[Congressional Record (Bound Edition), Volume 153 (2007), Part 15]
[House]
[Pages 21333-21340]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  IRAN SANCTIONS ENABLING ACT OF 2007

  Mr. SHERMAN. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 2347) to authorize State and local governments to direct 
divestiture from, and prevent investment in, companies with investments 
of $20,000,000 or more in Iran's energy sector, and for other purposes, 
as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2347

       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 ``Iran Sanctions Enabling Act 
     of 2007''.

     SEC. 2. FINDINGS.

       The Congress finds as follows:
       (1) The Convention on the Prevention and Punishment of the 
     Crime of Genocide, completed at Paris, December 9, 1948 
     (commonly referred to as the ``Genocide Convention'') defines 
     genocide as, among other things, the act of killing members 
     of a national, ethnic, racial, or religious group with the 
     intent to destroy, in whole or in part, the targeted group. 
     In addition, the Genocide Convention also prohibits 
     conspiracy to commit genocide, as well as ``direct and public 
     incitement to commit genocide''.
       (2) 133 member states of the United Nations have ratified 
     the Genocide Convention and thereby pledged to prosecute 
     individuals who violate the Genocide Convention's prohibition 
     on incitement to commit genocide, as well as those 
     individuals who commit genocide directly.
       (3) On October 27, 2005, at the World Without Zionism 
     Conference in Tehran, Iran, the President of Iran, Mahmoud 
     Ahmadinejad, called for Israel to be ``wiped off the map,'' 
     described Israel as ``a disgraceful blot [on] the face of the 
     Islamic world,'' and declared that ``[a]nybody who recognizes 
     Israel will burn in the fire of the Islamic nation's fury.'' 
     President Ahmadinejad has subsequently made similar types of 
     comments, and the Government of Iran has displayed 
     inflammatory symbols that express similar intent.
       (4) On December 23, 2006, the United Nations Security 
     Council unanimously approved Resolution 1737, which bans the 
     supply of nuclear technology and equipment to Iran and 
     freezes the assets of certain organizations and individuals 
     involved in Iran's nuclear program, until Iran suspends its 
     enrichment of uranium, as verified by the International 
     Atomic Energy Agency.
       (5) Following Iran's failure to comply with Resolution 
     1737, on March 24, 2007, the United Nations Security Council 
     unanimously approved Resolution 1747, to tighten sanctions on 
     Iran, imposing a ban on arms sales and expanding the freeze 
     on assets, in response to the country's uranium-enrichment 
     activities.
       (6) There are now signs of domestic discontent within Iran, 
     and targeted financial and economic measures could produce 
     further political pressure within Iran. According to the 
     Economist Intelligence Unit, the nuclear crisis ``is imposing 
     a heavy opportunity cost on Iran's economic development, 
     slowing down investment in the oil, gas, and petrochemical 
     sectors, as well as in critical infrastructure projects, 
     including electricity''.
       (7) Targeted financial measures represent one of the 
     strongest non-military tools available to convince Tehran 
     that it can no longer afford to engage in dangerous, 
     destabilizing activities such as its nuclear weapons program 
     and its support for terrorism.
       (8) Foreign persons that have invested in Iran's energy 
     sector, despite Iran's support of international terrorism and 
     its nuclear program, have provided additional financial means 
     for Iran's activities in these areas, and many United States 
     persons have unknowingly invested in those same foreign 
     persons.

[[Page 21334]]

       (9) There is an increasing interest by States, local 
     governments, educational institutions, and private 
     institutions to seek to disassociate themselves from 
     companies that directly or indirectly support the Government 
     of Iran's efforts to achieve a nuclear weapons capability.
       (10) Policy makers and fund managers may find moral, 
     prudential, or reputational reasons to divest from companies 
     that accept the business risk of operating in countries that 
     are 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.

     SEC. 3. TRANSPARENCY IN CAPITAL MARKETS.

       (a) List of Persons Investing in Iran Energy Sector or 
     Selling arms to the Government of Iran.--
       (1) Publication of list.--Not later than 6 months after the 
     date of the enactment of this Act and every 6 months 
     thereafter, the President or a designee of the President 
     shall, using only publicly available (including proprietary) 
     information, ensure publication in the Federal Register of a 
     list of each person, whether within or outside of the United 
     States, that, as of the date of the publication, has an 
     investment of more than $20,000,000 in the energy sector in 
     Iran, sells arms to the Government of Iran, or is a financial 
     insitutiton that extends $20,000,000 or more in credit to the 
     Government of Iran for 45 days or more. To the extent 
     practicable, the list shall include a description of the 
     investment made by each such person, including the dollar 
     value, intended purpose, and status of the investment, as of 
     the date of the publication.
       (2) Prior notice to persons.--The President or a designee 
     of the President shall, at least 30 days before the list is 
     published under paragraph (1), notify each person that the 
     President or the designee, as the case may be, intends to 
     include on the list.
       (3) Delay in including persons on the list.--After 
     notifying a person under paragraph (2), the the President or 
     a designee of the President may delay including that person 
     on the list for up to 60 days if the President or the 
     designee determines and certifies to the Congress that the 
     person has taken specific and effective actions to terminate 
     the involvement of the person in the activities that resulted 
     in the notification under paragraph (2).
       (4) Removal of persons from the list.--The President or a 
     designee of the President may remove a person from the list 
     before the next publication of the list under paragraph (1) 
     if the President or the designee determines that the person 
     does not have an investment of more than $20,000,000 in the 
     energy sector in Iran, does not sell arms to the Government 
     of Iran, and is not a financial insitutiton that extends 
     $20,000,000 or more in credit to the Government of Iran for 
     45 days or more.
       (b) Publication on Website.--The President or a designee of 
     the President shall ensure that the list is published on an 
     appropriate government website, updating the list as 
     necessary to take into account any person removed from the 
     list under subsection (a)(4).
       (c) Definition.--In this section, the term ``investment'' 
     has the meaning given that term in section 14(9) of the Iran 
     Sanctions Act (50 U.S.C. 1701 App.).

     SEC. 4. AUTHORITY OF STATE AND LOCAL GOVERNMENTS TO DIVEST 
                   FROM CERTAIN COMPANIES INVESTED IN IRAN'S 
                   ENERGY SECTOR.

       (a) Statement of Policy.--It is the policy of the United 
     States to support the decision of State governments, local 
     governments, and educational institutions to divest from, and 
     to prohibit the investment of assets they control in, persons 
     that have investments of more than $20,000,000 in Iran's 
     energy sector, persons that sell arms to the Government of 
     Iran, and financial institutions that extend $20,000,000 or 
     more in credit to the Government of Iran for 45 days or more.
       (b) Authority to Divest.--
       (1) In general.--Notwithstanding any other provision of 
     law, a State or local government may adopt and enforce 
     measures to divest the assets of the State or local 
     government from, or prohibit investment of the assets of the 
     State or local government in--
       (A) persons that are included on the list most recently 
     published under section 3(a)(1), as modified under section 
     3(a)(4);
       (B) persons that sell arms to the Government of Iran;
       (C) financial institutions that extend $20,000,000 or more 
     in credit to the Government of Iran for 45 days or more; and
       (D) persons that are included on any list of entities with 
     investments in Iran, entities doing business in Iran, or 
     entities doing business with the Government of Iran, which is 
     issued pursuant to a law that--
       (i) authorizes a State or local government to divest from, 
     or prohibits a State or local government from investing 
     assets in, the persons; and
       (ii) is enacted by a State or local government on or before 
     the first publication of a list under section 3.
       (2) Definitions.--In this subsection:
       (A) Investment.--The ``investment'' of assets includes--
       (i) a commitment or contribution of assets; and
       (ii) a loan or other extension of credit of assets.
       (B) Assets.--The term ``assets'' refers to public monies 
     and includes any pension, retirement, annuity, or endowment 
     fund, or similar instrument, that is controlled, directly or 
     indirectly, by a State or local government.
       (c) Preemption.--A measure of a State or local government 
     that is authorized by subsection (b) is not preempted by any 
     Federal law or regulation.

     SEC. 5. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY 
                   MUTUAL FUNDS.

       Section 13 of the Investment Company Act of 1940 (15 U.S.C. 
     80a-13) is amended by adding at the end the following new 
     subsection:
       ``(c) Safe Harbor for Changes in Investment Policies.--
     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 person 
     providing services to such registered investment company 
     (including its investment adviser), or any employee, officer, 
     or director thereof, based solely upon the investment company 
     divesting from, or avoiding investing in, securities issued 
     by companies that are included on the most recent list 
     published under section 3(a)(1) of the Iran Sanctions 
     Enabling Act of 2007, as modified under section 3(b) of that 
     Act. For purposes of this subsection the term `person' shall 
     include the Federal government, and any State or political 
     subdivision of a State.''.

     SEC. 6. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY 
                   EMPLOYEE BENEFIT PLANS.

       Section 502 of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1132) is amended by adding at the end the 
     following new subsection:
       ``(n) No person shall be treated as breaching any of the 
     responsibilities, obligations, or duties imposed upon 
     fiduciaries by this title, and no action may be brought under 
     this section against any person, for divesting plan assets 
     from, or avoiding investing plan assets in, persons that are 
     included on the most recent list published under section 
     3(a)(1) of the Iran Sanctions Enabling Act, as modified under 
     section 3(a)(4) of such Act.''.

     SEC. 7. RULE OF INTERPRETATION.

       Nothing in this Act shall be interpreted to limit the 
     authority of any person to divest, or avoid investment in, 
     any asset, or to adopt or enforce any measure to do so.

     SEC. 8. DEFINITIONS.

       In this Act:
       (1) Iran.--the term ``Iran'' includes any agency or 
     instrumentality of Iran.
       (2) Energy sector.--The term ``energy sector'' refers to 
     activities to develop petroleum or natural gas resources, or 
     nuclear power.
       (3) Person.--The term ``person'' means--
       (A) a natural person as well as a corporation, business 
     association, partnership, society, trust, 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); and
       (C) any successor, subunit, or subsidiary of any entity 
     described in subparagraph (A) or (B).
       (4) State.--The term ``State'' includes the District of 
     Columbia, the Commonwealth of Puerto Rico, the United States 
     Virgin Islands, Guam, American Samoa, and the Commonwealth of 
     the Northern Mariana Islands.
       (5) State or local government.--
       (A) In general.--The term ``State or local government'' 
     includes--
       (i) any State and any agency or instrumentality thereof;
       (ii) any local government within a State, and any agency or 
     instrumentality thereof;
       (iii) any other governmental instrumentality; and
       (iv) any public institution of higher education.
       (B) Public institution of higher education.--The term 
     ``public institution of higher education'' means a public 
     institution of higher education within the meaning of the 
     Higher Education Act of 1965.

     SEC. 9. SUNSET.

       This Act shall terminate 30 days after the date on which 
     the President has certified to Congress that--
       (1) the Government of Iran has ceased providing support for 
     acts of international terrorism and no longer satisfies the 
     requirements for designation as a state-sponsor of terrorism 
     for purposes of section 6(j) of the Export Administration Act 
     of 1979, section 620A of the Foreign Assistance Act of 1961, 
     section 40 of the Arms Export Control Act, or any other 
     provision of law; and
       (2) Iran has ceased the pursuit, acquisition, and 
     development of nuclear, biological, and chemical weapons and 
     ballistic missiles and ballistic missile launch technology.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from

[[Page 21335]]

California (Mr. Sherman) and the gentleman from New Jersey (Mr. 
Garrett) each will control 20 minutes.
  The Chair recognizes the gentleman from California.


                             General Leave

  Mr. SHERMAN. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days to revise and extend their remarks and include 
extraneous materials on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. SHERMAN. Mr. Speaker, I yield myself so much time as I may 
consume.
  Mr. Speaker, at Natans, the centrifuges are turning. Iran is perhaps 
half a decade away from a nuclear weapon. Iran, however, is not without 
its Achilles heels. The mullahs have mismanaged the economy to the 
point where they are rationing gasoline in Tehran. Iran has a vibrant 
political culture in which the behavior of the elites and the behavior 
of the people can indeed be influenced by outside information. The key 
is to be able to broadcast into Iran on RadioFarda a message. That 
message is that Iran will be diplomatically and economically isolated 
around the world, and especially from the United States, unless it 
drops its nuclear weapons program. The problem is, I can't lie that 
well in Farsi. The fact is we have not yet begun to use the economic 
and diplomatic levers available to the United States. And it is not yet 
true that Iran's nuclear program subjects it to the possibility of 
economic and diplomatic isolation.
  The bad news, Mr. Speaker, is that we have not had the political will 
to reach into our economic and diplomatic tool box. The good news is 
we've still got a lot of tools lying there in the tool box. One of the 
best is divestiture. Divestiture needs to be part of a bigger economic 
and diplomatic strategy to isolate the government in Tehran. If we can 
dry up, however, Iran's access to foreign investment, if we can sever 
the ties between the multinational corporations and the government of 
Iran, we may be able to increase the cost of Iran's behavior and put 
enough pressure on that regime so either it decides, or its people 
insist, that it abandon its nuclear program.
  Now, the key is to change the behavior of these multinational 
corporations, and the best way to do that is with American policies 
that make them choose between the benefits of doing business with the 
American people, American investors on the one hand, and the so-called 
benefits they might get from doing business with Tehran on the other.
  So what does this bill do to begin and continue the divestment 
process? The bill mandates nothing except for the creation of a list by 
the administration, which I will get to in just a second. It provides a 
clear authorization from Congress for States to divest from companies 
conducting the certain identified activities in Iran, and it would 
shield both private pension plan managers, mutual funds and public 
sector pension plan managers from harassing lawsuits should they decide 
on their own initiative to divest from those companies carrying out 
certain activities in Iran. In doing so, this bill sweeps away an 
excuse from those investment managers who, up until now, haven't wanted 
to be bothered to divest, even though their beneficiaries are demanding 
it.
  This bill also provides some standards. I mentioned this in the 
discussion of the Sudan bill. First, people want to know what 
activities should cause them to divest. Now, I have more than sympathy 
with those who say one penny of activity, sell one candy bar in Tehran 
and I don't want my money invested in your company. That's a purist 
approach. That's an approach some may choose to take. I think the 
better harnessing of America's economic power and the power of 
individual investors, individual decisionmakers, pension plans, mutual 
funds, et cetera, is to focus on three activities, and that is what 
this bill does.
  It requires that 6 months after enactment, the U.S. Government, the 
administration, probably the Treasury Department but whichever 
department is identified by the President, produce a list of those 
international corporations that engage in any one of these three 
activities. The first is to invest $20 million in the energy sector of 
Iran. That is a standard we have adhered to for a long time since the 
adoption of what was then called the Iran and Libya Sanctions Act, now 
the Iran Sanctions Act.

                              {time}  1330

  The second are those firms selling munitions to the government in 
Tehran. And the third are those who extend credit of $20 million or 
more to the Iranian Government.
  And at this point, let me pause, because the question arises, what is 
it to extend credit to the Iranian Government when the Iranian 
Government issues a long-term bond?
  Is it just the company that buys the bond or the financial 
institution that buys the bond, or is it directly from the Iranian 
Government, or is it those that provide a secondary market by buying 
those bonds from the original purchaser?
  Mr. FRANK of Massachusetts. Will the gentleman yield?
  Mr. SHERMAN. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. I thank the gentleman for making this 
point. The gentleman from California is a very careful student of the 
intertwined legal and economic issues, and the point he is making now 
is very important. We expect this to be subjected to a sensible 
economic analysis; that is, if you are providing real value to that 
government, then you are covered. Clearly, if you have a secondary 
market for bonds, you've enhanced the value of the initial instrument. 
So people who support a secondary market for a particular instrument 
are clearly investing in the underlying issuer. They know that. It is a 
conscious act. No one is going to be trapped.
  So the gentleman is making a very important point, and we want to be 
very clear. We will be expecting the administration, in preparing this 
list, to use the same kind of economic analysis we would use in any 
other case. If an activity, a purchase, an investment, a loan, any 
financial activity is contributing to the financial enhancement of the 
Iranian Government, then it triggers, we would believe, this bill.
  Mr. SHERMAN. I thank the gentleman and agree with him completely. 
This bill is designed to cause the list prepared by the administration 
to include those who invest in bonds issued by the Government of Iran.
  I should point out that in identifying the three activities that are 
going to cause multinational corporations to be listed, that we are 
paralleling what we did just last week when this Congress passed the 
bill dealing with the Overseas Private Investment Corporation, which 
also focused on pretty much the same standards and said those 
multinational corporations engaged in those activities with the 
Government of Iran would not be able to be partners of OPIC in its 
activities around the world.
  Now, the bill also provides that any State statute enacted prior to 
the publication of the first list of firms by the administration would 
be grandfathered. States do not have to wait and should not wait for 
the publication of this list by the administration.
  States such as Florida, Ohio and California, which are proceeding 
with divestment measures, and any other States which might consider a 
divestment program need not wait for the Federal list, and whatever 
they choose to do will be grandfathered in this legislation.
  Now, this bill states explicitly what I think was clearly true of 
both the Sudan bill we just discussed and this bill, and that is it 
provides a safe harbor but does not imply that that which lies outside 
the safe harbor is somehow forbidden. Section 7 of this bill would make 
it clear that the authorization that's been provided by this bill is 
just that, a safe harbor, that this bill in no way implicitly restricts 
or takes away whatever authorities the States, the pension managers and 
mutual funds already have.

[[Page 21336]]


  Mr. FRANK of Massachusetts. Will the gentleman yield?
  Mr. SHERMAN. I yield to the gentleman from Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. I thank the gentleman once again for 
helping clarify a point. Sometimes when we do legislation I wish we had 
a clause that we could automatically print out that says ``this bill 
does not do what this bill does not do,'' because people are forever 
reading into legislation things that aren't there.
  We have some people who have claimed that they do not now have the 
legal authority to do the divestment. When this bill becomes law, as I 
hope it will be, and its companion bill, that argument won't be able to 
be made at all.
  I agree with the gentleman from California. I don't think it's a good 
argument now. But we do want to make clear, in absolutely nailing this 
down, we in no way want to give any support to the argument that, in 
the absence of this bill, the authority isn't there. So I thank the 
gentleman for once again helping us be very clear about what we're 
doing.
  Mr. SHERMAN. I thank the gentleman and agree with him completely.
  I believe that divestment is already clearly authorized in the terms 
of the fiduciary trying to meet their fiduciary obligation. Investing 
in terror is bad business for States. I don't think they have an 
obligation to, in making their own investment policy, to conform to 
some Federal foreign policy. But if they do, Federal foreign policy for 
a long time has been very clear: don't invest in Iran. That's why we've 
had the Iran-Libya Sanctions Act, now the Iran Sanctions Act for quite 
some time.
  So this bill will eliminate an excuse for those who do not want to, 
that have not yet, divested. It will provide a safe harbor, and it will 
provide guidance for those who want to use their investments to get 
multinational corporations to take the actions that will be most 
effective.
  It provides a list of companies not to invest in, and it provides a 
standard to define what particularly it is we want the business 
community worldwide to desist from doing.
  Ms. JACKSON-LEE of Texas. Will the gentleman yield?
  Mr. SHERMAN. I'll yield to the gentlelady from Texas (Ms. Jackson-
Lee).
  Ms. JACKSON-LEE of Texas. I thank the distinguished gentleman. Let me 
quickly thank you for your leadership and thank the ranking member of 
our Committee on Foreign Affairs, who I know is involved in this 
action.
  And let me applaud the approach. That's what I want to reaffirm. 
Diplomatic and economic sanctions have not been used effectively 
against Iran. And with the more publicized National Intelligence 
Estimates that indicates that terrorism is franchising around the 
world, the troubling activities of Iran with Iraq and the actions that 
seem to be moving Iran toward nuclear creativity, if you will, warrants 
a strong statement by the United States. And it also is warranted 
because of the active middle class who wants a democratic and free 
Iran.
  This is a right way to go. It is a different approach from a military 
strike and the representations of this administration about attacking 
Iran militarily. The American people want to see us act, and I believe 
that this legislation dealing with a list of those investing and giving 
guidance to the economic sector is the right direction to take.
  And I am also grateful that this does not preempt State law and 
States that have already gone further in divestment.
  So I thank the gentleman for yielding, and I hope my colleagues will 
support this legislation.
  Mr. SHERMAN. Mr. Speaker, I reserve the balance of my time.
  Mr. GARRETT of New Jersey. Mr. Speaker, I also thank again the 
distinguished chairman of the committee for bringing this important 
legislation to the floor. I yield myself such time as I may consume.
  I rise today in support of H.R. 2347, the Iran Sanctions Enabling 
Act. The radical hard-line Islamic leadership of Iran presents one of 
the most serious threats today to peace and stability throughout the 
world. First, their quest to acquire nuclear weapons technology, when 
you combine that with comments by the Iranian President such that the 
Nation of Israel should be ``wiped off the map,'' make it clear that 
the Iranian leadership is unpredictable and dangerous.
  The Iranian President has gone even farther by speculating that the 
collateral damage of attacking Israel with nuclear weapons would be 
worth the cost to the Muslim world. So for a regime that is developing 
nuclear capabilities, these are truly extraordinary words, and the 
world must take notice.
  The Iranian President and the Ayatollah's supreme wish is the 
destruction of Israel and all of her people. They have not tried to 
mask their goal. They doubt that the Holocaust ever occurred in the 
past, and now they're making plans for the Holocaust of the future. And 
there is no doubt about it. Their fresh Holocaust will stretch far 
beyond the borders of Israel. They will encompass all whom they 
consider a threat to their values and to their plans. So to confront 
Iran now is not only in the national interest, it is also in our 
interest because the U.S. will surely sometime be a target itself.
  There is much talk at the U.N. about preventing wars and genocide, 
but, unfortunately, there is so too little action. The world should not 
ignore these words now of aggression. Because of the lack of success 
the U.N. has had in keeping the nuclear technology out of the hands of 
these radicals, the United States must now take the appropriate 
measures and work directly with all of our allies to do everything in 
our power to prevent Iran from obtaining those weapons.
  And so that is why I'm here today. I am pleased with H.R. 2347, for 
this act will do several important measures. First, as indicated, it 
permits, permits, not mandates, the divestiture from companies with 
investments of $20 million or more in Iran's energy sector.
  Secondly, it directs the Federal Government to produce a list of such 
companies that qualify for such investment.
  Thirdly, it authorizes State governments, local governments and 
public educational institutions to divest even their pension fund 
assets from companies on that list.
  Fourthly, it permits private investment and pension plan managers to 
divest from companies listed, as the chairman states, without breaching 
their fiduciary responsibilities.
  As the committee report herein notes, companies based in the U.S. are 
already barred from doing business with Iran. But these trade 
investment sanctions do not extend to foreign companies which operate 
legally. Foreign persons that invested in Iran's energy sector, despite 
Iran's support of international terrorism and its nuclear program, have 
provided additional financial means for Iran's activities in these 
areas, and many United States persons have unknowingly invested in 
those same persons.
  So Mr. Speaker, in conclusion, it is my hope that by allowing U.S. 
companies to divest their financial interests from any foreign-owned 
companies doing business with Iran, we will continue to put that 
pressure on that radical Iranian leadership to end their stated goals 
of acquiring nuclear weapons and encourage other countries to bolster 
their trade and economic restrictions on Iran as well.
  So I urge my colleagues to support this small but very important step 
in reining in this extremist regime.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SHERMAN. I yield 1 minute to the gentleman from Massachusetts 
(Mr. Frank).
  Mr. FRANK of Massachusetts. Mr. Speaker, again, I want to thank the 
bipartisan leadership and staff of both committees, because the Foreign 
Affairs Committee, under the leadership of the gentleman from 
California and the gentlewoman from Florida, have worked on this.
  I, in my remarks on the Darfur bill, really spoke about both bills. 
Let me just reiterate, this is a chance for us to make very clear the 
overwhelming opposition, staunch opposition of the

[[Page 21337]]

American people to the nuclear weapons plans of the regime in Iran and 
other aspects of that regime.
  And I hope that we will, I'm told it will be tomorrow, have two 
overwhelming rollcalls in this House which will be, in themselves, an 
expression of the American people's views on both the genocide in 
Darfur and the nuclearization of the Iranian military, and that will 
then be followed by a widespread demonstration across this country of 
people's determination as Americans that we will do what we can to stop 
both of those. So I think this is a very good day for the bipartisan 
legislative process.
  I submit the following correspondence.

                             Committee on Education and Labor,

                                    Washington, DC, July 27, 2007.
     Hon. Barney Frank,
     Chairman, Committee on Financial Services,
     House of Representatives, Washington, DC.
       Dear Mr. Chairman: I am writing to confirm our mutual 
     understanding with respect to the consideration of H.R. 2347, 
     the Darfur Accountability and Divestment Act.
       As you know, Section 7 of H.R. 2347 amends the Employee 
     Retirement Income Security Act of 1974 to provide a safe 
     harbor for changes of investment policies. I am writing to 
     confirm that this provision falls within the jurisdiction of 
     the Committee on Education and Labor.
       Given the importance of moving this bill forward promptly, 
     I do not intend to object to its consideration in the House. 
     However, I do so only with the understanding that this 
     procedure should not be construed to prejudice my Committee's 
     jurisdictional interest and prerogative in H.R. 2347 or any 
     other similar legislation and will not be considered as 
     precedent for consideration of matters of jurisdictional 
     interest to my Committee in the future. The Committee also 
     asks that you support our request to be conferees on the 
     provisions over which we have jurisdiction during any House-
     Senate conference.
           Sincerely,
                                                    George Miller,
     Chairman.
                                  ____



                              Committee on Financial Services,

                                    Washington, DC, July 27, 2007.
     Hon. George Miller,
     Chairman, Committee on Education and Labor,
     Washington, DC.
       Dear Chairman Miller: Thank you for your recent letter 
     regarding the consideration of H.R. 2347, the Iran Sanctions 
     Enabling Act of 2007. I agree that the amendment to the 
     Employee Retirement Income Security Act of 1974 to provide a 
     safe harbor for changes of investment policies falls within 
     the jurisdiction of the Committee on Education and Labor.
       I appreciate your willingness to allow this bill to move 
     forward today; and I agree that this procedure in no way 
     diminishes or alters the jurisdictional interest of the 
     Committee on Education and Labor.
           Sincerely,
                                                     Barney Frank,
                                                         Chairman.
                                 ______
                                 
         Congress of the United States, Committee on Oversight and 
           Government Reform,
                                    Washington, DC, July 27, 2007.
     Hon. Barney Frank,
     Chairman, Committee on Financial Services,
     Washington, DC.
       Dear Chairman Frank: I am writing to confirm our mutual 
     understanding with respect to the consideration of H.R. 2347, 
     the Iran Sanctions Enabling Act of 2007.
       As you know, on May 23, 2007, the Committee on Financial 
     Services ordered H.R. 2347 reported to the House. The 
     Committee on Oversight and Government Reform (Oversight 
     Committee) appreciates your effort to consult regarding those 
     provisions of H.R. 2347 that fall within the Oversight 
     Committee's jurisdiction, including matters related to the 
     federal workforce.
       In the interest of expediting consideration of H.R. 2347, 
     the Oversight Committee will not separately consider this 
     legislation. The Oversight Committee does so, however, with 
     the understanding that this does not prejudice the Oversight 
     Committee's jurisdictional interests and prerogatives 
     regarding this bill or similar legislation.
       I respectfully request your support for the appointment of 
     outside conferees from the Oversight Committee should H.R. 
     2347 or a similar Senate bill be considered in conference 
     with the Senate. I also request that you include our exchange 
     of letters on this matter in the Financial Services Committee 
     Report on H.R. 2347 or in the Congressional Record during 
     consideration of this legislation on the House floor.
       Thank you for your attention to these matters.
           Sincerely,
                                                  Henry A. Waxman,
     Chairman.
                                  ____



                              Committee on Financial Services,

                                    Washington, DC, July 27, 2007.
     Hon. Henry Waxman,
     Chairman, Committee on Oversight and Government Reform,
     House of Representatives, Washington, DC.
       Dear Chairman Waxman: Thank you for your letter concerning 
     H.R. 2347, the ``Iran Sanctions Enabling Act,'' which the 
     Committee on Financial Services has ordered reported. The 
     bill was also referred to the Committee on Oversight and 
     Government Reform. This legislation will be considered by the 
     House shortly.
       I want to confirm our mutual understanding with respect to 
     the consideration of this bill, I am pleased that our 
     committees have reached an agreement regarding matters within 
     the jurisdiction of the Oversight Committee, specifically 
     those involving the federal workforce. I appreciate your 
     cooperation in moving the bill to the House floor 
     expeditiously. I further agree that your decision to not to 
     proceed on this bill will not prejudice the Committee on 
     Oversight and Government Reform with respect to its 
     prerogatives on this or similar legislation. I would support 
     your request for conferees in the event of a House-Senate 
     conference.
       I will include this exchange of correspondence in the 
     Committee report and in the Congressional Record during the 
     consideration of the bill. Thank you again for your 
     assistance.
                                                     Barney Frank,
                                                         Chairman.

  Mr. GARRETT of New Jersey. I now yield such time as she may consume 
to the gentlelady from Florida (Ms. Ros-Lehtinen).
  Ms. ROS-LEHTINEN. Mr. Speaker, I also rise in support of the bill 
before us, H.R. 2347, the Iran Sanctions Enabling Act, introduced by 
the distinguished chairman of the Financial Services Committee, Mr. 
Barney Frank of Massachusetts.
  And I'm proud to cosponsor this bill, Mr. Speaker, because it's based 
on language that I drafted, and was adopted by the House last 
Congresses past as part of the Iran Freedom Support Act.
  As all of us have heard from the great discussions this morning, 
Iran's rogue regime has sworn to destroy us, has sworn to destroy 
Israel, and has throughout decades. It's demonstrated the will and the 
capacity to do so. It has a long record of pursuing nuclear 
capabilities and of supporting the extreme elements of Islam, including 
Hamas, Hezbollah and those who kill and maim Americans in Iraq.
  In fact, some have reported that Iran is providing the deep-buried 
IEDs that are indeed increasing the carnage in Iraq.
  No amount of handholding, no amount of dialogue will be able to deter 
Tehran.
  As part of an effort to prevent foreign funds from going to the 
Iranian regime, the bill before us authorizes State and local 
governments to direct divestiture and prevent investment in companies 
with investment of $20 million or more in Iran's energy sector.
  And furthermore, the bill requires that a list of those companies 
that have invested $20 million or more be published biannually.
  Furthermore, it protects investment companies and managers from being 
sued for divesting from companies included in the published list.
  And although I fully support this bill, Mr. Speaker, and I commend 
Chairman Frank for his efforts on this critical issue, as well as Mr. 
Sherman, who's been a leader on all the bills related to Iran, I'm 
concerned that this bill merely authorizes divestment from companies 
investing in Iran, rather than making divestment from those companies 
mandatory.

                              {time}  1345

  H.R. 1357, a bill I introduced earlier this year, along with Minority 
Whip Roy Blunt, would require divestment of all government pension 
plans or Thrift Savings Plans. Moreover, H.R. 1357 prohibits all future 
investments of government and private pension plans.
  I strongly believe that we must increase the pressure aimed at 
isolating Iran's extremist regime, and the bill authored by Chairman 
Frank is an important step toward achieving this goal, and I commend 
him for it.
  There are currently, also, Mr. Speaker, multiple measures dealing 
with putting further pressure on Iran including the Iran Counter-
Proliferation Act, authored by Congressman Tom Lantos,

[[Page 21338]]

the chairman of our Foreign Affairs Committee; and we have got to work 
to have those bills passed and build upon them in order to derail the 
dangerous ambitions of Iran.
  So I urge my colleagues to support this measure. It is part of the 
effort of many of us to prevent U.S. dollars from enabling and 
facilitating the murderous efforts of radical extremists who intend to 
destroy us and our allies.
  I thank the gentleman from New Jersey for yielding me the time, and I 
thank the chairman, Mr. Frank of Massachusetts, for this bill.
  Mr. SHERMAN. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. GARRETT of New Jersey. Mr. Speaker, I yield such time as he may 
consume to the gentleman from Connecticut (Mr. Shays).
  Mr. SHAYS. Mr. Speaker, I thank the gentleman for yielding and for 
his work on this legislation and the ranking member of the Foreign 
Affairs Committee for her work, and, clearly, Chairman Barney Frank and 
Tom Lantos.
  I rise in strong support of H.R. 2347 and am grateful to have worked 
on this legislation with Congressman Tom Lantos and Barney Frank as the 
chief Republican sponsor.
  This legislation will require the U.S. Government to publish a list 
of companies with investments of more than $20 million in Iran's energy 
sector and will authorize State and local governments to divest the 
assets of their pension funds and other funds under their control from 
any company on the list.
  In addition, H.R. 2347 provides safe harbor from litigation by 
shareholders for pension fund managers, managers of mutual funds, and 
corporate pension funds who divest from companies on this list.
  When Americans invest, it seems to me they want to know their dollars 
are not going to prop up the regime in Tehran, a sponsor of terrorism 
and an avowed enemy of American interests. By allowing State pension 
funds and mutual funds to more easily divest from energy companies 
doing business in Iran, this legislation will give investors more 
choice in directing their investments.
  Because I believe military action against Iran, while not off the 
table, must be an absolute last resort, it is critical our government 
utilize the tools at our disposal including economic sanctions and a 
divestment campaign to deter the threat Iran poses to global security.
  Iran is pursuing nuclear capabilities and is one of the world's most 
egregious exporters of terrorism. The seriousness of these facts was 
made clear when Iran's President threatened to ``wipe Israel off the 
map.''
  In addition, last April Ayatollah Khamenei told another of the 
world's worst human rights abusers, Sudan, that Iran would gladly 
transfer nuclear technology. He stated: ``The Islamic Republic of Iran 
is prepared to transfer the experience, knowledge, and technology of 
its scientists.''
  The bottom line is, in defiance of its assurances to the contrary, 
Iran remains committed to a nuclear weapons program. The United States 
must be unequivocal in its rejection of these ambitions and the 
financial support they require.
  Mr. SHERMAN. Mr. Speaker, I ask unanimous consent to reclaim my time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. SHERMAN. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the distinguished 
gentleman for yielding.
  And I again want to emphasize that we are taking a monumental step 
forward in getting America's foreign policy on record opposing the 
actions in Iran. I would say almost irresponsible actions by the 
government.
  I wanted to rise and thank Chairman Frank and Mr. Sherman, whose 
leadership on both the Financial Services Committee and Foreign Affairs 
Committee is well evident, this commitment to a free and democratic 
Iran.
  But I speak to the Iranian community here in the United States, who, 
every day that I see them in my own community, want this peaceful and 
democratic Iran. We have to join with them, and I think these sanctions 
raise the ante on the economic divestiture and also the opportunity for 
diplomacy.
  Mr. Speaker, I rise today in strong support of H.R. 2347, the Iran 
Sanctions Enabling Act of 2007. I would like to thank my colleague, 
Chairman Franks, for introducing this important legislation, as well as 
for his leadership on the Financial Services Committee.
  According to the Administration's ``National Security Strategy'' 
document released on March 16, 2006, the United States ``may face no 
greater challenge from a single country than Iran.'' I find Iran's 
support of terrorist organizations, pursuit of nuclear weapons, and 
dismal human rights record to be extremely worrisome. I have long been 
an advocate of a free, independent, and democratic Iran. I believe in 
an Iran that holds free elections, follows the rule of law, and is home 
to a vibrant civil society; an Iran that is a responsible member of the 
community, particularly with respect to the proliferation of nuclear 
weapons. An Iran that, unfortunately, we do not see today.
  This legislation is a very important step because it uses diplomacy 
and economic tools effectively. We must not move to join the 
representation of the Bush Administration to begin another non-declared 
war. The President should work diplomatically and economically without 
provoking war or an offensive attack without the constitutional 
authority.
  Mr. Speaker, this bipartisan bill authorizes state and local 
governments, as well as educational institutions, to divest from 
companies which invest in Iran's energy sector. Because estimates 
indicate that these companies account for 80 percent of Iran's hard 
currency, they directly allow Iran to fund its illicit nuclear weapons 
program.
  The Iran Sanctions Enabling Act of 2007 directs the Secretary of the 
Treasury to publish biannually in the Federal Register a list of each 
person, whether within or outside of the United States, that has an 
investment of more than $20 million in the energy sector in Iran and to 
maintain on the Web site of the Department of the Treasury the names of 
the persons on such list. It shields any registered investment company 
from civil, criminal, or administrative action based upon its divesting 
from, or avoiding investing in, securities issued by companies included 
on such most recent list.
  Additionally, this legislation expresses the sense of Congress that 
the Federal Retirement Thrift Investment Board should initiate efforts 
to provide a terror-free international investment option among the 
funds of the Thrift Savings Fund. Federal employees should have the 
opportunity to prevent their retirement savings from being invested in 
companies that support terrorism.
  Mr. Speaker, Iran cannot be permitted to develop nuclear bombs. 
Although most experts believe that Iran is at least several years away 
from developing a nuclear weapon, the fact that Iran has begun the 
process is a very clear and disturbing signal. The United States must 
recognize that it is dangerous to do nothing. But it is equally 
dangerous to take actions that are rash, unwise, or ineffective.
  We have ignored the inflammatory rhetoric of President Mahmoud 
Ahmadinejad. But we cannot ignore Iran's breaking of the U.N. seals on 
its uranium-enriching facilities in January. The U.S. government 
immediately understood the severity of the situation. This is not just 
a minor diplomatic nuisance--this is a serious security threat. The 
safety of the Iranian people, the safety of the Middle East, and even 
our own security is at risk. I firmly believe that we must utilize 
multilateral diplomatic channels to persuade Iran that it is not in its 
best interest to pursue nuclear weapons programs. I strongly support 
economic and diplomatic efforts to reign in Tehran, and I believe that 
we can work to resolve this crisis without resorting to the use of 
force.
  I strongly support this important legislation, and I urge my 
colleagues to do the same.
  Let me just add, in my final comments, my support for H.R. 180, and I 
thank Congresswoman Barbara Lee and Chairman Frank for raising to the 
level of prominence the importance of divestiture in Sudan. There is 
not one day when we are not accounting for the numbers who die, the 
numbers who are suffering in Chad, and I want to rise to thank my 
State, the State of Texas, for being one of those States that has 
approved legislation that has divested our State funds from Sudan.
  As I close, let me say as Secretary Paulson makes his way to China, I 
am

[[Page 21339]]

hoping that he will have on his agenda the divestiture by China out of 
Iran and out of Sudan. It is, I believe, an international embarrassment 
but, more importantly, lives are being lost. And I think it is an 
important diplomatic, if you will, crisis that China continues to 
support Sudan through its energy purchases. I hope that is a 
discussion, and I ask my colleagues to support both bills.
  Mr. GARRETT of New Jersey. Mr. Speaker, I commend the gentleman and 
gentlewoman on the other side of the aisle for their efforts on this 
legislation.
  Mr. HOYER. Mr. Speaker, I strongly support this legislation, the Iran 
Sanctions Enabling Act of 2007 (H.R. 2347), which would authorize state 
and local governments to direct divestiture from and prevent investment 
in entities with investments of $20 million or more in Iran's energy 
sector.
  As Iran continues to pursue its nuclear agenda--in defiance of UN 
sanctions and international pressure--the United States must leverage 
not only its diplomatic resources but its economic influence when it 
comes to Iran. Simply put, we must act aggressively to ensure that we 
are not providing Iran with money to develop nuclear weapons.
  This legislation will help us do that.
  Among other things, this bill would require the publication of 
entities, both inside and outside the United States, that have an 
investment of more than $20 million in Iran's energy sector. Any entity 
designated on this list could delay publication of its name if it 
demonstrates that it is taking steps to divest from Iran.
  Furthermore, the bill provides a safe harbor for investment and 
pension fund managers from lawsuits alleging that divestment would 
lower a fund's profits.
  Mr. Speaker, Iran's support for terrorist groups such as Hezbollah is 
well known and it is listed as a state sponsor of terrorism by our 
State Department.
  In addition, the President of Iran, Mahmoud Ahmadinejad, has made 
repeated outrageous statements toward the United States and our ally, 
Israel, even calling in October 2005 for Israel to be ``wiped off the 
map.''
  Given Iran's continued hostility and defiance of the international 
community, it is imperative that we use all the tools in our national 
security arsenal to attempt to change Iran's behavior. And, state-level 
divestment campaigns are an essential way for state officials to 
prevent retirement funds from helping Iran pursue nuclear weapons and 
fund terrorism.
  Although U.S. companies have been barred from directly investing in 
Iran since 1996, there are investment avenues not covered by those 
restrictions. This bill would close some of the loopholes in previous 
legislation and executive orders by prohibiting public pension funds 
from investing in foreign companies that do more than $20 million in 
business in Iran's oil and gas sector.
  Iran is already struggling with domestic instability, gas rationing 
and falling foreign investment. This legislation provides a useful 
diplomatic and economic tool to further push Iran toward complying with 
international pressure, both to stop its nuclear activities and to 
cease its sponsorship of terrorist groups.
  I urge my colleagues to support this bill.
  Mr. LANTOS. Mr. Speaker, I commend the Chairman of the Financial 
Services Committee, my good friend Congressman Barney Frank of 
Massachusetts, for authoring this critical piece of legislation, of 
which I am proud to be a principal cosponsor. This bill, H.R. 2347 the 
Iran Sanctions Enabling Act of 2007, is a critical element in a network 
of efforts intended to prevent the realization of a nightmare, a 
nuclear-armed Iran.
  Several of us in this body have been working ceaselessly to achieve--
by peaceful means--an end to Iran's quest for nuclear status. We have 
produced several pieces of legislation to achieve that end. The goal of 
all of this legislation is to deprive Iran, insofar as possible, of the 
benefit of its cash-cow, oil sales. And the means of doing this is to 
deter foreign investment in Iran's energy industry.
  Mr. Speaker, the primary purpose of this bill, H.R. 2347, is to allow 
state and local governments to contribute to this effort by divesting 
their pension plans of any foreign entity that invests in Iran. This 
legislation does not require them to divest, but it would certainly 
seem to be a wise course for them to choose, since foreign entities 
that invest in Iran's energy industry are subject to U.S. sanctions and 
therefore liable to lose a significant part of whatever their prior 
value may have been.
  Iran's bid for nuclear arms is the challenge of our age. Iran already 
seeks to dominate the Middle East through intimidation, including 
sponsorship of terrorist groups like Hezbollah and Hamas. If it 
achieves nuclear status, Tehran will greatly enlarge its sway in this 
volatile region and will likely touch off a regional nuclear arms race 
as well. Worse, at least one of Iran's leading political figures has 
intimated that Iran would be willing to use those arms to advance its 
well-known, reprehensible aims, and there is good reason to believe 
that other Iranian leaders subscribe to the same view.
  H.R. 2347 helps to fortify the barrier we are trying to erect to 
deter all foreign investment in Iran's energy sector and therefore 
deprive Iran's theocratic regime of the funds it needs to pay for its 
horrific nuclear goals.
  Mr. Speaker, I strongly support this legislation, and I urge all my 
colleagues to do likewise.
  Mr. PAUL. Mr. Speaker, I strongly oppose any move to initiate further 
sanctions on Iran. Sanctions are acts of war, and expanding sanctions 
on Iran serves no purpose other than preparing the American people for 
an eventual attack on Iran. This is the same pattern we saw in the run 
up to the war on Iraq: Congress passes legislation calling for regime 
change, sanctions are imposed, and eventually we are told that only an 
attack will solve the problem. We should expect the same tragic result 
if we continue down this path. I urge my colleagues to reconsider.
  I oppose economic sanctions for two very simple reasons. First, they 
don't work as effective foreign policy. Time after time, from Cuba to 
China to Iraq, we have failed to unseat despotic leaders or change 
their policies by refusing to trade with the people of those nations. 
If anything, the anti-American sentiment aroused by sanctions often 
strengthens the popularity of such leaders, who use America as a 
convenient scapegoat to divert attention from their own tyranny. 
History clearly shows that free and open trade does far more to 
liberalize oppressive governments than trade wars. Economic freedom and 
political freedom are inextricably linked--when people get a taste of 
goods and information from abroad, they are less likely to tolerate a 
closed society at home. So sanctions mostly harm innocent citizens and 
do nothing to displace the governments we claim as enemies.
  Second, sanctions simply hurt American industries, particularly 
agriculture. Every market we close to our nation's farmers is a market 
exploited by foreign farmers. China, Russia, the Middle East, North 
Korea, and Cuba all represent huge markets for our farm products, yet 
many in Congress favor current or proposed trade restrictions that 
prevent our farmers from selling to the billions of people in these 
areas.
  We must keep in mind that Iran has still not been found in violation 
of the Non-Proliferation Treaty. Furthermore, much of the information 
regarding Iran's nuclear program is coming to us via thoroughly 
discredited sources like the MeK, a fanatical cult that is on our State 
Department's terror list. Additionally, the same discredited neo-
conservatives who pushed us into the Iraq war are making similarly 
exaggerated claims against Iran. How often do these ``experts'' have to 
be proven wrong before we start to question their credibility?
  It is said that we non-interventionists are somehow ``isolationists'' 
because we don't want to interfere in the affairs of foreign nations. 
But the real isolationists are those who demand that we isolate certain 
peoples overseas because we disagree with the policies of their 
leaders. The best way to avoid war, to promote American values, and to 
spread real freedom and liberty is to engage in trade and contacts with 
the rest of the world as broadly as possible.
  I urge my colleagues to reconsider this counterproductive and 
dangerous move toward further sanctions on Iran.
  Mr. GENE GREEN of Texas. Mr. Speaker, I rise today in strong support 
of this legislation.
  Iran presents a major problem for the United States on a number of 
levels. Its overt nuclear ambitions, its interference in the Israeli-
Arab peace process, and its support for Hezbollah--which is second only 
to al Qaeda in the number of American lives it has claimed--as well as 
Hamas and other terrorist organizations all present challenges to 
stability in the region.
  We must use our economic leverage, among other tools, to address this 
problem, and this legislation allows us to do that. First, it extends 
the threat of sanctions to foreign subsidiaries of American companies 
if the subsidiaries were acquired or created in order to evade existing 
prohibitions on trade with Iran. Second, the definition of Iran's 
petroleum sector is expanded to include petroleum by-products and 
liquefied natural gas. Third, it expands who may be sanctioned to 
include the underwriters of these investments in Iran's energy sector.
  Iran's economy is heavily dependent on oil and gas windfall profits, 
and this money is also used to fund terrorism and its nuclear

[[Page 21340]]

program. This bill is a crucial part of continuing sanctions efforts, 
both by the U.S. and the international community.
  I urge my colleagues to join me in supporting this legislation.
  Mr. GARRETT of New Jersey. Mr. Speaker, I have no further requests 
for time, and I yield back the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Sherman) that the House suspend the 
rules and pass the bill, H.R. 2347, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. SHERMAN. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

                          ____________________