House Report 109-417 - IRAN FREEDOM SUPPORT ACT

[House Report 109-417]
[From the U.S. Government Publishing Office]

109th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 109-417

======================================================================

IRAN FREEDOM SUPPORT ACT

_______

April 25, 2006.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Hyde, from the Committee on International Relations, submitted the
following

R E P O R T

together with

ADDITIONAL VIEWS

[To accompany H.R. 282]

[Including cost estimate of the Congressional Budget Office]

The Committee on International Relations, to whom was
referred the bill (H.R. 282) to hold the current regime in Iran
accountable for its threatening behavior and to support a
transition to democracy in Iran, having considered the same,
reports favorably thereon with an amendment and recommends that
the bill as amended do pass.

TABLE OF CONTENTS

Page
The Amendment.................................................... 2
Purpose and Summary.............................................. 9
Summary of Provisions of the Bill as Reported.................... 11
Background and Need for the Legislation.......................... 12
Hearings......................................................... 14
Committee Consideration.......................................... 15
Votes of the Committee........................................... 15
Committee Oversight Findings..................................... 15
New Budget Authority and Tax Expenditures........................ 15
Congressional Budget Office Cost Estimate........................ 15
Performance Goals and Objectives................................. 18
Constitutional Authority Statement............................... 18
Section-by-Section Analysis and Discussion....................... 18
Agency Views..................................................... 28
New Advisory Committees.......................................... 31
Congressional Accountability Act................................. 31
Federal Mandates................................................. 32
Exchange of Letters Regarding Committee Jurisdiction............. 32
Changes in Existing Law Made by the Bill, as Reported............ 38
Additional Views................................................. 47

The Amendment

The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Iran Freedom Support Act''.

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

TITLE I--CODIFICATION OF SANCTIONS AGAINST IRAN

Sec. 101. Codification of sanctions.
Sec. 102. Liability of parent companies for violations of sanctions by
foreign entities.

TITLE II--AMENDMENTS TO THE IRAN AND LIBYA SANCTIONS ACT OF 1996 AND
OTHER PROVISIONS RELATED TO INVESTMENT IN IRAN

Sec. 201. Multilateral regime.
Sec. 202. Imposition of sanctions.
Sec. 203. Termination of sanctions.
Sec. 204. Sunset.
Sec. 205. Clarification and expansion of definitions.
Sec. 206. United States pension plans.
Sec. 207. Report by Office of Global Security Risks.
Sec. 208. Technical and conforming amendments.

TITLE III--DIPLOMATIC EFFORTS TO CURTAIL IRANIAN NUCLEAR PROLIFERATION
AND SPONSORSHIP OF INTERNATIONAL TERRORISM

Sec. 301. Diplomatic efforts.
Sec. 302. Strengthening the Nuclear Nonproliferation Treaty.

TITLE IV--DEMOCRACY IN IRAN

Sec. 401. Declaration of Congress regarding United States policy toward
Iran.
Sec. 402. Assistance to support democracy in Iran.
Sec. 403. Waiver of certain export license requirements.

TITLE I--CODIFICATION OF SANCTIONS AGAINST IRAN

SEC. 101. CODIFICATION OF SANCTIONS.

(a) Codification of Sanctions.--United States sanctions, controls,
and regulations with respect to Iran imposed pursuant to Executive
Order 12957, Executive Order 12959, and sections 2 and 3 of Executive
Order 13059 (relating to exports and certain other transactions with
Iran) as in effect on January 1, 2006, shall remain in effect until the
President certifies to the Committee on International Relations of the
House of Representatives and the Committee on Foreign Relations of the
Senate that the Government of Iran has verifiably dismantled its
weapons of mass destruction programs.
(b) No Effect on Other Sanctions Relating to Support for Acts of
International Terrorism.--Subsection (a) shall have no effect on United
States sanctions, controls, and regulations relating to a determination
under section 6(j)(1)(A) of the Export Administration Act of 1979 (50
U.S.C. App. 2405(j)(1)(A)), section 620A(a) of the Foreign Assistance
Act of 1961 (22 U.S.C. 2371(a)), or section 40(d) of the Arms Export
Control Act (22 U.S.C. 2780(d)) relating to support for acts of
international terrorism by the Government of Iran, as in effect on
January 1, 2006.

SEC. 102. LIABILITY OF PARENT COMPANIES FOR VIOLATIONS OF SANCTIONS BY
FOREIGN ENTITIES.

(a) In General.--In any case in which an entity engages in an act
outside the United States which, if committed in the United States or
by a United States person, would violate Executive Order 12959 of May
6, 1995, Executive Order 13059 of August 19, 1997, or any other
prohibition on transactions with respect to Iran that is imposed under
the International Emergency Economic Powers Act (50 U.S.C. 1701 et
seq.) and if that entity was created or availed of for the purpose of
engaging in such an act, the parent company of that entity shall be
subject to the penalties for such violation to the same extent as if
the parent company had engaged in that act.
(b) Definitions.--In this section--
(1) an entity is a ``parent company'' of another entity if
it owns, directly or indirectly, more than 50 percent of the
equity interest in that other entity and is a United States
person; and
(2) the term ``entity'' means a partnership, association,
trust, joint venture, corporation, or other organization.

TITLE II--AMENDMENTS TO THE IRAN AND LIBYA SANCTIONS ACT OF 1996 AND
OTHER PROVISIONS RELATED TO INVESTMENT IN IRAN

SEC. 201. MULTILATERAL REGIME.

(a) Reports to Congress.--Section 4(b) of the Iran and Libya
Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended to read as
follows:
``(b) Reports to Congress.--Not later than six months after the
date of the enactment of the Iran Freedom Support Act and every six
months thereafter, the President shall submit to the appropriate
congressional committees a report regarding specific diplomatic efforts
undertaken pursuant to subsection (a), the results of those efforts,
and a description of proposed diplomatic efforts pursuant to such
subsection. Each report shall include--
``(1) a list of the countries that have agreed to undertake
measures to further the objectives of section 3 with respect to
Iran;
``(2) a description of those measures, including--
``(A) government actions with respect to public or
private entities (or their subsidiaries) located in
their territories, that are engaged in Iran;
``(B) any decisions by the governments of these
countries to rescind or continue the provision of
credits, guarantees, or other governmental assistance
to these entities; and
``(C) actions taken in international fora to
further the objectives of section 3;
``(3) a list of the countries that have not agreed to
undertake measures to further the objectives of section 3 with
respect to Iran, and the reasons therefor; and
``(4) a description of any memorandums of understanding,
political understandings, or international agreements to which
the United States has acceded which affect implementation of
this section or section 5(a).''.
(b) Waiver.--Section 4(c) of such Act (50 U.S.C. 1701 note) is
amended to read as follows:
``(c) Waiver.--
``(1) In general.--The President may, on a case by case
basis, waive for a period of not more than six months the
application of section 5(a) with respect to a national of a
country, if the President certifies to the appropriate
congressional committees at least 30 days before such waiver is
to take effect that--
``(A) such waiver is vital to the national security
interests of the United States; and
``(B) the country of the national has undertaken
substantial measures to prevent the acquisition and
development of weapons of mass destruction by the
Government of Iran.
``(2) Subsequent renewal of waiver.--If the President
determines that, in accordance with paragraph (1), such a
waiver is appropriate, the President may, at the conclusion of
the period of a waiver under paragraph (1), renew such waiver
for subsequent periods of not more than six months each.''.
(c) Investigations.--Section 4 of such Act (50 U.S.C. 1701 note) is
amended by adding at the end the following new subsection:
``(f) Investigations.--
``(1) In general.--The President shall initiate an
investigation into the possible imposition of sanctions against
a person upon receipt by the United States of credible
information indicating that such person is engaged in activity
related to investment in Iran as described in section 5(a).
``(2) Determination and notification.--
``(A) In general.--Not later than 180 days after an
investigation is initiated in accordance with paragraph
(1), the President shall determine, pursuant to section
5(a), whether or not to impose sanctions against a
person engaged in activity related to investment in
Iran as described in such section as a result of such
activity and shall notify the appropriate congressional
committees of the basis for such determination.
``(B) Extension.--If the President is unable to
make a determination under subparagraph (A), the
President shall notify the appropriate congressional
committees and shall extend such investigation for a
subsequent period, not to exceed 180 days, after which
the President shall make the determination required
under such subparagraph and shall notify the
appropriate congressional committees of the basis for
such determination in accordance with such
subparagraph.
``(3) Determinations regarding pending investigations.--Not
later than 90 days after the date of the enactment of this Act,
the President shall, with respect to any investigation that was
pending as of January 1, 2006, concerning a person engaged in
activity related to investment in Iran as described in section
5(a), determine whether or not to impose sanctions against such
person as a result of such activity and shall notify the
appropriate congressional committees of the basis for such
determination.
``(4) Publication.--Not later than 10 days after the
President notifies the appropriate congressional committees
under paragraphs (2) and (3), the President shall ensure
publication in the Federal Register of the identification of
the persons against which the President has made a
determination that the imposition of sanctions is appropriate,
together with an explanation for such determination.''.

SEC. 202. IMPOSITION OF SANCTIONS.

(a) Sanctions With Respect to Development of Petroleum Resources.--
Section 5(a) of the Iran and Libya Sanctions Act of 1996 (50 U.S.C.
1701 note) is amended--
(1) in the heading, by striking ``to Iran'' and inserting
``to the Development of Petroleum Resources of Iran'';
(2) by striking ``(6)'' and inserting ``(5)''; and
(3) by striking ``with actual knowledge,''.
(b) Sanctions With Respect to Development of Weapons of Mass
Destruction or Other Military Capabilities.--Section 5(b) of such Act
(50 U.S.C. 1701 note) is amended to read as follows:
``(b) Mandatory Sanctions With Respect to Development of Weapons of
Mass Destruction or Other Military Capabilities.--Notwithstanding any
other provision of law, the President shall impose two or more of the
sanctions described in paragraphs (1) through (5) of section 6 if the
President determines that a person has, on or after the date of the
enactment of this Act, exported, transferred, or otherwise provided to
Iran any goods, services, technology, or other items knowing that the
provision of such goods, services, technology, or other items would
contribute to the ability of Iran to--
``(1) acquire or develop chemical, biological, or nuclear
weapons or related technologies; or
``(2) acquire or develop destabilizing numbers and types of
advanced conventional weapons.''.
(c) Persons Against Which the Sanctions Are to Be Imposed.--Section
5(c)(2) of such Act (50 U.S.C. 1701 note) is amended--
(1) in subparagraph (B), by striking ``, with actual
knowledge,'' and by striking ``or'' at the end;
(2) in subparagraph (C), by striking ``, with actual
knowledge,'' and by striking the period at the end and
inserting ``; or''; and
(3) by adding after subparagraph (C) the following new
subparagraph:
``(D) is a private or government lender, insurer,
underwriter, or guarantor of the person referred to in
paragraph (1) if that private or government lender,
insurer, underwriter, or guarantor engaged in the
activities referred to in paragraph (1).''.
(d) Effective Date.--The amendments made by this section shall
apply with respect to actions taken on or after March 15, 2006.

SEC. 203. TERMINATION OF SANCTIONS.

Section 8(a) of the Iran and Libya Sanctions Act of 1996 (50 U.S.C.
1701 note) is amended--
(1) in paragraph (1)(C), by striking ``and'' at the end;
(2) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(3) poses no significant threat to United States national
security, interests, or allies.''.

SEC. 204. SUNSET.

Section 13 of the Iran and Libya Sanctions Act of 1996 (50 U.S.C.
1701 note) is amended--
(1) in the section heading, by striking ``; SUNSET'';
(2) in subsection (a), by striking the subsection
designation and heading; and
(3) by striking subsection (b).

SEC. 205. CLARIFICATION AND EXPANSION OF DEFINITIONS.

(a) Person.--Section 14(14)(B) of the Iran and Libya Sanctions Act
of 1996 (50 U.S.C. 1701 note) is amended--
(1) by inserting after ``trust,'' the following:
``financial institution, insurer, underwriter, guarantor, any
other business organization, including any foreign subsidiaries
of the foregoing,''; and
(2) by inserting before the semicolon the following: ``,
such as an export credit agency''.
(b) Petroleum Resources.--Section 14(15) of the Iran and Libya
Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended by inserting
after ``petroleum'' the second place it appears, the following: ``,
petroleum by-products,''.

SEC. 206. UNITED STATES PENSION PLANS.

(a) Findings.--Congress finds the following:
(1) The United States and the international community face
no greater threat to their security than the prospect of rogue
regimes who support international terrorism obtaining weapons
of mass destruction, and particularly nuclear weapons.
(2) Iran is the leading state sponsor of international
terrorism and is close to achieving nuclear weapons capability
but has paid no price for nearly twenty years of deception over
its nuclear program. Foreign entities that have invested in
Iran's energy sector, despite Iran's support of international
terrorism and its nuclear program, have afforded Iran a free
pass while many United States entities have unknowingly
invested in those same foreign entities.
(3) United States investors have a great deal at stake in
preventing Iran from acquiring nuclear weapons.
(4) United States investors can have considerable influence
over the commercial decisions of the foreign entities in which
they have invested.
(b) Publication in Federal Register.--Not later than six months
after the date of the enactment of this Act and every six months
thereafter, the President shall ensure publication in the Federal
Register of a list of all United States and foreign entities that have
invested more than $20,000,000 in Iran's energy sector between August
5, 1996, and the date of such publication. Such list shall include an
itemization of individual investments of each such entity, including
the dollar value, intended purpose, and current status of each such
investment.
(c) Sense of Congress Relating to Divestiture From Iran.--It is the
sense of Congress that, upon publication of a list in the relevant
Federal Register under subsection (b), managers of United States
Government pension plans or thrift savings plans, managers of pension
plans maintained in the private sector by plan sponsors in the United
States, and managers of mutual funds sold or distributed in the United
States should immediately initiate efforts to divest all investments of
such plans or funds in any entity included on the list.
(d) Sense of Congress Relating to Prohibition on Future
Investment.--It is the sense of Congress that, upon publication of a
list in the relevant Federal Register under subsection (b), there
should be no future investment in any entity included on the list by
managers of United States Government pension plans or thrift savings
plans, managers of pension plans maintained in the private sector by
plan sponsors in the United States, and managers of mutual funds sold
or distributed in the United States.
(e) Disclosure to Investors.--
(1) In general.--Not later than 30 days after the date of
publication of a list in the relevant Federal Register under
subsection (b), managers of United States Government pension
plans or thrift savings plans, managers of pension plans
maintained in the private sector by plan sponsors in the United
States, and managers of mutual funds sold or distributed in the
United States shall notify investors that the funds of such
investors are invested in an entity included on the list. Such
notification shall contain the following information:
(A) The name or other identification of the entity.
(B) The amount of the investment in the entity.
(C) The potential liability to the entity if
sanctions are imposed by the United States on Iran or
on the entity.
(D) The potential liability to investors if such
sanctions are imposed.
(2) Follow-up notification.--
(A) In general.--Except as provided in subparagraph
(C), in addition to the notification required under
paragraph (1), such managers shall also include such
notification in every prospectus and in every regularly
provided quarterly, semi-annual, or annual report
provided to investors, if the funds of such investors
are invested in an entity included on the list.
(B) Contents of notification.--The notification
described in subparagraph (A) shall be displayed
prominently in any such prospectus or report and shall
contain the information described in paragraph (1).
(C) Good-faith exception.--If, upon publication of
a list in the relevant Federal Register under
subsection (b), such managers verifiably divest all
investments of such plans or funds in any entity
included on the list and such managers do not initiate
any new investment in any other such entity, such
managers shall not be required to include the
notification described in subparagraph (A) in any
prospectus or report provided to investors.

SEC. 207. REPORT BY OFFICE OF GLOBAL SECURITY RISKS.

Not later than 30 days after the date of publication of a list in
the relevant Federal Register under section 206(b), the Office of
Global Security Risks within the Division of Corporation Finance of the
United States Securities and Exchange Commission shall issue a report
containing a list of the United States and foreign entities identified
in accordance with such section, a determination of whether or not the
operations in Iran of any such entity constitute a political, economic,
or other risk to the United States, and a determination of whether or
not the entity faces United States litigation, sanctions, or similar
circumstances that are reasonably likely to have a material adverse
impact on the financial condition or operations of the entity.

SEC. 208. TECHNICAL AND CONFORMING AMENDMENTS.

(a) Findings.--Section 2 of the Iran and Libya Sanctions Act of
1996 (50 U.S.C. 1701 note) is amended by striking paragraph (4).
(b) Declaration of Policy.--Section 3 of the Iran and Libya
Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended--
(1) in subsection (a), by striking ``(a) Policy With
Respect to Iran.--''; and
(2) by striking subsection (b).
(c) Termination of Sanctions.--Section 8 of the Iran and Libya
Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended--
(1) in subsection (a), by striking ``(a) Iran.--''; and
(2) by striking subsection (b).
(d) Duration of Sanctions; Presidential Waiver.--Section 9(c)(2)(C)
of the Iran and Libya Sanctions Act of 1996 (50 U.S.C. 1701 note) is
amended to read as follows:
``(C) an estimate of the significance of the
provision of the items described in section 5(a) or
section 5(b) to Iran's ability to, respectively,
develop its petroleum resources or its weapons of mass
destruction or other military capabilities; and''.
(e) Reports Required.--Section 10(b)(1) of the Iran and Libya
Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended by striking
``and Libya'' each place it appears.
(f) Definitions.--Section 14 of the Iran and Libya Sanctions Act of
1996 (50 U.S.C. 1701 note) is amended--
(1) in paragraph (9)--
(A) in the matter preceding subparagraph (A), by--
(i) striking ``, or with the Government of
Libya or a nongovernmental entity in Libya,'';
and
(ii) by striking ``nongovenmental'' and
inserting ``nongovernmental''; and
(B) in subparagraph (A), by striking ``or Libya (as
the case may be)'';
(2) by striking paragraph (12); and
(3) by redesignating paragraphs (13), (14), (15), (16), and
(17) as paragraphs (12), (13), (14), (15), and (16),
respectively.
(g) Short Title.--
(1) In general.--Section 1 of the Iran and Libya Sanctions
Act of 1996 (50 U.S.C. 1701 note) is amended by striking ``and
Libya''.
(2) References.--Any reference in any other provision of
law, regulation, document, or other record of the United States
to the ``Iran and Libya Sanctions Act of 1996'' shall be deemed
to be a reference to the ``Iran Sanctions Act of 1996''.

TITLE III--DIPLOMATIC EFFORTS TO CURTAIL IRANIAN NUCLEAR PROLIFERATION
AND SPONSORSHIP OF INTERNATIONAL TERRORISM

SEC. 301. DIPLOMATIC EFFORTS.

(a) Sense of Congress Relating to United Nations Security Council
and the International Atomic Energy Agency.--It is the sense of
Congress that the President should instruct the United States Permanent
Representative to the United Nations to work to secure support at the
United Nations Security Council for a resolution that would impose
sanctions on Iran as a result of its repeated breaches of its nuclear
nonproliferation obligations, to remain in effect until Iran has
verifiably dismantled its weapons of mass destruction programs.
(b) Prohibition on Assistance to Countries That Invest in the
Energy Sector of Iran.--
(1) Withholding of assistance.--If, on or after April 13,
2005, a foreign person (as defined in section 14 of the Iran
Sanctions Act of 1996 (50 U.S.C. 1701 note), as renamed
pursuant to section 208(g)(1)) or an agency or instrumentality
of a foreign government has more than $20,000,000 invested in
Iran's energy sector, the President shall, until the date on
which such person or agency or instrumentality of such
government terminates such investment, withhold assistance
under the Foreign Assistance Act of 1961 (22 U.S.C. 2151 et
seq.) to the government of the country to which such person
owes allegiance or to which control is exercised over such
agency or instrumentality.
(2) Waiver.--Assistance prohibited by this section may be
furnished to the government of a foreign country described in
subsection (a) if the President determines that furnishing such
assistance is important to the national security interests of
the United States, furthers the goals described in this Act,
and, not later that 15 days before obligating such assistance,
notifies the Committee on International Relations of the House
of Representatives, the Committee on Foreign Relations of the
Senate, the Committee on Appropriations of the House of
Representatives, and the Committee on Appropriations of the
Senate of such determination and submits to such committees a
report that includes--
(A) a statement of the determination;
(B) a detailed explanation of the assistance to be
provided;
(C) the estimated dollar amount of the assistance;
and
(D) an explanation of how the assistance furthers
United States national security interests.

SEC. 302. STRENGTHENING THE NUCLEAR NONPROLIFERATION TREATY.

(a) Findings.--Congress finds the following:
(1) Article IV of the Treaty on the Non-Proliferation of
Nuclear Weapons (commonly referred to as the ``Nuclear
Nonproliferation Treaty'' or ``NPT'') states that countries
that are parties to the Treaty have the ``inalienable right . .
. to develop research, production and use of nuclear energy for
peaceful purposes without discrimination and in conformity with
articles I and II of this Treaty.''.
(2) Iran has manipulated Article IV of the Nuclear
Nonproliferation Treaty to acquire technologies needed to
manufacture nuclear weapons under the guise of developing
peaceful nuclear technology.
(3) Legal authorities, diplomatic historians, and officials
closely involved in the negotiation and ratification of the
Nuclear Nonproliferation Treaty state that the Treaty neither
recognizes nor protects such a per se right to all nuclear
technology, such as enrichment and reprocessing, but rather
affirms that the right to the use of peaceful nuclear energy is
qualified.
(b) Declaration of Congress Regarding United States Policy to
Strengthen the Nuclear Nonproliferation Treaty.--Congress declares that
it should be the policy of the United States to support diplomatic
efforts to end the manipulation of Article IV of the Nuclear
Nonproliferation Treaty, as undertaken by Iran, without undermining the
Treaty itself.

TITLE IV--DEMOCRACY IN IRAN

SEC. 401. DECLARATION OF CONGRESS REGARDING UNITED STATES POLICY TOWARD
IRAN.

(a) In General.--Congress declares that it should be the policy of
the United States to support independent human rights and peaceful pro-
democracy forces in Iran.
(b) Rule of Construction.--Nothing in this Act shall be construed
as authorizing the use of force against Iran.

SEC. 402. ASSISTANCE TO SUPPORT DEMOCRACY IN IRAN.

(a) Authorization.--
(1) In general.--The President is authorized to provide
financial and political assistance (including the award of
grants) to foreign and domestic individuals, organizations, and
entities that support democracy and the promotion of democracy
in Iran. Such assistance may include the award of grants to
eligible independent pro-democracy radio and television
broadcasting organizations that broadcast into Iran.
(2) Limitation on assistance.--In accordance with the rule
of construction described in subsection (b) of section 401,
none of the funds authorized under this section shall be used
to support the use of force against Iran.
(b) Eligibility for Assistance.--Financial and political assistance
under this section may be provided only to an individual, organization,
or entity that--
(1) officially opposes the use of violence and terrorism
and has not been designated as a foreign terrorist organization
under section 219 of the Immigration and Nationality Act (8
U.S.C. 1189) at any time during the preceding four years;
(2) advocates the adherence by Iran to nonproliferation
regimes for nuclear, chemical, and biological weapons and
materiel;
(3) is dedicated to democratic values and supports the
adoption of a democratic form of government in Iran;
(4) is dedicated to respect for human rights, including the
fundamental equality of women;
(5) works to establish equality of opportunity for people;
and
(6) supports freedom of the press, freedom of speech,
freedom of association, and freedom of religion.
(c) Funding.--The President may provide assistance under this
section using--
(1) funds available to the Middle East Partnership
Initiative (MEPI), the Broader Middle East and North Africa
Initiative, and the Human Rights and Democracy Fund; and
(2) amounts made available pursuant to the authorization of
appropriations under subsection (g).
(d) Notification.--Not later than 15 days before each obligation of
assistance under this section, and in accordance with the procedures
under section 634A of the Foreign Assistance Act of 1961 (22 U.S.C.
2394-l), the President shall notify the Committee on International
Relations and the Committee on Appropriations of the House of
Representatives and the Committee on Foreign Relations and the
Committee on Appropriations of the Senate. Such notification shall
include, as practicable, the types of programs supported by such
assistance and the recipients of such assistance.
(e) Sense of Congress Regarding Diplomatic Assistance.--It is the
sense of Congress that--
(1) contacts should be expanded with opposition groups in
Iran that meet the criteria under subsection (b);
(2) support for a transition to democracy in Iran should be
expressed by United States representatives and officials in all
appropriate international fora;
(3) efforts to bring a halt to the nuclear weapons program
of Iran, including steps to end the supply of nuclear
components or fuel to Iran, should be intensified, with
particular attention focused on the cooperation regarding such
program--
(A) between the Government of Iran and the
Government of the Russian Federation; and
(B) between the Government of Iran and individuals
from China and Pakistan, including the network of Dr.
Abdul Qadeer (A. Q.) Khan; and
(4) officials and representatives of the United States
should--
(A) strongly and unequivocally support indigenous
efforts in Iran calling for free, transparent, and
democratic elections; and
(B) draw international attention to violations by
the Government of Iran of human rights, freedom of
religion, freedom of assembly, and freedom of the
press.
(f) Authorization of Appropriations.--There is authorized to be
appropriated to the Department of State such sums as may be necessary
to carry out this section.

SEC. 403. WAIVER OF CERTAIN EXPORT LICENSE REQUIREMENTS.

The Secretary of State may, in consultation with the Secretary of
Commerce, waive the requirement to obtain a license for the export to,
or by, any person to whom the Department of State has provided a grant
under a program to promote democracy or human rights abroad, any item
which is commercially available in the United States without government
license or permit, to the extent that such export would be used
exclusively for carrying out the purposes of the grant.

Purpose and Summary

Iran is the state which poses the most critical security
threat to the United States. Iran's program to develop weapons
of mass destruction, in particular nuclear weapons and the
means to deliver them, is a special concern to the American
people and should alarm the entire international community. As
Under Secretary of State for Arms Control and International
Security Robert Joseph testified before the Committee on March
8, 2006: ``Iran is at the nexus of weapons of mass destruction
and terrorism, pursuing nuclear, chemical, and biological
programs and actively supporting terrorist movements. If Iran
has fissile material or nuclear weapons, the likelihood of
their transfer to a third party would increase--by design or
through diversion.''
The United States has sought to prevent Iran from acquiring
weapons of mass destruction by a number of means. One principal
means has been a series of Executive Orders under the
International Emergency Economic Powers Act which forbid
American firms from engaging in many routine transactions with
Iran, and which, in particular, forbid investments in Iran and
its petroleum sector. The petroleum sector is Iran's main
foreign currency earner. In addition, other administrative and
legislative provisions are designed to prevent specific
components of weapons of mass destruction systems from falling
into Iran's hands.
A major weakness of the United States system of laws and
regulations concerning Iran is and has been the ability of
entities outside the jurisdiction of the United States to enter
into transactions that ``fill in behind'' United States
entities which do not engage in those transactions because of
United States domestic law. Allowing this situation to continue
would have had the effect of allowing Iran access to capital
and future streams of petroleum revenue that could expedite
Iran's development of weapons of mass destruction and expand
their ability to fund, train, and supply terrorist
organizations around the world. In October, 1995, then-Under
Secretary of State Peter Tarnoff underscored that ``a straight
line links Iran's oil income and its ability to sponsor
terrorism and build weapons of mass destruction . . . and any
private company that helps Iran to expand its oil [sector] must
accept that it is indirectly contributing to this menace.''
Finally, allowing foreign firms to act where American firms
could not would have strengthened those foreign firms at the
expense of American firms, their employees, suppliers, and
investors.
Recognizing this, in 1996 the Congress passed and President
Clinton signed into law Public Law 104-172, ``the Iran and
Libya Sanctions Act'' (ILSA) which was designed to dissuade
foreign entities from investing in the Iranian petroleum sector
by providing for the imposition of certain sanctions on such
entities.
No firms have been sanctioned under this law. However,
there have been certain favorable aspects of its operation from
the perspective of United States national security. First,
certain concessions from major powers were made with respect to
those powers' dealings with Iran, in exchange for waivers of
the law's operation, pursuant (in the view of the
Administration) to the statute as enacted. In 1998, then-
Secretary of State Madeleine Albright found that an investment
by Total, a French firm, in Iran violated ILSA but waived
sanctions and indicated that additional waivers would be
forthcoming if there was cooperation from European Union states
on non-proliferation matters with respect to Iran. The view of
the importance of those concessions and promises of future
cooperation vary greatly. Second, the supply of capital to the
Iranian petroleum sector has been constrained by the threat of
sanctions, driving up the cost of capital--to the disadvantage
of Iran. ILSA was in fact a deterrent to investment and served
to help highlight the threat from Iran. In 2001, Iranian
economic experts themselves noted that ``sanctions result in
contracts with second [-rate] companies and ``at least double
the cost of [Iran's] oil extraction,'' requiring ``that a
significant part of [Iran's] economic and financial resources
are expended to compensate for such limitations.'' This is one
explanation for the widely disparate rate of investment in the
petroleum sector in Iran, on the one hand, and its immediate
neighbors, such as Qatar, on the other. For this reason, in
2001, the Congress extended ILSA, as mentioned above, for five
years. It would have otherwise expired. It will now expire in
August, 2006. The Administration testified in March, 2006, that
ILSA is a useful tool and supports its renewal for five years.
Nevertheless, the lack of imposition of sanctions has, over
time, greatly diminished ILSA's impact and, given the growing
concern over Iranian WMD capabilities, particularly its nuclear
program, led the Committee to recommend the enactment of H.R.
282 as amended.
In the years since ILSA was last amended, Libya's behavior
with respect to its weapons of mass destruction program has
changed radically. The President has certified that Libya has
met the requirements of United Nations Security Council
resolutions relating to Libyan involvement in the bombing of
Pan Am 103 in 1988, and accordingly, Administrative action
restrictions on investment in Libya have been removed. The
Committee deems it appropriate to remove references to Libya
from Public Law 104-172 at this time.
In brief, H.R. 282, as amended, would extend Public Law
104-172 indefinitely, remove former restrictions on investments
in Libya from its scope and change its title to the Iran
Sanctions Act (``ISA''), and entrench certain domestically-
applicable sanctions into law until specified conditions were
met. Also, as an additional means to deter investment in Iran,
language is included to inform pension funds and mutual funds
that they may be investing in entities which themselves invest
in Iran's petroleum sector, and is designed, in general, to
discourage such investments. The bill also requires the
President to investigate, on a schedule fixed in law, whether
credible evidence of an investment in the Iranian petroleum
sector exists, and if it does exist, whether sanctions should
be imposed or waived. Finally, the bill authorizes
appropriations for a program to help promote democracy in Iran.

Summary of Provisions of the Bill as Reported

Codification of U.S. Sanctions on Iran
Existing sanctions, controls and regulations under the
International Economic Emergency Powers Act relating to Iran
are codified and will remain in effect until the President can
certify to Congress that Iran has verifiably dismantled its
weapons of mass destruction and related programs.
The termination of sanctions for WMD reasons does not
affect sanctions imposed on Iran for state-sponsorship of
terrorism.
Amends the original Iran and Libya Sanctions Act, with respect to Iran
1) Requires a twice-annual report to Congress detailing
specific diplomatic efforts toward the imposition of
multilateral sanctions against Iran.
2) Investigation into violations of ILSA will be triggered
by the discovery of credible evidence of investment in the
petroleum sector of Iran.
3) No later than 180 days after beginning an investigation,
the President shall determine if sanctions are to be imposed. A
determination to impose sanctions shall be reported to Congress
and published in the Federal Register. The investigation may be
extended for one additional period of 180 days.
4) A decision on investigations pending on January 1, 2006,
must be made within 90 days of the date of enactment and such a
decision shall be reported to Congress and, if it results in
the imposition of sanctions, shall be published in the Federal
Register.
5) A waiver by the President shall be effective for six
months, on an entity basis, and will be based on a
determination that the waiver is vital to the national security
interests of the United States and that the country of the
person who would be subject to sanctions has undertaken
substantial measures to prevent Iran's acquisition of weapons
of mass destruction. Waivers may be renewed for subsequent six-
month periods.
6) Liability for sanctioned parties is expanded to private
or government lenders, insurers, underwriters, and guarantors.
A government export credit agency can help ensure the success
of an investment deal, and the provision of support by such an
agency would make that agency subject to sanctions.
7) The Sunset provision is eliminated. However, the
requirement to impose sanctions will no longer have force or
effect when the President determines and reports to the
Congress that Iran no longer poses a significant threat to the
national security of the United States, its interests, or
allies.
8) ILSA provides a set of criteria which, if met, would
result in the termination of sanctions. H.R. 282 adds: Iran
will have to be determined not to pose a significant threat to
United States national security, interests, or allies.
Definitions Expanded
1) The sorts of enterprises that may be deemed to
``invest'' in the Iranian petroleum sector are specified to
include entities such as guarantors, insurers, and the like.
2) The term ``petroleum resources'' shall now include
petroleum by-products.
Supporting a Change to Democratic Rule in Iran
1) Provides authorization of assistance for human rights
and peaceful pro-democracy organizations and individuals
meeting a certain criteria.
2) Authorizes assistance for independent broadcasts into
Iran. Funding for this provision could be derived from existing
programs relating to the Middle East region.
3) It formally articulates that United States policy should
be to support independent human rights and pro-democracy forces
in Iran, and that contacts should be expanded with opposition
groups in Iran that support the values articulated in the bill.
Additional provisions
1) Expresses the Sense of Congress that U.S. Government
pension funds and other similar funds should divest from
existing investments in companies subject to ILSA sanctions and
should not enter into any future investments in such entities.
2) Requires managers of these public and private pension
plans and mutual funds to notify investors that the funds are
invested in entities that are subject to ILSA sanctions because
of their activities in Iran's energy sector.
3) Calls for a series of reports documenting all companies
subject to ILSA sanctions since the enactment of ILSA in 1996.
4) Calls for a series of diplomatic efforts to curtail
Iranian terrorism and proliferation activities.
5) Requires the withholding of U.S. assistance to countries
that directly help Iran, or permit commercial entities subject
to their laws, help Iran, by investing in its energy sector.
(Can be waived by the President.)
6) Provides that nothing in H.R. 282 shall be construed as
authorizing the use of force against Iran.

Background and Need for the Legislation

Iran has been the subject of considerable Congressional
attention over the past dozen years.
The Committee is aware of abundant evidence of Iran's
misbehavior on all fronts: its pursuit of weapons of mass
destruction, its support for terrorism, its efforts to
undermine United States interests in Iraq and Afghanistan, its
denial of Israel's right to exist, its actions to try to defeat
the Middle East peace process, and its extreme mistreatment of
its own people. This record has been made in the public
hearings detailed in the section ``Hearings'' set out below, as
well as in dozens of meetings between Members or staff of the
House International Relations Committee, Administration
officials and members of the public. Diplomatic engagement by
friends (or rivals) of the United States, and on occasion by
the United States itself, aimed at moderating Iranian behavior,
has had little, if any, positive result.
In May 1995, then-Secretary of State Warren Christopher
warned the international community that the path Iran was
following was a mirror image of the steps taken by others who
have sought nuclear weapons capabilities. After numerous House
and Senate hearings, the Iran and Libya Sanctions Act (ILSA)
was signed on August 5, 1996. In May 1998, the Congress passed
the Iran Missile Proliferation Sanctions Act of 1998. President
Clinton vetoed the Act. Congress did not override the veto but
the Administration issued an Executive Order addressing the
Iranian missile threat.
Executive Order 13094 was issued in July 1998 and seven
Russian entities were sanctioned for assisting Iran in
developing its missile program. The decision came just days
after Iran test-fired a missile with an 800-mile range.
Hearings on and attention to Iran continued, and the Iran
Nonproliferation Act was signed into law on March 14, 2000. The
ILSA Extension Act was signed into law on August 3, 2001.
Representatives Ros-Lehtinen and Lantos introduced an
earlier version of the Iran Freedom Support Act in 2004; H.R.
282 was introduced on January 6, 2006, and has attracted 355
cosponsors. Further information on the bill's consideration is
set out in other sections of this report.
Other resolutions or provisions of law addressing Iran not
mentioned elsewhere are: H. Con. Res. 398, expressing the
concern of Congress over Iran's development of the means to
produce nuclear weapons (passed by the House on May 6, 2004);
and H. Con. Res. 341, condemning the Government of Iran for
violating its international nuclear nonproliferation
obligations and expressing support for efforts to report Iran
to the United Nations Security Council (passed by the House on
February 16, 2006).
The Committee believes that the laws which have been
enacted, as enforced, and other steps taken by current and past
Administrations, have proven inadequate. They have not
succeeded in ending Iran's efforts to produce weapons of mass
destruction or ending Iran's other, considerable threats to
American national interests.
Specifically with respect to ILSA, the Committee is deeply
dismayed that the current Administration, like the prior
Administration, has not acted to sanction a single enterprise
for investing in Iran, but has delayed its decisions on
``alleged'' investments well past the point of failing the
``laugh test.'' Even so, the Administration does support
continuing the present law (ILSA) in effect, albeit only for an
additional five years. The Administration, the Committee, and
some outside observers believe that the existing sanctions
regime has had some ongoing impact on Iran's ability to raise
investment capital. It is time, however, to either gain
diplomatic leverage to deal with the current emergency (by
exercising a waiver in an appropriate case) or to come down
hard on enterprises which choose to invest in Iran regardless
of the impact of those investments on world peace.
It is necessary, of course, that existing and strengthened
provisions be administered flexibly in appropriate cases. In
particular, the Committee acknowledges that the Administration,
after a long and arduous effort, has been able to move the
question of Iran's nuclear arms from the International Atomic
Energy Agency (IAEA) to the United Nations Security Council
(UNSC). This is a remarkable diplomatic feat, but it must now
be followed up by decisive action either in the UNSC or by
like-minded countries that share, in whole or in part, our
concerns about Iran. During its consideration of H.R. 282, the
Committee adjusted the various mechanisms contained within the
bill in part to provide the Administration the option to use
the newly-dubbed ISA as a lever in our current diplomatic
efforts, and not just as a weapon against states, or entities,
which invest in Iran's petroleum sector. The Committee
underlines the appropriateness of using all available leverage,
in addition to diplomatic efforts, to hold together the
diplomatic coalition that might be able to alter Iran's
behavior. It is ironic that the more dangerous Iran is, the
more appropriate it might be to decide that marshalling
effective diplomatic forces is critical to the national
security interests of the United States.
Current ILSA legislation would impose wide-ranging trade
and investment sanctions on firms involved in Libya until such
time as the President certified that Libya is in compliance
with UN Security Council (UNSC) Resolutions 731, 748, and 883,
all of which related to the involvement of Libyans in the
terrorist bombing of Pan Am Flight 103 in 1988. On April 23,
2004, President Bush certified that Libya had met the
requirements of the UNSC resolutions, thereby removing the ILSA
restrictions on trade with Libya. H.R. 282 would codify this
Presidential determination by removing all reference to Libya
from ILSA and changing the name of the law to ``Iran Sanctions
Act.'' The Committee believes that the U.S. willingness to
terminate sanctions contained in ILSA based on Libya's decision
to comply with its obligations under these Security Council
resolutions, as well as its December 2003 decision to
verifiably eliminate its weapons of mass destructions program,
is an incentive for Iran to modify its own behavior regarding
weapons of mass destruction and terrorism.

Hearings

In recent years, the Full Committee has held several
hearings regarding Iran: 1) February 26, 2003 (Russia's
Policies Toward the Axis of Evil: Money and Geopolitics in Iraq
and Iran); 2) June 4, 2003 (U.S. Nonproliferation Policy After
Iraq); 3) March 30, 2004 (The Bush Administration and
Nonproliferation: A New Strategy Emerges); and 4) February 15,
2006 and March 8, 2006 (both entitled ``United States Policy
Toward Iran--Next Steps'').
The Subcommittee on the Middle East and Central Asia has
held several hearings and briefings on or related to Iran,
including: June 25, 2003 (Enforcement of the Iran-Libya
Sanctions Act and Increasing Security Threats from Iran); and
June 24, 2004 (Iranian Proliferation: Implications for
Terrorists, their State-Sponsors and U.S. Counter-proliferation
Policy).
The Subcommittee on International Terrorism and
Nonproliferation held hearings on April 14, 2005 (Averting
Nuclear Terrorism); April 28, 2005 (Previewing the Nuclear
Nonproliferation Treaty Review Conference); and June 30, 2005
(Nonproliferation and the G-8); and March 2, 2006 (Assessing
`Rights' under the Nuclear Nonproliferation Treaty).
The Subcommittees on the Middle East and Central Asia and
on International Terrorism and Nonproliferation held a joint
hearing on February 16, 2005 (Iran: A Quarter-Century of State-
Sponsored Terror).

Committee Consideration

On April 13, 2005, the Subcommittee on the Middle East and
Central Asia met in open session and ordered favorably reported
the bill H.R. 282, as amended, by unanimous consent, a quorum
being present. On March 15, 2006, the Committee met in open
session and ordered favorably reported the bill H.R. 282, with
an amendment, by a recorded vote of 37 to 3, a quorum being
present.

Votes of the Committee

Clause (3)(b) of rule XIII of the Rules of the House of
Representatives requires that the results of each record vote
on an amendment or motion to report, together with the names of
those voting for or against, be printed in the Committee
Report.
The Committee considered an amendment in the nature of a
substitute offered by Ms. Ros-Lehtinen (for herself and Mr.
Lantos). The amendment was modified by unanimous consent, and
was agreed to by voice vote. On the motion to report the bill,
H.R. 282, as amended, the vote was as follows:
Voting for (37): Hyde, Smith (NJ), Burton, Gallegly, Ros-
Lehtinen, Rohrabacher, Royce, Chabot, Tancredo, Issa, Davis,
Green, Weller, Pence, McCotter, Boozman, Barrett, Mack,
Fortenberry, Poe, Lantos, Berman, Ackerman, Brown, Sherman,
Wexler, Delahunt, Meeks, Lee, Crowley, Berkley, Napolitano,
Schiff, Watson, Smith (WA), Chandler, and Carnahan.
Voting against (3): Leach, Paul, and Blumenauer.

Committee Oversight Findings

In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.

New Budget Authority and Tax Expenditures

Clause 3(c)(2) of House Rule XIII is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.

Congressional Budget Office Cost Estimate

In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 282, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:

U.S. Congress,
Congressional Budget Office,
Washington, DC, April 7, 2006.
Hon. Henry J. Hyde, Chairman,
Committee on International Relations,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 282, the Iran
Freedom Support Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sam
Papenfuss, who can be reached at 226-2840.
Sincerely,
Donald B. Marron,
Acting Director.
Enclosure

cc:
Honorable Tom Lantos
Ranking Member
H.R. 282--Iran Freedom Support Act

SUMMARY

H.R. 282 would codify certain sanctions currently imposed
by executive order with respect to Iran. Additionally, the bill
would require the President to publish in the Federal Register
a list of all foreign and domestic entities that have invested
more than $20 million in Iran's energy sector. If an agency or
instrumentality of a country, or a person owing allegiance to
that country, has invested more than $20 million in Iran's
energy sector, the bill would prohibit the provision of
assistance to that country, unless the President certifies that
such assistance is important for national security. Finally,
the bill would authorize the appropriation of such sums as may
be necessary for the President to provide assistance to
individuals and organizations that support the establishment of
democracy in Iran.
CBO estimates that implementing H.R. 282 would cost $1
million in 2006 and $81 million over the 2007-2011 period,
assuming appropriation of the estimated amounts over the next
several years. Enacting the bill would not affect direct
spending or receipts.
H.R. 282 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would not affect
the budgets of state, local, or tribal governments.
H.R. 282 would impose a private-sector mandate, as defined
in UMRA. It would require managers of pension plans and mutual
funds to notify investors if their plans or funds are invested
in firms that have invested more than $20 million in Iran's
energy sector. CBO expects that the direct cost of the mandate
would not exceed the annual threshold established by UMRA for
private-sector mandates ($128 million in 2006, adjusted
annually for inflation).

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.R. 282 is shown in the
following table. The costs of this legislation fall within
budget function 150 (international affairs).

By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2006 2007 2008 2009 2010 2011
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law for
Democracy Programs with Respect to Iran
Estimated Budget Authority\1\ 5 0 0 0 0 0
Estimated Outlays 10 1 1 0 0 0

Proposed Changes
Estimated Authorization Level 15 20 20 20 20 20
Estimated Outlays 1 9 16 17 19 20

Spending Under H.R. 282 for Democracy
Programs with Respect to Iran
Estimated Authorization Level 20 20 20 20 20 20
Estimated Outlays 11 10 17 17 19 20
----------------------------------------------------------------------------------------------------------------
\1\The 2006 level is the estimated amount appropriated for that year for programs that promote democracy in
Iran.

BASIS OF ESTIMATE

H.R. 282 would authorize the appropriation of such sums as
may be necessary to fund organizations and individuals that
support democracy in Iran. Public Law 109-102, the Foreign
Operations, Export Financing, and Related Programs
Appropriations Act, 2006, specified that $6.5 million be spent
on programs that promote democracy in Iran and Syria, of which
CBO estimates about $5 million would be for Iran. Additionally,
the Administration has requested $15 million for programs to
promote democracy in Iran in its request for a supplemental
appropriation for 2006. Based on this and information from the
Office of Management and Budget, CBO estimates that an
appropriation of $20 million a year would be sufficient to meet
the aims of H.R. 282. CBO expects that maintaining and
publishing the list of entities that have invested more than
$20 million in Iran's energy sector would have no significant
effect on the budget.
For the purposes of this estimate, CBO assumes that H.R.
282 would be enacted before the end of the fiscal year.
Accordingly, CBO estimates that implementing this legislation
would increase spending by $1 million in 2006 and $81 million
over the 2007-2011 period, assuming appropriation of the
estimated amounts.

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

H.R. 282 contains no intergovernmental mandates as defined
in UMRA and would not affect the budgets of state, local, or
tribal governments.
H.R. 282 would impose a private-sector mandate, as defined
in UMRA. It would require managers of pension plans and mutual
funds sold or distributed in the United States to notify
investors of any funds that are invested in United States or
foreign entities on the list to be published in the Federal
Register that have invested more than $20 million in Iran's
energy sector. The President would have to publish such a list
within six months after the enactment of the bill, and every
six months thereafter. The notification would have to be sent
to investors within 30 days of the publication in the Federal
Register. The notification also would have to be displayed
prominently in every prospectus and every regular report
provided to investors after the initial notification. The
notification would include the following:

The name or other identification of the
entity;

The amount of the investment in the entity;

The potential liability to the entity if
sanctions are imposed by the United States on Iran or
on the entity; and

The potential liability to investors if such
sanctions are imposed.

Notification would not be required, however, if pension and
mutual fund managers divest all investments in such entities.
Based on information from industry sources, CBO expects
that the direct cost to comply with the mandate would small
relative to the annual threshold.

Performance Goals and Objectives

The Committee expects that passage of this bill will have
the effect of slowing or of altogether interrupting Iran's
attempts to gain access to weapons of mass destruction.

Constitutional Authority Statement

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8, clauses 3 and 18 of
the Constitution.

Section-by-Section Analysis and Discussion

Sec. 1. Short Title.
Provides a short title for the Act (the ``Iran Freedom
Support Act'').
Sec. 2. Table of Contents.
Sets out a table of contents for the Act.

TITLE I--CODIFICATION OF SANCTIONS AGAINST IRAN

Sec. 101. Codification of Sanctions.
Subsection (a) of this section provides that United States
sanctions, controls, and regulations with respect to Iran
imposed pursuant to Executive Order 12957, Executive Order
12959, and sections 2 and 3 of Executive Order 13059 (relating
to exports and certain other transactions with Iran) as in
effect on January 1, 2006, shall remain in effect until the
President certifies to the Committee on International Relations
of the House of Representatives and the Committee on Foreign
Relations of the Senate that the Government of Iran has
verifiably dismantled its weapons of mass destruction programs.
(It is the intention of the Committee that the expression
``weapons of mass destruction programs'' includes the means to
produce weapons of mass destruction.) The intent of the
Committee in establishing this rule is that the Executive
Branch not weaken existing sanctions, established in order to
prevent Iran from making progress on its weapons of mass
destruction programs, prior to a real change in Iran's behavior
with respect to those programs. The Committee believes it would
be inappropriate and counterproductive to weaken such sanctions
as part of any diplomatic exercise, or to achieve good will on
the part of the Iranians. As in the Libyan case, action to end
weapons of mass destruction programs should come before any
relaxation of sanctions.
Subsection (b) provides that the preceding provision is to
have no effect on United States sanctions, controls, and
regulations relating to a determination under section
6(j)(1)(A) of the Export Administration Act of 1979 (50 U.S.C.
2405(j)(1)(A)), section 620A(a) of the Foreign Assistance Act
of 1961 (22 U.S.C. 2371(a)), or section 40(d) of the Arms
Export Control Act (22 U.S.C. 2780(d)) relating to support for
acts of international terrorism by the Government of Iran, as
in effect on January 1, 2006.
Sec. 102. Liability of Parent Companies for Violations of Sanctions By
Foreign Entities.
The Committee is concerned that entities may be established
or availed of by United States persons to evade rules
established by law. The Administration has indicated that it
will vigorously pursue sham transactions. The Committee
establishes a rule without prejudice to any prior or existing
interpretations, procedures, or enforcement actions of the
Administration. In cases where an entity engages in an act
outside the United States which, if committed in the United
States or by a United States person, would violate Executive
Order 12959 of May 6, 1995, Executive Order 13059 of August 19,
1997, or any other prohibition on transactions with respect to
Iran that is imposed under the International Emergency Economic
Powers Act (50 U.S.C. 1701 et seq.), and if that entity was
created or availed of for the purpose of engaging in such an
act, the parent company of that entity, if a United States
person, shall be subject to the penalties for such violation to
the same extent as if the parent company had engaged in that
act.
In addition, the Committee intends that the use of
personnel from the parent entity, the capital of the United
States parent entity, or the intellectual property of the
United States parent entity by the subsidiary entity in order
to undertake an activity prohibited by the rules outlined
above, are examples of taking advantage of, or ``availed of''
referred to in this section.
Definitions for ``parent company'' and ``entity'' are
provided in this section.

TITLE II--AMENDMENTS TO THE IRAN AND LIBYA SANCTIONS ACT OF 1996 AND
OTHER PROVISIONS RELATED TO INVESTMENT IN IRAN

Sec. 201. Multilateral Regime.
Reports to Congress.--Subsection (a) amends Section 4(b) of
the Iran and Libya Sanctions Act of 1996 to provide that no
later than six months after the date of the enactment of the
Iran Freedom Support Act and every six months thereafter, the
President shall submit to the appropriate congressional
committees a report regarding specific diplomatic efforts
undertaken to establish a multilateral regime of pressure on
Iran, the results of those efforts, and a description of
proposed diplomatic efforts pursuant to such subsection.
Each report shall include: (1) a list of the countries that
have agreed to undertake measures to further the legislative
objectives of section 3 of ILSA with respect to Iran (that is,
to deny Iran the ability to support acts of international
terrorism and fund the development and acquisition of weapons
of mass destruction and the means to deliver them by limiting
the development of Iran's ability to explore for, extract,
refine, or transport by pipeline its petroleum resources); (2)
a description of those measures, including: (A) government
actions with respect to public or private entities (or their
subsidiaries) located in their territories, that are engaged in
Iran; (B) any decisions by the governments of these countries
to rescind or continue the provision of credits, guarantees, or
other governmental assistance to these entities; and (C)
actions taken in international fora to further the objectives
of section 3 of ILSA; (3) a list of the countries that have not
agreed to undertake measures to further the objectives of
section 3 of ILSA with respect to Iran, and the reasons
therefore; and (4) a description of any memorandums of
understanding, political understandings, or international
agreements to which the United States has acceded which affect
implementation of this section or section 5(a) of ILSA.
The reference to ``international fora'' in (2)(C), above,
includes international financial institutions such as the World
Bank, and the reference to ``actions'' includes blocking of
loans and other assistance to Iran proposed to be provided by
and through such IFIs. The Committee requests that the reports
describe efforts by the Department of State to urge governments
with voting representation on IFIs to oppose assistance to
Iran.
Subsection (b) amends Section 4(c) of ILSA to provide that
waivers of sanctions against nationals of countries (including
entities) under section 5(a) of ILSA may be made by the
President, on a case by case basis, for a period of not more
than six months with respect to a national of a country, if the
President certifies to the appropriate congressional committees
at least 30 days before such waiver is to take effect that: (A)
such waiver is vital to the national security interests of the
United States; and (B) the country of the national has
undertaken substantial measures to prevent the acquisition and
development of weapons of mass destruction by the Government of
Iran.
The Committee believes that that the nature of the Iranian
threat requires the application of this higher standard for all
cases reviewed under ILSA. In the Committee's view, persuading
a country to take part in an effective effort against Iran (but
not participation in an effort that does not materialize with
impact on Iran) would qualify as an effort the successful
conclusion of which is vital to the national security interests
of the United States. The expression ``national security
interests'' is intended to encompass a slightly wider range of
matters than the expression ``national security.''
The waiver referred to in the preceding passage may be
renewed for additional periods of not more than six months each
by following the procedures and making the determination as set
out above.
Subsection (c) amends Section 4 of ILSA by adding at the
end a new subsection (f). That new subsection would require the
President to initiate an investigation that would lead to the
possible imposition of sanctions against a person upon receipt
by the United States of credible information indicating that
such person is engaged in activity related to investment in
Iran as described in section 5(a) of ILSA. For the purposes of
this subsection and of Section 5 of ILSA, the term ``person''
is intended to include foreign subsidiaries of United States
persons. The President shall within 180 days determine,
pursuant to section 5(a) of ILSA, whether or not to impose
sanctions and notify the appropriate congressional committees
of the basis for such determination. The period of 180 days
may, with notice to the appropriate congressional committees,
be extended by one additional period of 180 days. By the end of
the second period, the President must decide whether to impose
sanctions under section 5(a) of ILSA, and provide Congress an
explanation for the President's action or inaction, which may
include a statement that sufficient information was not
available.
Pending investigations--Investigations of ILSA violations
that were pending on January 1, 2006 are to be concluded,
determinations made (under ILSA section 5(a)), and reports to
the appropriate congressional committees made within 90 days of
the date of enactment of the Iran Freedom Support Act. Within
ten days after notification to the appropriate congressional
committees, the President shall ensure publication in the
Federal Register of the identity of persons against whom a
determination that the imposition of sanctions is appropriate
has been made, and the explanation of the reasons for such a
determination.
Sec. 202. Imposition of Sanctions.
(a) Sanctions with Respect to Development of Petroleum
Resources.--This subsection amends section 5(a) of ILSA
(relating to standards for the imposition of sanctions) by
reducing to five items the list of sanctions which might be
imposed on entities subject to sanctions to remove, (as one of
the sanctions which might be imposed for engaging in
investments in the Iranian petroleum sector, as defined),
restrictions on imports by the entity into the United States
(as provided in paragraph 6 of section 6 of ILSA prior to the
enactment of H.R. 282 as amended). It also eliminates the
requirement that an entity have ``actual knowledge'' of its
investment in the Iranian petroleum sector before sanctions
could be imposed.
(b) Sanctions with Respect to Development of Weapons of
Mass Destruction or Other Military Capabilities.--This
provision amends Section 5(b) of ILSA to require the imposition
of two or more of the sanctions described in paragraphs (1)
through (5) of section 6 if the President determines that a
person has, on or after the date of the enactment of this Act,
exported, transferred, or otherwise provided to Iran any goods,
services, technology, or other items knowing that the provision
of such goods, services, technology, or other items would
contribute to the ability of Iran to: (1) acquire or develop
chemical, biological, or nuclear weapons or related
technologies; or (2) acquire or develop destabilizing numbers
and types of advanced conventional weapons. This requirement to
impose a sanction may not be waived.
(c) Persons Against Which the Sanctions Are to Be
Imposed.--This provision amends section 5(c)(2) of ILSA to
eliminate the ``actual knowledge'' test in the case of parents
or subsidiaries (if the parent or subsidiary engaged in
proscribed activity), as well as in the case of certain
affiliates if the affiliates engaged in proscribed activity.
This provision also amends section 5(c)(2) to include private
or government lenders, insurers, underwriters, or guarantors of
the person (who has carried out proscribed activities) if the
private or government lenders, insurers, underwriters, or
guarantors themselves engaged in proscribed activities.
(d) Effective Date.--Provides that the amendments made by
section 202 shall apply with respect to actions taken on or
after March 15, 2006 (the date of the consideration of H.R. 282
in Committee). This provision is intended to obviate deals made
in contemplation of this change in law after fair notice was
given of the intention of the Committee with respect to the
bill.
Sec. 203. Termination of Sanctions.
Under Section 8(a) of ILSA the requirement to impose
sanctions on entities that invest in Iran's petroleum sector
ends when the President makes certain certifications to the
Congress relating to Iran's weapons of mass destruction program
and its presence on the terrorism list. This provision adds a
requirement that Iran be determined to pose no significant
threat to the United States national security, interests, or
allies.
Sec. 204. Sunset.
Section 13 of ILSA is amended to strike its sunset
provision (under current law it would expire ten years after
the date of its original enactment, which was August 5, 1996).
The Act will now continue in effect until repealed by a
subsequent law, although a Presidential determination under
Section 8 of ILSA (as amended by the Iran Freedom Support Act)
would obviate the requirement to impose sanctions.
Sec. 205. Clarification and Expansion of Definitions.
Subsection (a) amends the definition of the term ``person''
as to who might be subject to sanction under ILSA Section
14(14)(B) to include the following entities: financial
institutions, insurers, underwriters, guarantors, any other
business organizations, including any foreign subsidiaries any
sort of entity included in the definition of ``person'' in the
law, as amended. It also specifies the term ``governmental
entity operating as a business enterprise'' that is now in the
law as including export credit agencies.
Subsection (b) amends the definition of ``petroleum
resources'' in ILSA Section 14(15) to include petroleum by-
products.
Sec. 206. United States Pension Plans.
(a) Findings.--This provision includes a series of
Congressional findings about threats to security from rogue
regimes obtaining weapons of mass destruction, and particularly
nuclear weapons. The findings include: that Iran is the leading
state sponsor of international terrorism and is close to
achieving nuclear weapons capability, but has paid no price for
nearly twenty years of deception regarding its nuclear program;
and that foreign entities that have invested in Iran's energy
sector, despite Iran's support of international terrorism and
its nuclear program, have afforded Iran a free pass, while many
United States entities have unknowingly invested in those same
foreign entities. Further, United States investors have a great
deal at stake in preventing Iran from acquiring nuclear weapons
and can have considerable influence over the commercial
decisions of the foreign entities in which they have invested.
(b) Publication in Federal Register.--This provision
requires that the President, not later than six months after
the date of the enactment of this Act and every six months
thereafter, shall ensure publication in the Federal Register of
a list of all United States and foreign entities that have
invested more than $20,000,000 in Iran's energy sector between
August 5, 1996, and the date of such publication. This list is
intended to be a cumulative list since that date. Such list
shall include an itemization of individual investments of each
such entity, including the dollar value, intended purpose, and
current status of each such investment.
(c) Sense of Congress Relating to Divestiture From Iran.--
This provision expresses the sense of Congress that, upon
publication of a list in the relevant Federal Register under
the provision of law described in the preceding paragraph,
managers of United States Government pension plans or thrift
savings plans, managers of pension plans maintained in the
private sector by plan sponsors in the United States, and
managers of mutual funds sold or distributed in the United
States should immediately initiate efforts to divest all
investments of such plans or funds in any entity included on
the list.
(d) Sense of Congress Relating to Prohibition on Future
Investment.--This provision expresses the sense of Congress
that, upon publication of a list in the relevant Federal
Register, as described above, there should be no future
investment in any entity included on the list by managers of
United States Government pension plans or thrift savings plans,
managers of pension plans maintained in the private sector by
plan sponsors in the United States, and managers of mutual
funds sold or distributed in the United States.
(e) Disclosure to Investors.--This subsection requires that
not later than 30 days after the date of publication of a list
in the relevant Federal Register under the provision described
above, managers of United States Government pension plans or
thrift savings plans, managers of pension plans maintained in
the private sector by plan sponsors in the United States, and
managers of mutual funds sold or distributed in the United
States shall notify investors that the funds of such investors
are invested in an entity included on the list. The list is
that list described in subsection (b) and published in the
Federal Register of entities that have invested more than $20
million in Iran's petroleum sector between August 5, 1996 and
the date of the list's publication. Such notification shall
contain the following information: (a) the name or other
identification of the entity; (b) the amount of the investment
in the entity; (c) the potential liability to the entity if
sanctions are imposed by the United States on Iran or on the
entity; and (d) the potential liability to investors if such
sanctions are imposed. Such notifications are required to be
included in every prospectus and in every regularly provided
quarterly, semi-annual, or annual report provided to investors,
if the funds of such investors are invested in an entity
included on the list. The notification described above shall be
displayed prominently in any such prospectus or report and
shall contain the information discussed above. If, upon
publication of the list in the relevant Federal Register as
described above, managers of pension funds, mutual funds, and
so forth divest all investments of such plans or funds and the
managers do not initiate any new investment in any other such
entity, the managers are not required to include the
notification described above in any prospectus or report
provided to investors. Other dealings with Iran by an entity
would not trigger a disclosure requirement under this
provision.
Sec. 207. Report By Office of Global Security Risks.
This section provides that not later than 30 days after the
date of publication of a list in the relevant Federal Register
the section described above, the Office of Global Security
Risks within the Division of Corporation Finance of the United
States Securities and Exchange Commission shall issue a report
containing a list of the United States and foreign entities
identified in accordance with such section, a determination of
whether or not the operations in Iran of any such entity
constitute a political, economic, or other risk to the United
States, and a determination of whether or not the entity faces
United States litigation, sanctions, or similar circumstances
that are reasonably likely to have a material adverse impact on
the financial condition or operations of the entity.
Sec. 208. Technical and Conforming Amendments.
This section makes a series of technical and conforming
amendments to remove references to Libya in the Iran and Libya
Sanctions Act. It also provides that the law now known as the
Iran and Libya Sanctions Act will now be known as the Iran
Sanctions Act, and that any reference in any other provision of
law, regulation, document, or other record of the United States
to the ``Iran and Libya Sanctions Act of 1996'' shall be deemed
to be a reference to the ``Iran Sanctions Act of 1996''.

TITLE III--DIPLOMATIC EFFORTS TO CURTAIL IRANIAN NUCLEAR PROLIFERATION
AND SPONSORSHIP OF INTERNATIONAL TERRORISM

Sec. 301. Diplomatic Efforts.
Sense of Congress Relating to United Nations Security
Council and the International Atomic Energy Agency.--Subsection
(a) expresses the sense of Congress that the President should
instruct the United States Permanent Representative to the
United Nations to work to secure support at the United Nations
Security Council for a resolution that would impose sanctions
on Iran as a result of its repeated breaches of its nuclear
nonproliferation obligations and that such sanctions should
remain in effect until Iran has verifiably dismantled its
weapons of mass destruction programs. This subsection is
consistent with section 4(a) of ILSA, which calls for broader
diplomatic efforts in international fora to inhibit Iran's WMD
efforts and state-sponsorship of terrorism.
Prohibition on Assistance to Countries that Invest in the
Energy Sector of Iran.--Subsection (b) provides that, if, on or
after April 13, 2005, any particular foreign person (as defined
in section 14 of the Iran Sanctions Act, as renamed pursuant to
section 208(g)(1)) or any particular agency or instrumentality
of a foreign government, has more than $20,000,000 invested in
Iran's energy sector, the President shall, until the date on
which such person or agency or instrumentality of such
government terminates such investment, withhold assistance
under the Foreign Assistance Act of 1961 (22 U.S.C. 2151 et
seq.) to the government of the country to which such person
owes allegiance or to which control is exercised over such
agency or instrumentality. In the view of the Committee, the
President should apply common-sense aggregation principles to
avoid sham efforts to conceal the extent of investment by any
single entity, such as the division of an investing entity into
several entities. Generally, the Committee believes that
governments which themselves make, or whose nationals make,
investments in the Iranian petroleum sector should not, in the
ordinary course of events, receive foreign assistance from the
American taxpayer. This provision, however, applies neither to
aid to entities other than ``governments'' nor to assistance
other than that provided under the Foreign Assistance Act.
The withholding of assistance under the provisions
described immediately above may be waived if the President
determines that furnishing such assistance is important to the
national security interests of the United States and furthers
the goals described in this Act. In addition, not later that 15
days before obligating such assistance, the President must
notify the Committee on International Relations of the House of
Representatives, the Committee on Foreign Relations of the
Senate, the Committee on Appropriations of the House of
Representatives, and the Committee on Appropriations of the
Senate of such determination and submits to such committees a
report that includes: (a) a statement of the determination; (b)
a detailed explanation of the assistance to be provided; (c)
the estimated dollar amount of the assistance; and (d) an
explanation of how the assistance furthers United States
national security interests.
Sec. 302. Strengthening the Nuclear Nonproliferation Treaty.
Findings regarding the Nuclear Nonproliferation Treaty.--
Subsection (a) provides that the Congress finds that Article IV
of the Treaty on the Non-Proliferation of Nuclear Weapons
(commonly referred to as the ``Nuclear Nonproliferation
Treaty'' or ``NPT'') states that countries that are parties to
the Treaty have the ``inalienable right . . . to develop
research, production and use of nuclear energy for peaceful
purposes without discrimination and in conformity with articles
I and II of this Treaty,'' but that Iran has manipulated
Article IV of the Nuclear Nonproliferation Treaty to acquire
technologies needed to manufacture nuclear weapons under the
guise of developing peaceful nuclear technology. It is also
found that legal authorities, diplomatic historians, and
officials closely involved in the negotiation and ratification
of the Nuclear Nonproliferation Treaty state that the Treaty
neither recognizes nor protects such a right to all nuclear
technology, such as enrichment and reprocessing, but rather
affirms that the right to the use of peaceful nuclear energy is
qualified.
Declaration of Congress Regarding United States Policy to
Strengthen the Nuclear Nonproliferation Treaty.--In subsection
(b), Congress declares that it should be the policy of the
United States to support diplomatic efforts to end the
manipulation of Article IV of the Nuclear Nonproliferation
Treaty, such as that undertaken by Iran, without undermining
the Treaty itself.

TITLE IV--DEMOCRACY IN IRAN

Sec. 401. Declaration of Congress Regarding United States Policy Toward
Iran.
This section makes certain declarations regarding United
States policy toward Iran. In general, Congress declares that
it should be the policy of the United States to support
independent human rights and peaceful pro-democracy forces in
Iran. However, this section also provides that nothing in this
Act shall be construed as authorizing the use of force against
Iran.
Sec. 402. Assistance to Support Democracy in Iran.
This section authorizes the President to provide financial
and political assistance (including the award of grants) to
foreign and domestic individuals, organizations, and entities
that support democracy and the promotion of democracy in Iran.
Such assistance may include the award of grants to eligible
independent pro-democracy radio and television broadcasting
organizations that broadcast into Iran. None of the funds
authorized to be appropriated under this section shall be used
to support the use of force against Iran, including covert
operations against Iran. Financial and political assistance
under this section may be provided only to an individual,
organization, or entity that (a) officially opposes the use of
violence and terrorism and has not been designated as a foreign
terrorist organization under section 219 of the Immigration and
Nationality Act (8 U.S.C. 1189) at any time during the
preceding four years; (b) advocates the adherence by Iran to
nonproliferation regimes for nuclear, chemical, and biological
weapons and materiel; (c) is dedicated to democratic values and
supports the adoption of a democratic form of government in
Iran; (d) is dedicated to respect for human rights, including
the fundamental equality of women; (e) works to establish
equality of opportunity for people; and (f) supports freedom of
the press, freedom of speech, freedom of association, and
freedom of religion.
Section 402 authorizes the President to provide financial
and political assistance to foreign and domestic individuals,
organizations and entities that support democracy and the
promotion of democracy in Iran. The Committee expects that when
selecting such individuals, organizations and entities for such
assistance, the President shall focus on groups that maintain a
significant political constituency and legitimacy within Iran.
Section 402(a)(2) provides that none of the funds authorized by
this act are authorized to be used to support the use of force
against Iran. It is the intent of the Committee that the
prohibition referred to in the previous sentence also prohibits
the use of such funds to support covert operations by United
States forces in Iran.
The President may provide assistance under this section
using funds available to the Middle East Partnership Initiative
(MEPI), the Broader Middle East and North Africa Initiative,
and the Human Rights and Democracy Fund. In addition, there are
authorized to be appropriated for the purposes of carrying out
this section such sums as may be necessary.
Not later than 15 days before each obligation of assistance
under this section, and in accordance with the procedures under
section 634A of the Foreign Assistance Act of 1961 (22 U.S.C.
2394-l), the President shall notify the Committee on
International Relations and the Committee on Appropriations of
the House of Representatives and the Committee on Foreign
Relations and the Committee on Appropriations of the Senate.
Such notification shall include, as practicable, the types of
programs supported by such assistance and the recipients of
such assistance.
This section notes that it is the sense of Congress that
contacts should be expanded with opposition groups in Iran that
meet the criteria under the second paragraph of this section.
Moreover, support for a transition to democracy in Iran should
be expressed by United States representatives and officials in
all appropriate international fora.
Activities authorized under this section should include
efforts to bring a halt to the nuclear weapons program of Iran,
including intensifying steps to end the supply of nuclear
components or fuel to Iran, with particular attention focused
on the cooperation regarding such program between the
Government of Iran and the Government of the Russian
Federation, and between the Government of Iran and individuals
from China and Pakistan, including the network of Dr. Abdul
Qadeer (A.Q.) Khan.
This section provides that officials and representatives of
the United States should strongly and unequivocally support
indigenous efforts in Iran calling for free, transparent, and
democratic elections, and draw international attention to
violations by the Government of Iran of human rights, freedom
of religion, freedom of assembly, and freedom of the press.
Sec. 403. Waiver of Certain Export License Requirements.
This section provides that the Secretary of State may, in
consultation with the Secretary of Commerce, waive the
requirement to obtain a license for the export to, or by, any
person to whom the Department of State has provided a grant
under a program to promote democracy or human rights abroad,
any item which is commercially available in the United States
without government license or permit, to the extent that such
export would be used exclusively for carrying out the purposes
of the grant.

Agency Views

New Advisory Committees

H.R. 282 does not establish or authorize any new advisory
committees.

Congressional Accountability Act

H.R. 282 does not apply to the legislative branch.

Federal Mandates

H.R. 282 provides mandates to the degree discussed in the
report of the Congressional Budget Office.

Exchange of Letters Regarding Committee Jurisdiction

Letters between the Committee on Ways and Means and Committee on
International Relations

April 6, 2006
Hon. Henry J. Hyde, Chairman,
Committee on International Relations,
House of Representatives, Washington, DC.
Dear Chairman Hyde: I am writing regarding H.R. 282, the
``Iran Freedom Support Act,'' which the Committee on
International Relations marked up on March 15, 2006.
As per the agreement between our Committees, to be included
in a manager's amendment to H.R. 282, the amended bill would
modify the language in Section 101(a) so that the import
sanctions contained in Executive Order 12959 may remain in
effect under the terms of the Executive Order but would not be
codified by this bill. In addition, Sections 202(a) and 202(b)
of the reported bill will remain in the amended version. These
sections would change current law by striking the statutory
option the President currently has to ban imports against both
Iran and Libya.
Because all of these provisions have the effect of
modifying and altering the application of an import ban, they
fall within the jurisdiction of the Committee on Ways and
Means. However, in order to expedite this legislation for floor
consideration, the Committee will forgo action on this bill.
This is being done with the understanding that it does not in
any way prejudice the Committee with respect to the appointment
of conferees or its jurisdictional prerogatives on this or
similar legislation.
I would appreciate your response to this letter, confirming
this understanding with respect to H.R. 282, and would ask that
a copy of our exchange of letters on this matter be included in
your Committee report.
Best regards,
Bill Thomas, Chairman,
Committee on Ways and Means.

cc:
The Honorable J. Dennis Hastert
The Honorable John A. Boehner
The Honorable Roy Blunt
The Honorable Nancy Pelosi
The Honorable Steny Hoyer
The Honorable Tom Lantos
The Honorable Charles B. Rangel
Mr. John Sullivan, Parliamentarian
------

April 7, 2006
Hon. William M. Thomas, Chairman,
Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I am writing regarding H.R. 282, the
``Iran Freedom Support Act,'' which the Committee on
International Relations marked up on March 15, 2006.
As per the agreement between our Committees, I will include
in the manager's amendment to H.R. 282 language which would
modify the text in Section 101(a) so that the import sanctions
contained in Executive Order 12959 may remain in effect under
the terms of the Executive Order but would not be codified by
this bill. In addition, Sections 202(a) and 202(b) of the
reported bill will remain in the amended version. These
sections would change current law by striking the statutory
option the President currently has to ban imports against both
Iran and Libya.
I concur that these provisions have the effect of modifying
and altering the application of an import ban and, therefore,
they fall within the jurisdiction of the Committee on Ways and
Means. I appreciate your willingness to assist in expediting
this legislation by foregoing action on this bill. This is
being done with the understanding that it does not in any way
prejudice the Committee on Ways and Means with respect to the
appointment of conferees or its jurisdictional prerogatives on
this or similar legislation.
As you requested, I will be pleased to include a copy of
this exchange of letters in the Committee Report on H.R. 282
and in the Congressional Record during the consideration of
this bill. If you have any questions regarding this matter,
please do not hesitate to call me. I thank you for your
consideration.
Sincerely,
Henry J. Hyde, Chairman,
Committee on International Relations.
HJH:df/mco

Letters between the Committee on Education and the Workforce and
Committee on International Relations

April 6, 2006
Hon. Henry J. Hyde, Chairman,
Committee on International Relations,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I am writing to confirm our mutual
understanding with respect to the consideration of H.R. 282,
the Iran Freedom Support Act. Section 206, United States
Pension Plans, of the bill as ordered reported by your
committee is within the jurisdiction of the Committee on
Education and Workforce--specifically, section 206 (e), which
requires certain disclosures by managers of private pension
plans. In addition, the Senses of Congress contained in
sections 206 (c) and (d) urge private pension plan managers to
take certain actions and are also within the jurisdiction of
the Committee on Education and the Workforce.
I thank you for your agreement to support the removal of
section 206 (e) from the bill and to modify sections 206 (c)
and (d) with the addition of language recognizing the fiduciary
duties of pension plan managers, as you work to move this
important legislation forward. Given the importance and
timeliness of the Iran Freedom Support Act, and your
willingness to work with us regarding pension issues, I will
not seek a sequential referral of this legislation. However, I
do so only with the understanding that this procedural route
should not be construed to prejudice the Committee on Education
and the Workforce's jurisdictional interest and prerogatives on
these provisions 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.
Furthermore, should these or similar provisions be considered
in a conference with the Senate, I would expect members of the
Committee on Education and the Workforce be appointed to the
conference committee on these provisions.
Finally, I would ask that you include a copy of our
exchange of letters in the Committee Report on H.R. 282 and in
the Congressional Record during the consideration of this bill.
If you have any questions regarding this matter, please do not
hesitate to call me. I thank you for your consideration.
Sincerely,
Howard P. ``Buck'' McKeon, Chairman,
Committee on Education and the Workforce.

cc:
The Honorable J. Dennis Hastert
The Honorable George Miller
The Honorable John Sullivan, Parliamentarian
------

April 6, 2006
Hon. Howard P. ``Buck'' McKeon, Chairman,
Committee on Education and the Workforce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: Thank you for your letter concerning
H.R. 282, the Iran Freedom Support Act. I concur with your
assessment that Section 206 of the bill, as ordered reported by
the Committee on International Relations, which deals with
United States Pension Plans, falls within the Rule X
jurisdiction of the Committee on Education and the Workforce--
specifically Section 206(e), which requires certain disclosures
by managers of private pension plans. In addition, the Senses
of Congress contained in Sections 206 (c) and (d), urging
private pension plan managers to take certain actions, are also
within the jurisdiction of your Committee.
I thank you for your agreement to support moving this
important legislation forward. Based on our discussions, this
Committee will remove Section 206 (e) from the bill, modify
Sections 206 (c) and (d), and add language recognizing the
fiduciary duties of pension plan managers. I appreciate your
willingness to forego seeking a sequential referral of this
legislation. I understand your willingness to do so does not in
any way prejudice the Committee on Education and the
Workforce's jurisdictional interest and prerogatives on these
provisions or any other similar legislation and will not be
considered as precedent for consideration of matters of
jurisdictional interest to your Committee in the future. Should
these or similar provisions be considered in a conference with
the Senate, I will urge the Speaker to appoint members of the
Committee on Education and the Workforce to the conference
committee.
As you requested, I will include a copy of our exchange of
letters in the Committee Report on H.R. 282 and in the
Congressional Record during the consideration of this bill.
Sincerely,
Henry J. Hyde, Chairman,
Committee on International Relations.
HJH:df/mco
----------

Letters between the Committee on Government Reform and Committee on
International Relations

April 13, 2006
Hon. Henry J. Hyde, Chairman,
Committee on International Relations,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I am writing to confirm our mutual
understanding with respect to consideration of H.R. 282, the
Iran Freedom Support Act, which the Committee on International
Relations ordered reported on April 13, 2006. In the bill as
ordered reported by your Committee, section 206, specifically
the provisions providing Senses of Congress urging U.S.
government pension plan and thrift savings plan managers to
take certain actions (section 206(c) and (d)) and the provision
requiring certain disclosures by managers of U.S. government
pension plans and thrift savings plans (section 206(e)) are
within the jurisdiction of the Government Reform Committee.
I thank you for your agreement to support the removal of
section 206 (e) from the bill and to modify sections 206 (c)
and (d) with the addition of language recognizing the fiduciary
duties of U. S. government pension plan managers, as you work
to move this important legislation forward. Given the
importance and timeliness of the Iran Freedom Support Act, and
your willingness to work with us regarding pension issues, I
will not request a sequential referral of this legislation to
the Committee on Government Reform. However, I only do so with
the understanding that this procedural route should not be
construed to prejudice the Committee on Government Reform's
jurisdictional interest and prerogatives on these provisions 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. Furthermore, should
these or similar provisions be considered in a conference with
the Senate, I would expect Members of the Committee on
Government Reform be appointed to the conference committee on
these provisions.
Finally, I would ask that you include a copy of our
exchange of letters in the Committee Report on H.R. 282 and in
the Congressional Record during the consideration of this bill.
If you have any questions regarding this matter, please do not
hesitate to call me. I thank you for your consideration.
Sincerely,
Tom Davis, Chairman,
Committee on Government Reform.
------

April 14, 2006
Hon. Tom Davis, Chairman,
Committee on Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: Thank you for your letter concerning
H.R. 282, the Iran Freedom Support Act. I concur with your
assessment that Section 206 of the bill, as ordered reported by
the Committee on International Relations, which deals with
United States Pension Plans, falls within the Rule X
jurisdiction of the Committee on Government Reform--
specifically Section 206(e), which requires certain disclosures
by managers of U.S. government pension plans. In addition, the
Senses of Congress contained in Sections 206 (c) and (d),
urging U.S. government pension plan managers to take certain
actions, are also within the jurisdiction of your Committee.
I thank you for your agreement to support moving this
important legislation forward. Based on our discussions, this
Committee will remove Section 206 (e) from the bill, modify
Sections 206 (c) and (d), and add language recognizing the
fiduciary duties of pension plan managers. I appreciate your
willingness to forego seeking a sequential referral of this
legislation. I understand your willingness to do so does not in
any way prejudice the Committee on Government Reform's
jurisdictional interest and prerogatives on these provisions or
any other similar legislation and will not be considered as
precedent for consideration of matters of jurisdictional
interest to your Committee in the future. Should these or
similar provisions be considered in a conference with the
Senate, I will urge the Speaker to appoint members of the
Committee on Government Reform to the conference committee.
As you requested, I will include a copy of our exchange of
letters in the Committee Report on H.R. 282 and in the
Congressional Record during the consideration of this bill.
Sincerely,
Henry J. Hyde, Chairman,
Committee on International Relations.
HJH:df/mco
----------

Letters between the Committee on Financial Services and Committee on
International Relations

April 6, 2006
Hon. Henry J. Hyde, Chairman,
Committee on International Relations,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I am writing to confirm our mutual
understanding with respect to the consideration of H.R. 282,
the Iran Freedom Support Act. This bill was ordered reported by
the Committee on International Relations on March 15, 2006.
Section 206, ``United States pension plans'', and section 207,
``Report by Office of Global Security Risks'', of the bill as
ordered reported by your committee are within the jurisdiction
of the Committee on Financial Services under clause 1(g) of
rule X of the Rules of the House of Representatives.
Ordinarily, the Committee on Financial Services would be
entitled to receive a sequential referral of the bill. However,
I thank you for your agreement to support in moving this
important legislation forward the removal of section 206 (e)
and section 207 from the bill and to modify section 206 (b) by
inserting the Secretary of State in lieu of the President.
Given the importance and timeliness of the Iran Freedom Support
Act, and your willingness to work with us regarding these
issues, I will not seek a sequential referral of this
legislation. However, I do so only with the understanding that
this procedural route should not be construed to prejudice the
jurisdictional interest of the Committee on Financial Services
on these provisions 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.
Furthermore, should these or similar provisions be considered
in a conference with the Senate, I would expect members of the
Committee on Financial Services be appointed to the conference
committee on these provisions.
Finally, I would ask that you include a copy of our
exchange of letters in the Committee Report on H.R. 282 and in
the Congressional Record during the consideration of this bill.
If you have any questions regarding this matter, please do not
hesitate to call me. I thank you for your consideration.
Yours truly,
Michael G. Oxley, Chairman,
Committee on Financial Services.
------

April 7, 2006
Hon. Michael G. Oxley, Chairman,
Committee on Financial Services
House of Representatives, Washington, DC.
Dear Mr. Chairman: Thank you for your letter concerning
H.R. 282, the Iran Freedom Support Act. I concur that the bill,
as ordered reported by the Committee on International Relations
on March 15, 2006, contains language which falls within the
Rule X jurisdiction of the Committee on Financial Services.
Specifically, Section 206, ``United States Pension Plans,'' and
Section 207, ``Report by Office of Global Security Risks,'' of
the bill are within your Committee's jurisdiction.
Our two committees have reached agreement that, in the
interest of moving this important legislation forward, the text
of the bill which we will place in the manager's amendment will
remove Section 206 (e) and Section 207 from the bill and will
modify Section 206 (b) by inserting the ``Secretary of State''
in lieu of ``the President.'' Given the importance and
timeliness of the Iran Freedom Support Act, I appreciate your
willingness to work with us regarding these issues and to
forego sequential referral of this legislation. I understand
that by doing so, it should not be construed to prejudice the
jurisdictional interest of the Committee on Financial Services
on these provisions or any other similar legislation and will
not be considered as precedent for consideration of matters of
jurisdictional interest to your Committee in the future.
Furthermore, should these or similar provisions be considered
in a conference with the Senate, I will request the Speaker to
name members of the Committee on Financial Services to the
conference committee.
As you requested, I will be pleased to include a copy of
this exchange of letters in the Committee Report on H.R. 282
and in the Congressional Record during the consideration of
this bill. If you have any questions regarding this matter,
please do not hesitate to call me. I thank you for your
consideration.
Sincerely,
Henry J. Hyde, Chairman,
Committee on International Relations.
HJH:df/mco

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):

IRAN AND LIBYA SANCTIONS ACT OF 1996

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Iran [and Libya] Sanctions
Act of 1996''.

SEC. 2. FINDINGS.

The Congress makes the following findings:
(1) * * *

* * * * * * *

[(4) The failure of the Government of Libya to
comply with Resolutions 731, 748, and 883 of the
Security Council of the United Nations, its support of
international terrorism, and its efforts to acquire
weapons of mass destruction constitute a threat to
international peace and security that endangers the
national security and foreign policy interests of the
United States and those countries with which it shares
common strategic and foreign policy objectives.]

SEC. 3. DECLARATION OF POLICY.

[(a) Policy With Respect to Iran.--]The Congress declares
that it is the policy of the United States to deny Iran the
ability to support acts of international terrorism and to fund
the development and acquisition of weapons of mass destruction
and the means to deliver them by limiting the development of
Iran's ability to explore for, extract, refine, or transport by
pipeline petroleum resources of Iran.
[(b) Policy With Respect to Libya.--The Congress further
declares that it is the policy of the United States to seek
full compliance by Libya with its obligations under Resolutions
731, 748, and 883 of the Security Council of the United
Nations, including ending all support for acts of international
terrorism and efforts to develop or acquire weapons of mass
destruction.]

SEC. 4. MULTILATERAL REGIME.

(a) * * *
[(b) Reports to Congress.--The President shall report to
the appropriate congressional committees, not later than 1 year
after the date of the enactment of this Act, and periodically
thereafter, on the extent that diplomatic efforts described in
subsection (a) have been successful. Each report shall
include--
[(1) the countries that have agreed to undertake
measures to further the objectives of section 3 with
respect to Iran, and a description of those measures;
and
[(2) the countries that have not agreed to measures
described in paragraph (1), and, with respect to those
countries, other measures (in addition to that provided
in subsection (d)) the President recommends that the
United States take to further the objectives of section
3 with respect to Iran.
[(c) Waiver.--The President may waive the application of
section 5(a) with respect to nationals of a country if--
[(1) that country has agreed to undertake
substantial measures, including economic sanctions,
that will inhibit Iran's efforts to carry out
activities described in section 2 and information
required by subsection (b)(1) has been included in a
report submitted under subsection (b); and
[(2) the President, at least 30 days before the
waiver takes effect, notifies the appropriate
congressional committees of his intention to exercise
the waiver.]
(b) Reports to Congress.--Not later than six months after
the date of the enactment of the Iran Freedom Support Act and
every six months thereafter, the President shall submit to the
appropriate congressional committees a report regarding
specific diplomatic efforts undertaken pursuant to subsection
(a), the results of those efforts, and a description of
proposed diplomatic efforts pursuant to such subsection. Each
report shall include--
(1) a list of the countries that have agreed to
undertake measures to further the objectives of section
3 with respect to Iran;
(2) a description of those measures, including--
(A) government actions with respect to
public or private entities (or their
subsidiaries) located in their territories,
that are engaged in Iran;
(B) any decisions by the governments of
these countries to rescind or continue the
provision of credits, guarantees, or other
governmental assistance to these entities; and
(C) actions taken in international fora to
further the objectives of section 3;
(3) a list of the countries that have not agreed to
undertake measures to further the objectives of section
3 with respect to Iran, and the reasons therefor; and
(4) a description of any memorandums of
understanding, political understandings, or
international agreements to which the United States has
acceded which affect implementation of this section or
section 5(a).
(c) Waiver.--
(1) In general.--The President may, on a case by
case basis, waive for a period of not more than six
months the application of section 5(a) with respect to
a national of a country, if the President certifies to
the appropriate congressional committees at least 30
days before such waiver is to take effect that--
(A) such waiver is vital to the national
security interests of the United States; and
(B) the country of the national has
undertaken substantial measures to prevent the
acquisition and development of weapons of mass
destruction by the Government of Iran.
(2) Subsequent renewal of waiver.--If the President
determines that, in accordance with paragraph (1), such
a waiver is appropriate, the President may, at the
conclusion of the period of a waiver under paragraph
(1), renew such waiver for subsequent periods of not
more than six months each.

* * * * * * *

(f) Investigations.--
(1) In general.--The President shall initiate an
investigation into the possible imposition of sanctions
against a person upon receipt by the United States of
credible information indicating that such person is
engaged in activity related to investment in Iran as
described in section 5(a).
(2) Determination and notification.--
(A) In general.--Not later than 180 days
after an investigation is initiated in
accordance with paragraph (1), the President
shall determine, pursuant to section 5(a),
whether or not to impose sanctions against a
person engaged in activity related to
investment in Iran as described in such section
as a result of such activity and shall notify
the appropriate congressional committees of the
basis for such determination.
(B) Extension.--If the President is unable
to make a determination under subparagraph (A),
the President shall notify the appropriate
congressional committees and shall extend such
investigation for a subsequent period, not to
exceed 180 days, after which the President
shall make the determination required under
such subparagraph and shall notify the
appropriate congressional committees of the
basis for such determination in accordance with
such subparagraph.
(3) Determinations regarding pending
investigations.--Not later than 90 days after the date
of the enactment of this Act, the President shall, with
respect to any investigation that was pending as of
January 1, 2006, concerning a person engaged in
activity related to investment in Iran as described in
section 5(a), determine whether or not to impose
sanctions against such person as a result of such
activity and shall notify the appropriate congressional
committees of the basis for such determination.
(4) Publication.--Not later than 10 days after the
President notifies the appropriate congressional
committees under paragraphs (2) and (3), the President
shall ensure publication in the Federal Register of the
identification of the persons against which the
President has made a determination that the imposition
of sanctions is appropriate, together with an
explanation for such determination.

SEC. 5. IMPOSITION OF SANCTIONS.

(a) Sanctions With Respect [to Iran] to the Development of
Petroleum Resources of Iran.--Except as provided in subsection
(f), the President shall impose 2 or more of the sanctions
described in paragraphs (1) through [(6)] (5) of section 6 if
the President determines that a person has, [with actual
knowledge,] on or after the date of the enactment of this Act,
made an investment of $40,000,000 or more (or any combination
of investments of at least $10,000,000 each, which in the
aggregate equals or exceeds $40,000,000 in any 12-month
period), that directly and significantly contributed to the
enhancement of Iran's ability to develop petroleum resources of
Iran.
[(b) Mandatory Sanctions With Respect to Libya.--
[(1) Violations of prohibited transactions.--Except
as provided in subsection (f), the President shall
impose 2 or more of the sanctions described in
paragraphs (1) through (6) of section 6 if the
President determines that a person has, with actual
knowledge, on or after the date of the enactment of
this Act, exported, transferred, or otherwise provided
to Libya any goods, services, technology, or other
items the provision of which is prohibited under
paragraph 4(b) or 5 of Resolution 748 of the Security
Council of the United Nations, adopted March 31, 1992,
or under paragraph 5 or 6 of Resolution 883 of the
Security Council of the United Nations, adopted
November 11, 1993, if the provision of such items
significantly and materially--
[(A) contributed to Libya's ability to
acquire chemical, biological, or nuclear
weapons or destabilizing numbers and types of
advanced conventional weapons or enhanced
Libya's military or paramilitary capabilities;
[(B) contributed to Libya's ability to
develop its petroleum resources; or
[(C) contributed to Libya's ability to
maintain its aviation capabilities.
[(2) Investments that contribute to the development
of petroleum resources.--Except as provided in
subsection (f), the President shall impose 2 or more of
the sanctions described in paragraphs (1) through (6)
of section 6 if the President determines that a person
has, with actual knowledge, on or after the date of the
enactment of this Act, made an investment of
$20,000,000 or more (or any combination of investments
of at least $10,000,000 each, which in the aggregate
equals or exceeds $20,000,000 in any 12-month period),
that directly and significantly contributed to the
enhancement of Libya's ability to develop its petroleum
resources.]
(b) Mandatory Sanctions With Respect to Development of
Weapons of Mass Destruction or Other Military Capabilities.--
Notwithstanding any other provision of law, the President shall
impose two or more of the sanctions described in paragraphs (1)
through (5) of section 6 if the President determines that a
person has, on or after the date of the enactment of this Act,
exported, transferred, or otherwise provided to Iran any goods,
services, technology, or other items knowing that the provision
of such goods, services, technology, or other items would
contribute to the ability of Iran to--
(1) acquire or develop chemical, biological, or
nuclear weapons or related technologies; or
(2) acquire or develop destabilizing numbers and
types of advanced conventional weapons.
(c) Persons Against Which the Sanctions Are To Be
Imposed.--The sanctions described in subsections (a) and (b)
shall be imposed on--
(1) * * *
(2) any person the President determines--
(A) * * *
(B) is a parent or subsidiary of the person
referred to in paragraph (1) if that parent or
subsidiary[, with actual knowledge,] engaged in
the activities referred to in paragraph (1);
[or]
(C) is an affiliate of the person referred
to in paragraph (1) if that affiliate[, with
actual knowledge,] engaged in the activities
referred to in paragraph (1) and if that
affiliate is controlled in fact by the person
referred to in paragraph (1)[.]; or
(D) is a private or government lender,
insurer, underwriter, or guarantor of the
person referred to in paragraph (1) if that
private or government lender, insurer,
underwriter, or guarantor engaged in the
activities referred to in paragraph (1).
For purposes of this Act, any person or entity described in
this subsection shall be referred to as a ``sanctioned
person''.

* * * * * * *

SEC. 8. TERMINATION OF SANCTIONS.

[(a) Iran.--]The requirement under section 5(a) to impose
sanctions shall no longer have force or effect with respect to
Iran if the President determines and certifies to the
appropriate congressional committees that Iran--
(1) has ceased its efforts to design, develop,
manufacture, or acquire--
(A) * * *

* * * * * * *

(C) ballistic missiles and ballistic
missile launch technology; [and]
(2) has been removed from the list of countries the
governments of which have been determined, for purposes
of section 6(j) of the Export Administration Act of
1979, to have repeatedly provided support for acts of
international terrorism[.]; and
(3) poses no significant threat to United States
national security, interests, or allies.
[(b) Libya.--The requirement under section 5(b) to impose
sanctions shall no longer have force or effect with respect to
Libya if the President determines and certifies to the
appropriate congressional committees that Libya has fulfilled
the requirements of United Nations Security Council Resolution
731, adopted January 21, 1992, United Nations Security Council
Resolution 748, adopted March 31, 1992, and United Nations
Security Council Resolution 883, adopted November 11, 1993.]

SEC. 9. DURATION OF SANCTIONS; PRESIDENTIAL WAIVER.

(a) * * *

* * * * * * *

(c) Presidential Waiver.--
(1) * * *
(2) Contents of report.--Any report under paragraph
(1) shall provide a specific and detailed rationale for
the determination under paragraph (1), including--
(A) * * *

* * * * * * *

[(C) an estimate as to the significance--
[(i) of the provision of the items
described in section 5(a) to Iran's
ability to develop its petroleum
resources, or
[(ii) of the provision of the items
described in section 5(b)(1) to the
abilities of Libya described in
subparagraph (A), (B), or (C) of
section 5(b)(1), or of the investment
described in section 5(b)(2) on Libya's
ability to develop its petroleum
resources,
as the case may be; and]
(C) an estimate of the significance of the
provision of the items described in section
5(a) or section 5(b) to Iran's ability to,
respectively, develop its petroleum resources
or its weapons of mass destruction or other
military capabilities; and

* * * * * * *

SEC. 10. REPORTS REQUIRED.

(a) * * *
(b) Report on Effectiveness of Actions Under This Act.--Not
earlier than 24 months, and not later than 30 months, after the
date of the enactment of the ILSA Extension Act of 2001, the
President shall transmit to Congress a report that describes--
(1) the extent to which actions relating to trade
taken pursuant to this Act--
(A) have been effective in achieving the
objectives of section 3 and any other foreign
policy or national security objectives of the
United States with respect to Iran [and Libya];
and
(B) have affected humanitarian interests in
Iran [and Libya], the country in which the
sanctioned person is located, or in other
countries; and

* * * * * * *

SEC. 13. EFFECTIVE DATE[; SUNSET].

[(a) Effective Date.--]This Act shall take effect on the
date of the enactment of this Act.
[(b) Sunset.--This Act shall cease to be effective on the
date that is 10 years after the date of the enactment of this
Act.]

SEC. 14. DEFINITIONS.

As used in this Act:
(1) * * *

* * * * * * *

(9) Investment.--The term ``investment'' means any
of the following activities if such activity is
undertaken pursuant to an agreement, or pursuant to the
exercise of rights under such an agreement, that is
entered into with the Government of Iran or a
[nongovenmental] nongovernmental entity in Iran[, or
with the Government of Libya or a nongovernmental
entity in Libya,] on or after the date of the enactment
of this Act:
(A) The entry into a contract that includes
responsibility for the development of petroleum
resources located in Iran [or Libya (as the
case may be)], or the entry into a contract
providing for the general supervision and
guarantee of another person's performance of
such a contract.

* * * * * * *

[(12) Libya.--The term ``Libya'' includes any
agency or instrumentality of Libya.]
[(13)] (12) Nuclear explosive device.--The term
``nuclear explosive device'' means any device, whether
assembled or disassembled, that is designed to produce
an instantaneous release of an amount of nuclear energy
from special nuclear material (as defined in section
11(aa) of the Atomic Energy Act of 1954) that is
greater than the amount of energy that would be
released from the detonation of one pound of
trinitrotoluene (TNT).
[(14)] (13) Person.--The term ``person'' means--
(A) * * *
(B) a corporation, business association,
partnership, society, trust, financial
institution, insurer, underwriter, guarantor,
any other business organization, including any
foreign subsidiaries of the foregoing, any
other nongovernmental entity, organization, or
group, and any governmental entity operating as
a business enterprise, such as an export credit
agency; and
(C) any successor to any entity described
in subparagraph (B).
[(15)] (14) Petroleum resources.--The term
``petroleum resources'' includes petroleum, petroleum
by-products, and natural gas resources.
[(16)] (15) United states or state.--The term
``United States'' or ``State'' means the several
States, the District of Columbia, the Commonwealth of
Puerto Rico, the Commonwealth of the Northern Mariana
Islands, American Samoa, Guam, the United States Virgin
Islands, and any other territory or possession of the
United States.
[(17)] (16) United states person.--The term
``United States person'' means--
(A) a natural person who is a citizen of
the United States or who owes permanent
allegiance to the United States; and
(B) a corporation or other legal entity
which is organized under the laws of the United
States, any State or territory thereof, or the
District of Columbia, if natural persons
described in subparagraph (A) own, directly or
indirectly, more than 50 percent of the
outstanding capital stock or other beneficial
interest in such legal entity.

* * * * * * *

Additional Views

I am appalled by the Iranian regime's behavior, of which
the continuing effort to develop nuclear weapons is only one
component. President Mahmoud Ahmadinejad's genocidal threats
against Israel and denial of the Holocaust, the continued
suppression of dissent and basic freedoms, and support for
terrorist groups like al-Qaeda and Hamas all paint a picture of
a dangerous regime.
As H.R.282, the ``Iran Freedom Support Act,'' has started
to move its way through the legislative process, I appreciate
that positive changes have already occurred in the course of
discussions with Chairman Hyde and the administration. I
appreciate the willingness of Ms. Ros-Lehtinen and Mr. Lantos
to accept my amendment prohibiting assistance to groups that
have been on the State Department's list of Foreign Terrorist
Organizations over the previous four years and to include
report language urging that funding go to groups who have a
significant political constituency and legitimacy within Iran.
Continuing to tighten these provisions is necessary to ensure
that we don't face the same situation as we did in Iraq, where
the U.S. was misled by exile groups with little legitimacy
inside the country.
Presidents of both parties have declined to place sanctions
on allies, or companies within those countries, whose support
we need to deal effectively with Iran. Certainly, no one would
accuse our current president of being weak-willed on the nexus
of terror and nuclear proliferation, yet, despite its
widespread support in Congress, even the Administration is
still unable to support the bill in its current form.
I believe that we will be most successful at crafting an
effective strategy for denying Iran nuclear capability if
Congress and the administration can reach a consensus as to
what tools the President and the Secretary of State need to
employ strong, coercive diplomacy. Because we have not yet
reached this point, I voted ``no'' on the bill, yet I remain
open to supporting it in the future.
I continue to believe that the 5-year sunset should be
restored to the base Iran-Libya Sanctions Act and look forward
to working on efforts to do so. Congress usually finds it much
easier to implement sanctions than to engage in regular reviews
to ensure that they are advancing our intended goals. The
United States needs an effective policy on how to use
sanctions: What are we trying to achieve? What works? What
doesn't? What criteria do we use to figure out when sanctions
would and wouldn't work? How do we know if we've been
successful? How do we know when to call them off, either
because we've succeeded or failed? Until we develop this kind
of policy, however, it is important to restore the sunset
provision and require a periodic review of sanctions.
Both the administration and Chairman Hyde have recognized
the trade-off in this bill between any gains in leverage over
Iran through enhanced sanctions and the impact on our efforts
with our allies. We should also pay attention to the
perspectives of those democracy advocates within Iran whom we
intend to help, who must balance the benefits of any increased
resources from the United States and the negative impact of
being tarred as tools of U.S. interests. I hope that striking
the right balance in these trade-offs will be at the forefront
of our discussions as this bill moves through the legislative
process.

Earl Blumenauer.