[House Report 114-746]
[From the U.S. Government Publishing Office]
114th Congress } { Rept. 114-746
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
======================================================================
IRANIAN LEADERSHIP ASSET TRANSPARENCY ACT
_______
September 13, 2016.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 5461]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 5461) to require the Secretary of the Treasury
to submit a report to the appropriate congressional committees
on the estimated total assets under direct or indirect control
by certain senior Iranian leaders and other figures, and for
other purposes, having considered the same, report favorably
thereon without amendment and recommend that the bill do pass.
PURPOSE AND SUMMARY
Introduced June 13, 2016, by Rep. Bruce Poliquin for
himself and Rep. French Hill, H.R. 5461, the ``Iranian
Leadership Asset Transparency Act,'' would require the Treasury
Secretary to develop and post online a list estimating the
``funds and assets'' held by senior Iranian political and
military leaders, along with a description of how they acquired
the assets and how those assets are employed. The report would
be posted on the Treasury Department's website in English but
also translated into the three main languages used inside Iran,
and would be available in any of those forms in a way that is
easy to download and share.
BACKGROUND AND NEED FOR LEGISLATION
Iran is characterized by high levels of official and
institutional corruption, and substantial involvement by Iran's
security forces, particularly the Islamic Revolutionary Guard
Corps (IRGC), in the economy. Many members of Iran's senior
political and military leadership have acquired significant
personal and institutional wealth by using their positions to
secure control of major portions of the Iranian national
economy.
Sanctions relief provided through the Joint Comprehensive
Plan of Action (JCPOA) has resulted in the removal of many
Iranian entities that are tied to government corruption from
the list of entities sanctioned by the United States.
However, the Transparency International index of perceived
public corruption ranks Iran 130th out of 168 countries
surveyed, and the State Department in 2014 identified Iran as a
country of ``primary concern'' for money laundering.
Separately, the State Department has identified it as a country
that has ``repeatedly provided support for acts of
international terrorism,'' and in its June 2015 ``country
report'' noted the country ``continues to sponsor terrorist
groups around the world, principally through its Islamic
Revolutionary Guard Corps-Qods Force.''
The Iranian government's tolerance of corruption in
business limits opportunities for foreign and domestic
investment, particularly given the significant involvement of
the IRGC in many sectors of the economy. The ``bonyads''
(foundations) controlled by top political and military leaders
control an estimated one-third of the total economy, including
large portions of the telecommunications, construction, airport
and seaport sectors, giving the IRGC and its leaders vast funds
to support terrorism at a time when the average Iranian citizen
earns about $15,000 a year.
The Iranian Leadership Asset Transparency Act requires
Treasury to list the known assets of senior Iranian officials
in a form that is easily understandable and accessible to those
in the financial or business sector who might be concerned
about inadvertently doing business with an Iranian entity. Any
reports prepared under the Act would be available in a form
accessible to the average Iranian so that they might better
understand the nature of their own economy.
HEARING
The Committee on Financial Services' Task Force to
Investigate Terrorism Financing held a hearing examining
matters relating to H.R. 5461 on July 22, 2015.
COMMITTEE CONSIDERATION
The Committee on Financial Services met in open session on
June 15, 2016, and ordered H.R. 5461 to be reported favorably
to the House without amendment by a recorded vote of 39 yeas to
20 nays (recorded vote no. FC-112), a quorum being present.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
sole recorded vote was on a motion by Chairman Hensarling to
report the bill favorably to the House without amendment. The
motion was agreed to by a recorded vote of 39 yeas to 20 nays
(Record vote no. FC-112), a quorum being present.
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 5461
will enhance transparency and disclosure for international
financial transactions by requiring the Treasury Department to
develop and post online a list estimating the funds and assets
held by senior Iranian political and military leaders, along
with a description of how they acquired the assets and how
those assets are employed.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
COMMITTEE COST ESTIMATE
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
CONGRESSIONAL BUDGET OFFICE ESTIMATES
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 5, 2016.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5461, the Iranian
Leadership Asset Transparency Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall, Director.
Enclosure.
H.R. 5461--Iranian Leadership Asset Transparency Act
H.R. 5461 would require the Department of the Treasury to
provide reports in 2017 and 2018 to the Congress on the
financial assets held by specified Iranian political and
military leaders. The reports would describe how the assets
were acquired and any unclassified portions of those reports
would be posted on the Treasury's website in multiple
languages.
CBO could not find comprehensive and detailed information
regarding the financial assets of Iranian leaders. If such
information is collected (by the Office of Foreign Asset
Control, the Office of Intelligence and Analysis in the
Department of Treasury, or any other federal agency), CBO
expects it would be classified. Some less comprehensive
information may be available in the public domain. Based on the
costs of similar reports, CBO estimates that compiling the
reports from information currently available would cost less
than $500,000 in each of 2017 and 2018; such spending would be
subject to the availability of appropriated funds.
Enacting the legislation would not affect direct spending
or revenues; therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting H.R. 5461 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2027.
H.R. 5461 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
EARMARK IDENTIFICATION
H.R. 5461 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015),
the Committee states that no provision of H.R. 5461 establishes
or reauthorizes a program of the Federal Government known to be
duplicative of another Federal program, a program that was
included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance.
DISCLOSURE OF DIRECTED RULEMAKING
Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015),
the Committee states that H.R. 5461 contains no directed
rulemaking.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
This Section cites H.R. 5461 as the ``Iranian Leadership
Asset Transparency Act.''
Section 2. Findings
This section establishes as the findings of Congress that
there are high levels of official and institutional corruption
rampant in Iran; that there is a concentration of corruption-
derived wealth among Iran's senior political and military
leaders; that there is ample documentation of Iran's history of
non-cooperative behavior in the global fight against terror
finance and money laundering; and, that there exists the
potential that such wealth and behavior might be used in the
future to further terrorism.
Section 3. Report required
This section requires the Treasury Secretary to compile and
submit to Congress, within 270 days, a report detailing the
known assets of the top political and military leaders of Iran,
how those assets were acquired, and for what purposes those
assets are used. The report shall be updated at least annually
for the next two years, and shall be submitted in unclassified
form but may contain a classified annex. The section also
requires that the unclassified portion of the report be made
available to the public via posting on the Treasury
Department's website in English and translated into the three
languages most commonly spoken in Iran, all available in easily
downloadable formats.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 5461 does not repeal or amend any section of a
statute. Therefore, the Office of Legislative Counsel did not
prepare the report contemplated by Clause 3(e)(1)(B) of rule
XIII of the House of Representatives.
MINORITY VIEWS
The ``Iranian Leadership Asset Transparency Act'' would
require the Secretary of the Treasury to report to Congress on,
and post online, the estimated total assets under direct or
indirect control of certain senior Iranian leaders and other
figures, along with a description of how these assets were
acquired and are employed, regardless of whether said figures
are subject to U.S. sanctions.
We share the Administration's concerns about the critical
resources that would be diverted from targeting sanctionable
conduct and compliance over existing sanctions in order to
produce this report. Moreover, the requirement to report on
``any equity stake'' natural persons have in certain entities
exceeds the commonly used metric of ``controlling equity
interest'' for identifying meaningful ownership interests and,
thus, would add substantially to the resource burden associated
with the report with possibly little added value.
We also share the Administration's concern that this bill
would likely be a strategic mistake. Iran likely would view
this reporting as an attempt to undermine sanctions relief and
inconsistent with both the letter and spirit of the Joint
Comprehensive Plan of Action (JCPOA). Given the direct and
personal targeting of this report, the bill could strengthen
the hand of hardline elements in Iran who oppose the JCPOA,
which could impact continued support for the JCPOA within Iran.
Finally, the bill does little to meet its stated objective
of making ``financial institutions'' required compliance with
remaining sanctions more easily understood.'' If anything, the
creation of a new list that would not necessarily be tied to
any prohibition--to the degree that any of it would be made
public--would increase confusion regarding compliance
obligations and deter non-U.S. banks and businesses from
reengaging in legitimate businesses in Iran. Moreover, the
report would do little to publicize the unjust enrichment of
Iranian leaders or help industry comply with current
sanctions--as Republicans have argued--since much of the most
important parts of the report would be classified.
Given that producing the report required in this bill would
have a negative impact on Treasury's limited resources; divert
energy and resources away from investigations related to
sanctions; add confusion to the Office of Foreign Assets
Control's regulated public; potentially undermine continued
support for the JCPOA within Iran; and the report's lack of
usefulness as a compliance tool, we oppose this bill.
Maxine Waters.
Keith Ellison.
Gwen Moore.
Stephen F. Lynch.
Al Green.
Joyce Beatty.
Terri A. Sewell.
Wm. Lacy Clay.
Ruben Hinojosa.
[all]