[House Report 111-512]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     111-512

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



 
  COMPREHENSIVE IRAN SANCTIONS, ACCOUNTABILITY, AND DIVESTMENT ACT OF 
                                  2010

                                _______
                                

                 June 23, 2010.--Ordered to be printed

                                _______
                                

 Mr. Berman, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                        [To accompany H.R. 2194]

    The committee of conference on the disagreeing votes of the 
two Houses on the amendment of the Senate to the bill (H.R. 
2194), to amend the Iran Sanctions Act of 1996 to enhance 
United States diplomatic efforts with respect to Iran by 
expanding economic sanctions against Iran, having met, after 
full and free conference, have agreed to recommend and do 
recommend to their respective Houses as follows:
    That the House recede from its disagreement to the 
amendment of the Senate and agree to the same with an amendment 
as follows:
    In lieu of the matter proposed to be inserted by the Senate 
amendment, insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

                           TITLE I--SANCTIONS

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

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

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

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

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

                      TITLE IV--GENERAL PROVISIONS

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

SEC. 2. FINDINGS.

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

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

    It is the sense of Congress that--
            (1) international diplomatic efforts to address 
        Iran's illicit nuclear efforts and support for 
        international terrorism are more likely to be effective 
        if strong additional sanctions are imposed on the 
        Government of Iran;
            (2) the concerns of the United States regarding 
        Iran are strictly the result of the actions of the 
        Government of Iran;
            (3) the revelation in September 2009 that Iran is 
        developing a secret uranium enrichment site on a base 
        of Iran's Revolutionary Guard Corps near Qom, which 
        appears to have no civilian application, highlights the 
        urgency that Iran--
                    (A) disclose the full nature of its nuclear 
                program, including any other secret locations; 
                and
                    (B) provide the International Atomic Energy 
                Agency unfettered access to its facilities 
                pursuant to Iran's legal obligations under the 
                Treaty on the Non-Proliferation of Nuclear 
                Weapons, done at Washington, London, and Moscow 
                July 1, 1968, and entered into force March 5, 
                1970 (commonly known as the ``Nuclear Non-
                Proliferation Treaty'') and Iran's safeguards 
                agreement with the International Atomic Energy 
                Agency;
            (4) because of the involvement of Iran's 
        Revolutionary Guard Corps in Iran's nuclear program, 
        international terrorism, and domestic human rights 
        abuses, the President should impose the full range of 
        applicable sanctions on--
                    (A) any individual or entity that is an 
                agent, alias, front, instrumentality, 
                representative, official, or affiliate of 
                Iran's Revolutionary Guard Corps; and
                    (B) any individual or entity that has 
                conducted any commercial transaction or 
                financial transaction with an individual or 
                entity described in subparagraph (A);
            (5) additional measures should be adopted by the 
        United States to prevent the diversion of sensitive 
        dual-use technologies to Iran;
            (6) the President should--
                    (A) continue to urge the Government of Iran 
                to respect the internationally recognized human 
                rights and religious freedoms of its citizens;
                    (B) identify the officials of the 
                Government of Iran and other individuals who 
                are responsible for continuing and severe 
                violations of human rights and religious 
                freedom in Iran; and
                    (C) take appropriate measures to respond to 
                such violations, including by--
                            (i) prohibiting officials and other 
                        individuals the President identifies as 
                        being responsible for such violations 
                        from entry into the United States; and
                            (ii) freezing the assets of the 
                        officials and other individuals 
                        described in clause (i);
            (7) additional funding should be provided to the 
        Secretary of State to document, collect, and 
        disseminate information about human rights abuses in 
        Iran, including serious abuses that have taken place 
        since the presidential election in Iran on June 12, 
        2009;
            (8) with respect to nongovernmental organizations 
        based in the United States--
                    (A) many of such organizations are 
                essential to promoting human rights and 
                humanitarian goals around the world;
                    (B) it is in the national interest of the 
                United States to allow responsible 
                nongovernmental organizations based in the 
                United States to establish and carry out 
                operations in Iran to promote civil society and 
                foster humanitarian goodwill among the people 
                of Iran; and
                    (C) the United States should ensure that 
                the organizations described in subparagraph (B) 
                are not unnecessarily hindered from working in 
                Iran to provide humanitarian, human rights, and 
                people-to-people assistance, as appropriate, to 
                the people of Iran;
            (9) the United States should not issue a license 
        pursuant to an agreement for cooperation (as defined in 
        section 11 b. of the Atomic Energy Act of 1954 (42 
        U.S.C. 2014(b))) for the export of nuclear material, 
        facilities, components, or other goods, services, or 
        technology that are or would be subject to such an 
        agreement to a country that is providing similar 
        nuclear material, facilities, components, or other 
        goods, services, or technology to another country that 
        is not in full compliance with its obligations under 
        the Nuclear Non-Proliferation Treaty, including its 
        obligations under the safeguards agreement between that 
        country and the International Atomic Energy Agency, 
        unless the President determines that the provision of 
        such similar nuclear material, facilities, components, 
        or other goods, services, or technology to such other 
        country does not undermine the nonproliferation 
        policies and objectives of the United States; and
            (10) the people of the United States--
                    (A) have feelings of friendship for the 
                people of Iran;
                    (B) regret that developments in recent 
                decades have created impediments to that 
                friendship; and
                    (C) hold the people of Iran, their culture, 
                and their ancient and rich history in the 
                highest esteem.

                           TITLE I--SANCTIONS

SEC. 101. DEFINITIONS.

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

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

    (a) In General.--Section 5 of the Iran Sanctions Act of 
1996 (Public Law 104-172; 50 U.S.C. 1701 note) is amended--
            (1) by striking subsection (a) and inserting the 
        following:
    ``(a) Sanctions With Respect to the Development of 
Petroleum Resources of Iran, Production of Refined Petroleum 
Products in Iran, and Exportation of Refined Petroleum Products 
to Iran.--
            ``(1) Development of petroleum resources of iran.--
                    ``(A) In general.--Except as provided in 
                subsection (f), the President shall impose 3 or 
                more of the sanctions described in section 6(a) 
                with respect to a person if the President 
                determines that the person knowingly, on or 
                after the date of the enactment of the 
                Comprehensive Iran Sanctions, Accountability, 
                and Divestment Act of 2010--
                            ``(i) makes an investment described 
                        in subparagraph (B) of $20,000,000 or 
                        more; or
                            ``(ii) makes a combination of 
                        investments described in subparagraph 
                        (B) in a 12-month period if each such 
                        investment is of at least $5,000,000 
                        and such investments equal or exceed 
                        $20,000,000 in the aggregate.
                    ``(B) Investment described.--An investment 
                described in this subparagraph is an investment 
                that directly and significantly contributes to 
                the enhancement of Iran's ability to develop 
                petroleum resources.
            ``(2) Production of refined petroleum products.--
                    ``(A) In general.--Except as provided in 
                subsection (f), the President shall impose 3 or 
                more of the sanctions described in section 6(a) 
                with respect to a person if the President 
                determines that the person knowingly, on or 
                after the date of the enactment of the 
                Comprehensive Iran Sanctions, Accountability, 
                and Divestment Act of 2010, sells, leases, or 
                provides to Iran goods, services, technology, 
                information, or support described in 
                subparagraph (B)--
                            ``(i) any of which has a fair 
                        market value of $1,000,000 or more; or
                            ``(ii) that, during a 12-month 
                        period, have an aggregate fair market 
                        value of $5,000,000 or more.
                    ``(B) Goods, services, technology, 
                information, or support described.--Goods, 
                services, technology, information, or support 
                described in this subparagraph are goods, 
                services, technology, information, or support 
                that could directly and significantly 
                facilitate the maintenance or expansion of 
                Iran's domestic production of refined petroleum 
                products, including any direct and significant 
                assistance with respect to the construction, 
                modernization, or repair of petroleum 
                refineries.
            ``(3) Exportation of refined petroleum products to 
        iran.--
                    ``(A) In general.--Except as provided in 
                subsection (f), the President shall impose 3 or 
                more of the sanctions described in section 6(a) 
                with respect to a person if the President 
                determines that the person knowingly, on or 
                after the date of the enactment of the 
                Comprehensive Iran Sanctions, Accountability, 
                and Divestment Act of 2010--
                            ``(i) sells or provides to Iran 
                        refined petroleum products--
                                    ``(I) that have a fair 
                                market value of $1,000,000 or 
                                more; or
                                    ``(II) that, during a 12-
                                month period, have an aggregate 
                                fair market value of $5,000,000 
                                or more; or
                            ``(ii) sells, leases, or provides 
                        to Iran goods, services, technology, 
                        information, or support described in 
                        subparagraph (B)--
                                    ``(I) any of which has a 
                                fair market value of $1,000,000 
                                or more; or
                                    ``(II) that, during a 12-
                                month period, have an aggregate 
                                fair market value of $5,000,000 
                                or more.
                    ``(B) Goods, services, technology, 
                information, or support described.--Goods, 
                services, technology, information, or support 
                described in this subparagraph are goods, 
                services, technology, information, or support 
                that could directly and significantly 
                contribute to the enhancement of Iran's ability 
                to import refined petroleum products, 
                including--
                            ``(i) except as provided in 
                        subparagraph (C), underwriting or 
                        entering into a contract to provide 
                        insurance or reinsurance for the sale, 
                        lease, or provision of such goods, 
                        services, technology, information, or 
                        support;
                            ``(ii) financing or brokering such 
                        sale, lease, or provision; or
                            ``(iii) providing ships or shipping 
                        services to deliver refined petroleum 
                        products to Iran.
                    ``(C) Exception for underwriters and 
                insurance providers exercising due diligence.--
                The President may not impose sanctions under 
                this paragraph with respect to a person that 
                provides underwriting services or insurance or 
                reinsurance if the President determines that 
                the person has exercised due diligence in 
                establishing and enforcing official policies, 
                procedures, and controls to ensure that the 
                person does not underwrite or enter into a 
                contract to provide insurance or reinsurance 
                for the sale, lease, or provision of goods, 
                services, technology, information, or support 
                described in subparagraph (B).'';
            (2) in subsection (b)--
                    (A) by redesignating paragraphs (1) and (2) 
                as subparagraphs (A) and (B), respectively, and 
                moving such subparagraphs, as so redesignated, 
                2 ems to the right;
                    (B) by striking ``The President shall 
                impose'' and inserting the following:
            ``(1) In general.--The President shall impose''; 
        and
                    (C) in paragraph (1), as redesignated by 
                subparagraph (B) of this paragraph, by striking 
                ``two or more'' and all that follows through 
                ``of this Act'' and inserting ``3 or more of 
                the sanctions described in section 6(a) if the 
                President determines that a person has, on or 
                after the date of the enactment of the 
                Comprehensive Iran Sanctions, Accountability, 
                and Divestment Act of 2010''; and
                    (D) by adding at the end the following:
            ``(2) Additional mandatory sanctions relating to 
        transfer of nuclear technology.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), in any case in which 
                a person is subject to sanctions under 
                paragraph (1) because of an activity described 
                in that paragraph that relates to the 
                acquisition or development of nuclear weapons 
                or related technology or of missiles or 
                advanced conventional weapons that are designed 
                or modified to deliver a nuclear weapon, no 
                license may be issued for the export, and no 
                approval may be given for the transfer or 
                retransfer, directly or indirectly, to the 
                country the government of which has primary 
                jurisdiction over the person, of any nuclear 
                material, facilities, components, or other 
                goods, services, or technology that are or 
                would be subject to an agreement for 
                cooperation between the United States and that 
                government.
                    ``(B) Exception.--The sanctions described 
                in subparagraph (A) shall not apply with 
                respect to a country the government of which 
                has primary jurisdiction over a person that 
                engages in an activity described in that 
                subparagraph if the President determines and 
                notifies the appropriate congressional 
                committees that the government of the country--
                            ``(i) does not know or have reason 
                        to know about the activity; or
                            ``(ii) has taken, or is taking, all 
                        reasonable steps necessary to prevent a 
                        recurrence of the activity and to 
                        penalize the person for the activity.
                    ``(C) Individual approval.--Notwithstanding 
                subparagraph (A), the President may, on a case-
                by-case basis, approve the issuance of a 
                license for the export, or approve the transfer 
                or retransfer, of any nuclear material, 
                facilities, components, or other goods, 
                services, or technology that are or would be 
                subject to an agreement for cooperation, to a 
                person in a country to which subparagraph (A) 
                applies (other than a person that is subject to 
                the sanctions under paragraph (1)) if the 
                President--
                            ``(i) determines that such approval 
                        is vital to the national security 
                        interests of the United States; and
                            ``(ii) not later than 15 days 
                        before issuing such license or 
                        approving such transfer or retransfer, 
                        submits to the Committee on Foreign 
                        Affairs of the House of Representatives 
                        and the Committee on Foreign Relations 
                        of the Senate the justification for 
                        approving such license, transfer, or 
                        retransfer.
                    ``(D) Construction.--The restrictions in 
                subparagraph (A) shall apply in addition to all 
                other applicable procedures, requirements, and 
                restrictions contained in the Atomic Energy Act 
                of 1954 and other related laws.
                    ``(E) Definition.--In this paragraph, the 
                term `agreement for cooperation' has the 
                meaning given that term insection 11 b. of the 
Atomic Energy Act of 1954 (42 U.S.C. 2014(b)).
                    ``(F) Applicability.--The sanctions under 
                subparagraph (A) shall apply only in a case in 
                which a person is subject to sanctions under 
                paragraph (1) because of an activity described 
                in that paragraph in which the person engages 
                on or after the date of the enactment of the 
                Comprehensive Iran Sanctions, Accountability, 
                and Divestment Act of 2010.'';
            (3) in subsection (c)--
                    (A) by striking ``(b)'' each place it 
                appears and inserting ``(b)(1)''; and
                    (B) by striking paragraph (2) and inserting 
                the following:
            ``(2) any person that--
                    ``(A) is a successor entity to the person 
                referred to in paragraph (1);
                    ``(B) owns or controls the person referred 
                to in paragraph (1), if the person that owns or 
                controls the person referred to in paragraph 
                (1) had actual knowledge or should have known 
                that the person referred to in paragraph (1) 
                engaged in the activities referred to in that 
                paragraph; or
                    ``(C) is owned or controlled by, or under 
                common ownership or control with, the person 
                referred to in paragraph (1), if the person 
                owned or controlled by, or under common 
                ownership or control with (as the case may be), 
                the person referred to in paragraph (1) 
                knowingly engaged in the activities referred to 
                in that paragraph.''; and
            (4) in subsection (f)--
                    (A) in the matter preceding paragraph (1), 
                by striking ``(b)'' and inserting ``(b)(1)''; 
                and
                    (B) in paragraph (2), by striking ``section 
                301(b)(1) of that Act (19 U.S.C. 2511(b)(1))'' 
                and inserting ``section 301(b) of that Act (19 
                U.S.C. 2511(b))''.
    (b) Description of Sanctions.--Section 6 of such Act is 
amended--
            (1) by striking ``The sanctions to be imposed'' and 
        inserting the following:
    ``(a) In General.--The sanctions to be imposed'';
            (2) in subsection (a), as redesignated by paragraph 
        (1)--
                    (A) by redesignating paragraph (6) as 
                paragraph (9); and
                    (B) by inserting after paragraph (5) the 
                following:
            ``(6) Foreign exchange.--The President may, 
        pursuant to such regulations as the President may 
        prescribe, prohibit any transactions in foreign 
        exchange that are subject to the jurisdiction of the 
        United States and in which the sanctioned person has 
        any interest.
            ``(7) Banking transactions.--The President may, 
        pursuant to such regulations as the President may 
        prescribe, prohibit any transfers of credit or payments 
        between financial institutions or by, through, or to 
        any financial institution, to the extent that such 
        transfers or payments are subject to the jurisdiction 
        of the United States and involve any interest of the 
        sanctioned person.
            ``(8) Property transactions.--The President may, 
        pursuant to such regulations as the President may 
        prescribe, prohibit any person from--
                    ``(A) acquiring, holding, withholding, 
                using, transferring, withdrawing, transporting, 
                importing, or exporting any property that is 
                subject to the jurisdiction of the United 
                States and with respect to which the sanctioned 
                person has any interest;
                    ``(B) dealing in or exercising any right, 
                power, or privilege with respect to such 
                property; or
                    ``(C) conducting any transaction involving 
                such property.''; and
            (3) by adding at the end the following:
    ``(b) Additional Measure Relating to Government 
Contracts.--
            ``(1) Modification of federal acquisition 
        regulation.--Not later than 90 days after the date of 
        the enactment of the Comprehensive Iran Sanctions, 
        Accountability, and Divestment Act of 2010, the Federal 
        Acquisition Regulation issued pursuant to section 25 of 
        the Office of Federal Procurement Policy Act (41 U.S.C. 
        421) shall be revised to require a certification from 
        each person that is a prospective contractor that the 
        person, and any person owned or controlled by the 
        person, does not engage in any activity for which 
        sanctions may be imposed under section 5.
            ``(2) Remedies.--
                    ``(A) In general.--If the head of an 
                executive agency determines that a person has 
                submitted a false certification under paragraph 
                (1) on or after the date on which the revision 
                of the Federal Acquisition Regulation required 
                by this subsection becomes effective, the head 
                of that executive agency shall terminate a 
                contract with such person or debar or suspend 
                such person from eligibility for Federal 
                contracts for a period of not more than 3 
                years. Any such debarment or suspension shall 
                be subject to the procedures that apply to 
                debarment and suspension under the Federal 
                Acquisition Regulation under subpart 9.4 of 
                part 9 of title 48, Code of Federal 
                Regulations.
                    ``(B) Inclusion on list of parties excluded 
                from federal procurement and nonprocurement 
                programs.--The Administrator of General 
                Services shall include on the List of Parties 
                Excluded from Federal Procurement and 
                Nonprocurement Programs maintained by the 
                Administrator under part 9 of the Federal 
                Acquisition Regulation issued pursuant to 
                section 25 of the Office of Federal Procurement 
                Policy Act (41 U.S.C. 421) each person that is 
                debarred, suspended, or proposed for debarment 
                or suspension by the head of an executive 
                agency on the basis of a determination of a 
                false certification under subparagraph (A).
            ``(3) Clarification regarding certain products.--
        The remedies set forth in paragraph (2) shall not apply 
        with respect to the procurement of eligible products, 
        as defined in section 308(4) of the Trade Agreements 
        Act of 1974 (19 U.S.C. 2518(4)),of any foreign country 
or instrumentality designated under section 301(b) of that Act (19 
U.S.C. 2511(b)).
            ``(4) Rule of construction.--This subsection shall 
        not be construed to limit the use of other remedies 
        available to the head of an executive agency or any 
        other official of the Federal Government on the basis 
        of a determination of a false certification under 
        paragraph (1).
            ``(5) Waivers.--The President may on a case-by-case 
        basis waive the requirement that a person make a 
        certification under paragraph (1) if the President 
        determines and certifies in writing to the appropriate 
        congressional committees, the Committee on Armed 
        Services of the Senate, and the Committee on Armed 
        Services of the House of Representatives, that it is in 
        the national interest of the United States to do so.
            ``(6) Executive agency defined.--In this 
        subsection, the term `executive agency' has the meaning 
        given that term in section 4 of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 403).
            ``(7) Applicability.--The revisions to the Federal 
        Acquisition Regulation required under paragraph (1) 
        shall apply with respect to contracts for which 
        solicitations are issued on or after the date that is 
        90 days after the date of the enactment of the 
        Comprehensive Iran Sanctions, Accountability, and 
        Divestment Act of 2010.''.
    (c) Presidential Waiver.--Section 9 of such Act is 
amended--
            (1) in subsection (a), by striking ``5(b)'' each 
        place it appears and inserting ``5(b)(1)''; and
            (2) in subsection (c)--
                    (A) by striking ``section 5(a) or (b)'' 
                each place it appears and inserting ``section 
                5(a) or 5(b)(1)'';
                    (B) in paragraph (1), by striking 
                ``important to the national interest'' and 
                inserting ``necessary to the national 
                interest''; and
                    (C) in paragraph (2), by striking 
                subparagraph (C) and inserting the following:
                    ``(C) an estimate of the significance of 
                the conduct of the person in contributing to 
                the ability of Iran to, as the case may be--
                            ``(i) develop petroleum resources, 
                        produce refined petroleum products, or 
                        import refined petroleum products; or
                            ``(ii) acquire or develop--
                                    ``(I) chemical, biological, 
                                or nuclear weapons or related 
                                technologies; or
                                    ``(II) destabilizing 
                                numbers and types of advanced 
                                conventional weapons; and''.
    (d) Reports on Global Trade Relating to Iran.--Section 10 
of such Act is amended by adding at the end the following:
    ``(d) Reports on Global Trade Relating to Iran.--Not later 
than 90 days after the date of the enactment of the 
Comprehensive Iran Sanctions, Accountability, and Divestment 
Act of 2010, and annually thereafter, the President shall 
submit to the appropriate congressional committees a report, 
with respect to the most recent 12-month period for which data 
are available, on the dollar value amount of trade, including 
in the energy sector, between Iran and each country maintaining 
membership in the Group of 20 Finance Ministers and Central 
Bank Governors.''.
    (e) Extension of Iran Sanctions Act of 1996.--Section 13(b) 
of such Act is amended by striking ``December 31, 2011'' and 
inserting ``December 31, 2016''.
    (f) Clarification and Expansion of Definitions.--Section 14 
of such Act is amended--
            (1) in paragraph (2), by striking ``the Committee 
        on Banking and Financial Services, and the Committee on 
        International Relations'' and inserting ``the Committee 
        on Financial Services, and the Committee on Foreign 
        Affairs'';
            (2) in paragraph (9), in the flush text following 
        subparagraph (C), by striking ``The term `investment' 
        does not include'' and all that follows through 
        ``technology.'';
            (3) by redesignating paragraphs (12), (13), (14), 
        (15), and (16) as paragraphs (13), (14), (15), (17), 
        and (18), respectively;
            (4) by inserting after paragraph (11) the 
        following:
            ``(12) Knowingly.--The term `knowingly', with 
        respect to conduct, a circumstance, or a result, means 
        that a person has actual knowledge, or should have 
        known, of the conduct, the circumstance, or the 
        result.'';
            (5) in paragraph (14), as redesignated by paragraph 
        (3) of this subsection--
                    (A) by redesignating subparagraphs (A), 
                (B), and (C) as clauses (i), (ii), and (iii), 
                respectively, and moving such clauses, as so 
                redesignated, 2 ems to the right;
                    (B) by striking ``The term `person' means--
                '' and inserting the following:
                    ``(A) In general.--The term `person' 
                means--'';
                    (C) in subparagraph (A), as redesignated by 
                this paragraph--
                            (i) in clause (ii), by inserting 
                        ``financial institution, insurer, 
                        underwriter, guarantor, and any other 
                        business organization,'' after 
                        ``trust,''; and
                            (ii) in clause (iii), by striking 
                        ``subparagraph (B)'' and inserting 
                        ``clause (ii)''; and
                    (D) by adding at the end the following:
                    ``(B) Application to governmental 
                entities.--The term `person' does not include a 
                government or governmental entity that is not 
                operating as a business enterprise.'';
            (6) in paragraph (15), as redesignated by paragraph 
        (3) of this subsection, by striking ``petroleum and 
        natural gas resources'' and inserting ``petroleum, 
        refined petroleum products, oil or liquefied natural 
        gas, natural gas resources, oil or liquefied natural 
        gas tankers, and products used to construct or maintain 
        pipelines used to transport oil or liquefied natural 
        gas''; and
            (7) by inserting after paragraph (15), as so 
        redesignated, the following:
            ``(16) Refined petroleum products.--The term 
        `refined petroleum products' means diesel, gasoline, 
        jet fuel (including naphtha-type and kerosene-type jet 
        fuel), and aviation gasoline.''.
    (g) Waiver for Certain Persons in Certain Countries; 
Mandatory Investigations and Reporting; Conforming 
Amendments.--Section 4 of such Act is amended--
            (1) in subsection (b)(2), by striking ``(in 
        addition to that provided in subsection (d))'';
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking ``The President 
                        may'' and inserting the following:
                    ``(A) General waiver.--The President may''; 
                and
                            (ii) by adding at the end the 
                        following:
                    ``(B) Waiver with respect to persons in 
                countries that cooperate in multilateral 
                efforts with respect to iran.--The President 
                may, on a case by case basis, waive for a 
                period of not more than 12 months the 
                application of section 5(a) with respect to a 
                person if the President, at least 30 days 
                before the waiver is to take effect--
                            ``(i) certifies to the appropriate 
                        congressional committees that--
                                    ``(I) the government with 
                                primary jurisdiction over the 
                                person is closely cooperating 
                                with the United States in 
                                multilateral efforts to prevent 
                                Iran from--
                                            ``(aa) acquiring or 
                                        developing chemical, 
                                        biological, or nuclear 
                                        weapons or related 
                                        technologies; or
                                            ``(bb) acquiring or 
                                        developing 
                                        destabilizing numbers 
                                        and types of advanced 
                                        conventional weapons; 
                                        and
                                    ``(II) such a waiver is 
                                vital to the national security 
                                interests of the United States; 
                                and
                            ``(ii) submits to the appropriate 
                        congressional committees a report 
                        identifying--
                                    ``(I) the person with 
                                respect to which the President 
                                waives the application of 
                                sanctions; and
                                    ``(II) the actions taken by 
                                the government described in 
                                clause (i)(I) to cooperate in 
                                multilateral efforts described 
                                in that clause.''; and
                    (B) by striking paragraph (2) and inserting 
                the following:
            ``(2) Subsequent renewal of waiver.--At the 
        conclusion of the period of a waiver under subparagraph 
        (A) or (B) of paragraph (1), the President may renew 
        the waiver--
                    ``(A) if the President determines, in 
                accordance with subparagraph (A) or (B) of that 
                paragraph (as the case may be), that the waiver 
                is appropriate; and
                    ``(B)(i) in the case of a waiver under 
                subparagraph (A) of paragraph (1), for 
                subsequent periods of not more than six months 
                each; and
                    ``(ii) in the case of a waiver under 
                subparagraph (B) of paragraph (1), for 
                subsequent periods of not more than 12 months 
                each.'';
            (3) by striking subsection (d);
            (4) by redesignating subsections (e) and (f) as 
        subsections (d) and (e), respectively; and
            (5) in subsection (e), as redesignated by paragraph 
        (4) of this subsection--
                    (A) in paragraph (1)--
                            (i) by striking ``should initiate'' 
                        and inserting ``shall initiate''; and
                            (ii) by striking ``investment 
                        activity in Iran as'' and inserting 
                        ``an activity'';
                    (B) in paragraph (2)--
                            (i) by striking ``should 
                        determine'' and inserting ``shall 
                        (unless paragraph (3) applies) 
                        determine''; and
                            (ii) by striking ``investment 
                        activity in Iran as'' and inserting 
                        ``an activity''; and
                    (C) by adding at the end the following:
            ``(3) Special rule.--The President need not 
        initiate an investigation, and may terminate an 
        investigation, under this subsection if the President 
        certifies in writing to the appropriate congressional 
        committees that--
                    ``(A) the person whose activity was the 
                basis for the investigation is no longer 
                engaging in the activity or has taken 
                significant verifiable steps toward stopping 
                the activity; and
                    ``(B) the President has received reliable 
                assurances that the person will not knowingly 
                engage in an activity described in section 5(a) 
                in the future.''.
    (h) Effective Date.--
            (1) In general.--The amendments made by this 
        section shall--
                    (A) take effect on the date of the 
                enactment of this Act; and
                    (B) except as provided in this subsection 
                or section 6(b)(7) of the Iran Sanctions Act of 
                1996, as amended by subsection (b) of this 
                section, apply with respect to an investment or 
                activity described in subsection (a) or (b) of 
                section 5 of the Iran Sanctions Act of 1996, as 
                amended by this section, that is commenced on 
                or after such date of enactment.
            (2) Applicability to ongoing investments prohibited 
        under prior law.--A person that makes an investment 
        described in section 5(a) of the Iran Sanctions Act of 
        1996, as in effect on the day before the date of the 
        enactment of this Act, that is commenced before such 
        date of enactment and continues on or after such date 
        of enactment, shall, except as provided in paragraph 
        (4), be subject to the provisions of the Iran Sanctions 
        Act of 1996, as in effect on the day before such date 
        of enactment.
            (3) Applicability to ongoing activities relating to 
        chemical, biological, or nuclear weapons or related 
        technologies.--A person that, before the date of the 
        enactment of this Act, commenced an activity described 
        in section 5(b) of the Iran Sanctions Act of 1996, as 
        in effect on the day before such date of enactment, and 
        continues the activity on or after such date of 
        enactment, shall be subject to the provisions of the 
        Iran Sanctions Act of 1996, as amended by this Act.
            (4) Applicability of mandatory investigations to 
        investments.--The amendments made by subsection (g)(5) 
        of thissection shall apply on and after the date of the 
enactment of this Act--
                    (A) with respect to an investment described 
                in section 5(a)(1) of the Iran Sanctions Act of 
                1996, as amended by subsection (a) of this 
                section, that is commenced on or after such 
                date of enactment; and
                    (B) with respect to an investment described 
                in section 5(a) of the Iran Sanctions Act of 
                1996, as in effect on the day before the date 
                of the enactment of this Act, that is commenced 
                before such date of enactment and continues on 
                or after such date of enactment.
            (5) Applicability of mandatory investigations to 
        activities relating to petroleum.--
                    (A) In general.--Except as provided in 
                subparagraph (B), the amendments made by 
                subsection (g)(5) of this section shall apply 
                on and after the date that is 1 year after the 
                date of the enactment of this Act with respect 
                to an activity described in paragraph (2) or 
                (3) of section 5(a) of the Iran Sanctions Act 
                of 1996, as amended by subsection (a) of this 
                section, that is commenced on or after the date 
                that is 1 year after the date of the enactment 
                of this Act or the date on which the President 
                fails to submit a certification that is 
                required under subparagraph (B) (whichever is 
                applicable).
                    (B) Special rule for delay of effective 
                date.--
                            (i) Reporting requirement.--Not 
                        later than 30 days before the date that 
                        is 1 year after the date of the 
                        enactment of this Act, the President 
                        shall submit to the appropriate 
                        congressional committees a report 
                        describing--
                                    (I) the diplomatic and 
                                other efforts of the 
                                President--
                                            (aa) to dissuade 
                                        foreign persons from 
                                        engaging in activities 
                                        described in paragraph 
                                        (2) or (3) of section 
                                        5(a) of the Iran 
                                        Sanctions Act of 1996, 
                                        as amended by 
                                        subsection (a) of this 
                                        section; and
                                            (bb) to encourage 
                                        other governments to 
                                        dissuade persons over 
                                        which those governments 
                                        have jurisdiction from 
                                        engaging in such 
                                        activities;
                                    (II) the successes and 
                                failures of the efforts 
                                described in subclause (I); and
                                    (III) each investigation 
                                under section 4(e) of the Iran 
                                Sanctions Act of 1996, as 
                                amended by subsection (g)(5) of 
                                this section and as in effect 
                                pursuant to subparagraph (C) of 
                                this paragraph, or any other 
                                review of an activity described 
                                in paragraph (2) or (3) of 
                                section 5(a) of the Iran 
                                Sanctions Act of 1996, as 
                                amended by subsection (a) of 
                                this section, that is initiated 
                                or ongoing during the period 
                                beginning on the date of the 
                                enactment of this Act and 
                                ending on the date on which the 
                                President is required to submit 
                                the report.
                            (ii) Certification.--If the 
                        President submits to the appropriate 
                        congressional committees, with the 
                        report required by clause (i), a 
                        certification that there was a 
                        substantial reduction in activities 
                        described in paragraphs (2) and (3) of 
                        section 5(a) of the Iran Sanctions Act 
                        of 1996, as amended by subsection (a) 
                        of this section, during the period 
                        described in clause (i)(III), the 
                        effective date provided for in 
                        subparagraph (A) shall be delayed for a 
                        180-day period beginning after the date 
                        provided for in that subparagraph.
                            (iii) Subsequent reports and 
                        delays.--The effective date provided 
                        for in subparagraph (A) shall be 
                        delayed for additional 180-day periods 
                        occurring after the end of the 180-day 
                        period provided for under clause (ii), 
                        if, not later than 30 days before the 
                        180-day period preceding such 
                        additional 180-day period expires, the 
                        President submits to the appropriate 
                        congressional committees--
                                    (I) a report containing the 
                                matters required in the report 
                                under clause (i) for the period 
                                beginning on the date on which 
                                the preceding report was 
                                required to be submitted under 
                                clause (i) or this clause (as 
                                the case may be) and ending on 
                                the date on which the President 
                                is required to submit the most 
                                recent report under this 
                                clause; and
                                    (II) a certification that, 
                                during the period described in 
                                subclause (I), there was (as 
                                compared to the period for 
                                which the preceding report was 
                                submitted under this 
                                subparagraph) a progressive 
                                reduction in activities 
                                described in paragraphs (2) and 
                                (3) of section 5(a) of the Iran 
                                Sanctions Act of 1996, as 
                                amended by subsection (a) of 
                                this section.
                            (iv) Consequence of failure to 
                        certify.--If the President does not 
                        make a certification at a time required 
                        by this subparagraph--
                                    (I) the amendments made by 
                                subsection (g)(5) of this 
                                section shall apply on and 
                                after the date on which the 
                                certification was required to 
                                be submitted by this 
                                subparagraph, with respect to 
                                an activity described in 
                                paragraph (2) or (3) of section 
                                5(a) of the Iran Sanctions Act 
                                of 1996, as amended by 
                                subsection (a) of this section, 
                                that--
                                            (aa) is referenced 
                                        in the most recent 
                                        report required to be 
                                        submitted under this 
                                        subparagraph; or
                                            (bb) is commenced 
                                        on or after the date on 
                                        which such most recent 
                                        report is required to 
                                        be submitted; and
                                    (II) not later than 45 days 
                                after the date on which the 
                                certification was required to 
                                be submitted by this 
                                subparagraph, the President 
                                shall make a determination 
                                under paragraph (2) or (3) of 
                                section 5(a) of the Iran 
                                Sanctions Act of 1996 (as the 
                                case may be), as amended by 
                                subsection (a) ofthis section, 
with respect to relevant activities described in subclause (I)(aa).
                    (C) Applicability of permissive 
                investigations.--During the 1-year period 
                beginning on the date of the enactment of this 
                Act and during any 180-day period during which 
                the effective date provided for in subparagraph 
                (A) is delayed pursuant to subparagraph (B), 
                section 4(e) of the Iran Sanctions Act of 1996, 
                as amended by subsection (g)(5) of this 
                section, shall be applied, with respect to an 
                activity described in paragraph (2) or (3) of 
                section 5(a) of the Iran Sanctions Act of 1996, 
                as amended by subsection (a) of this section, 
                by substituting ``should'' for ``shall'' each 
                place it appears.
            (6) Waiver authority.--The amendments made by 
        subsection (c) shall not be construed to affect any 
        exercise of the authority under section 9(c) of the 
        Iran Sanctions Act of 1996, as in effect on the day 
        before the date of the enactment of this Act.

SEC. 103. ECONOMIC SANCTIONS RELATING TO IRAN.

    (a) In General.--Notwithstanding section 101 of the Iran 
Freedom Support Act (Public Law 109-293; 120 Stat. 1344), and 
in addition to any other sanction in effect, beginning on the 
date that is 90 days after the date of the enactment of this 
Act, the economic sanctions described in subsection (b) shall 
apply with respect to Iran.
    (b) Sanctions.--The sanctions described in this subsection 
are the following:
            (1) Prohibition on imports.--
                    (A) In general.--Except as provided in 
                subparagraph (B), no good or service of Iranian 
                origin may be imported directly or indirectly 
                into the United States.
                    (B) Exceptions.--The exceptions provided 
                for in section 203(b) of the International 
                Emergency Economic Powers Act (50 U.S.C. 
                1702(b)), including the exception for 
                information and informational materials, shall 
                apply to the prohibition in subparagraph (A) of 
                this paragraph to the same extent that such 
                exceptions apply to the authority provided 
                under section 203(a) of that Act.
            (2) Prohibition on exports.--
                    (A) In general.--Except as provided in 
                subparagraph (B), no good, service, or 
                technology of United States origin may be 
                exported to Iran from the United States or by a 
                United States person, wherever located.
                    (B) Exceptions.--
                            (i) Personal communications; 
                        articles to relieve human suffering; 
                        information and informational 
                        materials; transactions incident to 
                        travel.--The exceptions provided for in 
                        section 203(b) of the International 
                        Emergency Economic Powers Act (50 
                        U.S.C. 1702(b)), including the 
                        exception for information and 
                        informational materials, shall apply to 
                        the prohibition in subparagraph (A) of 
                        this paragraph to the same extent that 
                        such exceptions apply to the authority 
                        provided under section 203(a) of that 
                        Act.
                            (ii) Food; medicine; humanitarian 
                        assistance.--The prohibition in 
                        subparagraph (A) shall not apply to the 
                        exportation of--
                                    (I) agricultural 
                                commodities, food, medicine, or 
                                medical devices; or
                                    (II) articles exported to 
                                Iran to provide humanitarian 
                                assistance to the people of 
                                Iran.
                            (iii) Internet communications.--The 
                        prohibition in subparagraph (A) shall 
                        not apply to the exportation of--
                                    (I) services incident to 
                                the exchange of personal 
                                communications over the 
                                Internet or software necessary 
                                to enable such services, as 
                                provided for in section 560.540 
                                of title 31, Code of Federal 
                                Regulations (or any 
                                corresponding similar 
                                regulation or ruling);
                                    (II) hardware necessary to 
                                enable such services; or
                                    (III) hardware, software, 
                                or technology necessary for 
                                access to the Internet.
                            (iv)  Goods, services, or 
                        technologies necessary to ensure the 
                        safe operation of commercial 
                        aircraft.--The prohibition in 
                        subparagraph (A) shall not apply to the 
                        exportation of goods, services, or 
                        technologies necessary to ensure the 
                        safe operation of commercial aircraft 
                        produced in the United States or 
                        commercial aircraft into which aircraft 
                        components produced in the United 
                        States are incorporated, if the 
                        exportation of such goods, services, or 
                        technologies is approved by the 
                        Secretary of the Treasury, in 
                        consultation with the Secretary of 
                        Commerce, pursuant to regulations 
                        issued by the Secretary of the Treasury 
                        regarding the exportation of such 
                        goods, services, or technologies, if 
                        appropriate.
                            (v) Goods, services, or 
                        technologies exported to support 
                        international organizations.--The 
                        prohibition in subparagraph (A) shall 
                        not apply to the exportation of goods, 
                        services, or technologies that--
                                    (I) are provided to the 
                                International Atomic Energy 
                                Agency and are necessary to 
                                support activities of that 
                                Agency in Iran; or
                                    (II) are necessary to 
                                support activities, including 
                                the activities of 
                                nongovernmental organizations, 
                                relating to promoting democracy 
                                in Iran.
                            (vi) Exports in the national 
                        interest.--The prohibition in 
                        subparagraph (A) shall not apply to the 
                        exportation of goods, services, or 
                        technologies if the President 
                        determines the exportation of such 
                        goods, services, or technologies to be 
                        in the national interest of the United 
                        States.
            (3) Freezing assets.--
                    (A) In general.--At such time as the 
                President determines that a person in Iran, 
                including an Iranian diplomat or representative 
                of another government or military or quasi-
                governmental institution of Iran (including 
                Iran'sRevolutionary Guard Corps and its 
affiliates), satisfies the criteria for designation with respect to the 
imposition of sanctions under the authority of the International 
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), the President 
shall take such action as may be necessary to freeze, as soon as 
possible--
                            (i) the funds and other assets 
                        belonging to that person; and
                            (ii) any funds or other assets that 
                        person transfers, on or after the date 
                        on which the President determines the 
                        person satisfies such criteria, to any 
                        family member or associate acting for 
                        or on behalf of the person.
                    (B) Reports to the office of foreign assets 
                control.--The action described in subparagraph 
                (A) includes requiring any United States 
                financial institution that holds funds or 
                assets of a person described in that 
                subparagraph or funds or assets that person 
                transfers to a family member or associate 
                described in that subparagraph to report 
                promptly to the Office of Foreign Assets 
                Control information regarding such funds and 
                assets.
                    (C) Reports to congress.--Not later than 14 
                days after a decision is made to freeze the 
                funds or assets of any person under 
                subparagraph (A), the President shall report 
                the name of the person to the appropriate 
                congressional committees. Such a report may 
                contain a classified annex.
                    (D) Termination.--The President shall 
                release assets or funds frozen under 
                subparagraph (A) if the person to which the 
                assets or funds belong or the person that 
                transfers the assets or funds as described in 
                subparagraph (A)(ii) (as the case may be) no 
                longer satisfies the criteria for designation 
                with respect to the imposition of sanctions 
                under the authority of the International 
                Emergency Economic Powers Act (50 U.S.C. 1701 
                et seq.).
                    (E) United states financial institution 
                defined.--In this paragraph, the term ``United 
                States financial institution'' means a 
                financial institution (as defined in section 14 
                of the Iran Sanctions Act of 1996 (Public Law 
                104-172; 50 U.S.C. 1701 note)) that is a United 
                States person.
    (c) Penalties.--The penalties provided for in subsections 
(b) and (c) of section 206 of the International Emergency 
Economic Powers Act (50 U.S.C. 1705) shall apply to a person 
that violates, attempts to violate, conspires to violate, or 
causes a violation of this section or regulations prescribed 
under this section to the same extent that such penalties apply 
to a person that commits an unlawful act described in section 
206(a) of that Act.
    (d) Regulatory Authority.--
            (1) In general.--The President shall prescribe 
        regulations to carry out this section, which may 
        include regulatory exceptions to the sanctions 
        described in subsection (b).
            (2) Applicability of certain regulations.--No 
        exception to the prohibition under subsection (b)(1) 
        may be made for the commercial importation of an 
        Iranian origin good described in section 560.534(a) of 
        title 31, Code of Federal Regulations (as in effect on 
        the day before the date of the enactment of this Act), 
        unless the President--
                    (A) prescribes a regulation providing for 
                such an exception on or after the date of the 
                enactment of this Act; and
                    (B) submits to the appropriate 
                congressional committees--
                            (i) a certification in writing that 
                        the exception is in the national 
                        interest of the United States; and
                            (ii) a report describing the 
                        reasons for the exception.

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

    (a) Findings.--Congress makes the following findings:
            (1) The Financial Action Task Force is an 
        intergovernmental body whose purpose is to develop and 
        promote national and international policies to combat 
        money laundering and terrorist financing.
            (2) Thirty-three countries, plus the European 
        Commission and the Cooperation Council for the Arab 
        States of the Gulf, belong to the Financial Action Task 
        Force. The member countries of the Financial Action 
        Task Force include the United States, Canada, most 
        countries in western Europe, Russia, the People's 
        Republic of China, Japan, South Korea, Argentina, and 
        Brazil.
            (3) In 2008 the Financial Action Task Force 
        extended its mandate to include addressing ``new and 
        emerging threats such as proliferation financing'', 
        meaning the financing of the proliferation of weapons 
        of mass destruction, and published ``guidance papers'' 
        for members to assist them in implementing various 
        United Nations Security Council resolutions dealing 
        with weapons of mass destruction, including United 
        Nations Security Council Resolutions 1737 (2006) and 
        1803 (2008), which deal specifically with proliferation 
        by Iran.
            (4) The Financial Action Task Force has repeatedly 
        called on members--
                    (A) to advise financial institutions in 
                their jurisdictions to give special attention 
                to business relationships and transactions with 
                Iran, including Iranian companies and financial 
                institutions;
                    (B) to apply effective countermeasures to 
                protect their financial sectors from risks 
                relating to money laundering and financing of 
                terrorism that emanate from Iran;
                    (C) to protect against correspondent 
                relationships being used by Iran and Iranian 
                companies and financial institutions to bypass 
                or evade countermeasures and risk-mitigation 
                practices; and
                    (D) to take into account risks relating to 
                money laundering and financing of terrorism 
                when considering requests by Iranian financial 
                institutions to open branches and subsidiaries 
                in their jurisdictions.
            (5) At a February 2010 meeting of the Financial 
        Action Task Force, the Task Force called on members to 
        apply countermeasures ``to protect the international 
        financial system from the ongoing and substantial money 
        laundering and terrorist financing (ML/TF) risks'' 
        emanating from Iran.
    (b) Sense of Congress Regarding the Imposition of Sanctions 
on the Central Bank of Iran.--Congress--
            (1) acknowledges the efforts of the United Nations 
        Security Council to impose limitations on transactions 
        involving Iranian financial institutions, including the 
        Central Bank of Iran; and
            (2) urges the President, in the strongest terms, to 
        consider immediately using the authority of the 
        President to impose sanctions on the Central Bank of 
        Iran and any other Iranian financial institution 
        engaged in proliferation activities or support of 
        terrorist groups.
    (c) Prohibitions and Conditions With Respect to Certain 
Accounts Held by Foreign Financial Institutions.--
            (1) In general.--Not later than 90 days after the 
        date of the enactment of this Act, the Secretary of the 
        Treasury shall prescribe regulations to prohibit, or 
        impose strict conditions on, the opening or maintaining 
        in the United States of a correspondent account or a 
        payable-through account by a foreign financial 
        institution that the Secretary finds knowingly engages 
        in an activity described in paragraph (2).
            (2) Activities described.--A foreign financial 
        institution engages in an activity described in this 
        paragraph if the foreign financial institution--
                    (A) facilitates the efforts of the 
                Government of Iran (including efforts of Iran's 
                Revolutionary Guard Corps or any of its agents 
                or affiliates)--
                            (i) to acquire or develop weapons 
                        of mass destruction or delivery systems 
                        for weapons of mass destruction; or
                            (ii) to provide support for 
                        organizations designated as foreign 
                        terrorist organizations under section 
                        219(a) of the Immigration and 
                        Nationality Act (8 U.S.C. 1189(a)) or 
                        support for acts of international 
                        terrorism (as defined in section 14 of 
                        the Iran Sanctions Act of 1996 (Public 
                        Law 104-172; 50 U.S.C. 1701 note));
                    (B) facilitates the activities of a person 
                subject to financial sanctions pursuant to 
                United Nations Security Council Resolution 1737 
                (2006), 1747 (2007), 1803 (2008), or 1929 
                (2010), or any other resolution that is agreed 
                to by the Security Council and imposes 
                sanctions with respect to Iran;
                    (C) engages in money laundering to carry 
                out an activity described in subparagraph (A) 
                or (B);
                    (D) facilitates efforts by the Central Bank 
                of Iran or any other Iranian financial 
                institution to carry out an activity described 
                in subparagraph (A) or (B); or
                    (E) facilitates a significant transaction 
                or transactions or provides significant 
                financial services for--
                            (i) Iran's Revolutionary Guard 
                        Corps or any of its agents or 
                        affiliates whose property or interests 
                        in property are blocked pursuant to the 
                        International Emergency Economic Powers 
                        Act (50 U.S.C. 1701 et seq.); or
                            (ii) a financial institution whose 
                        property or interests in property are 
                        blocked pursuant to that Act in 
                        connection with--
                                    (I) Iran's proliferation of 
                                weapons of mass destruction or 
                                delivery systems for weapons of 
                                mass destruction; or
                                    (II) Iran's support for 
                                international terrorism.
            (3) Penalties.--The penalties provided for in 
        subsections (b) and (c) of section 206 of the 
        International Emergency Economic Powers Act (50 U.S.C. 
        1705) shall apply to a person that violates, attempts 
        to violate, conspires to violate, or causes a violation 
        of regulations prescribed under paragraph (1) of this 
        subsection to the same extent that such penalties apply 
        to a person that commits an unlawful act described in 
        section 206(a) of that Act.
    (d) Penalties for Domestic Financial Institutions for 
Actions of Persons Owned or Controlled by Such Financial 
Institutions.--
            (1) In general.--Not later than 90 days after the 
        date of the enactment of this Act, the Secretary of the 
        Treasury shall prescribe regulations to prohibit any 
        person owned or controlled by a domestic financial 
        institution from knowingly engaging in a transaction or 
        transactions with or benefitting Iran's Revolutionary 
        Guard Corps or any of its agents or affiliates whose 
        property or interests in property are blocked pursuant 
        to the International Emergency Economic Powers Act (50 
        U.S.C. 1701 et seq.).
            (2) Penalties.--The penalties provided for in 
        section 206(b) of the International Emergency Economic 
        Powers Act (50 U.S.C. 1705(b)) shall apply to a 
        domestic financial institution to the same extent that 
        such penalties apply to a person that commits an 
        unlawful act described in section 206(a) of that Act 
        if--
                    (A) a person owned or controlled by the 
                domestic financial institution violates, 
                attempts to violate, conspires to violate, or 
                causes a violation of regulations prescribed 
                under paragraph (1) of this subsection; and
                    (B) the domestic financial institution knew 
                or should have known that the person violated, 
                attempted to violate, conspired to violate, or 
                caused a violation of such regulations.
    (e) Requirements for Financial Institutions Maintaining 
Accounts for Foreign Financial Institutions.--
            (1) In general.--The Secretary of the Treasury 
        shall prescribe regulations to require a domestic 
        financial institution maintaining a correspondent 
        account or payable-through account in the United States 
        for a foreign financial institution to do one or more 
        of the following:
                    (A) Perform an audit of activities 
                described in subsection (c)(2) that may be 
                carried out by the foreign financial 
                institution.
                    (B) Report to the Department of the 
                Treasury with respect to transactions or other 
                financial services provided with respect to any 
                such activity.
                    (C) Certify, to the best of the knowledge 
                of the domestic financial institution, that the 
                foreign financial institution is not knowingly 
                engaging in any such activity.
                    (D) Establish due diligence policies, 
                procedures, and controls, such as the due 
                diligence policies, procedures, and controls 
                described in section 5318(i) of title 31, 
                United States Code, reasonably designed to 
                detect whether the Secretary of the Treasury 
                has found the foreign financial institution to 
                knowingly engage in any such activity.
            (2) Penalties.--The penalties provided for in 
        sections 5321(a) and 5322 of title 31, United States 
        Code, shall apply to a person that violates a 
        regulation prescribed under paragraph (1) of this 
        subsection, in the same manner and to the same extent 
        as such penalties would apply to any person that is 
        otherwise subject to such section 5321(a) or 5322.
    (f) Waiver.--The Secretary of the Treasury may waive the 
application of a prohibition or condition imposed with respect 
to a foreign financial institution pursuant to subsection (c) 
or the imposition of a penalty under subsection (d) with 
respect to a domestic financial institution on and after the 
date that is 30 days after the Secretary--
            (1) determines that such a waiver is necessary to 
        the national interest of the United States; and
            (2) submits to the appropriate congressional 
        committees a report describing the reasons for the 
        determination.
    (g) Procedures for Judicial Review of Classified 
Information.--
            (1) In general.--If a finding under subsection 
        (c)(1), a prohibition, condition, or penalty imposed as 
        a result of any such finding, or a penalty imposed 
        under subsection (d), is based on classified 
        information (as defined in section 1(a) of the 
        Classified Information Procedures Act (18 U.S.C. App.)) 
        and a court reviews the finding or the imposition of 
        the prohibition, condition, or penalty, the Secretary 
        of the Treasury may submit such information to the 
        court ex parte and in camera.
            (2) Rule of construction.--Nothing in this 
        subsection shall be construed to confer or imply any 
        right to judicial review of any finding under 
        subsection (c)(1), any prohibition, condition, or 
        penalty imposed as a result of any such finding, or any 
        penalty imposed under subsection (d).
    (h) Consultations in Implementation of Regulations.--In 
implementing this section and the regulations prescribed under 
this section, the Secretary of the Treasury--
            (1) shall consult with the Secretary of State; and
            (2) may, in the sole discretion of the Secretary of 
        the Treasury, consult with such other agencies and 
        departments and such other interested parties as the 
        Secretary considers appropriate.
    (i) Definitions.--
            (1) In general.--In this section:
                    (A) Account; correspondent account; 
                payable-through account.--The terms 
                ``account'', ``correspondent account'', and 
                ``payable-through account'' have the meanings 
                given those terms in section 5318A of title 31, 
                United States Code.
                    (B) Agent.--The term ``agent'' includes an 
                entity established by a person for purposes of 
                conducting transactions on behalf of the person 
                in order to conceal the identity of the person.
                    (C) Financial institution.--The term 
                ``financial institution'' means a financial 
                institution specified in subparagraph (A), (B), 
                (C), (D), (E), (F), (G), (H), (I), (J), (M), or 
                (Y) of section 5312(a)(2) of title 31, United 
                States Code.
                    (D) Foreign financial institution; domestic 
                financial institution.--The terms ``foreign 
                financial institution'' and ``domestic 
                financial institution'' shall have the meanings 
                of those terms as determined by the Secretary 
                of the Treasury.
                    (E) Money laundering.--The term ``money 
                laundering'' means the movement of illicit cash 
                or cash equivalent proceeds into, out of, or 
                through a country, or into, out of, or through 
                a financial institution.
            (2) Other definitions.--The Secretary of the 
        Treasury may further define the terms used in this 
        section in the regulations prescribed under this 
        section.

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

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

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

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

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

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

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

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

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

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

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

    (a) Initial Report.--
            (1) In general.--Not later than 90 days after the 
        date of the enactment of this Act, the President shall 
        submit to the appropriate congressional committees a 
        report--
                    (A) on investments in the energy sector of 
                Iran that were made during the period described 
                in paragraph (2); and
                    (B) that contains--
                            (i) an estimate of the volume of 
                        energy-related resources (other than 
                        refined petroleum), including ethanol, 
                        that Iran imported during the period 
                        described in paragraph (2); and
                            (ii) a list of all significant 
                        known energy-related joint ventures, 
                        investments, and partnerships located 
                        outside Iran that involve Iranian 
                        entities in partnership with entities 
                        from other countries, including an 
                        identification of the entities from 
                        other countries; and
                            (iii) an estimate of--
                                    (I) the total value of each 
                                such joint venture, investment, 
                                and partnership; and
                                    (II) the percentage of each 
                                such joint venture, investment, 
                                and partnership owned by an 
                                Iranian entity.
            (2) Period described.--The period described in this 
        paragraph is the period beginning on January 1, 2006, 
        and ending on the date that is 60 days after the date 
        of the enactment of this Act.
    (b) Updated Reports.--Not later than 180 days after 
submitting the report required by subsection (a), and every 180 
days thereafter, the President shall submit to the appropriate 
congressional committees a report containing the matters 
required in the report under subsection (a)(1) for the 180-day 
period beginning on the date that is 30 days before the date on 
which the preceding report was required to be submitted by this 
section.

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

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

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

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

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

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

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

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

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

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

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

SEC. 201. DEFINITIONS.

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

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

    (a) Sense of Congress.--It is the sense of Congress that 
the United States should support the decision of any State or 
local government that for moral, prudential, or reputational 
reasons divests from, or prohibits the investment of assets of 
the State or local government in, a person that engages in 
investment activities in the energy sector of Iran, as long as 
Iran is subject to economic sanctions imposed by the United 
States.
    (b) Authority to Divest.--Notwithstanding any other 
provision of law, a State or local government may adopt and 
enforce measures that meet the requirements of subsection (d) 
to divest the assets of the State or local government from, or 
prohibit investment of the assets of the State or local 
government in, any person that the State or local government 
determines, using credible information available to the public, 
engages in investment activities in Iran described in 
subsection (c).
    (c) Investment Activities Described.--A person engages in 
investment activities in Iran described in this subsection if 
the person--
            (1) has an investment of $20,000,000 or more in the 
        energy sector of Iran, including in a person that 
        provides oil or liquified natural gas tankers, or 
        products used to construct or maintain pipelines used 
        to transport oil or liquified natural gas, for the 
        energy sector of Iran; or
            (2) is a financial institution that extends 
        $20,000,000 or more in credit to another person, for 45 
        days or more, if that person will use the credit for 
        investment in the energy sector of Iran.
    (d) Requirements.--Any measure taken by a State or local 
government under subsection (b) shall meet the following 
requirements:
            (1) Notice.--The State or local government shall 
        provide written notice to each person to which a 
        measure is to be applied.
            (2) Timing.--The measure shall apply to a person 
        not earlier than the date that is 90 days after the 
        date on which written notice is provided to the person 
        under paragraph (1).
            (3) Opportunity for hearing.--The State or local 
        government shall provide an opportunity to comment in 
        writing to each person to which a measure is to be 
        applied. If the person demonstrates to the State or 
        local government that the person does not engage in 
        investment activities in Iran described in subsection 
        (c), the measure shall not apply to the person.
            (4) Sense of congress on avoiding erroneous 
        targeting.--It is the sense of Congress that a State or 
        local government should not adopt a measure under 
        subsection (b) with respect to a person unless the 
        State or local government has made every effort to 
        avoid erroneously targeting the person and has verified 
        that the person engages in investment activities in 
        Iran described in subsection (c).
    (e) Notice to Department of Justice.--Not later than 30 
days after adopting a measure pursuant to subsection (b), a 
State or local government shall submit written notice to the 
Attorney General describing the measure.
    (f) Nonpreemption.--A measure of a State or local 
government authorized under subsection (b) or (i) is not 
preempted by any Federal law or regulation.
    (g) Definitions.--In this section:
            (1) Assets.--
                    (A) In general.--Except as provided in 
                subparagraph (B), the term ``assets'' refers to 
                public monies and includes any pension, 
                retirement, annuity, or endowment fund, or 
                similar instrument, that is controlled by a 
                State or local government.
                    (B) Exception.--The term ``assets'' does 
                not include employee benefit plans covered by 
                title I of the Employee Retirement Income 
                Security Act of 1974 (29 U.S.C. 1001 et seq.).
            (2) Investment.--The ``investment'' includes--
                    (A) a commitment or contribution of funds 
                or property;
                    (B) a loan or other extension of credit; 
                and
                    (C) the entry into or renewal of a contract 
                for goods or services.
    (h) Effective Date.--
            (1) In general.--Except as provided in paragraph 
        (2) or subsection (i), this section applies to measures 
        adopted by a State or local government before, on, or 
        after the date of the enactment of this Act.
            (2) Notice requirements.--Except as provided in 
        subsection (i), subsections (d) and (e) apply to 
        measures adopted by a State or local government on or 
        after the date of the enactment of this Act.
    (i) Authorization for Prior Enacted Measures.--
            (1) In general.--Notwithstanding any other 
        provision of this section or any other provision of 
        law, a State or local government may enforce a measure 
        (without regard to the requirements of subsection (d), 
        except as provided in paragraph (2)) adopted by the 
        State or local government before the date of the 
        enactment of this Act that provides for the divestment 
        of assets of the State or local government from, or 
        prohibits the investment of the assets of the State or 
        local government in, any person that the State or local 
        government determines, using credible information 
        available to the public, engages in investment 
        activities in Iran (determined without regard to 
        subsection (c)) or other business activities in Iran 
        that are identified in the measure.
            (2) Application of notice requirements.--A measure 
        described in paragraph (1) shall be subject to the 
        requirements of paragraphs (1) and (2) and the first 
        sentence of paragraph (3) of subsection (d) on and 
        after the date that is 2 years after the date of the 
        enactment of this Act.

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

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

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

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

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

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

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

SEC. 301. DEFINITIONS.

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

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

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

SEC. 303. DESTINATIONS OF DIVERSION CONCERN.

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

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

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

SEC. 305. ENFORCEMENT AUTHORITY.

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

                      TITLE IV--GENERAL PROVISIONS

SEC. 401. GENERAL PROVISIONS.

    (a) Sunset.--The provisions of this Act (other than 
sections 105 and 305 and the amendments made by sections 102, 
107, 109, and 205) shall terminate, and section 13(c)(1)(B) of 
the Investment Company Act of 1940, as added by section 203(a), 
shall cease to be effective, on the date that is 30 days after 
the date on which the President certifies to Congress that--
            (1) the Government of Iran has ceased providing 
        support for acts of international terrorism and no 
        longer satisfies the requirements for designation as a 
        state sponsor of terrorism (as defined in section 301) 
        under--
                    (A) section 6(j)(1)(A) of the Export 
                Administration Act of 1979 (50 U.S.C. App. 
                2405(j)(1)(A)) (or any successor thereto);
                    (B) section 40(d) of the Arms Export 
                Control Act (22 U.S.C. 2780(d)); or
                    (C) section 620A(a) of the Foreign 
                Assistance Act of 1961 (22 U.S.C. 2371(a)); and
            (2) Iran has ceased the pursuit, acquisition, and 
        development of nuclear, biological, and chemical 
        weapons and ballistic missiles and ballistic missile 
        launch technology.
    (b) Presidential Waivers.--
            (1) In general.--The President may waive the 
        application of sanctions under section 103(b), the 
        requirement to impose or maintain sanctions with 
        respect to a person under section 105(a), the 
        requirement to include a person on the list required by 
        section 105(b), the application of the prohibition 
        under section 106(a), or the imposition of the 
        licensing requirement under section 303(c) with respect 
        to a country designated as a Destination of Diversion 
        Concern under section 303(a), if the President 
        determines that such a waiver is in the national 
        interest of the United States.
            (2) Reports.--
                    (A) In general.--If the President waives 
                the application of a provision pursuant to 
                paragraph (1), the President shall submit to 
                the appropriate congressional committees a 
                report describing the reasons for the waiver.
                    (B) Special rule for report on waiving 
                imposition of licensing requirement under 
                section 303(c).--In any case in which the 
                President waives, pursuant to paragraph (1), 
                the imposition of the licensing requirement 
                under section 303(c) with respect to a country 
                designated as a Destination of Diversion 
                Concern under section 303(a), the President 
                shall include in the report required by 
                subparagraph (A) of this paragraph an 
                assessment of whether the government of the 
                country is taking the steps described in 
                subparagraph (A) of section 303(d)(1).
    (c) Authorizations of Appropriations.--
            (1) Authorization of appropriations for the 
        department of state and the department of the 
        treasury.--There are authorized to be appropriated to 
        the Secretary of State and to the Secretary of the 
        Treasury such sums as may be necessary to implement the 
        provisions of, and amendments made by, titles I and III 
        of this Act.
            (2) Authorization of appropriations for the 
        department of commerce.--There are authorized to be 
        appropriated to the Secretary of Commerce such sums as 
        may be necessary to carry out title III.

SEC. 402. DETERMINATION OF BUDGETARY EFFECTS.

    The budgetary effects of this Act, for the purpose of 
complying with the Statutory Pay-As-You-Go-Act of 2010, shall 
be determined by reference to the latest statement titled 
``Budgetary Effects of PAYGO Legislation'' for this Act, 
jointly submitted for printing in the Congressional Record by 
the Chairmen of the House and Senate Budget Committees, 
provided that such statement has been submitted prior to the 
vote on passage in the House acting first on this conference 
report or amendment between the Houses.
    And the Senate agree to the same.

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

                                   Christopher J. Dodd,
                                   John F. Kerry,
                                   Joseph I. Lieberman,
                                   Robert Menendez,
                                   Richard C. Shelby,
                                   Robert F. Bennett,
                                   Richard G. Lugar,
                                Managers on the Part of the Senate.
       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

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

                          Summary and Purpose

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

                Background and Need for the Legislation

    Iran poses a significant threat to the United States and 
its allies in the Middle East and elsewhere. A nuclear Iran 
would intimidate its neighbors; be further emboldened in 
pursuing terrorism abroad and oppression at home; represent an 
imminent threat to Israel and other friends and allies of the 
United States; and likely spark a destabilizing Middle East 
arms race that would deal a major blow to U.S. and 
international non-proliferation efforts and threaten vital U.S. 
national security interests.
    Iran's persistent deception regarding its nuclear program, 
its general unresponsiveness to diplomacy, and its rejection of 
international community demands regarding its nuclear program 
have deepened Congressional concerns about that program. Since 
2006 the UN Security Council has been calling on Iran to 
suspend its uranium enrichment program and increase its 
cooperation with the International Atomic Energy Agency 
(IAEA)--to no avail.
    Notwithstanding the additional costs imposed on Iran as a 
result of previous U.S. and UN Security Council sanctions, 
Iran's development of its nuclear program continues. The 
International Atomic Energy Agency (IAEA) now estimates that 
Iran has produced and stockpiled sufficient low-enriched 
uranium, if further enriched, for two nuclear explosive 
devices. For these reasons, Conferees assess that additional 
and tougher sanctions are needed in order to persuade Iran to 
cease its nuclear program. Conferees believe that the imminence 
and seriousness of the threat posed to U.S. interests by Iran's 
nuclear weapons program warrants the enactment of H.R. 2194.
    Conferees take note of and applaud recent adoption by the 
U.N. Security Council of Resolution 1929 regarding Iran's 
nuclear program. Conferees believe the resolution is a powerful 
statement of opposition by the international community to 
Iran's ongoing illicit nuclear activities and a critical step 
in strengthening the multilateral sanctions regime intended to 
persuade Iran to suspend those activities. Conferees believe 
this legislation will complement UNSCR 1929 and will deepen 
efforts to thwart Iran's efforts to obtain a nuclear weapons 
capability.

                       Background: U.S. Sanctions

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

                     MULTILATERAL SANCTIONS EFFORTS

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

                         Contents of H.R. 2194

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

                           TITLE I: SANCTIONS

    Title I of H.R. 2194 strengthens the U.S. sanctions regime 
by requiring severe limitations on U.S. correspondent banking 
for foreign financial institutions doing business with relevant 
Iranian banks. The Act further strengthens existing legislation 
by broadening the categories of transactions that trigger 
sanctions, increasing the number of sanctions the President can 
impose on foreign companies whose activities trigger sanctions, 
and requiring the President to investigate reports of 
sanctionable activities to determine whether sanctionable 
activity has indeed occurred.
    In broadening the categories of transactions that trigger 
sanctions, the bill focuses on sales to Iran of refined 
petroleum and assistance to Iran for its own domestic refining 
capacity. Under H.R. 2194, companies engaged in either of these 
activities would be subject to the same sanctions as companies 
that invest $20 million or more in Iran's energy sector (the 
original category of sanctionable activity established under 
ISA). Despite being one of the world's leading oil producers, 
Iran reportedly imports between 25 and 40 percent of its 
refined oil needs, due to its limited domestic refining 
capacity. Accordingly, Conferees believe that imposition of 
refined-petroleum-related sanctions could have a powerful 
impact on Iran's economy and, as a result, on its decision-
making regarding its nuclear program.
    The bill likewise imposes sanctions on companies that sell 
Iran goods, services, or know-how that assist it in developing 
its energy sector. As is the case with refined-petroleum-
related sanctions, companies that engage in such transactions 
would be subject to the same sanctions as companies that invest 
$20 million or more in Iran's energy sector. Furthermore, 
energy investment now covers the sale of petroleum-related 
goods, services, and technology to Iran, which was a category 
of activity that was not previously covered by the U.S. 
sanctions regime.
    The bill also expands in other ways the universe of 
activities to be considered sanctionable.
    H.R. 2194 establishes three new sanctions, in addition to 
the menu of six sanctions that already exists under ISA. The 
three new sanctions are, respectively, a prohibition on access 
to foreign exchange in the U.S., a prohibition on access to the 
U.S. banking system, and a prohibition on property transactions 
in the United States. H.R. 2194 requires the President to 
impose at least three of the nine sanctions on a company 
involved in sanctionable activity, in addition to other 
mandatory sanctions.
    The bill also toughens the sanctions regime by requiring 
the President (a) to investigate any report of sanctionable 
activity for which there is credible evidence; and (b) to make 
a determination in writing to Congress whether such activity 
has indeed occurred. The President would then be expected 
either to impose or waive sanctions. Under current law, the 
President is authorized to investigate and make a determination 
but is not required to do so. In fact, the President has made 
only one determination under current law, despite at least two 
dozen credible reports of sanctionable activity. That 
determination, in 1998, was made for the purpose of waiving 
sanctions.
    H.R. 2194 is designed to impose considerable additional 
pressure on Iran by mandating a new financial sanction that, if 
implemented appropriately, will substantially reduce Iran's 
access to major segments of the global financial system. The 
Act requires the Secretary of the Treasury to prohibit or 
impose strict conditions on U.S. banks' correspondent 
relationships with foreign financial institutions that (1) 
engage in financial transactions that facilitate Iranian 
efforts to develop WMD or promote terrorist activities, 
including through money-laundering or through enabling an 
Iranian financial institution--including the Central Bank of 
Iran, for example--to facilitate such efforts; (2) facilitate 
or otherwise contribute to a transaction or provides 
financialservices for a financial institution that the Office of 
Foreign Assets Control at the Department of the Treasury has designated 
to be supporting the proliferation of weapons of mass destruction or 
financing of international terrorism; or (3) involve the Islamic 
Revolutionary Guard Corps (IRGC) or its affiliates or agents. In 
addition, H.R. 2194 prohibits any U.S. financial institution or its 
foreign subsidiaries from engaging in any financial transaction with 
IRGC entities.
    Indeed, the IRGC, its affiliates, and agents have 
reportedly extended their reach heavily into various parts of 
the Iranian economy, dominating critical financial services, 
construction, energy, shipping, telecommunications, and certain 
manufacturing sectors throughout the country. Thus, in addition 
to playing pivotal roles in Tehran's proliferation of weapons 
of mass destruction, financing of international terrorism, and 
gross human rights abuses, the IRGC is now a key source of 
wealth for the Iranian regime. Conferees join the 
administration and international community in seeking to combat 
the IRGC's growing power, and to curb the IRGC's access to 
capital, which is used to further Tehran's various ambitions.
    Other major measures in Title I include:
            --visa, property, and financial sanctions on 
        Iranians the President determines to be complicit in 
        serious human rights abuses against other Iranians on 
        or after June 12, 2009, the date of Iran's most recent 
        Presidential election;
            --a ban on U.S. government procurement contracts 
        for any company that exports to Iran technology used to 
        restrict the free flow of information or to disrupt, 
        monitor, or otherwise restrict freedom of speech;
            --an authorization for the President to prescribe 
        regulations for the purpose of implementing Iran-
        related sanctions in UN Security Council resolutions; 
        and
            --an authorization for FY 2011 appropriations of 
        slightly more than $100 million each to the Secretary 
        of the Treasury for the Office of Terrorism and 
        Financial Intelligence; to the Secretary of the 
        Treasury for the Financial Crimes Enforcement Network; 
        and to the Secretary of Commerce for the Bureau of 
        Industry and Security, for the purposes of reinforcing 
        the U.S. trade embargo, combating diversion of 
        sensitive technology to Iran, and preventing the 
        international financial system from being used to 
        support terrorism or develop WMD.

    TITLE II: DIVESTMENT FROM CERTAIN COMPANIES THAT INVEST IN IRAN

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

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

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

                      TITLE IV: GENERAL PROVISIONS

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

               Section-by-Section Analysis and Discussion


Section 2. Findings

    This section articulates the findings that frame the basis 
for the additional sanctions and the purpose of the bill. The 
findings in section 2 draw from both S. 2799 and H.R. 2194.
    Subsection (1) finds that the illicit nuclear activities of 
the Government of Iran, combined with its development of 
unconventional weapons and ballistic missiles and its support 
for international terrorism, represent a threat to the security 
of the United States, its strong ally Israel, and other allies 
of the United States around the world.
    Subsection (2) asserts that the United States and other 
responsible countries have a vital interest in working together 
to prevent the Iranian regime from acquiring a nuclear weapons 
capability.
    Subsection (3) finds that the International Atomic Energy 
Agency has repeatedly called attention to Iran's illicit 
nuclear activities and, as a result, the United Nations 
Security Council has adopted a range of sanctions designed to 
encourage the Government of Iran to suspend those activities 
and comply with its obligations under the Treaty on Non-
Proliferation of Nuclear Weapons, done at Washington, London, 
and Moscow July 1, 1968, and entered into force March 5, 1970 
(commonly known as the ``Nuclear Non-Proliferation Treaty'').
    Subsection (4) finds that the serious and urgent nature of 
the threat from Iran demands that the United States work 
together with its allies to do everything possible--
diplomatically, politically, and economically--to prevent Iran 
from acquiring a nuclear weapons capability.
    Subsection (5) finds the United States and its major 
European allies, including the United Kingdom, France, and 
Germany, have advocated that sanctions be strengthened should 
international diplomatic efforts fail to achieve verifiable 
suspension of Iran's uranium enrichment program and an end to 
its nuclear weapons program and other illicit nuclear 
activities.
    Subsection (6) finds that the Government of Iran continues 
to engage in serious, systematic, and ongoing violations of 
human rights, including suppression of freedom of expression 
and religious freedom, illegitimately prolonged detention, 
torture, and executions. Such violations have increased in the 
aftermath of the fraudulent presidential election in Iran on 
June 12, 2009.
    Subsection (7) finds that the Iranian regime has been 
unresponsive to President Obama's unprecedented and serious 
efforts at engagement, revealing that the Government of Iran 
does not appear to be interested in a diplomatic resolution, as 
made clear by its recent actions detailed in this section.
    Subsection (8) finds that there is an increasing interest 
by State governments, local governments, educational 
institutions, and private institutions, business firms, and 
other investors to disassociate themselves from companies that 
conduct business activities in the energy sector of Iran, since 
such business activities may directly or indirectly support the 
efforts of the Government of Iran to achieve a nuclear weapons 
capability.
    Subsection (9) finds that black market proliferation 
networks continue to flourish in the Middle East, allowing 
countries like Iran to gain access to sensitive dual-use 
technologies.
    Subsection (10) finds that economic sanctions imposed 
pursuant to the provisions of this Act, the Iran Sanctions Act 
of 1996, as amended by this Act, and the International 
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), and 
other authorities available to the United States to impose 
economic sanctions to prevent Iran from developing nuclear 
weapons, are necessary to protect the essential security 
interest of the United States.
    Section 3--Sense of Congress Regarding Illicit Nuclear 
Activities and Violations of Human Rights in Iran. Section 3 of 
the Senate bill expresses the Sense of Congress regarding 
Iran's continuing illicit nuclear activities and ongoing 
violations of human rights in Iran. The House bill contains no 
such provision. The House recedes.
    Paragraph (1) states that international diplomatic efforts 
to address Iran's illicit nuclear efforts and support for 
international terrorism are more likely to be effective if 
strong additional sanctions are imposed on the Government of 
Iran.
    Paragraph (2) states that concerns of the United States 
regarding Iran are strictly the result of the Government of 
Iran's behavior.
    Paragraph (3) states that the revelation in September 2009 
that Iran is developing a secret uranium enrichment site on a 
base of Iran's Revolutionary Guard Corps near Qom, which 
appears to have no civilian application, highlights the urgency 
for Iran to disclose fully the nature of its nuclear program, 
including any other secret locations; to provide the 
International Atomic Energy Agency unfettered access to its 
facilities pursuant to Iran's legal obligations under the 
Nuclear Non-Proliferation Treaty and Iran's Safeguards 
Agreement with the International Atomic Energy Agency.
    Paragraph (4) states that due to the Iranian Revolutionary 
Guard Corps' involvement in Iran's nuclear program, 
international terrorism activities, and domestic human rights 
abuses, the President should impose the full range of 
applicable sanctions against them. Those liable for sanctions 
would include any individual or entity that is an agent, alias, 
front, instrumentality, representative, official, or affiliate 
of Iran's Revolutionary Guard Corps, and any individual 
orentity that has conducted any commercial or financial transaction 
with such an individual or entity.
    Paragraph (5) states that additional measures should be 
adopted by the United States to prevent the diversion and 
transshipment of sensitive dual-use technologies to Iran.
    Paragraph (6) outlines Congress' view of appropriate 
Executive Branch responses to the human rights situation in 
Iran. It states that the President should continue to press the 
Government of Iran to respect the internationally-recognized 
human rights and religious freedoms of its citizens, and 
identify the officials of the Government of Iran that are 
responsible for continuing and severe violations of human 
rights and religious freedom in Iran. The paragraph also urges 
the President to take appropriate measures to respond to such 
violations by prohibiting officials the President identifies as 
being responsible for such violations from entry into the 
United States and freezing the assets of those officials.
    Paragraph (7) states that additional funding should be 
provided to the Secretary of State to document, collect, and 
disseminate information about human rights abuses in Iran, 
including serious abuses that have taken place since the 
presidential election in Iran conducted on June 12, 2009.
    Paragraph (8) states that it is in the national interest of 
the United States for responsible nongovernmental organizations 
based in the United States to establish and carry out 
operations in Iran to promote civil society and foster 
humanitarian goodwill among the people of Iran and the United 
States should ensure that such nongovernmental organizations 
are not unnecessarily hindered from working in Iran.
    Paragraph (9) states that the United States should not 
issue a license pursuant to an agreement for cooperation (a 
``123 agreement'' for civil nuclear cooperation) for the export 
of nuclear material, facilities, components, or other goods, 
services, or technology that are or would be subject to such an 
agreement to a country that is providing similar nuclear 
material, facilities, components, or other goods, services, or 
technology to another country that is not in full compliance 
with its obligations under the Nuclear Non-Proliferation 
Treaty.
    Paragraph (10) states that the people of the United States 
have feelings of friendship for the people of Iran; regret that 
developments in recent decades have created impediments to that 
friendship; and hold the people of Iran, their culture, and 
their ancient and rich history in the highest esteem.

                           TITLE I--SANCTIONS

    Section 101. Definitions. S. 2799 included definitions for 
sanctions. H.R. 2194 contained no such provisions. Reflecting 
the approach in S. 2799, this section defines terms used in 
this title, including: agricultural commodity, executive 
agency, family member, knowingly, appropriate Congressional 
Committees, information and informational materials, 
investment, Iranian diplomats and representatives of other 
government and military or quasi-governmental institutions of 
Iran, United States person, U.S. state, medical device, and 
medicine.
    Section 102. Expansion of Sanctions under the Iran 
Sanctions Act of 1996.
    Summary. The amendments to the ISA in this section address 
the major role of Iran's oil and gas industry in generating 
revenue for the regime's proliferation and international 
terrorism activities; they require the President to impose at 
least three out of a menu of nine sanctions on `persons' that 
knowingly engage in activities related to Iran's refined 
petroleum industry, in addition to other mandatory sanctions. 
These activities include making an `investment' of more than 
$20 million annually in Iran's energy sector; selling, leasing 
or providing to Iran goods, services, or other support to 
facilitate Iran's domestic oil production of refined petroleum; 
or providing Iran with refined petroleum products with an 
aggregate fair market value of $5 million. The sanctions 
(Section 6 of the ISA) include the following underlying six 
sanctions: (1) Denial of any guarantee, insurance, or extension 
of credit from the U.S. Export-Import Bank; (2) denial of 
licenses for the U.S. export of military or militarily-useful 
technology to the entity; (3) denial of U.S. bank loans 
exceeding $10 million in one year to the entity; (4) if the 
entity is a financial institution, a prohibition on its service 
as a primary dealer in U.S. government bonds; and/or a 
prohibition on its serving as a repository for U.S. government 
funds (each counts as one sanction); (5) prohibition on U.S. 
government procurement from the entity; and (6) restriction on 
imports from the entity, in accordance with the International 
Emergency Economic Powers Act (IEEPA, 50 U.S.C. 1701). The Act 
would provide for three new sanctions: (1) Prohibitions on any 
transactions in foreign exchange that are subject to the 
jurisdiction of the United States and in which a sanctioned 
person has any interest; (2) prohibitions on any transfers of 
credit or payments between, by, through, or to any financial 
institution, to the extent such transfers or payments are 
subject to the jurisdiction of the United States and involve 
any interest of the sanctioned person; and (3) restrictions on 
property transactions with respect to which a sanctioned person 
has any interest. The President may waive the sanctions if he 
determines that it is necessary to the national interest of the 
U.S. to do so.
    Development of Petroleum Resources of Iran. Subsection (a) 
amends section 5(a) of the Iran Sanctions Act of 1996 (ISA) by 
requiring the President to impose three or more sanctions under 
ISA if a person has knowingly made an investment of $20 million 
or more (or any combination of investments of at least $5 
million each, which in the aggregate equals or exceeds $20 
million in any 12-month period) that directly and significantly 
contributed to Iran's ability to develop its petroleum 
resources.
    In the context of investment, the House-passed legislation 
amends section 5(a) by shifting the mens rea standard for 
investment in petroleum resources from `actual knowledge' to 
`knowingly.' The Senate amendment contained no such provision. 
The Senate recedes to the House language. The new standard will 
expand the range of conduct potentially subject to sanctions, 
thereby making it easier to implement sanctions under ISA.
    Production and Exportation of Refined Petroleum Products. 
Subsection (a) further amends section 5(a) of ISA to require 
that the President impose three or more mandatory sanctions 
described in section 6(a) of the Act if a person: (1) knowingly 
sells, leases, or provides to Iran any goods, services, 
technology, information, or support, that could directly and 
significantly facilitate the maintenance or expansion of Iran's 
domestic production of refined petroleum products, including 
any direct and significant assistance with respect to 
construction,modernization, or repair of petroleum refineries; 
or (2) if a person knowingly provides Iran with refined petroleum 
products or provides goods, services, technology, information, or 
support that could directly and significantly contribute to Iran's 
ability to refine petroleum or import refined petroleum resources, 
including providing ships, vehicles, or other means of transportation 
to deliver refined petroleum products to Iran or providing insurance or 
financing services for such activities.
    Subsection (a) of the Act further clarifies the categories 
of persons against which sanctions are to be imposed to include 
the parent and foreign subsidiary of a person determined by the 
President to be engaged in sanctionable activities. The Act 
further amends the mens rea standard for a parent by: (1) 
Requiring sanctions to be imposed on a parent that either had 
actual knowledge or ``should have known'' that its affiliate or 
subsidiary engaged in the sanctionable activities described in 
section 5(a); and (2) requiring sanctions to be imposed on an 
affiliate or a subsidiary of a person determined to be carrying 
out sanctionable activities if the affiliate or subsidiary 
knowingly engaged in sanctionable activities.
    The Act provides a ``safe harbor'' for a person that 
provides underwriting services or insurance or reinsurance, if 
that person exercises due diligence to ensure it does not 
provide insurance or reinsurance for the sale, lease, or 
provision of goods, services, technology, information, or 
support that could directly and significantly contribute to the 
enhancement of Iran's ability to import refined petroleum 
products. Such due diligence would include procedures and 
controls to prevent such underwriting or the entry into 
contracts for such purposes, and the designation of an official 
with responsibility for enforcing the policy. The Act further 
establishes that the fair market value of the goods, services, 
technology, information, or support provided by such activities 
must exceed $1 million to be subject to the requirement of 
Section 102(a). The combination of such sales, leases, or 
provision of support in any 12-month period, or to be provided 
under contracts entered into in any 12-month period, must 
exceed $5 million.
    Subsection (a) also prohibits the issuance of export 
licenses pursuant to an agreement for peaceful civil nuclear 
cooperation for any country whose nationals have engaged in 
activities with Iran relating to the acquisition or development 
of nuclear weapons or related technology, or of missiles or 
other advanced conventional weapons that have been designed or 
modified to deliver a nuclear weapon.
    This prohibition can be set aside for a government if the 
President determines and notifies the appropriate Congressional 
committees that such government does not know or have reason to 
know about the activity, or has taken, or is taking, all 
reasonable steps necessary to prevent a recurrence of the 
activity and penalize the person(s) involved. Further, 
notwithstanding the prohibition on issuance of export licenses, 
the President may, on a case-by-case basis, approve the 
issuance of a license for the export, or approve the transfer 
or retransfer, of any nuclear material, facilities, components, 
or other goods, services, or technology that are or would be 
subject to an agreement for cooperation, to a person in a 
country otherwise restricted by this paragraph (except to a 
person that is subject to sanctions under paragraph (1)) if the 
President determines that such approval is vital to U.S. 
national security interests and pre-notifies Congress not less 
than 15 days before approving the license, transfer, or 
retransfer. This sanction would apply only in a case in which a 
person is subject to sanctions for an activity engaged on or 
after the date of enactment of the Act.
    The Conferees believe that as a general principle, the 
United States cannot and should not reward any country with 
U.S. civil nuclear trade if that country's nationals are able 
to advance Iran's nuclear weapons programs and/or their means 
of delivery.
    Subsection 102(b) of the Act adds three new, sweeping 
sanctions to the now nine possible sanctions from which the 
President must choose three. If invoked, the sanctions would 
prohibit, respectively, foreign exchange, banking, and property 
transactions with persons involved in activities related to 
refined petroleum products, as specified in section 5(a) of the 
ISA, as amended. The Act clarifies that the prohibition on 
banking activities extends solely to those transfers or 
payments that are subject to the jurisdiction of the United 
States and involve any interest of the sanctioned person. The 
banking sanction in the Act will complement restrictions on 
financial institutions available in the underlying ISA, 
including a prohibition on U.S. financial institutions from 
making loans or providing credits to any sanctioned person 
totaling more than $10 million in any 12-month period.
    Finally, subsection 102(b) amends ISA by adding a new 
section which requires each prospective contractor submitting a 
bid to the Federal Government to certify that the contractor or 
a person owned or controlled by the contractor does not conduct 
any activity for which sanctions may be imposed under section 
(5). Conferees believe that exercising control as a ``parent 
company'' over subsidiaries or affiliates should be considered 
in functional terms, as the ability to exercise certain powers 
over important matters affecting an entity. ``Control'' may 
also be defined according to ownership of a majority or a 
dominant minority of the total outstanding voting interest in 
an entity, board representation, proxy voting, a special share, 
or contractual arrangements, to direct important matters 
affecting an entity. The prospective contractor, when making 
the certification pursuant to this subsection, must certify 
that it is not engaged in any activity sanctionable under 
section 5 of ISA. The Act mandates the head of an executive 
agency that determines that a person has submitted a false 
certification under paragraph (1) after the date on which the 
Federal Acquisition Regulation is revised to implement the 
requirements of this subsection, to terminate a contract or 
agreement or debar or suspend such person from eligibility for 
Federal contracts or such agreements for a period not to exceed 
3 years. The Act requires the Administrator of General Services 
to include on the List of Parties Excluded from Federal 
Procurement and Nonprocurement Programs each person that is 
debarred, suspended, proposed for debarment, or declared 
ineligible by the head of an executive agency on the basis of a 
determination of a false certification. The Act authorizes the 
President to waive the certification requirement on a case-by-
case basis if the President determines and certifies that it is 
in the national interest to do so. Conferees believe that one 
of the instances where the President may exercise the waiver is 
where a company has demonstrated that it is taking steps to 
extricate itself from all sanctionable activities with Iran.
    Subsection 102(c) amends the standard for the President to 
waive sanctions under ISA to `necessary to the national 
interest of the United States'. The Senate recedes to the House 
in elevating the waiver standard. Subsection (c) further amends 
the reporting requirements of section 9(c)(2) of ISA relating 
to a waiver by requiring the President to include (1) an 
estimate ofthe significance of a sanctioned action to Iran's 
ability to develop its petroleum resources, produce refined petroleum 
products, or import refined petroleum products; or (2) acquire or 
develop chemical, biological, or nuclear weapons or related 
technologies or destabilizing numbers and types of advanced 
conventional weapons.
    Subsection 102(d) incorporates a reporting requirement in 
H.R. 2194 on the dollar value amount of trade, including in the 
energy sector, between Iran and each country maintaining 
membership in the Group of Twenty Finance Ministers and Central 
Bank Governors.
    Consistent with subsection (h) of section 3 of the House 
bill, Subsection 102(e) amends ISA to extend the operative date 
of that legislation from 2011 to 2016. The Senate bill has no 
such provision. The Senate recedes. ISA was initially passed 
for a five-year period. It was extended for five years in 2001 
and again in 2006. Given the urgency of the Iranian nuclear 
problem and the conviction of Conferees that this problem will 
persist beyond 2011 and that Iran almost certainly will not 
meet the criteria for terminating ISA in 2011, Conferees have 
decided to extend the law for another five years.
    Finally, subsection (f) amends ISA to expand the definition 
of a ``person'' subject to sanctions to include a financial 
institution, insurer, underwriter, guarantor, any other 
business organization, including any foreign subsidiary, 
parent, or affiliate of such a business organization, any other 
nongovernmental entity, organization, or group, and any 
governmental entity operating as a business enterprise. The 
term ``person'' does not include a government or governmental 
entity that is not operating as a business enterprise.
    Subsection (f) also defines the term ``knowingly'' to 
include a person who has actual knowledge of sanctionable 
activities or should have known of the conduct, the 
circumstance, or the result. The Conferees intend to prevent 
persons from evading sanctions by relying on the prior standard 
of ``actual knowledge.'' This prior standard might otherwise be 
used to enable certain persons to deliberately avoid knowledge 
of sanctionable activities.
    Subsection (f) amends the definition of ``investment'' in 
the underlying ISA to include entry into, performance, or 
financing of a contract to sell or purchase goods, services, or 
technology. The Conferees believe that expanding the definition 
of investment to include the activities above will deter 
persons from doing business in the Iranian energy sector. Based 
on the expanded definition of ``investment'' and ``petroleum 
resources,'' the Conferees intend that, for example, sales of 
technology for natural gas would now be considered a 
sanctionable offense falling into the category of 
``investment,'' provided such a sale reached the $20 million 
threshold.
    Subsection (f) expands the term ``petroleum resources'' to 
include petroleum, refined petroleum products, oil or liquefied 
natural gas, natural gas resources, oil or liquefied natural 
gas tankers, and products used to construct or maintain 
pipelines used to transport oil or liquefied natural gas.
    The House version of H.R. 2194 defines the term ``refined 
petroleum products'' to include gasoline, kerosene, diesel 
fuel, residual fuel oil, and distillates and other goods 
classified in headings 2709 and 2710 of the Harmonized Tariff 
Schedule of the United States. The Senate bill defines 
``refined petroleum products'' as ``diesel, gasoline, jet fuel 
(including naphtha-type and kerosene-type jet fuel), and 
aviation gasoline.
    The House recedes.

Section 102(g). Waiver for certain persons in certain countries, 
        mandatory investigations and reporting; conforming amendments

    Waiver for Certain Persons in Certain Countries. The 
conference agreement amends subsection (c) of Section 4 of the 
Iran Sanctions Act to provide an additional exception to the 
underlying requirement that the President impose sanctions for 
certain activities. Under this additional exception, the 
President would be authorized to waive sanctions for a period 
not longer than 12 months (as opposed to the 6 months now 
authorized) on a case by case basis for persons under the 
jurisdiction of governments that are closely cooperating with 
the United States in multilateral efforts to prevent Iran from 
acquiring or developing chemical, biological, or nuclear 
weapons or related technologies, including ballistic missiles 
or delivery systems; or acquiring or developing destabilizing 
numbers and types of conventional weapons. The President must 
further certify that the waiver is vital to the national 
security interests of the United States and submit a report to 
the appropriate congressional committees. It is the 
understanding of the Conferees that this waiver would not be 
available as a preemptive waiver; rather, in order to exercise 
the waiver, the President must initiate an investigation and 
make a determination pursuant to section 4(f).
    To utilize this exception, the President would have to 
provide advance notice to Congress and provide a certification 
of the person with respect to which the President will waive 
the application of sanctions; the actions taken by the 
government cooperating in multilateral efforts; and that the 
waiver is vital to the national security interests of the 
United States. ``Cooperating actions'' must include a 
substantial number of the following types of actions:
            --restricting Iran's access to the global financial 
        system;
            --limiting Iran's import of refined petroleum 
        products and refinery equipment;
            --strictly enforcing UN sanctions;
            --prohibiting commercial activities with the Iran 
        Revolutionary Guard Corps;
            --cooperating with U.S. anti-terrorism initiatives 
        against the IRGC and other Iranian elements;
            --taking concrete, verifiable steps to impede 
        Iran's WMD programs and its support for international 
        terrorism;
            --restricting trade with Iran, including provision 
        of export credits.
    The President may renew the waiver in six-month increments 
if the President determines that the waiver threshold is met.
    Investigations. H.R. 2194 requires that the President shall 
immediately investigate a person upon receipt of credible 
information that such person is engaged in sanctionable 
activity as described in section 5. The House-passed bill 
further requires the President, not later than 180 days after 
an investigation is initiated, to make a determination whether 
a person has engaged in sanctionable activity described in 
section 5. The Senate-passed bill contained no such language. 
The Senate recedes. The Conferees believe that a statutory 
mandate is required to ensure sanctionable entities are pursued 
and prosecuted. By not enforcing current sanctions law, 
theUnited States has sent mixed messages to the corporate world when it 
comes to doing business in Iran by rewarding companies whose commercial 
interests conflict with American security goals.
    Special Rule. However, in order to provide an incentive for 
companies that are withdrawing from Iran, the Act provides that 
the President need not initiate an investigation, and may 
terminate an investigation, if the President certifies that the 
person whose activities were the basis for the investigation is 
no longer engaging in such activities; and the President has 
received reliable, verifiable assurances that the person will 
not knowingly engage in such activities in the future.
    The Conferees provided this Special Rule to allow firms to 
avoid sanction for activities described in the revised Section 
5 of the Iran Sanctions Act by taking steps to curtail and 
eventually eliminate such activities. Ideally, in order to 
benefit, a firm would provide the President the required 
assurances that it will not undertake Section 5 activity in the 
future, and any other assurances required by the president, in 
writing. Such assurances should be credible and transparently 
verifiable by the United States government. Firms should also 
be strongly encouraged to provide the President a detailed 
catalog of their existing activity in Iran, and a plan for 
winding down any activity covered by Section 5 as soon as 
possible. The goal of this measure is to facilitate their 
withdrawal from such activities.
    To the extent a person benefitting from the special rule 
continues activities described in section 5, such continuing 
activities should be pursuant solely to a contract or other 
legally binding commitment. Conferees expect that any firm 
seeking to take advantage of this special rule will commit to 
refuse any expansion or extension of business or investment 
pursuant to a clause in a contract that allows the firm to 
elect to do so. Binding commitments should be narrowly 
construed and any firm seeking to benefit from this rule should 
be encouraged to provide assurances that it will do only the 
minimum required by an agreement involving Iran. The Conferees 
intend to evaluate carefully any certifications under this 
Special Rule.
    Section 102(h). Effective Date. In order to clarify the 
timing of application of the Act, subsection 102(h) further 
provides that the provisions of section 102 shall take effect 
on the date of enactment of the Act. Investments sanctionable 
under the underlying ISA shall continue to be unlawful. 
However, pursuant to subsection (g) of this section, the 
President shall, in the context of investment, commence an 
investigation of a person which engaged in conduct prior to the 
passage of this Act that would be sanctionable under ISA and 
that continues after the date of enactment. This differs from 
the underlying ISA by requiring the President to commence an 
investigation of sanctionable activities. Likewise, a person 
that conducts activities related to the development of Iranian 
chemical, biological, or nuclear weapons or related 
technologies shall be subject immediately upon enactment of the 
Act to the new provisions under the Act. With respect to 
refined petroleum-related activities described in paragraph (2) 
or (3) of section 5(a) of ISA (as amended by subsection 102(a) 
of the Act), the new requirement to commence an investigation 
shall apply one year after the date of enactment.
    Not later than 30 days before the date that is one year 
after the date of enactment, the President shall issue a report 
describing the President's efforts to dissuade foreign persons 
from engaging in sanctionable activity described in paragraphs 
(2) and (3) (facilitation of Iran's production and import of 
refined petroleum), along with a list of each investment under 
section 4(e) of ISA, that is initiated or ongoing during the 
previous one-year period. If the President certifies that there 
was a substantial reduction in the sanctionable activities 
described in paragraphs (2) and (3) of ISA, the requirement to 
commence an investigation shall be delayed by six months. 
Conferees understand ``substantial reduction'' to mean a 
roughly 20-30% reduction in such activities, a similar 
reduction in the volume of refined petroleum imported by Iran, 
and/or a similar reduction in the amount of refined petroleum 
Iran produces domestically. The President may continue to defer 
the requirement to commence an investigation every six months 
by issuing a report containing the above-mentioned items, along 
with a certification regarding reduction of activities, for the 
previous six-month period. If the President fails to make the 
certification, the requirement to commence an investigation 
shall apply on the date the certification was due, and he would 
then be required to make a determination in 45 days.

Section 103. Economic sanctions relating to Iran

    The Senate bill contained a provision building on actions 
taken under the Iran Freedom Support Act (IFSA) (P.L. 109-293) 
codifying critical restrictions on imports from and exports to 
Iran, currently authorized by the President in accordance with 
IEEPA. The House-passed bill contained no such provision. The 
House recedes. This provision strengthens the current trade 
embargo by eliminating certain import exceptions for luxury and 
other goods from Iran made under the Clinton administration. 
Consistent with IEEPA, exceptions to the import ban are made 
for informational materials that may be used, for example, in 
the conduct of news reporting, or in mapping for air travel 
over land. Similarly, exceptions to the export ban include 
food, medicine, humanitarian assistance, informational 
materials, goods used to ensure safety of flight for U.S.-made 
aircraft, aid necessary to support IAEA efforts in Iran, and 
democracy promotion initiatives. The exception related to 
Internet communications extends to personal communications, as 
provided for in section 560.540 of the Code of Federal 
Regulations; it does not apply to the Iranian Government or any 
affiliated entities. Notwithstanding the exceptions, the 
standard requirements pursuant to IEEPA to seek a license for 
such activities remain in effect.
    Consistent with his existing regulatory authority, the 
President is authorized to issue regulations, orders, and 
licenses to implement these provisions. In addition, this 
section requires asset freezes for persons, including officials 
of Iranian agencies specified in ISA and certain of their 
affiliates that have engaged in activities such as terrorism or 
weapons proliferation under IEEPA sanction. To limit sanctioned 
persons' ability to evade U.S. scrutiny and penalty, this 
section further stipulates that the assets freeze should extend 
to those assets which sanctioned persons transfer to family 
members or associates. The Conferees recognize that agencies 
involved in implementing these measures will require time to 
prepare appropriate evidentiary materials before executing 
corresponding sanctions, which this section requires to be 
imposed as soon as possible.
    Section 104--Mandatory Sanctions with Respect to Financial 
Institutions that Engage in Certain Transactions. Section 104 
establishes a sanction in addition to those enumerated in 
section 6(a) of ISA, as amended. The additional sanction would 
require the Secretary of the Treasury to prohibit from or 
impose strict sanctions on U.S. financial institutions that 
establish, maintain, administer, or manage a correspondent or 
payable-through account by a foreign financialinstitution if 
that institution engages in certain financial transactions. Targets of 
this provision include foreign banks that: (A) Facilitate the Iranian 
government's efforts to acquire weapons of mass destruction (WMD) or to 
support international terrorism; (B) Engage in dealings with Iranian 
companies sanctioned by the U.N. Security Council; (C) Help launder 
money, to aid Iran's WMD programs, to support Iran's sponsorship of 
terrorism, or to support companies/persons under sanction by the U.N. 
Security Council; (D) Facilitate efforts by the Central Bank of Iran to 
aid Iran's WMD programs, to support Iran's sponsorship of terrorism, or 
to support companies sanctioned by the U.N. Security Council; or (E) 
Conduct significant business with Iran's Revolutionary Guard Corps, its 
front companies, or its affiliates, and other key Iranian financial 
institutions currently blacklisted by the U.S. Department of the 
Treasury. These measures are roughly patterned after Section 311 of the 
USA Patriot Act (31 U.S.C. 5318A), which Conferees recognize as some of 
our government's most effective targeted financial sanctions. However, 
while the USA Patriot Act measures are generally regarded as defensive 
of the U.S. financial system from special money laundering concerns, 
these new sanctions are to be deployed in an offensive fashion. Under 
the Comprehensive Iran Sanctions, Accountability, and Divestment Act, 
the Department of the Treasury is mandated to pursue relentlessly 
foreign banks engaged in business with blacklisted Iranian entities. 
Conferees expect any conditions imposed on U.S. correspondent accounts 
under this Act to be stringent and temporary. Most important, if 
foreign institutions do not cease their business with blacklisted 
Iranian entities, after an appropriate warning, the Treasury Department 
is to direct U.S. banks to sever immediately their correspondent or 
payable through account services with these foreign institutions.
    Under the Act, U.S. banks maintaining correspondent or 
payable through accounts for foreign financial institutions 
will be required to take appropriate steps to ensure that they 
remain in full compliance with this law, which may include due 
diligence policies, procedures and controls. Subsection (f) 
provides for a mechanism for domestic financial institutions to 
conduct audits of their correspondent or payable-through 
accounts report to the Treasury Department on compliance, and 
certify that the foreign financial institutions using such 
accounts are not engaged in sanctionable activities. Subsection 
(g) authorizes the Secretary of the Treasury to waive the 
application of sanctions with respect to a foreign financial 
institution opening a correspondent or payable-through account 
and with respect to a domestic institution engaging in 
transactions with the IRGC if the Secretary determines that 
such a waiver is necessary to the national interest of the 
United States. Those U.S. financial institutions that fail to 
comply with the directives of the Department of the Treasury--
imposing strict conditions, prohibiting correspondent or 
payable through accounts, following appropriate auditing, 
reporting, due diligence, or certification measures--are to be 
subject to the same penalties as U.S. banks that fail to comply 
with Title III of the USA PATRIOT Act.
    Once the legislation is enacted, the Conferees expect 
representatives of the Administration to take all necessary 
actions to fully implement this section, including by directly 
engaging the numerous foreign financial institutions banking 
with Iranian financiers and supporters of WMD proliferation and 
international terrorism. Severing U.S. correspondent relations 
with these foreign financial institutions is merely a means to 
an end. The goal is the termination of international commerce 
with Iranian businesses that threaten global peace and 
security.
    In general, subparagraph (c)(2)(A) is a conduct-based 
prohibition. Thus, if the Secretary of the Treasury determines 
that a foreign financial institution has engaged in 
transactions that facilitate Iran's efforts to develop WMD or 
support terrorism, among other activities, the Secretary need 
not designate such entities before restricting that entity's 
opening or maintaining a correspondent account or a payable-
through account in the United States. However, a financial 
institution doing business with an entity on the designated 
list pursuant to IEEPA would also be barred. Subparagraph 
(c)(2)(E) further requires that the Secretary prohibit or 
impose strict conditions on a foreign financial institution 
that (1) facilitates a transaction involving the IRGC, 
regardless of what the transaction was for; or (2) facilitates 
a transaction with any entity on the designated list maintained 
by the Department of Treasury pursuant to its authority under 
IEEPA, regardless of the type or reason for the transaction.
    Section 104 would further require the Secretary to prohibit 
foreign subsidiaries of U.S. financial institutions from 
engaging in any transaction involving Iran's Islamic 
Revolutionary Guard Corps (IRGC), its agents or affiliates. 
U.S. companies already face severe civil and criminal penalties 
for doing business in Iran under IEEPA, as amended by the 
International Emergency Economic Powers Enhancement Act of 2007 
(P.L. 110-96). This provision imposes similar judicial 
procedures and penalties on U.S. banks if their foreign 
subsidiaries are doing any business with the IRGC, its front 
companies, or affiliates. Thus, companies and financial 
institutions may be subjected to civil penalties of as much as 
either $250,000 or an amount twice the value of the actual 
transaction. Criminal penalties may be as high as $1 million 
per transaction and/or entail prison sentences of up to 20 
years.
    Subsection (j) defines key terms, including 
``correspondent'' and ``payable-through'' account.

Section 105--Imposition of sanctions on certain persons who are 
        complicit in human rights abuses committed against citizens of 
        Iran or their family members after the June 12, 2009, elections 
        in Iran

    Section 105 requires the President to impose sanctions on 
persons who are citizens of Iran that the President determines, 
based on credible evidence, are complicit in, or responsible 
for ordering, controlling, or otherwise directing the 
commission of serious human rights abuses against citizens of 
Iran or their family members on or after the Presidential 
elections of June 12, 2009, regardless of whether such abuses 
occurred in Iran. The President is to do so no later than 90 
days after the date of enactment of this legislation. The 
President will also provide appropriate Congressional 
committees with a list of those persons the President 
determines meet the criteria for sanctions, and the President 
will also be required to submit to the appropriate 
Congressional committees updates to the list of Iranian 
citizens eligible for sanction not later than 270 days after 
the date of enactment and every 180 days thereafter, and as new 
information becomes available. Furthermore, the unclassified 
portion of this list will be made available to the public on 
the websites of the Department of the Treasury and the 
Department of State. In addition, the President's list must 
consider credible data already obtained by other countries and 
non-governmental organizations, including in Iran, that monitor 
the human rights abuses of the Government of Iran.
    The President shall impose two sanctions on the Iranian 
human rights violators listed in his report to the appropriate 
Congressional committees. The first is a visa ban making 
thosehuman rights violators ineligible to enter the United States. The 
second is financial sanctions authorized under the International 
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.). These sanctions 
include the blocking of property; restrictions or prohibitions on 
financial transactions; and the exportation and importation of 
property. This section provides for regulatory exceptions, including 
those to permit the United States to comply with the Agreement between 
the United Nations and the United States of America regarding the 
Headquarters of the United Nations, signed June 26, 1947, and entered 
into force November 21, 1947, and other applicable international 
agreements.
    The President may waive the sanctions required by Section 
105 if the President determines that such a waiver is in the 
national interest of the United States and submits to the 
appropriate Congressional committees a report describing the 
reasons for the waiver determination.
    The provisions of Section 105 shall cease to have force and 
effect on the date on which the President determines and 
certifies to the appropriate Congressional committees that the 
Government of Iran has unconditionally released all political 
prisoners, including the citizens of Iran detained in the 
aftermath of the June 12, 2009, presidential election in Iran; 
ceased its practices of violence, unlawful detention, torture, 
and abuse of citizens of Iran while engaging in peaceful 
political activity; conducted a transparent investigation into 
the killings, arrest, and abuse of peaceful political activists 
in Iran and prosecuted those responsible; and made progress 
toward establishing an independent Judiciary and respecting 
internationally-recognized human rights.
    Section 106. Prohibition of procurement contracts with 
persons that export sensitive technology to Iran. This section 
would prohibit the head of any U.S. executive agency from 
entering into procurement contracts with an entity that the 
President determines has exported to Iran sensitive 
communications technology to be used for monitoring, jamming, 
or other disruption of communications by the people of Iran. 
This section further requires the Comptroller General to submit 
a report assessing the impact of sanctions on executive 
agencies' procurement of goods of services with persons that 
export sensitive technology to Iran.
    Section 107. Harmonization of Criminal Penalties for 
Violations of Sanctions. This section harmonizes penalties for 
violating export controls and U.S. sanctions across various 
statutes with the strongest such penalty standards in the U.S. 
Code, consistent with the International Emergency Economic 
Powers Enhancement Act of 2007 (P.L. 110-96). The section 
specifically increases criminal penalties for violators of the 
provisions of the Arms Export Control Act, Trading with the 
Enemy Act, and the United Nations Participation Act to up to $1 
million and 20 years in prison.
    Section 108. Authority to Implement United Nations Security 
Council Resolutions Imposing Sanctions with Respect to Iran. 
This section authorizes the President to prescribe regulations 
as may be necessary to implement a resolution imposing 
sanctions with respect to Iran agreed to by the United National 
Security Council on or after the date of enactment of this Act.
    Section 109. Increased capacity for efforts to combat 
unlawful or terrorist financing. This section authorizes 
funding of $102.6 million in fiscal year 2011 for the Office of 
Terrorism and Financial Intelligence of the Department of the 
Treasury, and such sums as may be necessary for each of the 
fiscal years 2012 and 2013. This section also authorizes $100.4 
million for the Financial Crimes Enforcement Network and $113 
million for the Department of Commerce. This section also 
acknowledges the Treasury Department's recent designation of 
various Iranian individuals and banking, military, energy, and 
shipping entities as proliferators of weapons of mass 
destruction pursuant to Executive Order 13382 (50 U.S.C. 1701 
note), along with designation of entities in the insurance, 
petroleum, and petrochemicals industries that the Secretary has 
determined to be owned or controlled by the Government of Iran.
    Section 110. Reports on Investments in the Energy Sector of 
Iran. The Act requires the President, within 90 days of 
enactment of the bill and every 180 days thereafter, to report 
to the appropriate congressional committees on an estimate of 
the volume of energy-related resources (other than refined 
petroleum) including ethanol, that Iran imported since January 
1, 2006, along with a list of all known energy-related joint 
ventures, investments, and partnerships located outside Iran 
that involve Iranian entities in partnership with entities from 
other countries. It is the intention of the Conferees that the 
report be undertaken by the Secretary of Energy and parallel 
the format of previous reports, including one provided as 
recently as 2006, and should include updated information as 
provided by the Energy Information Administration (EIA). The 
report shall also include information on the effect of Iranian 
know-how in the energy sector as a result of joint energy-
related ventures with other countries.
    Section 111. Reports on certain activities of foreign 
export credit agencies and of the Export-Import Bank of the 
United States. This section requires the President--90 days 
after the date of enactment--to submit a report on any activity 
of an export credit agency of a foreign country that would be 
engaged in activities comparable to those which would otherwise 
be sanctionable under subsection (a) or (b) of section 5 of 
ISA, as amended by this Act. Not later than 30 days (or, in 
extraordinary circumstances, not later than 15 days) prior to 
the Export-Import Bank of the United States approving 
cofinancing with an export credit agency of a foreign country 
identified in the above-mentioned report, the President shall 
inform Congress of such action and of the beneficiaries of the 
financing. The Conferees intend to raise awareness about which 
countries and persons are engaged in activities comparable to 
those which would trigger U.S. sanctions and which may benefit 
from financing provided by the Export-Import Bank.
    Section 112. Sense of Congress on Iran's Revolutionary 
Guard Corps (IRGC) and its Affiliates. Expresses the sense of 
Congress that (1) the U.S. should persistently target with 
sanctions Iran's Revolutionary Guard Corps, its supporters and 
affiliates, and any foreign governments determined to be 
providing material support for the IRGC; (2) identify any 
foreign individual or entity that is an agent, alias, front, 
instrumentality, official, or affiliate of Iran's Revolutionary 
Guard Corps or providing material support to the IRGC; and (3) 
immediately impose sanctions on the individuals, entities, and 
governments described in paragraph (2).
    Section 113. Sense of Congress Regarding Iran and 
Hezbollah. Expresses the Sense of Congress that the U.S. should 
continue to: (1) work to counter support for Hezbollah from 
Iran and otherforeign governments; (2) target with sanctions 
Hezbollah, its affiliates and supporters; (3) urge other nations to do 
the same; and (4) take steps to renew international efforts to disarm 
Hezbollah.
    Section 114. Sense of Congress Regarding the Imposition of 
Multilateral Sanctions with Respect to Iran. Expresses the 
Sense of Congress that, in general, multilateral sanctions are 
more effective than unilateral sanctions against countries like 
Iran, and that the President should continue to work with our 
allies to impose multilateral sanctions if diplomatic efforts 
to end Iran's illicit nuclear activities fail.
    Section 115. Report on Providing Compensation for Victims 
of International Terrorism. This section requires the President 
to submit a report within 180 days of enactment on equitable 
methods for providing compensation on a comprehensive basis to 
victims of acts of international terrorism who are citizens or 
residents of the United States or nationals of the United 
States. The Conferees intend to address concerns presented by 
numerous plaintiffs' groups that have yet to gain compensation 
for terrorist attacks.

                          TITLE II--DIVESTMENT

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

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

    Title III of the Senate version of the bill provides new 
authority and imposes new responsibilities to stop the 
diversion from the U.S. to Iran of critical goods through other 
countries. The House recedes to the Senate. This provision 
relates to (1) U.S.-origin goods, services and technologies 
that are controlled for export from the United States, and (2) 
items denied for export to Iran by a United Nations Security 
Council resolution. The purpose is to shut off Iran's 
clandestine acquisition of items and technologies that would 
contribute to its weapons development programs, its other 
defense capabilities and its support for international 
terrorism. While U.S.-origin items do not make a significant 
contribution to Iran's military or terrorism capabilities, by 
utilizing U.S. global jurisdiction over our export-controlled 
items, effective leverage can be utilized to identify and shut 
down Iran's black-market technology acquisition and 
proliferation around the world.
    Section 301--Definitions. This section defines terms used 
in this title including: allow, Commerce List, end user, entity 
owned or controlled by the Government of Iran, Export 
Administration Regulations, government, Iran, state sponsor of 
terrorism, as well as diversion.
    Section 302 requires the Director of National Intelligence 
to identify, on an ongoing basis, those countries that allow 
diversion to Iran, either directly or through indirect routes, 
of U.S.-origin goods, services and technologies and items 
prohibited for Iran under a UN Security Council resolution. The 
Director shall report such countries to the President, relevant 
departments and the Congress.
    Section 303 requires the President to designate 
Destinations of Diversion Concern and authorizes U.S.-provided 
training, technical assistance and law enforcement support to 
strengthen other governments' capability to stop diversions to 
Iran. For governments that take effective action against 
diversion to Iran, the President removes the designation. 
Specific standards are required to be met by a country in 
halting diversions to Iran.
    Further under Section 303, for governments identified under 
Section 302 that are deemed resistant to U.S. engagement, or 
where U.S. assistance fails to secure cooperation, the 
President must require a license, under the Export 
Administration Regulations, for the export from the U.S. of any 
good, service or technology that, if diverted to Iran, would 
contribute to Iran's weapons programs, defense capabilities or 
support of terrorism. There would be a presumption of denial 
for all applications for such licenses. The requirement for a 
license could be delayed during efforts by the U.S. to assist a 
country to take effective action to stop diversions to Iran.
    Section 304 requires a report to Congress by the President 
on other countries that may be allowing diversion of certain 
U.S.-origin items to other countries, aside from Iran, that may 
be seeking nuclear and other weapons of mass destruction, other 
defense technologies, or other capabilities for terrorist 
support.
    Section 305 clarifies and reinforces the statutory law 
enforcement authority for agents of the Enforcement Division of 
the Commerce Department's Bureau of Industry and Security, so 
that they can fully carry out the expanded duties required by 
enactment of this legislation.

                      TITLE IV--GENERAL PROVISIONS

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

                  Compliance With Clause 9 of Rule XXI

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

 CBO ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS FOR THE CONFERENCE REPORT TO ACCOMPANY H.R. 2194, THE COMPREHENSIVE IRAN SANCTIONS, ACCOUNTABILITY,
                                   AND DIVESTMENT ACT OF 2010, AS PROVIDED TO CBO ON JUNE 23, 2010 (FILENAME MAR10519)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2010   2011   2012   2013   2014   2015   2016   2017   2018   2019   2020  2010-2015  2010-2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact.......................      0      0      0      0      0      0      0      0      0      0      0         0         0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: H.R. 2194 would ban certain imports from Iran and impose sanctions on certain entities that conduct business with Iran. The act would reduce
  customs duties and impose civil and criminal penalties, but CBO estimates those effects would not be significant in any year.

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

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

                                  
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