[Congressional Record (Bound Edition), Volume 153 (2007), Part 19]
[House]
[Pages 26178-26180]
[From the U.S. Government Publishing Office, www.gpo.gov]




        INTERNATIONAL EMERGENCY ECONOMIC POWERS ENHANCEMENT ACT

  Mr. SHERMAN. Mr. Speaker, I move to suspend the rules and pass the 
Senate bill (S. 1612) to amend the penalty provisions in the 
International Emergency Economic Powers Act, and for other purposes.
  The Clerk read the title of the Senate bill.
  The text of the Senate bill is as follows:

                                S. 1612

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``International Emergency 
     Economic Powers Enhancement Act''.

     SEC. 2. INCREASED PENALTIES FOR VIOLATIONS OF IEEPA.

       (a) In General.--Section 206 of the International Emergency 
     Economic Powers Act (50 U.S.C. 1705) is amended to read as 
     follows:

[[Page 26179]]



     ``SEC. 206. PENALTIES.

       ``(a) Unlawful Acts.--It shall be unlawful for a person to 
     violate, attempt to violate, conspire to violate, or cause a 
     violation of any license, order, regulation, or prohibition 
     issued under this title.
       ``(b) Civil Penalty.--A civil penalty may be imposed on any 
     person who commits an unlawful act described in subsection 
     (a) in an amount not to exceed the greater of--
       ``(1) $250,000; or
       ``(2) an amount that is twice the amount of the transaction 
     that is the basis of the violation with respect to which the 
     penalty is imposed.
       ``(c) Criminal Penalty.--A person who willfully commits, 
     willfully attempts to commit, or willfully conspires to 
     commit, or aids or abets in the commission of, an unlawful 
     act described in subsection (a) shall, upon conviction, be 
     fined not more than $1,000,000, or if a natural person, may 
     be imprisoned for not more than 20 years, or both.''.
       (b) Effective Date.--
       (1) Civil penalties.--Section 206(b) of the International 
     Emergency Economic Powers Act, as amended by subsection (a), 
     shall apply to violations described in section 206(a) of such 
     Act with respect to which enforcement action is pending or 
     commenced on or after the date of the enactment of this Act.
       (2) Criminal penalties.--Section 206(c) of the 
     International Emergency Economic Powers Act, as amended by 
     subsection (a), shall apply to violations described in 
     section 206(a) of such Act with respect to which enforcement 
     action is commenced on or after the date of the enactment of 
     this Act.
       ``(c) Criminal Penalty.--A person who willfully commits, 
     willfully attempts to commit, or willfully conspires to 
     commit, or aids or abets in the commission of, an unlawful 
     act described in subsection (a) shall, upon conviction, be 
     fined not more than $1,000,000, or if a natural person, may 
     be imprisoned for not more than 20 years, or both.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     applies to violations described in section 206 of the 
     International Emergency Economic Powers Act (50 U.S.C. 1705) 
     with respect to which enforcement action is pending or 
     commenced on or after the date of the enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Sherman) and the gentleman from Illinois (Mr. Manzullo) 
each will control 20 minutes.
  The Chair recognizes the gentleman from California.


                             General Leave

  Mr. SHERMAN. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days to revise and extend their remarks and 
include extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. SHERMAN. Mr. Speaker, I rise in strong support of this bill, and 
yield myself such time as I may consume.
  Mr. Speaker, the International Emergency Economic Powers Act, IEEPA, 
has over the years enabled the United States on various occasions to 
impose significant economic sanctions and limitations on terrorists, 
terrorist groups and their supporters, on financiers and on some of the 
worst rogue regimes in the world. It has allowed three Presidents to 
keep the U.S. dual-use export control system in operation against the 
efforts of states like Iran and North Korea to require sensitive dual-
use technology and equipment.
  IEEPA has accomplished this goal, even though Congress has been 
unable to reauthorize the long-expired Export Administration Act, and I 
hope that later in this Congress we do reauthorize the Export 
Administration Act. That act was the original basis for the system of 
export control which is now handled through IEEPA.
  Immediately after 9/11, IEEPA authority was used to freeze the assets 
of terrorist, terrorist organizations and their supporters and to 
hobble the international terrorist network that sought and still seeks 
to kill and maim innocent Americans. Yet the penalties for violating 
IEEPA's provisions are lighter than they should be. Send $1 million as 
a gift to Osama bin Laden and you get as a maximum penalty a $50,000 
fine and 10 years in prison under the act. The same is true for 
unlawful exports of sensitive commercial technology, equipment and 
components that have military applications that are controlled for 
national security purposes.

                              {time}  1115

  If you send a milling machine for shaping nuclear warhead cores to 
either Iran or North Korea, the same maximum fine and prison terms 
under the act apply.
  This bill increases the penalties to a level that I think is 
consistent with the importance of making sure that Americans do not, 
whether for ideological reasons or financial gain, deliberately violate 
our efforts to control terrorism and to prevent the spread of weapons 
of mass destruction.
  S. 1612 increases civil penalties from $50,000 up to $250,000, or to 
an amount that is twice the amount of the transaction that is the basis 
of the violation with respect to which the penalty is imposed. It also 
increases criminal penalties for willful violations from $50,000 up to 
$1 million and/or imprisonment for not more than 20 years. This 
increase in penalties is appropriate given the importance of the 
International Emergency Economic Powers Act to our national security. I 
urge my colleagues to support this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MANZULLO. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of S. 1612. S. 1612 is legislation 
which significantly increases the enforcement and deterrent effects of 
sanctions and export control violations imposed under the International 
Emergency Economic Powers Act, otherwise known as IEEPA.
  Through this law, the President may respond to unusual and 
extraordinary threats originating in substantial part outside of the 
United States by, among other things, prohibiting transactions 
associated with particular entities or countries.
  In other words, IEEPA authorizes the President to impose economic and 
financial sanctions against certain foreign threats to the U.S. and our 
interests around the world. An example of success was the use of these 
tools to bring North Korea back to the bargaining table to eliminate 
their nuclear program.
  IEEPA is also vital to U.S. national security because it continues 
the expired Export Administration Act in full force, allowing the 
Department of Commerce to carry out its mission of ensuring sensitive 
goods and technologies do not fall into the hands of our adversaries. 
It is important to keep the EAA in force so violators do not escape the 
penalties of the law on a mere technicality.
  I would like to take the time to respectfully remind the 
administration that IEEPA brings the entire Export Administration Act 
into force, not just certain provisions.
  Mr. Speaker, this legislation would remove existing barriers to 
meaningful enforcement of U.S. sanctions against terrorist financers, 
proliferators of weapons of mass destruction, Iran, Sudan, and other 
threats under IEEPA.
  Current penalties under IEEPA do not constitute an effective 
deterrent to entities that violate the law by engaging in prohibited 
transactions.
  The legislation will remedy that problem by increasing civil 
penalties from $50,000 to $250,000 and increasing criminal penalties 
for willful violations to $1 million with a maximum jail sentence of 20 
years.
  Mr. Speaker, while I strongly support this increase in penalties to 
willful and knowing violators, I have expressed concern that these 
increased penalties may be applied without taking into account 
unintentional, accidental, or inadvertent violations by companies that 
are trying to comply with the law.
  I have since been assured by the Departments of Treasury and Commerce 
that they will not abuse this new authority, and I include for the 
Record the letter sent to me by Under Secretary of Commerce Mancuso.

                                       Department of Commerce,

                               Washington, DC, September 26, 2007.
     Hon. Donald A. Manzullo,
     House of Representatives,
     Washington, DC.
       Dear Representative Manzullo: Thank you for your letter of 
     September 24, 2007, to Secretary Carlos Gutierrez expressing 
     your concerns over S. 2000, the Export Enhancement Act of 
     2007 (EEA), and S. 1612, the International Emergency Economic 
     Powers Enhancement Act, Secretary Gutierrez asked me to 
     respond to you on his behalf.
       We share a concern for ensuring the vitality of American 
     businesses--small, medium

[[Page 26180]]

     and large, while keeping the most sensitive U.S. goods and 
     technologies out of the hands of those who would do us harm. 
     The Department of Commerce, including the Bureau of Industry 
     and Security (BIS), welcomes your leadership in promoting the 
     role of America's manufacturing sector in sustaining our 
     country's industrial innovation and global competitiveness.
       BIS is focused on ensuring that penalties for violations of 
     the dual-use export control laws and regulations are 
     appropriate. These penalties must not bear disproportionately 
     on small businesses that may have committed a minor, 
     inadvertent violation. With these goals in common, we can 
     work together to protect businesses while protecting America.
       Passage of the EEA is an important step toward this goal, 
     and for this reason is a high priority of the Secretary. 
     Although you point out that S. 2000 would substantially 
     increase penalty levels for civil and criminal violations, we 
     believe that such levels are necessary to make these 
     penalties a more effective deterrent to companies that would 
     intentionally violate the law. Given the national security 
     issues involved, such as WMD proliferation, terrorism, and 
     military diversions, we must do all we can to make our export 
     controls effective.
       Our intent is not to punish any business unfairly for 
     minor, accidental violations. As you know, BIS has 
     implemented a system that mitigates the penalty if certain 
     elements are met in each case of a violation. It is through 
     this system, as articulated in the BIS Penalty Guidelines 
     published in the Code of Federal Regulations in July 2007 (a 
     copy of which is enclosed for your review), that BIS ensures 
     that the penalty assessed is commensurate with the 
     infraction.
       In civil cases, the published Penalty Guidelines set forth 
     several factors that may be considered when deciding ultimate 
     penalty amounts to be imposed, including;
       1. whether or not the respondent submitted a voluntary 
     self-disclosure in the case;
       2. whether the respondent had an export compliance program 
     in place at the time of the violation;
       3. whether the respondent has a prior conviction for export 
     control violations; and
       4. how cooperative the respondent is with the investigation 
     by export enforcement officials.
       These, and other factors, are taken into consideration by 
     BIS when imposing penalties to ensure the punishment fits the 
     violation. Further, the Penalty Guidelines are drafted to 
     allow BIS to take into account company size and the nature of 
     the specific violations in a way that would warrant smaller 
     penalty amounts.
       Additionally, BIS frequently conducts outreach to large and 
     small businesses to aid in the assessment of their export 
     compliance programs, and to address general compliance 
     questions. These visits and outreach programs provide 
     significant opportunities for the federal government and 
     exporters to have a dialogue on export controls, penalties, 
     and compliance concerns. To that end, I would like to offer 
     to visit your Congressional District and hold roundtable 
     discussions with business leaders and entrepreneurs.
       We are working to create, administer and improve an 
     effective and flexible system of export controls that 
     recognize the unique situations that U.S. businesses, 
     particularly small businesses, encounter. Please do not 
     hesitate to contact me or Bill Houston on my staff at 202-
     482-6002 at anytime. I value our relationship and look 
     forward to working together in the future.
           Sincerely,
                                                    Mario Mancuso,
                        Under Secretary for Industry and Security.

  Mr. Speaker, I have also expressed concern about the lack of 
understanding that most small businesses have concerning export 
controls and sanctions. Our sanctions and export control laws are the 
most complex in the world. I believe if we are truly to keep goods and 
services from embargoed countries, small businesses must have a better 
understanding of what those prohibited items are.
  Educated self-governance by small businesses would greatly enhance 
IEEPA as a deterrent, far more than some of the minimal fines that are 
currently imposed.
  Mr. Speaker, I look forward to working with the Departments of 
Treasury and Commerce to make certain that small businesses clearly 
understand the law. IEEPA is an important tool in the effort to combat 
terrorist financing and other illicit activity, such as the 
proliferation of weapons of mass destruction.
  I want to thank Chairman Lantos, Ranking Member Ros-Lehtinen and 
obviously Subcommittee Chairman Sherman for the bipartisan way they 
have moved this measure. They have worked with the administration to 
address my concerns. I support passage of this critical improvement to 
our economic sanctions law.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I yield myself 3 minutes.
  Mr. Speaker, I thank the gentleman for his support of the bill. I 
thank Chairman Lantos and our ranking member, Ms. Ros-Lehtinen, for 
their work in bringing this bill to the floor.
  IEEPA is but one part of an overall effort to use the economic power 
of the United States to prevent terrorism and the spread of nuclear 
weapons. I think we have adequately covered in today's debate the 
importance of this bill to strengthen IEEPA; but I now would like to 
put IEEPA into overall context and take a look at some of the other 
economic measures that we should also be employing in our effort to 
stop the spread of nuclear weapons.
  This House passed H.R. 1400 designed to improve the Iran Sanctions 
Act. We need to press our colleagues in the Senate to pass that bill as 
well. But even more important, we need to press the administration to 
enforce the Iran Sanctions Act.
  Many of us know that as the Iran-Libya Sanctions Act, or ILSA. What 
happened is both the last administration and this administration 
applied those sanctions to investments in the Libyan oil sector. That 
was effective. Gaddafi changed his policies, and so we had to rename 
the bill the Iran Sanctions Act, as we lifted sanctions from Libya.
  Unfortunately, both the last administration and now this 
administration have been unwilling to enforce what is now the Iran 
Sanctions Act, which would be our best tool to put pressure on the 
regime in Tehran.
  We need to close Iranian access to the U.S. financial system. I 
applaud the Treasury Department for blocking access to the New York 
Federal Reserve Board branch in New York to two major Iranian banks, 
which begs the question: Why not the others as well?
  We need to stop World Bank loans to Iran. We need to urge upon our 
colleagues in the Senate that they pass H.R. 2337, known in their house 
as S. 1430, to allow American pension plans to divest from those 
companies doing business in Iran, and we need to urge the Senate to 
pass similar legislation already passed through this House doing the 
same thing with regard to investments in Sudan.
  Finally, we need to make sure that our procurement laws and our laws 
for assisting businesses like the Ex-Im Bank and OPEC also require that 
corporations stop investing in the oil sector of Iran if they want the 
support of U.S. Government agencies.
  It is time for us not to assume that the only possible response is 
either to acquiesce in a nuclear Iran or to use military action. It is 
time for us to get the message to Iranian elites and the Iranian people 
that they face true economic isolation if they continue down the 
current course. The way to do that is to muster all of the economic 
power of the United States towards achieving our national security 
objectives, and one small step in that direction is for us to pass S. 
1612 today.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MANZULLO. Mr. Speaker, I yield back the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Sherman) that the House suspend the 
rules and pass the Senate bill, S. 1612.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the Senate bill was passed.
  A motion to reconsider was laid on the table.

                          ____________________