieve their solitude by offering them a spark of hope is to exile 
them from human memory. And in denying their humanity we betray our 
own.''
  Speaking of our humanity, I offer the following words as a contrast. 
They are from Russian playwright Mikhail Ugarov who created One Hour 
Eighteen, which is the exact amount of time it took for Sergei 
Magnitsky to die in his isolation cell at Moscow's Matrosskaya Tishina 
prison. Ugarov asks, ``When a person puts on the uniform of a public 
prosecutor, the white lab coat of a doctor, or the black robe of a 
judge, does he or she inevitably lose their humanity? Do they lose 
their ability to--even in a small way--empathize with a fellow human 
being? In the case of Sergei Magnitsky, each of the people who assumed 
these professional duties in the case left their humanity behind.''
  The coming year will be a significant moment in the evolution of 
Russian politics. With Duma elections scheduled for the end of 2011 and 
presidential elections for early 2012, there is an opportunity for the 
Russian government to reverse what has been a steady trajectory away 
from the rule of law and respect for human rights and toward 
authoritarianism.
  Private and even public expressions of concern are not a substitute 
for a real policy nor are they enough, it's time for consequences. The 
bill I introduce today sends a strong message to those who are 
currently acting with impunity in Russia that there will be 
consequences for corruption should you wish to travel to and invest in 
the United States. Such actions will provide needed moral support for 
those in Russia doing the really heavy-lifting in fighting corruption 
and promoting the rule of law, but they will also protect our own 
interests--values or business related.
  We see before us a tale of two Russias, the double headed eagle if 
you will. To whom does the future of Russia belong? Does it belong to 
the Yevgenia Chirikovas, Alexey Navalnys, Oleg Orlovs and countless 
other courageous, hard working, and patriotic Russians who expose 
corruption and fight for human rights or those who inhabit the shadows 
abusing and stealing from their fellow citizens?
  Let us not put aside our humanity out of exaggerated and excessively 
cautious diplomatic concerns for the broader relationship. Let us take 
the long view and stand on the right side--

[[Page S3181]]

and I believe the wise side--with the Russian people who have suffered 
so much for the cause of liberty and human dignity. They are the ones 
who daily risk their safety and freedom to promote those basic 
principles enshrined in Russian law and many international commitments 
including the Helsinki Final Act. They are the conscience of Russia. 
Let us tell them with one voice that they are not alone and that 
concepts like the rule of law and human rights are not empty words for 
this body and for our government. I urge my colleagues to support this 
bill.
  I ask unanimous consent that the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1039

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Sergei Magnitsky Rule of Law 
     Accountability Act of 2011''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) The United States supports the people of the Russian 
     Federation in their efforts to realize their full economic 
     potential and to advance democracy, human rights, and the 
     rule of law.
       (2) The Russian Federation--
       (A) is a member of the United Nations, the Organization for 
     Security and Co-operation in Europe, the Council of Europe, 
     and the International Monetary Fund;
       (B) has ratified the Convention against Torture and Other 
     Cruel, Inhuman or Degrading Treatment or Punishment, the 
     International Covenant on Civil and Political Rights, and the 
     United Nations Convention against Corruption; and
       (C) is bound by the legal obligations set forth in the 
     European Convention on Human Rights.
       (3) States voluntarily commit themselves to respect 
     obligations and responsibilities through the adoption of 
     international agreements and treaties, which must be observed 
     in good faith in order to maintain the stability of the 
     international order. Human rights are an integral part of 
     international law, and lie at the foundation of the 
     international order. The protection of human rights, 
     therefore, particularly in the case of a country that has 
     incurred obligations to protect human rights under an 
     international agreement to which it is a party, is not left 
     exclusively to the internal affairs of that country.
       (4) Good governance and anti-corruption measures are 
     instrumental in the protection of human rights and in 
     achieving sustainable economic growth, which benefits both 
     the people of the Russian Federation and the international 
     community through the creation of open and transparent 
     markets.
       (5) Systemic corruption erodes trust and confidence in 
     democratic institutions, the rule of law, and human rights 
     protections. This is the case when public officials are 
     allowed to abuse their authority with impunity for political 
     or financial gains in collusion with private entities.
       (6) The Russian nongovernmental organization INDEM has 
     estimated that corruption amounts to hundreds of billions of 
     dollars a year, an increasing share of the gross domestic 
     product of the Russian Federation.
       (7) The President of the Russian Federation, Dmitry 
     Medvedev, has addressed corruption in many public speeches, 
     including stating in his 2009 address to Russia's Federal 
     Assembly, ``[Z]ero tolerance of corruption should become part 
     of our national culture. . . . In Russia we often say that 
     there are few cases in which corrupt officials are 
     prosecuted. . . . [S]imply incarcerating a few will not 
     resolve the problem. But incarcerated they must be.''. 
     President Medvedev went on to say, ``We shall overcome 
     underdevelopment and corruption because we are a strong and 
     free people, and deserve a normal life in a modern, 
     prosperous democratic society.''. Furthermore, President 
     Medvedev has acknowledged Russia's disregard for the rule of 
     law and used the term ``legal nihilism'' to describe a 
     criminal justice system that continues to imprison innocent 
     people.
       (8) The systematic abuse of Sergei Magnitsky, including his 
     repressive arrest and torture in custody by the same officers 
     of the Ministry of the Interior of the Russian Federation 
     that Mr. Magnitsky had implicated in the embezzlement of 
     funds from the Russian Treasury and the misappropriation of 3 
     companies from his client, Hermitage, reflects how deeply the 
     protection of human rights is affected by corruption.
       (9) The politically motivated nature of the persecution of 
     Mr. Magnitsky is demonstrated by--
       (A) the denial by all state bodies of the Russian 
     Federation of any justice or legal remedies to Mr. Magnitsky 
     during the nearly 12 full months he was kept without trial in 
     detention; and
       (B) the impunity of state officials he testified against 
     for their involvement in corruption and the carrying out of 
     his repressive persecution since his death.
       (10) Mr. Magnitsky died on November 16, 2009, at the age of 
     37, in Matrosskaya Tishina Prison in Moscow, Russia, and is 
     survived by a mother, a wife, and 2 sons.
       (11) The Public Oversight Commission of the City of Moscow 
     for the Control of the Observance of Human Rights in Places 
     of Forced Detention, an organization empowered by Russian law 
     to independently monitor prison conditions, concluded, ``A 
     man who is kept in custody and is being detained is not 
     capable of using all the necessary means to protect either 
     his life or his health. This is a responsibility of a state 
     which holds him captive. Therefore, the case of Sergei 
     Magnitsky can be described as a breach of the right to life. 
     The members of the civic supervisory commission have reached 
     the conclusion that Magnitsky had been experiencing both 
     psychological and physical pressure in custody, and the 
     conditions in some of the wards of Butyrka can be justifiably 
     called torturous. The people responsible for this must be 
     punished.''.
       (12) According to the Financial Times, ``A commission 
     appointed by President Dmitry Medvedev has found that Russian 
     police fabricated charges against an anti-corruption lawyer 
     [Sergei Magnitsky], whose death in prison in 2009 has come to 
     symbolise pervasive corruption in Russian law enforcement.''.
       (13) The second trial and verdict against former Yukos 
     executives Mikhail Khodorkovsky and Platon Lebedev evokes 
     serious concerns about the right to a fair trial and the 
     independence of the judiciary in the Russian Federation. The 
     lack of credible charges, intimidation of witnesses, 
     violations of due process and procedural norms, falsification 
     or withholding of documents, denial of attorney-client 
     privilege, and illegal detention in the Yukos case are highly 
     troubling. The Council of Europe, Freedom House, and Amnesty 
     International, among others, have concluded that they were 
     charged and imprisoned in a process that did not follow the 
     rule of law and was politically influenced. Furthermore, 
     senior officials of the Government of the Russian Federation 
     have acknowledged that the arrest and imprisonment of 
     Khodorkovsky were politically motivated.
       (14) According to Freedom House's 2011 report entitled 
     ``The Perpetual Battle: Corruption in the Former Soviet Union 
     and the New EU Members'', ``[t]he highly publicized cases of 
     Sergei Magnitsky, a 37-year-old lawyer who died in pretrial 
     detention in November 2009 after exposing a multimillion-
     dollar fraud against the Russian taxpayer, and Mikhail 
     Khodorkovsky, the jailed business magnate and regime critic 
     who was sentenced at the end of 2010 to remain in prison 
     through 2017, put an international spotlight on the Russian 
     state's contempt for the rule of law. . . . By silencing 
     influential and accomplished figures such as Khodorkovsky and 
     Magnitsky, the Russian authorities have made it abundantly 
     clear that anyone in Russia can be silenced.''.
       (15) Sergei Magnitsky's experience, while particularly 
     illustrative of the negative effects of official corruption 
     on the rights of an individual citizen, appears to be 
     emblematic of a broader pattern of disregard for the numerous 
     domestic and international human rights commitments of the 
     Russian Federation and impunity for those who violate basic 
     human rights and freedoms.
       (16) The tragic and unresolved murders of Nustap 
     Abdurakhmanov, Maksharip Aushev, Natalya Estemirova, Akhmed 
     Hadjimagomedov, Umar Israilov, Paul Klebnikov, Anna 
     Politkovskaya, Saihadji Saihadjiev, and Magomed Y. Yevloyev, 
     the death in custody of Vera Trifonova, the disappearances of 
     Mokhmadsalakh Masaev and Said-Saleh Ibragimov, the torture of 
     Ali Israilov and Islam Umarpashaev, the near-fatal beatings 
     of Mikhail Beketov, Oleg Kashin, Arkadiy Lander, and Mikhail 
     Vinyukov, and the harsh and ongoing imprisonment of Mikhail 
     Khodorkovsky, Alexei Kozlov, Platon Lebedev, and Fyodor 
     Mikheev further illustrate the grave danger of exposing the 
     wrongdoing of officials of the Government of the Russian 
     Federation, including Chechen leader Ramzan Kadyrov, or of 
     seeking to obtain, exercise, defend, or promote 
     internationally recognized human rights and freedoms.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Admitted; alien.--The terms ``admitted'' and ``alien'' 
     have the meanings given those terms in section 101 of the 
     Immigration and Nationality Act (8 U.S.C. 1101).
       (2) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means--
       (A) the Committee on Financial Services, the Committee on 
     Foreign Affairs, and the Committee on the Judiciary of the 
     House of Representatives; and
       (B) the Committee on Banking, Housing, and Urban Affairs, 
     the Committee on Foreign Relations, and the Committee on the 
     Judiciary of the Senate.
       (3) Financial institution; domestic financial agency; 
     domestic financial institution.--The terms ``financial 
     institution'', ``domestic financial agency'', and ``domestic 
     financial institution'' have the meanings given those terms 
     in section 5312 of title 31, United States Code.
       (4) United states person.--The term ``United States 
     person'' means--
       (A) a United States citizen or an alien lawfully admitted 
     for permanent residence to the United States; or
       (B) an entity organized under the laws of the United States 
     or of any jurisdiction within the United States, including a 
     foreign branch of such an entity.

[[Page S3182]]

     SEC. 4. IDENTIFICATION OF PERSONS RESPONSIBLE FOR THE 
                   DETENTION, ABUSE, AND DEATH OF SERGEI 
                   MAGNITSKY, THE CONSPIRACY TO DEFRAUD THE 
                   RUSSIAN FEDERATION OF TAXES ON CERTAIN 
                   CORPORATE PROFITS, AND OTHER GROSS VIOLATIONS 
                   OF HUMAN RIGHTS.

       (a) In General.--Not later than 90 days after the date of 
     the enactment of this Act, the Secretary of State, in 
     consultation with the Secretary of the Treasury, shall 
     publish a list of each person the Secretary of State has 
     reason to believe--
       (1)(A) is responsible for the detention, abuse, or death of 
     Sergei Magnitsky;
       (B) participated in efforts to conceal the legal liability 
     for the detention, abuse, or death of Sergei Magnitsky; or
       (C) committed those frauds discovered by Sergei Magnitsky, 
     including conspiring to defraud the Russian Federation of 
     taxes on corporate profits through fraudulent transactions 
     and lawsuits against the foreign investment company known as 
     Hermitage and to misappropriate entities owned or controlled 
     by Hermitage; or
       (2) is responsible for extrajudicial killings, torture, or 
     other gross violations of human rights committed against 
     individuals seeking--
       (A) to expose illegal activity carried out by officials of 
     the Government of the Russian Federation; or
       (B) to obtain, exercise, defend, or promote internationally 
     recognized human rights and freedoms, such as the freedoms of 
     religion, expression, association, and assembly and the 
     rights to a fair trial and democratic elections.
       (b) Updates.--The Secretary of State shall update the list 
     required by subsection (a) as new information becomes 
     available.
       (c) Notice.--The Secretary of State shall--
       (1) to the extent practicable, provide notice and an 
     opportunity for a hearing to a person before the person is 
     added to the list required by subsection (a); and
       (2) remove a person from the list if the person 
     demonstrates to the satisfaction of the Secretary that the 
     person did not engage in the activity for which the person 
     was added to the list.
       (d) Requests by Members of Congress.--Not later than 30 
     days after receiving a written request from a Member of 
     Congress with respect to whether a person meets the criteria 
     for being added to the list required by subsection (a), the 
     Secretary of State shall inform that Member of the 
     determination of the Secretary with respect to whether or not 
     that person meets those criteria.

     SEC. 5. INADMISSIBILITY OF CERTAIN ALIENS.

       (a) Ineligibility for Visas.--An alien is ineligible to 
     receive a visa to enter the United States and ineligible to 
     be admitted to the United States if the alien is on the list 
     required by section 4(a).
       (b) Current Visas Revoked.--The Secretary of State shall 
     revoke, in accordance with section 221(i) of the Immigration 
     and Nationality Act (8 U.S.C. 1201(i)), the visa or other 
     documentation of any alien who would be ineligible to receive 
     such a visa or documentation under subsection (a).
       (c) Waiver for National Interests.--The Secretary of State 
     may waive the application of subsection (a) or (b) in the 
     case of an alien if the Secretary determines that such a 
     waiver is in the national interests of the United States. 
     Upon granting such a waiver, the Secretary shall provide to 
     the appropriate congressional committees notice of, and a 
     justification for, the waiver.

     SEC. 6. FINANCIAL MEASURES.

       (a) Special Measures.--Not later than 120 days after the 
     date of the enactment of this Act, the Secretary of the 
     Treasury shall investigate money laundering relating to the 
     conspiracy described in section 4(a)(1)(C). If the Secretary 
     of the Treasury makes a determination under section 5318A of 
     title 31, United States Code, with respect to such money 
     laundering, the Secretary of the Treasury shall instruct 
     domestic financial institutions and domestic financial 
     agencies to take 1 or more special measures described in 
     section 5318A(b) of such title.
       (b) Freezing of Assets.--The Secretary of the Treasury 
     shall freeze and prohibit all transactions in all property 
     and interests in property of a person that are in the United 
     States, that come within the United States, or that are or 
     come within the possession or control of a United States 
     person if the person--
       (1) is on the list required by section 4(a); or
       (2) acts as an agent of or on behalf of a person on that 
     list in a matter relating to the activity for which the 
     person was added to that list.
       (c) Waiver for National Interests.--The Secretary of the 
     Treasury may waive the application of subsection (a) or (b) 
     if the Secretary determines that such a waiver is in the 
     national interests of the United States. Upon granting such a 
     waiver, the Secretary shall provide to the appropriate 
     congressional committees notice of, and a justification for, 
     the waiver.
       (d) Enforcement.--
       (1) Penalties.--A person that violates, attempts to 
     violate, conspires to violate, or causes a violation of this 
     section or any regulation, license, or order issued to carry 
     out this section shall be subject to the penalties set forth 
     in subsections (b) and (c) of section 206 of the 
     International Emergency Economic Powers Act (50 U.S.C. 1705) 
     to the same extent as a person that commits an unlawful act 
     described in subsection (a) of such section.
       (2) Requirements for financial institutions.--
       (A) In general.--Not later than 120 days after the date of 
     the enactment of this Act, the Secretary of the Treasury 
     shall prescribe regulations to require each financial 
     institution that is a United States person--
       (i) to perform an audit of the assets within the possession 
     or control of the financial institution to determine whether 
     any of such assets are required to be frozen pursuant to 
     subsection (b); and
       (ii) to submit to the Secretary--

       (I) a report containing the results of the audit; and
       (II) a certification that, to the best of the knowledge of 
     the financial institution, the financial institution has 
     frozen all assets within the possession or control of the 
     financial institution that are required to be frozen pursuant 
     to subsection (b).

       (B) Penalties.--The penalties provided for in sections 
     5321(a) and 5322 of title 31, United States Code, shall apply 
     to a financial institution that violates a regulation 
     prescribed under subparagraph (A) 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.
       (e) Regulatory Authority.--The Secretary of the Treasury 
     shall issue such regulations, licenses, and orders as are 
     necessary to carry out this section.

     SEC. 7. REPORT TO CONGRESS.

       Not later than 180 days after the date of the enactment of 
     this Act, and annually thereafter, the Secretary of State and 
     the Secretary of the Treasury shall submit to the appropriate 
     congressional committees a report on--
       (1) the actions taken to carry out this Act, including--
       (A) the number of times and the circumstances in which 
     persons described in section 4(a) have been added to the list 
     required by that section during the year preceding the 
     report; and
       (B) if few or no such persons have been added to that list 
     during that year, the reasons for not adding more such 
     persons to the list; and
       (2) efforts to encourage the governments of other countries 
     to impose sanctions that are similar to the sanctions imposed 
     under this Act.
                                 ______