[House Report 115-361]
[From the U.S. Government Publishing Office]



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115th Congress     }                                 {        Report
                        HOUSE OF REPRESENTATIVES
 1st Session       }                                 {         115-361
======================================================================



 
          IMPEDING NORTH KOREA'S ACCESS TO FINANCE ACT OF 2017

                                _______
                                

October 23, 2017.--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

                            ADDITIONAL VIEWS

                        [To accompany H.R. 3898]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 3898) to require the Secretary of the Treasury 
to place conditions on certain accounts at United States 
financial institutions with respect to North Korea, and for 
other purposes, having considered the same, reports favorably 
thereon with amendments and recommends that the bill as amended 
do pass.
    The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Impeding North Korea's Access to 
Finance Act of 2017''.

SEC. 2. FINDINGS.

  The Congress finds the following:
          (1) On June 1, 2016, the Department of the Treasury's 
        Financial Crimes Enforcement Network announced a Notice of 
        Finding that the Democratic People's Republic of Korea is a 
        jurisdiction of primary money laundering concern due to its use 
        of state-controlled financial institutions and front companies 
        to support the proliferation and development of weapons of mass 
        destruction (WMD) and ballistic missiles.
          (2) The Financial Action Task Force (FATF) has expressed 
        serious concerns with the threat posed by North Korea's 
        proliferation and financing of WMD, and has called on FATF 
        members to apply effective counter-measures to protect their 
        financial sectors from North Korean money laundering, WMD 
        proliferation financing, and the financing of terrorism.
          (3) In its February 2017 report, the U.N. Panel of Experts 
        concluded that--
                  (A) North Korea continued to access the international 
                financial system in support of illicit activities 
                despite sanctions imposed by U.N. Security Council 
                Resolutions 2270 (2016) and 2321 (2016);
                  (B) during the reporting period, no member state had 
                reported taking actions to freeze North Korean assets; 
                and
                  (C) sanctions evasion by North Korea, combined with 
                inadequate compliance by member states, had 
                significantly negated the impact of U.N. Security 
                Council resolutions.
          (4) In its September 2017 report, the U.N. Panel of Experts 
        found that--
                  (A) North Korea continued to violate financial 
                sanctions by using agents acting abroad on the 
                country's behalf;
                  (B) foreign financial institutions provided 
                correspondent banking services to North Korean persons 
                and front companies for illicit purposes;
                  (C) foreign companies violated sanctions by 
                maintaining links with North Korean financial 
                institutions; and
                  (D) North Korea generated at least $270 million 
                during the reporting period through the violation of 
                sectoral sanctions.
          (5) North Korean entities engage in significant financial 
        transactions through foreign bank accounts that are maintained 
        by non-North Korean nationals, thereby masking account users' 
        identity in order to access financial services.
          (6) North Korea's sixth nuclear test on September 3, 2017, 
        demonstrated an estimated explosive power more than 100 times 
        greater than that generated by its first nuclear test in 2006.
          (7) North Korea has successfully tested submarine-launched 
        and intercontinental ballistic missiles, and is rapidly 
        progressing in its development of a nuclear-armed missile that 
        is capable of reaching United States territory.

SEC. 3. CONDITIONS WITH RESPECT TO CERTAIN ACCOUNTS AND TRANSACTIONS AT 
                    UNITED STATES FINANCIAL INSTITUTIONS.

  (a) Correspondent and Payable-Through Accounts Held by Foreign 
Financial Institutions.--
          (1) In general.--Not later than 45 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 
        facilitates a significant transaction or transactions or 
        provides significant financial services for a covered person.
          (2) Penalties.--
                  (A) Civil penalty.--A person who violates, attempts 
                to violate, conspires to violate, or causes a violation 
                of regulations prescribed under this subsection shall 
                be subject to a civil penalty in an amount not to 
                exceed the greater of--
                          (i) $250,000; or
                          (ii) an amount that is twice the amount of 
                        the transaction that is the basis of the 
                        violation with respect to which the penalty is 
                        imposed.
                  (B) Criminal penalty.--A person who willfully 
                commits, willfully attempts to commit, or willfully 
                conspires to commit, or aids or abets in the commission 
                of, a violation of regulations prescribed under this 
                subsection shall, upon conviction, be fined not more 
                than $1,000,000, or if a natural person, may be 
                imprisoned for not more than 20 years, or both.
  (b) Restrictions on Certain Transactions by United States Financial 
Institutions.--
          (1) In general.--Not later than 45 days after the date of the 
        enactment of this Act, the Secretary of the Treasury shall 
        prescribe regulations to prohibit a United States financial 
        institution, and any person owned or controlled by a United 
        States financial institution, from knowingly engaging in a 
        significant transaction or transactions with or benefitting any 
        person that the Secretary finds to be a covered person.
          (2) Civil penalty.--A person who violates, attempts to 
        violate, conspires to violate, or causes a violation of 
        regulations prescribed under this subsection shall be subject 
        to a civil penalty in an amount not to exceed the greater of--
                  (A) $250,000; or
                  (B) an amount that is twice the amount of the 
                transaction that is the basis of the violation with 
                respect to which the penalty is imposed.

SEC. 4. OPPOSITION TO ASSISTANCE BY THE INTERNATIONAL FINANCIAL 
                    INSTITUTIONS AND THE EXPORT-IMPORT BANK.

  (a) International Financial Institutions.--The Bretton Woods 
Agreements Act (22 U.S.C. 286 et seq.) is amended by adding at the end 
the following:

``SEC. 73. OPPOSITION TO ASSISTANCE FOR ANY GOVERNMENT THAT FAILS TO 
                    IMPLEMENT SANCTIONS ON NORTH KOREA.

  ``(a) In General.--The Secretary of the Treasury shall instruct the 
United States Executive Director at the international financial 
institutions (as defined under section 1701(c) of the International 
Financial Institutions Act) to use the voice and vote of the United 
States to oppose the provision of financial assistance to a foreign 
government, other than assistance to support basic human needs, if the 
President determines that, in the year preceding consideration of 
approval of such assistance, the government has knowingly failed to 
prevent the provision of financial services to, or freeze the funds, 
financial assets, and economic resources of, a person described under 
subparagraphs (A) through (E) of section 7(2) of the Impeding North 
Korea's Access to Finance Act of 2017.
  ``(b) Waiver.--The President may waive subsection (a) for up to 180 
days at a time with respect to a foreign government if the President 
reports to Congress that--
          ``(1) the foreign government's failure described under (a) is 
        due exclusively to a lack of foreign government capacity;
          ``(2) the foreign government is taking effective steps to 
        prevent recurrence of such failure; or
          ``(3) such waiver is vital to the national security interests 
        of the United States.''.
  (b) Export-Import Bank.--Section 2(b) of the Export-Import Bank Act 
of 1945 (12 U.S.C. 635(b)) is amended by adding at the end the 
following:
          ``(14) Prohibition on support involving persons connected 
        with north korea.--The Bank may not guarantee, insure, or 
        extend credit, or participate in the extension of credit in 
        connection with the export of a good or service to a covered 
        person (as defined under section 7 of the Impeding North 
        Korea's Access to Finance Act of 2017).''.

SEC. 5. TREASURY REPORTS ON COMPLIANCE, PENALTIES, AND TECHNICAL 
                    ASSISTANCE.

  (a) Quarterly Report.--
          (1) In general.--Not later than 120 days following the date 
        of the enactment of this Act, and every 90 days thereafter, the 
        Secretary of the Treasury shall submit a report to the 
        Committee on Financial Services of the House of Representatives 
        and the Committee on Banking, Housing, and Urban Affairs of the 
        Senate that includes--
                  (A) a list of financial institutions that, in the 
                period since the preceding report, knowingly 
                facilitated a significant transaction or transactions 
                or provided significant financial services for a 
                covered person, or failed to apply appropriate due 
                diligence to prevent such activities;
                  (B) a list of any penalties imposed under section 3 
                in the period since the preceding report; and
                  (C) a description of efforts by the Department of the 
                Treasury in the period since the preceding report, 
                through consultations, technical assistance, or other 
                appropriate activities, to strengthen the capacity of 
                financial institutions and foreign governments to 
                prevent the provision of financial services benefitting 
                any covered person.
          (2) Form of report; public availability.--
                  (A) Form.--The report required under paragraph (1) 
                shall be submitted in unclassified form but may contain 
                a classified annex.
                  (B) Public availability.--The unclassified portion of 
                such report shall be made available to the public and 
                posted on the website of the Department of the 
                Treasury.
  (b) Testimony Required.--Upon request of the Committee on Financial 
Services of the House of Representatives or the Committee on Banking, 
Housing, and Urban Affairs of the Senate, the Under Secretary of the 
Treasury for Terrorism and Financial Intelligence shall testify to 
explain the effects of this Act, and the amendments made by this Act, 
on North Korea's access to finance.
  (c) International Monetary Fund.--Title XVI of the International 
Financial Institutions Act (22 U.S.C. 262p et seq.) is amended by 
adding at the end the following:

``SEC. 1629. SUPPORT FOR CAPACITY OF THE INTERNATIONAL MONETARY FUND TO 
                    PREVENT MONEY LAUNDERING AND FINANCING OF 
                    TERRORISM.

  ``The Secretary of the Treasury shall instruct the United States 
Executive Director at the International Monetary Fund to support the 
use of the administrative budget of the Fund for technical assistance 
that strengthens the capacity of Fund members to prevent money 
laundering and the financing of terrorism.''.
  (d) National Advisory Council Report to Congress.--The Chairman of 
the National Advisory Council on International Monetary and Financial 
Policies shall include in the report required by section 1701 of the 
International Financial Institutions Act (22 U.S.C. 262r) for the 
fiscal year following the date of the enactment of this Act a 
description of--
          (1) the activities of the International Monetary Fund in the 
        most recently completed fiscal year to provide technical 
        assistance that strengthens the capacity of Fund members to 
        prevent money laundering and the financing of terrorism, and 
        the effectiveness of the assistance; and
          (2) the efficacy of efforts by the United States to support 
        such technical assistance through the use of the Fund's 
        administrative budget.

SEC. 6. SUSPENSION AND TERMINATION OF PROHIBITIONS AND PENALTIES.

  (a) Suspension.--The President may suspend, on a case-by-case basis, 
the application of any provision of this Act, or provision in an 
amendment made by this Act, for a period of not more than 180 days at a 
time if the President certifies to Congress that--
          (1) the Government of North Korea has--
                  (A) committed to the verifiable suspension of North 
                Korea's proliferation and testing of WMD, including 
                systems designed in whole or in part for the delivery 
                of such weapons; and
                  (B) has agreed to multilateral talks including the 
                Government of the United States, with the goal of 
                permanently and verifiably limiting North Korea's WMD 
                and ballistic missile programs; or
          (2) such suspension is vital to the national security 
        interests of the United States, with an explanation of the 
        reasons therefor.
  (b) Termination.--
          (1) In general.--On the date that is 30 days after the date 
        on which the President makes the certification described under 
        paragraph (2)--
                  (A) section 3, subsections (a) and (b) of section 5, 
                and section 6(a) of this Act shall cease to have any 
                force or effect;
                  (B) section 73 of the Bretton Woods Agreements Act, 
                as added by section 4(a), shall be repealed; and
                  (C) section 2(b)(14) of the Export-Import Bank Act of 
                1945, as added by section 4(b), shall be repealed.
          (2) Certification.--The certification described under this 
        paragraph is a certification by the President to the Congress 
        that--
                  (A) the Government of North Korea--
                          (i) has ceased to pose a significant threat 
                        to national security, with an explanation of 
                        the reasons therefor; or
                          (ii) is committed to, and is taking effective 
                        steps to achieving, the goal of permanently and 
                        verifiably limiting North Korea's WMD and 
                        ballistic missile programs; or
                  (B) such termination is vital to the national 
                security interests of the United States, with an 
                explanation of the reasons therefor.

SEC. 7. DEFINITIONS.

  For purposes of this Act:
          (1) Terms related to north korea.--The terms ``applicable 
        Executive order'', ``Government of North Korea'', ``North 
        Korea'', ``North Korean person'', and ``significant activities 
        undermining cybersecurity'' have the meanings given those 
        terms, respectively, in section 3 of the North Korea Sanctions 
        and Policy Enhancement Act of 2016 (22 U.S.C. 9202).
          (2) Covered person.--The term ``covered person'' means the 
        following:
                  (A) Any designated person under an applicable 
                Executive order.
                  (B) Any North Korean person that facilitates the 
                transfer of bulk cash or covered goods (as defined 
                under section 1027.100 of title 31, Code of Federal 
                Regulations).
                  (C) Any North Korean financial institution.
                  (D) Any North Korean person employed outside of North 
                Korea, except that the Secretary of the Treasury may 
                waive the application of this subparagraph for a North 
                Korean person that is not otherwise a covered person 
                and--
                          (i) has been granted asylum or refugee status 
                        by the country of employment; or
                          (ii) is employed as essential diplomatic 
                        personnel for the Government of North Korea.
                  (E) Any person acting on behalf of, or at the 
                direction of, a person described under subparagraphs 
                (A) through (D).
                  (F) Any person that knowingly employs a person 
                described under subparagraph (D).
                  (G) Any person that facilitates the import of goods, 
                services, technology, or natural resources, including 
                energy imports and minerals, or their derivatives, from 
                North Korea.
                  (H) Any person that facilitates the export of goods, 
                services, technology, or natural resources, including 
                energy exports and minerals, or their derivatives, to 
                North Korea, except for food, medicine, or medical 
                supplies required for civilian humanitarian needs.
                  (I) Any person that invests in, or participates in a 
                joint venture with, an entity in which the Government 
                of North Korea participates or an entity that is 
                created or organized under North Korean law.
                  (J) Any person that provides financial services, 
                including through a subsidiary or joint venture, in 
                North Korea.
                  (K) Any person that insures, registers, facilitates 
                the registration of, or maintains insurance or a 
                registration for, a vessel owned, controlled, 
                commanded, or operated by a North Korean person.
                  (L) Any person providing specialized teaching, 
                training, or information or providing material or 
                technological support to a North Korean person that--
                          (i) may contribute to North Korea's 
                        development and proliferation of WMD, including 
                        systems designed in whole or in part for the 
                        delivery of such weapons; or
                          (ii) may contribute to significant activities 
                        undermining cybersecurity.
          (3) Financial institution definitions.--
                  (A) Financial institution.--The term ``financial 
                institution'' means a United States financial 
                institution or a foreign financial institution.
                  (B) Foreign financial institution.--The term 
                ``foreign financial institution'' has the meaning given 
                that term under section 1010.605 of title 31, Code of 
                Federal Regulations.
                  (C) North korean financial institution.--The term 
                ``North Korean financial institution'' includes--
                          (i) any North Korean financial institution, 
                        as defined in section 3 of the North Korea 
                        Sanctions and Policy Enhancement Act of 2016 
                        (22 U.S.C. 9202);
                          (ii) any financial agency, as defined in 
                        section 5312 of title 31, United States Code, 
                        that is owned or controlled by the Government 
                        of North Korea;
                          (iii) any money transmitting business, as 
                        defined in section 5330(d) of title 31, United 
                        States Code, that is owned or controlled by the 
                        Government of North Korea;
                          (iv) any financial institution that is a 
                        joint venture between any person and the 
                        Government of North Korea; and
                          (v) any joint venture involving a North 
                        Korean financial institution.
                  (D) United states financial institution.--The term 
                ``United States financial institution'' has the meaning 
                given the term ``U.S. financial institution'' under 
                section 510.310 of title 31, Code of Federal 
                Regulations.
          (4) 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.

    Amend the title so as to read:
    A bill to impose secondary sanctions with respect to North 
Korea, strengthen international efforts to improve sanctions 
enforcement, and for other purposes.

                          Purpose and Summary

    On October 2, 2017, Representative Andy Barr introduced 
H.R. 3898 the ``Impeding North Korea's Access to Finance Act of 
2017.'' This legislation would impose secondary sanctions with 
respect to North Korea and require the Secretary of the 
Treasury to place conditions on the correspondent and payable-
through accounts of foreign financial institutions that 
knowingly do business with ``covered persons,'' a category that 
encompasses virtually anyone that facilitates North Korean 
trade and investment, acquires hard currency for the Kim Jong-
Un regime, or provides other support for North Korea's weapons 
and cyber-hacking programs. In addition, the bill would require 
the U.S. to oppose assistance by the international financial 
institutions for countries that knowingly fail to stop 
providing financial services for enablers of North Korea's 
illicit activities.
    H.R. 3898 includes waiver authorities that incentivize 
North Korean behavioral change, particularly the suspension of 
its testing and proliferation of weapons of mass destruction 
(WMD), and a commitment to permanently limit its WMD and 
ballistic missile programs. Waiver provisions further 
incentivize third countries to strictly enforce North Korean 
sanctions, and to take corrective action in cases where 
sanctions enforcement has fallen short. Finally, reporting 
requirements in this legislation call for quarterly 
implementation updates from the Secretary of the Treasury, 
enhancing congressional oversight over the Treasury 
Department's efforts to cut off North Korea's access to 
finance.

                  Background and Need for Legislation

    The Democratic People's Republic of Korea (DPRK) has 
conducted six nuclear tests since 2006, and successfully tested 
an intercontinental ballistic missile (ICBM) on July 4 and July 
28, 2017. This missile--dubbed the ``Hwasong-14''--had an 
estimated range sufficient to reach Alaska, and potentially the 
East Coast of the United States. Moreover, the Defense 
Intelligence Agency has reportedly concluded that North Korea 
could miniaturize a nuclear device to fit inside its missiles, 
and may be able to design a reentry vehicle to support a 
nuclear warhead by late 2018. Developing an effective reentry 
vehicle would cross a significant threshold for Pyongyang, as 
it would represent the ability to wage a nuclear attack on the 
continental United States.
    North Korea's nuclear ambitions may be traced to as early 
as 1959, when the DPRK signed an agreement with the Soviet 
Union, and later China, to cooperate on nuclear research. Under 
Kim Il-Sung, the North Koreans went on to pursue nuclear 
weapons in the 1970s, yet these plans were discouraged by both 
the USSR and China. The Soviets eventually convinced North 
Korea to join the Nuclear Non-Proliferation Treaty (NPT) in 
1985, which bound Pyongyang to refrain from developing nuclear 
weapons of its own.
    Despite signing on to the NPT, North Korea blocked 
international inspections required under the treaty, and 
threatened to withdraw from the NPT in the 1990s. This crisis 
led to the Agreed Framework of 1994, where the U.S. committed 
to providing energy assistance and, in collaboration with Japan 
and South Korea, constructing two proliferation-resistant 
nuclear power reactors in exchange for Pyongyang suspending its 
plutonium production under international monitoring. Although 
the North froze its production facilities, the Agreed Framework 
began to break down in the ensuing years, especially following 
the DPRK's 1998 launch of the Taepodong-1 long-range missile 
over Japan. In 2002, the George W. Bush Administration accused 
North Korea of violating the Agreed Framework by producing 
highly enriched uranium, a violation that the North Koreans 
reportedly admitted to. Reactor construction and energy 
assistance were subsequently put on hold, after which North 
Korea expelled international inspectors, and ultimately 
withdrew from the NPT in January 2003.
    As a result, 2003 saw the Agreed Framework give way to the 
establishment of the Six Party Talks, a series of negotiations 
involving the U.S., China, Japan, Russia, and North and South 
Korea. Although the Talks may have served as a useful forum for 
the U.S. to discuss policy with regional actors, they also led 
to several false dawns. In 2005, North Korea implemented a 
freeze on plutonium production, only to test its first nuclear 
device in 2006. Another tentative plan to verifiably 
denuclearize in 2007 led to the easing of U.S. sanctions the 
following year, including the removal of North Korea from the 
state sponsors of terrorism list. In the end, however, 
Pyongyang restarted its nuclear program as President Bush 
prepared to leave office.
    Bad-faith commitments by the DPRK continued under the Obama 
Administration, with North Korea agreeing in 2012 to suspend 
nuclear and long-range missile testing and open its Yongbyon 
reactor to inspections from the International Atomic Energy 
Agency (IAEA), only to launch a long-range rocket a few weeks 
later and proceed with its third nuclear test the next year--
the most powerful yet--in February 2013. This test led to a 
unanimous United Nations Security Council vote for new 
sanctions targeting North Korean trade and financial services.
    Two additional nuclear tests were held in January and 
September 2016, with the latter registering an explosion 10 
times greater than North Korea's initial test a decade earlier. 
The January test prompted the UN to call for members to inspect 
all cargo originating from or destined for North Korea. The 
September test was followed by UN Security Council Resolution 
2321, which banned most coal, iron, and other mineral exports 
from the DPRK to UN member states. Resolution 2321 also called 
on member countries to close their representative offices, 
subsidiaries, and bank accounts in North Korea unless they were 
required to deliver humanitarian assistance. In addition, UN 
members were called upon to de-register North Korean vessels, 
and to prohibit public and private financial support for trade 
with the country.
    Following the two test launches of the Hwasong-14 in July 
2017, the UN Security Council passed Resolution 2371 on August 
5, a set of sanctions that completely banned North Korean coal, 
mineral, and seafood exports, and prohibited additional 
laborers from employment abroad. Within weeks, Pyongyang 
launched a ballistic missile over Japan, and followed this with 
its sixth nuclear test on September 3, 2017.
    North Korea's sixth nuclear test demonstrated an estimated 
explosive power in excess of 100 kilotons, which would make it 
over 100 times more powerful than the DPRK's first nuclear test 
from 2006, and far more devastating than the 15 kiloton bomb 
that was dropped on Hiroshima.
    A week following the September 2017 nuclear test, the UN 
Security Council approved Resolution 2375, which, among other 
provisions, banned North Korean textile exports and capped 
foreign countries' petroleum exports to the DPRK. The impact of 
this latest sanctions round quickly appeared uncertain, 
however: shortly after passage of the Resolution, North Korean 
Foreign Minister Ri Yong Ho threatened that the North might 
test a hydrogen bomb over the Pacific Ocean and shoot down U.S. 
strategic bombers. In early October, a Russian lawmaker who had 
returned from a visit to Pyongyang revealed that the North was 
preparing to test another ICBM that could reach the United 
States.
    It is clear that North Korea sanctions have thus far been 
unable to thwart the country's nuclear ambitions. There are 
several reasons for this failure:
    Limited Reach of Primary Sanctions--Previous sanctions have 
targeted North Korean relationships with the outside world that 
may not be essential for Pyongyang. This includes sanctions 
prohibiting trade and investment between the U.S. and DPRK 
(i.e. ``primary sanctions''). Since the end of the Korean War 
in 1953, economic relations between the two countries have been 
nearly nonexistent, with the temporary exception of aid 
provided to address the North Korean famine in the 1990s, and 
to reward Pyongyang intermittently for suspending its nuclear 
program. Therefore, while primary sanctions are extensive, 
their impact may be limited.
    Deficient Sanctions Enforcement--Although UN members are 
bound to implement sanctions imposed by UN Security Council 
Resolutions, such implementation has been uneven, either 
because sanctions may not be written into national laws, or 
because enforcement of those laws is deficient. As the UN Panel 
of Experts noted in a February 2017 report:

          ``Despite expanded financial sanctions adopted by the 
        Security Council in resolutions 2270 (2016) and 2321 
        (2016), the Democratic People's Republic of Korea has 
        continued to access the international financial system 
        to support its activities. Financial networks of the 
        Democratic People's Republic of Korea have adapted to 
        these sanctions, using evasive methods to maintain 
        access to formal banking channels and bulk cash 
        transfers to facilitate prohibited activities. At the 
        time of writing, Democratic People's Republic of Korea 
        circumvention techniques and inadequate compliance by 
        Member States are combining to significantly negate the 
        impact of the resolutions.''

    In a July 2017 hearing before the Financial Services 
Committee, William Newcomb, a former member of the UN Panel of 
Experts, testified:

          ``Over the past decade, the record of implementation 
        by Member States is a poor one. It was not unusual to 
        find that even several members of the Security Council 
        had not implemented sanctions. Typically it took many 
        years following adoption of a resolution before reports 
        of its implementation rose to the fifty percent mark.''

    According to Newcomb, UN members cannot plausibly claim 
ignorance of the Resolutions' requirements; although continued 
efforts to educate countries on their provisions are important, 
compelling those countries to take action may be necessary. As 
Newcomb stated in his testimony:

          ``While outreach will remain essential, particularly 
        to explain the growing complexity of sanctions as new 
        Resolutions are adopted, positive and negative 
        incentives are needed to encourage more Member States 
        to act.''

    North Korean Use of Foreign Nationals--The DPRK has sought 
to evade sanctions through the use of brokers and front 
companies abroad, notably in China and Southeast Asia, which 
act on behalf of North Korean persons. At a hearing before the 
Committee on September 13, 2017, David Albright, President of 
the Institute for Science and International Security, outlined 
how non-North Korean nationals have been crucial for the DPRK's 
procurement activities:

          When [North Korea] could no longer base its 
        operations in Europe in the early 2000s, it shifted its 
        operations to China, where many procurement operations 
        for its nuclear program have been centered since then. 
        Operating in China and Hong Kong, it has acquired a 
        wide range of goods from Chinese companies and 
        middlemen, as well as from U.S., Japanese, and European 
        subsidiaries, which have been deceived into thinking 
        they were selling to Chinese end users. North Korean 
        entities often contract with private Chinese and Hong 
        Kong trading companies and sometimes manufacturing 
        companies to acquire these goods, either from Chinese 
        suppliers or subsidiaries of Western or Japanese 
        suppliers in China. Although China is improving its 
        export control laws, Beijing has not done an adequate 
        job of enforcing its laws and sanctions against illegal 
        exports and retransfers to North Korea.

    The challenge posed by front companies was echoed in a 
September 2017 report by the UN Panel of Experts, which noted:

          ``Financial institutions in numerous Member States 
        wittingly and unwittingly have provided correspondent 
        banking services to front companies and individual of 
        the Democratic People's Republic of Korea engaged in 
        prohibited activities. Moreover, foreign companies 
        maintain links with financial institutions of the 
        country established as subsidiaries or joint ventures 
        in violation of the resolutions.''

    Despite the DPRK's use of non-North Korean persons, its 
trading activities should nonetheless be detectable. As C4ADS, 
a nonprofit research organization, concluded in its 2017 
report, Risky Business: A System-Level Analysis of the North 
Korean Proliferation Financing System: ``By being centralized, 
limited, and ultimately vulnerable, North Korean overseas 
networks are, by their nature, ripe for disruption.'' Drawing 
on open-source data, C4ADS mapped such networks, and concluded 
that targeting key non-North Korean nationals, particularly in 
China, could significantly undermine the DPRK's procurement and 
financing efforts. According to the C4ADS report:

          ``Although to date economic coercion has been 
        ineffective in persuading North Korea to abandon its 
        pursuit of nuclear weapons, this does not mean it 
        cannot work. On the contrary, targeted enforcement 
        actions against key nodes within the system can have 
        the effect of impacting multiple networks across 
        multiple countries simultaneously, removing key 
        functions, such as individuals or entities specialized 
        in illicit finance and procurement, who cannot be 
        easily replaced. Each action can individually increase 
        the cost and complexity of sanctions evasion for North 
        Korea but if applied against a number of these key 
        nodes simultaneously, they could, in theory, cause the 
        entire overseas system to collapse.''

    In the absence of sufficient enforcement measures taken 
against these trading entities by their home countries, H.R. 
3898 would punish foreign financial institutions that conduct 
business with them, and help foreign governments ensure that 
their financial sectors cannot be exploited by North Korean 
efforts to evade sanctions.
    At the same time, H.R. 3898 reflects the principle that 
secondary sanctions should include significant flexibility for 
the President to advance U.S. foreign policy goals. As Adam 
Szubin, Director of the Treasury Department's Office of Foreign 
Assets Control under the George W. Bush administration, and 
Acting Under Secretary for Terrorism and Financial Intelligence 
under the Obama administration, testified on September 7, 2017 
before the Senate Committee on Banking, Housing, and Urban 
Affairs:

          ``[Sanctions] are meant to incentivize behavioral 
        change. For that inducement to work, the targets of 
        sanctions must see that the President has the ability 
        to lighten or remove the pressure. That is, those that 
        conduct our nation's foreign affairs must have 
        discretion over how and when sanctions are eased or 
        removed.''

    Consequently, this legislation's waiver authorities are 
designed to provide sanctions relief in response to realistic 
behavioral change on the part of North Korea and other affected 
countries. In addition, the application of any provision may be 
suspended if the President reports to Congress that a waiver is 
vital to national security interests.
    In summary, the DPRK's rapid development of both nuclear 
weapons and vehicles for their delivery calls for forceful 
secondary sanctions premised on a limited number of clear and 
achievable goals, incentives for foreign countries to eliminate 
business benefitting North Korea, and appropriate discretion 
for the President to maximize the effectiveness of these tools.

                                Hearings

    On July 19, 2017, the Monetary Policy and Trade 
Subcommittee held a hearing on matters relating to H.R. 3898 
entitled, ``Restricting North Korea's Access to Finance.'' On 
September 13, 2017, the Monetary Policy and Trade Subcommittee 
held an additional hearing on a discussion draft of H.R. 3898 
entitled, ``A Legislative Proposal to Impede North Korea's 
Access to Finance.''

                        Committee Consideration

    The Committee on Financial Services met in open session on 
October 11, 2017, and ordered H.R. 3898 to be reported 
favorably to the House as amended by a recorded vote of 56 yeas 
to 0 nays (Recorded vote no. FC-73), a quorum being present. 
Before the motion to report was offered, the Committee adopted 
an amendment in the nature of a substitute offered by Mr. Barr 
by voice vote.

                            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 as amended. The motion 
was agreed to by a recorded vote of 56 yeas to 0 nays (Record 
vote no. FC-73), a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      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

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizes funding is required.

   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.

                 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, October 20, 2017.
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. 3898, the Impeding 
North Korea's Access to Finance Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jacob Fabian.
            Sincerely,
                                                Keith Hall,
                                                          Director.
            Enclosure.

H.R. 3898--Impeding North Korea's Access to Finance Act of 2017

    H.R. 3898 would expand federal sanctions and reporting 
requirements related to commercial transactions and 
interactions with North Korea. The bill would require the 
Secretary of the Treasury to issue regulations that prohibit or 
strictly limit correspondent accounts maintained in the United 
States by certain foreign financial institutions. 
(Correspondent accounts allow banks to send money to each other 
internationally and are essential for banks to access foreign 
financial systems and for customer payments.) The affected 
institutions would include any institution that knowingly 
facilitates transactions or provides significant financial 
services for individuals or entities in the world that transact 
with persons in North Korea.
    Additionally, the bill would instruct the U.S. executive 
directors of international financial institutions (for example, 
the International Monetary Fund, the Asian Development Bank, or 
similar institutions) to support the denial of financial 
assistance to foreign governments that do not comply with the 
bill and, in the case of the International Monetary Fund, to 
support the use of administrative funds to prevent money 
laundering and the financing of terrorism. The bill also would 
require the Secretary of the Treasury to regularly report on 
the sanctions and other activities covered by the bill.
    On the basis of information about the costs of similar 
activities, CBO estimates that administering the sanctions and 
implementing the reporting requirements under H.R. 3898 would 
cost the Department of the Treasury less than $500,000 over the 
2018-2022 period; such spending would be subject to the 
availability of appropriated funds.
    Enacting H.R. 3898 would increase the number of people and 
entities that would be subject to civil or criminal penalties. 
Penalties are recorded in the budget as revenues and a portion 
of those penalties can be spent without further appropriation. 
Pay-as-you-go procedures apply to this bill because enacting 
H.R. 3898 would affect direct spending and revenues. However, 
CBO estimates that implementing the additional sanctions in 
H.R. 3898 would affect very few people or entities because of 
the broad scope of restrictions that exist under current law 
and executive orders that address financial and other 
interactions with North Korea. Thus enacting the bill would 
have insignificant effects on both revenues and direct 
spending, CBO estimates.
    CBO estimates that enacting H.R. 3898 would not 
significantly increase net direct spending or on-budget 
deficits in any of the four consecutive 10-year periods 
beginning in 2028.
    H.R. 3898 contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Jacob Fabian. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis, and John McClelland, 
Assistant Director for Tax Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      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

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed 
rulemakings: H.R. 3898 requires the Secretary of the Treasury 
to prescribe regulations to implement the conditions and 
prohibitions described in Section 3(a) and (b) of the Act.

             Section-by-Section Analysis of the Legislation


Sec. 1: Short title

    This Act may be cited as the Impeding North Korea's Access 
to Finance Act of 2017.

Sec. 2: Findings

    Congressional findings make note of the following:
     The Treasury Department has found North Korea to 
be a ``jurisdiction of primary money laundering concern,'' due 
to its use of state-controlled banks and front companies to 
support the development of weapons of mass destruction (WMD) 
and ballistic missiles.
     The Financial Action Task Force (FATF) has called 
on its members to apply effective counter-measures to protect 
their financial sectors from North Korean money laundering, WMD 
proliferation financing, and the financing of terrorism.
     The UN Panel of Experts' report from February 2017 
concluded that North Korea continued to access the 
international financial system in spite of UN sanctions. In 
addition, the report found that no UN member state had reported 
taking actions to freeze North Korean assets; and a combination 
of sanctions evasion by the country as well as inadequate 
enforcement by foreign countries had undermined the 
effectiveness of UN sanctions.
     A September 2017 report from the UN Panel again 
determined that North Korea continued to violate financial 
sanctions through the use of agents abroad; foreign financial 
institutions provided correspondent banking services to North 
Korean persons and front companies for illicit purposes; 
foreign companies maintained sanctionable links with North 
Korean financial institutions; and North Korea generated at 
least $270 million through the violation of UN sectoral 
sanctions since the February 2017 report.
     North Korea maintains access to financial services 
through non-North Korean nationals who help mask the identity 
of bank accounts' end users.
     North Korea's sixth nuclear test on September 3, 
2017 had an estimated explosive power more than 100 times 
greater than that generated by its first test in 2006.
     North Korea has successfully tested submarine-
launched and intercontinental ballistic missiles, and is 
rapidly progressing in its development of a nuclear-armed 
missile that can reach U.S. territory.

Sec. 3: Conditions with respect to certain accounts and transactions at 
        United States financial institutions

            Correspondent and Payable-Through Accounts
    Within 45 days of enactment, the Secretary of the Treasury 
shall issue regulations to prohibit, or impose strict 
conditions on, the opening or maintaining of a foreign 
financial institution's correspondent or payable-through 
account(s) at a U.S. financial institution if the foreign 
financial institution knowingly facilitates a significant 
transaction or provides significant financial services for a 
covered person.
    A person that violates or attempts to violate these 
sanctions would be subject to civil penalties not to exceed 
$250,000, or twice the amount of the transaction that is the 
basis of the violation, whichever is greater. In addition, 
criminal penalties of not more than $1 million in fines, or 
imprisonment of up to 20 years, would be imposed on persons who 
willfully commit or attempt to commit a violation.
            Transactions by U.S. financial institutions
    Within 45 days of enactment, Treasury would also be 
required to prohibit any U.S. financial institution, or a 
person owned or controlled by it, from engaging in a 
significant transaction with or benefitting any person that the 
Secretary finds to be a covered person.
    Violators of this subsection would be subject to civil 
penalties not to exceed $250,000, or twice the amount of the 
transaction that is the basis of the violation, whichever is 
greater.
    A covered person, as defined further under Sec. 7, denotes 
the following:
          A. Any person designated by an applicable Executive 
        order with respect to North Korea;
          B. Any North Korean person that facilitates the 
        transfer of bulk cash or covered goods (jewels, 
        precious metals, and precious stones);
          C. Any North Korean financial institution;
          D. Any North Korean person employed outside of North 
        Korea (with discretion for the Secretary to exempt 
        defectors granted asylum or refugee status, or 
        essential North Korean diplomatic personnel, provided 
        they do not otherwise qualify as a covered person);
          E. Any person acting on behalf of, or at the 
        direction of, a person described under A through D;
          F. Any person that knowingly employs a person 
        described under D;
          G. Any person that facilitates the import of goods, 
        services, technology, or natural resources, including 
        energy imports and minerals, or their derivatives, from 
        North Korea;
          H. Any person that facilitates the export of goods, 
        services, technology, or natural resources, including 
        energy exports and minerals, or derivatives, to North 
        Korea, except for food, medicine, or medical supplies 
        required for civilian humanitarian needs;
          I. Any person that invests in, or participates in a 
        joint venture with, an entity in which the Government 
        of North Korea participates, or an entity that is 
        created or organized under North Korean law;
          J. Any person that provides financial services, 
        including through a subsidiary or joint venture, in 
        North Korea;
          K. Any person that insures, registers, facilitates 
        the registration of, or maintains insurance or a 
        registration for, a vessel owned, controlled, commanded 
        or operated by a North Korean person; or
          L. Any person providing specialized teaching, 
        training, or information to a North Korean person that 
        1) may contribute to North Korea's development and 
        proliferation of WMD, including systems designed in 
        whole or in part for the delivery of such weapons; or 
        2) may contribute to significant activities undermining 
        cybersecurity.

Sec. 4: Opposition to assistance by the international financial 
        institutions and the Export-Import Bank

    This section would require the U.S. Executive Director at 
the international financial institutions to oppose assistance 
to a foreign government if the President determines that, in 
the year prior to considering approval of the assistance, the 
government knowingly failed to prevent the provision of 
financial services to, or failed to freeze the funds, financial 
assets, and economic resources of, a covered person described 
under subparagraphs (A) through (E) of Section 7(2).
    The President may waive this provision for up to 180 days 
upon reporting to Congress that the foreign government's 
failure is due solely to a lack of capacity, or that the 
government is taking effective steps to prevent the failure's 
recurrence. The President may also issue a waiver upon 
determining that it is vital to U.S. national security 
interests.
    In addition, this section would require the Export-Import 
Bank to deny assistance for the export of goods or services to 
a covered person.

Sec. 5: Treasury reports on compliance, penalties, and technical 
        assistance

    No later than 120 days after enactment, and every 90 days 
thereafter, the Secretary of the Treasury would be required to 
submit a report to the Financial Services Committee and Senate 
Committee on Banking, Housing, and Urban Affairs that includes:
           A list of financial institutions that 
        knowingly facilitated a transaction, or provided 
        significant financial services to, a covered person; or 
        that failed to exercise appropriate due diligence to 
        prevent such activities;
           A list of any penalties imposed in the 
        reporting period; and
           A description of Treasury's efforts-through 
        consultations, technical assistance, or other 
        appropriate activities-to strengthen financial 
        institutions and foreign countries' capacity to prevent 
        the provision of financial services benefitting a 
        covered person.
    This report shall be made public on the Treasury 
Department's website.
    Upon request by the Financial Services Committee or Senate 
Committee on Banking, Housing, and Urban Affairs, the Under 
Secretary of the Treasury for Terrorism and Financial 
Intelligence would be required to provide testimony on the 
effects of H.R. 3898 with respect to North Korea's access to 
finance.
    This section would also require the U.S. Executive Director 
at the IMF to support the Fund's use of its administrative 
budget for technical assistance on anti-money laundering and 
combatting the financing of terrorism.

Sec. 6: Suspension and termination of prohibitions and penalties

    The President may suspend any provision, on a case-by-case 
basis, for up to 180 days at a time upon certifying to Congress 
that the Government of North Korea has:
           Committed to the verifiable suspension of 
        North Korea's proliferation and testing of WMD, 
        including delivery systems for such weapons; and
           Has agreed to multilateral talks including 
        the U.S. government, with the goal of permanently and 
        verifiably limiting North Korea's WMD and ballistic 
        missile programs.
    The President may also suspend any provision upon 
certifying to Congress that the waiver is vital to U.S. 
national security interests, with an explanation of the reasons 
therefor.
            Sunset
    H.R. 3898's provisions would expire 30 days after the 
President certifies to Congress that the Government of North 
Korea:
           Has ceased to pose a significant threat to 
        national security, with an explanation of the reasons 
        therefor; or
           Is committed to, and is taking effective 
        steps to achieving, the goal of permanently and 
        verifiably limiting its WMD and ballistic missile 
        programs.
    The President may also sunset the Act by certifying to 
Congress that its termination is vital to U.S. national 
security interests, with an explanation of the reasons 
therefor.

Sec. 7: Definitions

    This section defines terms consistent with appropriate 
statutes and regulations, and includes a definition of covered 
persons.

         Changes in Existing Law Made by the Bill, as Reported

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

         Changes in Existing Law Made by the Bill, as Reported

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

BRETTON WOODS AGREEMENTS ACT

           *       *       *       *       *       *       *



SEC. 73. OPPOSITION TO ASSISTANCE FOR ANY GOVERNMENT THAT FAILS TO 
                    IMPLEMENT SANCTIONS ON NORTH KOREA.

  (a) In General.--The Secretary of the Treasury shall instruct 
the United States Executive Director at the international 
financial institutions (as defined under section 1701(c) of the 
International Financial Institutions Act) to use the voice and 
vote of the United States to oppose the provision of financial 
assistance to a foreign government, other than assistance to 
support basic human needs, if the President determines that, in 
the year preceding consideration of approval of such 
assistance, the government has knowingly failed to prevent the 
provision of financial services to, or freeze the funds, 
financial assets, and economic resources of, a person described 
under subparagraphs (A) through (E) of section 7(2) of the 
Impeding North Korea's Access to Finance Act of 2017.
  (b) Waiver.--The President may waive subsection (a) for up to 
180 days at a time with respect to a foreign government if the 
President reports to Congress that--
          (1) the foreign government's failure described under 
        (a) is due exclusively to a lack of foreign government 
        capacity;
          (2) the foreign government is taking effective steps 
        to prevent recurrence of such failure; or
          (3) such waiver is vital to the national security 
        interests of the United States.
                              ----------                              


EXPORT-IMPORT BANK ACT OF 1945

           *       *       *       *       *       *       *


  Sec. 2. (a)(1) There is hereby created a corporation with the 
name Export-Import Bank of the United States which shall be an 
agency of the United States of America. The objects and 
purposes of the Bank shall be to aid in financing and to 
facilitate exports of goods and services, imports, and the 
exchange of commodities and services between the United States 
or any of its territories or insular possessions and any 
foreign country or the agencies or nationals of any such 
country, and in so doing to contribute to the employment of 
United States workers. The Bank's objective in authorizing 
loans, guarantees, insurance, and credits shall be to 
contribute to maintaining or increasing employment of United 
States workers. In connection with and in furtherance of its 
objects and purposes, the Bank is authorized and empowered to 
do a general banking business except that of circulation; to 
receive deposits; to purchase, discount, rediscount, sell, and 
negotiate, with or without its endorsement or guaranty, and to 
guarantee notes, drafts, checks, bills of exchange, 
acceptances, including bankers' acceptances, cable transfers, 
and other evidences of indebtedness; to guarantee, insure, co-
insure, reinsure against political and credit risks of loss; to 
purchase, sell, and guarantee securities but not to purchase 
with its funds any stock in any other corporation except that 
it may acquire any such stock, through the enforcement of any 
lien or pledge or otherwise to satisfy a previously contracted 
indebtedness to it; to accept bills and drafts drawn upon it; 
to issue letters of credit; to purchase and sell coin, bullion, 
and exchange; to borrow and to lend money; to perform any act 
herein authorized in participation with any other person, 
including any individual, partnership, corporation, or 
association; to adopt, alter, and use a corporate seal, which 
shall be judicially noticed; to sue and to be sued, to complain 
and to defend in any court of competent jurisdiction; to 
represent itself or to contract for representation in all legal 
and arbitral proceedings outside the United States; and the 
enumeration of the foregoing powers shall not be deemed to 
exclude other powers necessary to the achievement of the 
objects and purposes of the Bank. The Bank shall be entitled to 
the use of the United States mails in the same manner and upon 
the same conditions as the executive departments of the 
Government. The Bank is authorized to publish or arrange for 
the publications of any documents, reports, contracts, or other 
material necessary in connection with or in furtherance of its 
objects and purposes without regard to the provisions of 
section 501 of title 44, United States Code, whenever the Bank 
determines that publication in accordance with the provisions 
of such section would not be practicable. Subject to 
regulations which the Bank shall issue pursuant to section 553 
of title 5, United States Code, the Bank may impose and collect 
reasonable fees to cover the costs of conferences and seminars 
sponsored by, and publications provided by, the Bank, and may 
accept reimbursement for travel and subsistence expenses 
incurred by a director, officer, or employee of the Bank, in 
accordance with subchapter I of chapter 57 of title 5, United 
States Code. Amounts received under the preceding sentence 
shall be credited to the fund which initially paid for such 
activities and shall be offset against the expenses of the Bank 
for such activities. The Bank is hereby authorized to use all 
of its assets and all moneys which have been or may thereafter 
be allocated to or borrowed by it in the exercise of its 
functions. Net earnings of the Bank after reasonable provision 
for possible losses shall be used for payment of dividends on 
capital stock. Any such dividends shall be deposited into the 
Treasury as miscellaneous receipts.
  (2) In order for the Bank to be competitive in all of its 
financing programs with countries whose exports compete with 
United States exports, the Bank shall establish a program 
that--
          (A) provides medium-term financing where necessary to 
        be fully competitive--
                  (i) at rates of interest to the customer 
                which are equal to rates established in 
                international agreements;
                  (ii) in amounts up to 85 percent of the total 
                cost of the exports involved; and
                  (iii) with principal amounts of not more than 
                $25,000,000; and
          (B) enables the Bank to cooperate fully with the 
        Secretary of Commerce and the Administrator of the 
        Small Business Administration to develop a program for 
        purposes of disseminating information (using existing 
        private institutions) to small business concerns 
        regarding the medium-term financing provided under this 
        paragraph.
  (3) Enhancement of Medium-Term Program.--To enhance the 
medium-term financing program established pursuant to paragraph 
(2), the Bank shall establish measures to--
          (A) improve the competitiveness of the Bank's medium-
        term financing and ensure that its medium-term 
        financing is fully competitive with that of other major 
        official export credit agencies;
          (B) ease the administrative burdens and procedural 
        and documentary requirements imposed on the users of 
        medium-term financing;
          (C) attract the widest possible participation of 
        private financial institutions and other sources of 
        private capital in the medium-term financing of United 
        States exports; and
          (D) render the Bank's medium-term financing as 
        supportive of United States exports as is its Direct 
        Loan Program.
  (b)(1)(A) It is the policy of the United States to foster 
expansion of exports of manufactured goods, agricultural 
products, and other goods and services, thereby contributing to 
the promotion and maintenance of high levels of employment and 
real income, a commitment to reinvestment and job creation, and 
the increased development of the productive resources of the 
United States. To meet this objective in all its programs, the 
Export-Import Bank is directed, in the exercise of its 
functions, to provide guarantees, insurance, and extensions of 
credit at rates and on terms and other conditions which are 
fully competitive with the Government-supported rates and terms 
and other conditions available for the financing of exports of 
goods and services from the principal countries whose exporters 
compete with United States exporters, including countries the 
governments of which are not members of the Arrangement (as 
defined in section 10(h)(3)). The Bank shall, in cooperation 
with the export financing instrumentalities of other 
governments, seek to minimize competition in Government-
supported export financing and shall, in cooperation with other 
appropriate United States Government agencies, seek to reach 
international agreements to reduce government subsidized export 
financing.
  (B) It is further the policy of the United States that loans 
made by the Bank in all its programs shall bear interest at 
rates determined by the Board of Directors, consistent with the 
Bank's mandate to support United States exports at rates and on 
terms and conditions which are fully competitive with exports 
of other countries, and consistent with international 
agreements. For the purpose of the preceding sentence, rates 
and terms and conditions need not be identical in all respects 
to those offered by foreign countries, but should be 
established so that the effect of such rates, terms, and 
conditions for all the Bank's programs, including those for 
small businesses and for medium-term financing, will be to 
neutralize the effect of such foreign credit on international 
sales competition. The Bank shall consider its average cost of 
money as one factor in its determination of interest rates, 
where such consideration does not impair the Bank's primary 
function of expanding United States exports through fully 
competitive financing. The Bank may not impose a credit 
application fee unless (i) the fee is competitive with the 
average fee charged by the Bank's primary foreign competitors, 
and (ii) the borrower or the exporter is given the option of 
paying the fee at the outset of the loan or over the life of 
the loan and the present value of the fee determined under 
either such option is the same amount. It is also the policy of 
the United States that the Bank in the exercise of its 
functions should supplement and encourage, and not compete 
with, private capital; that the Bank, in determining whether to 
provide support for a transaction under the loan, guarantee, or 
insurance program, or any combination thereof, shall consider 
the need to involve private capital in support of United States 
exports as well as the cost of the transaction as calculated in 
accordance with the requirements of the Federal Credit Reform 
Act of 1990; that the Bank shall accord equal opportunity to 
export agents and managers, independent export firms, export 
trading companies, and small commercial banks in the 
formulation and implementation of its programs; that the Bank 
should give emphasis to assisting new and small business 
entrants in the agricultural export market, and shall, in 
cooperation with other relevant Government agencies, including 
the Commodity Credit Corporation, develop a program of 
education to increase awareness of export opportunities among 
small agribusinesses and cooperatives, that loans, so far as 
possible consistent with the carrying out of the purposes of 
subsection (a) of this section, shall generally be for specific 
purposes, and, in the judgment of the Board of Directors, offer 
reasonable assurance of repayment; and that in authorizing any 
loan or guarantee, the Board of Directors shall take into 
account any serious adverse effect of such loan or guarantee on 
the competitive position of United States industry, the 
availability of materials which are in short supply in the 
United States, and employment in the United States, and shall 
give particular emphasis to the objective of strengthening the 
competitive position of United States exporters and thereby of 
expanding total United States exports. Only in cases where the 
President, after consultation with the Committee on Financial 
Services of the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate, determines 
that such action would be in the national interest where such 
action would clearly and importantly advance United States 
policy in such areas as international terrorism (including, 
when relevant, a foreign nation's lack of cooperation in 
efforts to eradicate terrorism), nuclear proliferation, the 
enforcement of the Foreign Corrupt Practices Act of 1977, the 
Arms Export Control Act, the International Emergency Economic 
Powers Act, or the Export Administration Act of 1979, 
environmental protection and human rights (such as are provided 
in the Universal Declaration of Human Rights adopted by the 
United Nations General Assembly on December 10, 1948) 
(including child labor), should the Export-Import Bank deny 
applications for credit for nonfinancial or noncommercial 
considerations. Each such determination shall be delivered in 
writing to the President of the Bank, shall state that the 
determination is made pursuant to this section, and shall 
specify the applications or categories of applications for 
credit which should be denied by the Bank in furtherance of the 
national interest.
  (C) Consistent with the policy of section 501 of the Nuclear 
Non-Proliferation Act of 1978 and section 119 of the Foreign 
Assistance Act of 1961, the Board of Directors shall name an 
officer of the Bank whose duties shall include advising the 
President of the Bank on ways or promoting the export of goods 
and services to be used in the development, production, and 
distribution of nonnuclear renewable energy resources, 
disseminating information concerning export opportunities and 
the availability of Bank support for such activities, and 
acting as a liaison between the Bank and the Department of 
Commerce and other appropriate departments and agencies.
  (D) It is further the policy of the United States to foster 
the delivery of United States services in international 
commerce. In exercising its powers and functions, the Bank 
shall give full and equal consideration to making loans and 
providing guarantees for the export of services (independently, 
or in conjunction with the export of manufactured goods, 
equipment, hardware or other capital goods) consistent with the 
Bank's policy to neutralize foreign subsidized credit 
competition and to supplement the private capital market.
  (E)(i)(I) It is further the policy of the United States to 
encourage the participation of small business in international 
commerce.
  (II) In exercising its authority, the Bank shall develop a 
program which gives fair consideration to making loans and 
providing guarantees for the export of goods and services by 
small businesses.
  (ii) It is further the policy of the United States that the 
Bank shall give due recognition to the policy stated in section 
2(a) of the Small Business Act that ``the Government should 
aid, counsel, assist, and protect, insofar as is possible, the 
interests of small business concerns in order to preserve free 
competitive enterprise''.
  (iii) In furtherance of this policy, the Board of Directors 
shall designate an officer of the Bank who--
          (I) shall be responsible to the President of the Bank 
        for all matters concerning or affecting small business 
        concerns; and
          (II) among other duties, shall be responsible for 
        advising small business concerns of the opportunities 
        for small business concerns in the functions of the 
        Bank, with particular emphasis on conducting outreach 
        and increasing loans to socially and economically 
        disadvantaged small business concerns (as defined in 
        section 8(a)(4) of the Small Business Act), small 
        business concerns (as defined in section 3(a) of the 
        Small Business Act) owned by women, and small business 
        concerns (as defined in section 3(a) of the Small 
        Business Act) employing fewer than 100 employees, and 
        for maintaining liaison with the Small Business 
        Administration and other departments and agencies in 
        matters affecting small business concerns.)
  (iv) The Director appointed to represent the interests of 
small business under section 3(c) of this Act shall ensure that 
the Bank carries out its responsibilities under clauses (ii) 
and (iii) of this subparagraph and that the Bank's financial 
and other resources are, to the maximum extent possible, 
appropriately used for small business needs.
  (v) To assure that the purposes of clauses (i) and (ii) of 
this subparagraph are carried out, the Bank shall make 
available, from the aggregate loan, guarantee, and insurance 
authority available to it, an amount to finance exports 
directly by small business concerns (as defined under section 3 
of the Small Business Act) which shall be not less than 25 
percent of such authority for each fiscal year. From the amount 
made available under the preceding sentence, it shall be a goal 
of the Bank to increase the amount made available to finance 
exports directly by small business concerns referred to in 
section 3(i)(1).
  (vi) The Bank shall utilize the amount set-aside pursuant to 
clause (v) of this subparagraph to offer financing for small 
business exports on terms which are fully competitive with 
regard to interest rates and with regard to the portion of 
financing which may be provided, guaranteed, or insured. 
Financing under this clause (vi) shall be available without 
regard to whether financing for the particular transaction was 
disapproved by any other Federal agency.
  (vii)(I) The Bank shall utilize a part of the amount set 
aside pursuant to clause (v) to provide lines of credit or 
guarantees to consortia of small or medium size banks, export 
trading companies, State export finance agencies, export 
financing cooperatives, small business investment companies (as 
defined in section 103 of the Small Business Investment Act of 
1958), or other financing institutions or entities in order to 
finance small business exports.
  (II) Financing under this clause (vii) shall be made 
available only where the consortia or the participating 
institutions agree to undertake processing, servicing, and 
credit evaluation functions in connection with such financing.
  (III) To the maximum extent practicable, the Bank shall 
delegate to the consortia or other financing institutions or 
entities the authority to approve financing under this clause 
(vii).
  (IV) In the administration of the program under this clause 
(vii), the Bank shall provide appropriate technical assistance 
to participating consortia and may require such consortia 
periodically to furnish information to the Bank regarding the 
number and amount of loans made and the creditworthiness of the 
borrowers.
  (viii) In order to assure that the policy stated in clause 
(i) is carried out, the Bank shall promote small business 
exports and its small business export financing programs in 
cooperation with the Secretary of Commerce, the Office of 
International Trade of the Small Business Administration, and 
the private sector, particularly small business organizations, 
State agencies, chambers of commerce, banking organizations, 
export management companies, export trading companies and 
private industry.
  (ix) The Bank shall provide, through creditworthy trade 
associations, export trading companies, State export finance 
companies, export finance cooperatives, and other multiple-
exporter organizations, medium-term risk protection coverage 
for the members and clients of such organizations. Such 
coverage shall be made available to each such organization 
under a single risk protection policy covering its members or 
clients. Nothing in this provision shall be interpreted as 
limiting the Bank's authority to deny support for specific 
transactions or to disapprove a request by such an organization 
to participate in such coverage.
  (x) The Bank shall implement technology improvements that are 
designed to improve small business outreach, including allowing 
customers to use the Internet to apply for the Bank's small 
business programs.
  (F) Consistent with international agreements, the Bank shall 
urge the Foreign Credit Insurance Association to provide 
coverage against 100 per centum of any loss with respect to 
exports having a value of less than $100,000.
  (G) Participation in or access to long-, medium-, and short-
term financing, guarantees, and insurance provided by the Bank 
shall not be denied solely because the entity seeking 
participation or access is not a bank or is not a United States 
person.
  (H)(i) It is further the policy of the United States to 
foster the development of democratic institutions and market 
economies in countries seeking such development, and to assist 
the export of high technology items to such countries.
  (ii) In exercising its authority, the Bank shall develop a 
program for providing guarantees and insurance with respect to 
the export of high technology items to countries making the 
transition to market based economies, including eligible East 
European countries (within the meaning of section 3 of the 
Support For East European Democracy (SEED) Act of 1989).
  (iii) As part of the ongoing marketing and outreach efforts 
of the Bank, the Bank shall, to the maximum extent practicable, 
inform high technology companies, particularly small business 
concerns (as such term is defined in section 3 of the Small 
Business Act), about the programs of the Bank for United States 
companies interested in exporting high technology goods to 
countries making the transition to market based economies, 
including any eligible East European country (within the 
meaning of section 3 of the Support For East European Democracy 
(SEED) Act of 1989).
  (iv) In carrying out clause (iii), the Bank shall--
          (I) work with other agencies involved in export 
        promotion and finance; and
          (II) invite State and local governments, trade 
        centers, commercial banks, and other appropriate public 
        and private organizations to serve as intermediaries 
        for the outreach efforts.
  (I) The President of the Bank shall undertake efforts to 
enhance the Bank's capacity to provide information about the 
Bank's programs to small and rural companies which have not 
previously participated in the Bank's programs. Not later than 
1 year after the date of enactment of this subparagraph, the 
President of the Bank shall submit to Congress a report on the 
activities undertaken pursuant to this subparagraph.
  (J) The Bank shall implement an electronic system designed to 
track all pending transactions of the Bank.
  (K) The Bank shall promote the export of goods and services 
related to renewable energy sources.
  (L) The Bank shall require an applicant for assistance from 
the Bank to disclose whether the applicant has been found by a 
court of the United States to have violated the Foreign Corrupt 
Practices Act of 1977, the Arms Export Control Act, the 
International Emergency Economic Powers Act, or the Export 
Administration Act of 1979 within the preceding 12 months, and 
shall maintain, in cooperation with the Department of Justice, 
for not less than 3 years a record of such applicants so found 
to have violated any such Act.
  (M) Not later than 2 years after the date of the enactment of 
the Export-Import Bank Reform and Reauthorization Act of 2015, 
the Bank shall implement policies--
          (i) to accept electronic documents with respect to 
        transactions whenever possible, including copies of 
        bills of lading, certifications, and compliance 
        documents, in such manner so as not to undermine any 
        potential civil or criminal enforcement related to the 
        transactions; and
          (ii) to accept electronic payments in all of its 
        programs.
  (2) Prohibition on Aid to Marxist-Leninist Countries.--
          (A) In general.--The Bank in the exercise of its 
        functions shall not guarantee, insure, extend credit, 
        or participate in the extension of credit--
                  (i) in connection with the purchase or lease 
                of any product by a Marxist-Leninist country, 
                or agency or national thereof; or
                  (ii) in connection with the purchase or lease 
                of any product by any other foreign country, or 
                agency or national thereof, if the product to 
                be purchased or leased by such other country, 
                agency, or national is, to the knowledge of the 
                Bank, principally for use in, or sale or lease 
                to, a Marxist-Leninist country.
          (B) Marxist-Leninist country defined.--
                  (i) In general.--For purposes of this 
                paragraph, the term ``Marxist-Leninist 
                country'' means any country that maintains a 
                centrally planned economy based on the 
                principles of Marxism-Leninism, or is 
                economically and militarily dependent on any 
                other such country.
                  (ii) Specific countries deemed to be marxist-
                leninist.--Unless otherwise determined by the 
                President in accordance with subparagraph (C), 
                the following countries are deemed to be 
                Marxist-Leninist countries for purposes of this 
                paragraph:
                          (I) Democratic People's Republic of 
                        Korea.
                          (II) Democratic Republic of 
                        Afghanistan.
                          (III) People's Republic of China.
                          (IV) Republic of Cuba.
                          (V) Socialist Republic of Vietnam.
                          (VI) Tibet.
          (C) Presidential determination that a country has 
        ceased to be Marxist-Leninist.--If the President 
        determines that any country on the list contained in 
        subparagraph (B)(ii) has ceased to be a Marxist-
        Leninist country (within the definition of such term in 
        subparagraph (B)(i)), such country shall not be treated 
        as a Marxist-Leninist country for purposes of this 
        paragraph after the date of such determination, unless 
        the President subsequently determines that such country 
        has again become a Marxist-Leninist country.
          (D) Presidential determination relating to financing 
        in the national interest.--
                  (i) In general.--Subparagraph (A) shall not 
                apply to guarantees, insurance, or extensions 
                of credit by the Bank to a country, agency, or 
                national described in clause (i) or (ii) of 
                subparagraph (A) (in connection with 
                transactions described in such clauses) if the 
                President determines that such guarantees, 
                insurance, or extensions of credit are in the 
                national interest.
                  (ii) Separate determination for certain 
                transactions.--The President shall make a 
                separate determination under clause (i) for 
                each transaction described in clause (i) or 
                (ii) of subparagraph (A) for which the Bank 
                would extend a loan in an amount equal to or 
                greater than $50,000,000.
                  (iii) Report of clause (i) determinations to 
                congress.--Any determination by the President 
                under clause (i) shall be reported to the 
                Congress not later than the earlier of--
                          (I) the end of the 30-day period 
                        beginning on the date of such 
                        determination; or
                          (II) the date the Bank takes final 
                        action with respect to the first 
                        transaction involving the country, 
                        agency, or national for which such 
                        determination is made after the date of 
                        the enactment of the Export-Import Bank 
                        Amendments of 1974, unless a report of 
                        a determination with respect to such 
                        date of enactment.
                  (iv) Report of clause (ii) determinations to 
                congress.--Any determination by the President 
                under clause (ii) shall be reported to the 
                Congress not later than the earlier of--
                          (I) the end of the 30-day period 
                        beginning on the date of such 
                        determination; or
                          (II) the date the Bank takes final 
                        action with respect to the transaction 
                        for which such determination is made.
  (3) Except as provided by the fourth sentence of this 
paragraph, no loan or financial guarantee or general guarantee 
or insurance facility or combination thereof (i) in an amount 
which equals or exceeds $100,000,000, or (ii) for the export of 
technology, fuel, equipment, materials, or goods or services to 
be used in the construction, alteration, operation, or 
maintenance of nuclear power, enrichment, reprocessing, 
research, or heavy water production facilities, shall be 
finally approved by the Board of Directors of the Bank, unless 
in each case the Bank has submitted to the Congress with 
respect to such loan, financial guarantee, or combination 
thereof, a detailed statement describing and explaining the 
transaction, at least 25 days of continuous session of the 
Congress prior to the date of final approval. For the purpose 
of the preceding sentence, continuity of a session of the 
Congress shall be considered as broken only by an adjournment 
of the Congress sine die, and the days on which either House is 
not in session because of an adjournment of more than 3 days to 
a day certain shall be excluded in the computation of the 25 
day period referred to in such sentence. Such statement shall 
contain--
          (A) in the case of a loan or financial guarantee--
                  (i) a brief description of the purposes of 
                the transaction;
                  (ii) the identity of the party or parties 
                requesting the loan or financial guarantee;
                  (iii) the nature of the goods or services to 
                be exported and the use for which the goods or 
                services are to be exported; and
                  (iv) in the case of a general guarantee or 
                insurance facility--
                          (I) a description of the nature and 
                        purpose of the facility;
                          (II) the total amount of guarantees 
                        or insurance; and
                          (III) the reasons for the facility 
                        and its methods of operation; and
          (B) a full explanation of the reasons for Bank 
        financing of the transaction, the amount of the loan to 
        be provided by the Bank, the approximate rate and 
        repayment terms at which such loan will be made 
        available and the approximate amount of the financial 
        guarantee.
If the Bank submits a statement to the Congress under this 
paragraph and either House of Congress is in an adjournment for 
a period which continues for at least ten days after the date 
of submission of the statement, then any such loan or guarantee 
or combination thereof may, subject to the second sentence of 
this paragraph, be finally approved by the Board of Directors 
upon the termination of the twenty-five-day period referred to 
in the first sentence of this paragraph or upon the termination 
of a thirty-five-calendar-day period (which commences upon the 
date of submission of the statement), whichever occurs sooner.
  (4)(A) If the Secretary of State determines that--
          (i) any country that has agreed to International 
        Atomic Energy Agency nuclear safeguards materially 
        violates, abrogates, or terminates, after October 26, 
        1977, such safeguards;
          (ii) any country that has entered into an agreement 
        for cooperation concerning the civil use of nuclear 
        energy with the United States materially violates, 
        abrogates, or terminates, after October 26, 1977, any 
        guarantee or other undertaking to the United States 
        made in such agreement;
          (iii) any country that is not a nuclear-weapon state 
        detonates, after October 26, 1977, a nuclear explosive 
        device;
          (iv) any country willfully aids or abets, after June 
        29, 1994, any non-nuclear-weapon state to acquire any 
        such nuclear explosive device or to acquire 
        unsafeguarded special nuclear material; or
          (v) any person knowingly aids or abets, after the 
        date of enactment of the National Defense Authorization 
        Act for Fiscal Year 1997, any non-nuclear-weapon state 
        to acquire any such nuclear explosive device or to 
        acquire unsafeguarded special nuclear material,
then the Secretary of State shall submit a report to the 
appropriate committees of the Congress and to the Board of 
Directors of the Bank stating such determination and 
identifying each country or person the Secretary determines has 
so acted.
  (B)(i) If the Secretary of State makes a determination under 
subparagraph (A)(v) with respect to a foreign person, the 
Congress urges the Secretary to initiate consultations 
immediately with the government with primary jurisdiction over 
that person with respect to the imposition of the prohibition 
contained in subparagraph (C).
  (ii) In order that consultations with that government may be 
pursued, the Board of Directors of the Bank shall delay 
imposition of the prohibition contained in subparagraph (C) for 
up to 90 days if the Secretary of State requests the Board to 
make such delay. Following these consultations, the prohibition 
contained in subparagraph (C) shall apply immediately unless 
the Secretary determines and certifies to the Congress that 
that government has taken specific and effective actions, 
including appropriate penalties, to terminate the involvement 
of the foreign person in the activities described in 
subparagraph (A)(v). The Board of Directors of the Bank shall 
delay the imposition of the prohibition contained in 
subparagraph (C) for up to an additional 90 days if the 
Secretary requests the Board to make such additional delay and 
if the Secretary determines and certifies to the Congress that 
that government is in the process of taking the actions 
described in the preceding sentence.
  (iii) Not later than 90 days after making a determination 
under subparagraph (A)(v), the Secretary of State shall submit 
to the appropriate committees of the Congress a report on the 
status of consultations with the appropriate government under 
this subparagraph, and the basis for any determination under 
clause (ii) that such government has taken specific corrective 
actions.
  (C) The Board of Directors of the Bank shall not give 
approval to guarantee, insure, or extend credit, or participate 
in the extension of credit in support of United States exports 
to any country, or to or by any person, identified in the 
report described in subparagraph (A).
  (D) The prohibition in subparagraph (C) shall not apply to 
approvals to guarantee, insure, or extend credit, or 
participate in the extension of credit in support of United 
States exports to a country with respect to which a 
determination is made under clause (i), (ii), (iii), or (iv) of 
subparagraph (A) regarding any specific event described in such 
clause if the President determines and certifies in writing to 
the Congress not less than 45 days prior to the date of the 
first approval following the determination that it is in the 
national interest for the Bank to give such approvals.
  (E) The prohibition in subparagraph (C) shall not apply to 
approvals to guarantee, insure, or extend credit, or 
participate in the extension of credit in support of United 
States exports to or by a person with respect to whom a 
determination is made under clause (v) of subparagraph (A) 
regarding any specific event described in such clause if--
          (i) the Secretary of State determines and certifies 
        to the Congress that the appropriate government has 
        taken the corrective actions described in subparagraph 
        (B)(ii); or
          (ii) the President determines and certifies in 
        writing to the Congress not less than 45 days prior to 
        the date of the first approval following the 
        determination that--
                  (I) reliable information indicates that--
                          (aa) such person has ceased to aid or 
                        abet any non-nuclear-weapon state to 
                        acquire any nuclear explosive device or 
                        to acquire unsafeguarded special 
                        nuclear material; and
                          (bb) steps have been taken to ensure 
                        that the activities described in item 
                        (aa) will not resume; or
                  (II) the prohibition would have a serious 
                adverse effect on vital United States 
                interests.
  (F) For purposes of this paragraph:
          (i) The term ``country'' has the meaning given to 
        ``foreign state'' in section 1603(a) of title 28, 
        United States Code.
          (ii) The term ``knowingly'' is used within the 
        meaning of the term ``knowing'' in section 104(h)(3) of 
        the Foreign Corrupt Practices Act (15 U.S.C. 78dd-
        2(h)(3)).
          (iii) The term ``person'' means a natural person as 
        well as a corporation, business association, 
        partnership, society, trust, any other nongovernmental 
        entity, organization, or group, and any governmental 
        entity operating as a business enterprise, and any 
        successor of any such entity.
          (iv) The term ``nuclear-weapon state'' has the 
        meaning given the term in Article IX(3) of the Treaty 
        on the Non-Proliferation of Nuclear Weapons, signed at 
        Washington, London, and Moscow on July 1, 1968.
          (v) The term ``non-nuclear-weapon state'' has the 
        meaning given the term in section 830(5) of the Nuclear 
        Proliferation Prevention Act of 1994 (Public Law 103-
        236; 108 Stat. 521).
          (vi) The term ``nuclear explosive device'' has the 
        meaning given the term in section 830(4) of the Nuclear 
        Proliferation Prevention Act of 1994 (Public Law 103-
        236; 108 Stat. 521).
          (vii) The term ``unsafeguarded special nuclear 
        material'' has the meaning given the term in section 
        830(8) of the Nuclear Proliferation Prevention Act of 
        1994.
  (5) The Bank shall not guarantee, insure, or extend credit, 
or participate in the extension of credit in connection with 
(A) the purchase of any product, technical data, or other 
information by a national or agency of any nation which engages 
in armed conflict declared or otherwise, with the Armed Forces 
of the United States, (B) the purchase by any nation (or 
national or agency thereof) of any product, technical data, or 
other information which is to be used principally by or in any 
such nation described in clause (A), or (C) the purchase of any 
liquid metal fast breeder nuclear reactor or any nuclear fuel 
reprocessing facility. The Bank shall not guarantee, insure, or 
extend credit, or participate in the extension of credit in 
connection with the purchase of any product, technical data, or 
other information by a national or agency of any nation if the 
President determines that any such transaction would be 
contrary to the national interest.
  (6)(A) The Bank shall not guarantee, insure, or extend 
credit, or participate in an extension of credit in connection 
with any credit sale of defense articles and defense services 
to any country.
  (B) Subparagraph (A) shall not apply to any sale of defense 
articles or services if--
          (i) the Bank is requested to provide a guarantee or 
        insurance for the sale;
          (ii) the President determines that the defense 
        articles or services are being sold primarily for anti-
        narcotics purposes;
          (iii) section 490(e) of the Foreign Assistance Act of 
        1961 does not apply with respect to the purchasing 
        country; and
          (iv) the President determines, in accordance with 
        subparagraph (C), that the sale is in the national 
        interest of the United States; and
          (v) the Bank determines that, notwithstanding the 
        provision of a guarantee or insurance for the sale, not 
        more than 5 percent of the guarantee and insurance 
        authority available to the Bank in any fiscal year will 
        be used by the Bank to support the sale of defense 
        articles or services.
  (C) In determining whether a sale of defense articles or 
services would be in the national interest of the United 
States, the President shall take into account whether the sale 
would--
          (i) be consistent with the anti-narcotics policy of 
        the United States;
          (ii) involve the end use of a defense article or 
        service in a major illicit drug producing or major 
        drug-transit country (as defined in section 481(e) of 
        the Foreign Assistance Act of 1961); and
          (iii) be made to a country with a democratic form of 
        government.
  (D)(i) The Board shall not give approval to guarantee or 
insure a sale of defense articles or services unless--
          (I) the President determines, in accordance with 
        subparagraph (C), that it is in the national interest 
        of the United States for the Bank to provide such 
        guarantee or insurance;
          (II) the President determines, after consultation 
        with the Assistant Secretary of State for Human Rights 
        and Humanitarian Affairs, that the purchasing country 
        has complied with all restrictions imposed by the 
        United States on the end use of any defense articles or 
        services for which a guarantee or insurance was 
        provided under subparagraph (B), and has not used any 
        such defense articles or services to engage in a 
        consistent pattern of gross violations of 
        internationally recognized human rights; and
          (III) such determinations have been reported to the 
        Speaker and the Committee on Financial Services of the 
        House of Representatives, and to the Committee on 
        Banking, Housing, and Urban Affairs and the Committee 
        on Foreign Relations of the Senate, not less than 25 
        days of continuous session of the Congress before the 
        date of such approval.
          (ii) For purposes of clause (i), continuity of a 
        session of the Congress shall be considered as broken 
        only by an adjournment of the Congress sine die, and 
        the days on which either House is not in session 
        because of an adjournment of more than 3 days to a day 
        certain shall be excluded in the computation of the 25-
        day period referred to in such clause.
  (E) The provision of a guarantee or insurance under 
subparagraph (B) shall be deemed to be the provision of 
security assistance for purposes of section 502B of the Foreign 
Assistance Act of 1961 (relating to governments which engage in 
a consistent pattern of gross violations of internationally 
recognized human rights).
  (F) To the extent that defense articles or services for which 
a guarantee or insurance is provided under subparagraph (B) are 
used for a purpose other than anti-narcotics purposes, they may 
be used only for those purposes for which defense articles and 
defense services sold under the Arms Export Control Act 
(relating to the foreign military sales program) may be used 
under section 4 of such Act.
  (G) As used in subparagraphs (B), (C), (D), and (F), the term 
``defense articles or services'' means articles, services, and 
related technical data that are designated as defense articles 
and defense services pursuant to sections 38 and 47(7) of the 
Arms Export Control Act and listed on the United States 
Munitions List (part 121 of title 22 of the Code of Federal 
Regulations).
  (H) Once in each calendar quarter, the Bank shall submit a 
report to the Committee on Banking, Housing, and Urban Affairs 
of the Senate, and the Committee on Financial Services of the 
House of Representatives on all instances in which the Bank, 
during the reporting quarter, guaranteed, insured, or extended 
credit or participated in an extension of credit in connection 
with any credit sale of an article, service, or related 
technical data described in subparagraph (G) that the Bank 
determined would not be put to a military use or described in 
subparagraph (I)(i). Such report shall include a description of 
each of the transactions and the justification for the Bank's 
actions.
  (I)(i) Subparagraph (A) shall not apply to a transaction 
involving defense articles or services if--
          (I) the Bank determines that--
                  (aa) the defense articles or services are 
                nonlethal; and
                  (bb) the primary end use of the defense 
                articles or services will be for civilian 
                purposes; and
          (II) at least 15 calendar days before the date on 
        which the Board of Directors of the Bank gives final 
        approval to Bank participation in the transaction, the 
        Bank provides notice of the transaction to the 
        Committees on Financial Services and on Appropriations 
        of the House of Representatives and the Committees on 
        Banking, Housing, and Urban Affairs and on 
        Appropriations of the Senate.
  (ii) Not more than 10 percent of the loan, guarantee, and 
insurance authority available to the Bank for a fiscal year may 
be used by the Bank to support the sale of defense articles or 
services to which subparagraph (A) does not apply by reason of 
clause (i) of this subparagraph.
  (iii) Not later than September 1 of each fiscal year, the 
Comptroller General of the United States, in consultation with 
the Bank, shall submit to the Committees on Financial Services 
and on Appropriations of the House of Representatives and the 
Committees on Banking, Housing, and Urban Affairs and on 
Appropriations of the Senate a report on the end uses of any 
defense articles or services described in clause (i) with 
respect to which the Bank provided support during the second 
preceding fiscal year.
  (7) In no event shall the Bank have outstanding at any time 
in excess of 7\1/2\ per centum of the limitation imposed by 
section 7 of this Act for such guarantees, insurance, credits 
or participation in credits with respect to exports of defense 
articles and services to countries which, in the judgment of 
the Board of Directors of the Bank, are less developed.
  (8) The Bank shall supplement but not compete with private 
capital and the programs of the Commodity Credit Corporation to 
ensure that adequate financing will be made available to assist 
the export of agricultural commodities, except that, consistent 
with section 2(b)(1)(A) of this Act, the Bank in assisting any 
such export transactions shall, in cooperation with the export 
financing instrumentalities of other governments, seek to 
minimize competition in Government-supported export financing, 
and shall, in cooperation with other appropriate United States 
Government agencies, seek to reach international agreements to 
reduce Government subsidized export financing. In order to 
carry out the purposes of this subsection, the Bank shall 
consult with the Secretary of Agriculture and where the 
Secretary of Agriculture has recommended against Bank financing 
of the export of a particular agricultural commodity, shall 
take such recommendation into consideration in determining 
whether to provide credit or other assistance for any export 
sale of such commodity, and shall consider the importance of 
agricultural commodity exports to the United States export 
market and the Nation's balance of trade in deciding whether or 
not to provide assistance under this subsection.
  (9)(A) The Board of Directors of the Bank shall, in 
consultation with the Secretary of Commerce and the Trade 
Promotion Coordinating Committee, take prompt measures, 
consistent with the credit standards otherwise required by law, 
to promote the expansion of the Bank's financial commitments in 
sub-Saharan Africa under the loan, guarantee, and insurance 
programs of the Bank.
  (B)(i) The Board of Directors shall establish and use an 
advisory committee to advise the Board of Directors on the 
development and implementation of policies and programs 
designed to support the expansion described in subparagraph 
(A).
  (ii) The advisory committee shall make recommendations to the 
Board of Directors on how the Bank can facilitate greater 
support by United States commercial banks for trade with sub-
Saharan Africa.
  (iii) The advisory committee shall terminate on the date on 
which the authority of the Bank expires under section 7.
  (C) The Bank shall include in the annual report to the 
Congress submitted under section 8(a) a separate section that 
contains a report on the efforts of the Bank to--
          (i) improve its working relationships with the 
        African Development Bank, the African Export-Import 
        Bank, and other institutions in the region that are 
        relevant to the purposes of subparagraph (A) of this 
        paragraph; and
          (ii) coordinate closely with the United States 
        Foreign Service and Foreign Commercial Service, and 
        with the overall strategy of the United States 
        Government for economic engagement with Africa pursuant 
        to the African Growth and Opportunity Act.
  (D) Consistent with the requirement that the Bank obtain a 
reasonable assurance of repayment in connection with each 
transaction the Bank supports, the Bank shall, in consultation 
with the entities described in subparagraph (C), seek to 
qualify a greater number of appropriate African entities for 
participation in programs of the Bank.
  (10)(A) The Bank shall not, without a specific authorization 
by law, guarantee, insure, or extend credit (or participate in 
the extension of credit) to--
          (i) assist specific countries with balance of 
        payments financing; or
          (ii) assist (as the primary purpose of any such 
        guarantee, insurance, or credit) any country in the 
        management of its international indebtedness, other 
        than its outstanding obligations to the Bank.
  (B) Nothing contained in subparagraph (A) shall preclude 
guarantees, insurance, or credit the primary purpose of which 
is to support United States exports.
  (11) Prohibition Relating to Angola.--The Bank may not 
guarantee, insure, or extend (or participate in the extension 
of) credit in connection with any export of any good (other 
than food or an agricultural commodity) or service to the 
People's Republic of Angola until the President certifies to 
the Congress that free and fair elections have been held in 
Angola in which all participants were afforded free and fair 
access, and that the government of Angola--
          (A) is willing, and is actively seeking, to achieve 
        an equitable political settlement of the conflict in 
        Angola, including free and fair elections, through a 
        mutual cease-fire and a dialogue with the opposition 
        armed forces;
          (B) has demonstrated progress in protecting 
        internationally recognized human rights, and 
        particularly in--
                  (i) ending, through prosecution or other 
                means, involvement of members of the military 
                and security forces in political violence and 
                abuses of internationally recognized human 
                rights;
                  (ii) vigorously prosecuting persons engaged 
                in political violence who are connected with 
                the government; and
                  (iii) bringing to justice those responsible 
                for the abduction, torture, and murder of 
                citizens of Angola and citizens of the United 
                States; and
          (C) has demonstrated progress in its respect for, and 
        protection of--
                  (i) the freedom of the press;
                  (ii) the freedom of speech;
                  (iii) the freedom of assembly;
                  (iv) the freedom of association (including 
                the right to organize for political purposes);
                  (v) internationally recognized worker rights; 
                and
                  (vi) other attributes of political pluralism 
                and democracy.
The President shall include in each report made pursuant to 
this paragraph a detailed statement with respect to each of the 
conditions set forth in this paragraph. This paragraph shall 
not be construed to impose any requirement with respect to 
Angola that is more restrictive than any requirement imposed by 
this section generally on all other countries.
  (12) Prohibition relating to russian transfers of certain 
missile systems.--If the President of the United States 
determines that the military or Government of the Russian 
Federation has transferred or delivered to the People's 
Republic of China an SS-N-22 missile system and that the 
transfer or delivery represents a significant and imminent 
threat to the security of the United States, the President of 
the United States shall notify the Bank of the transfer or 
delivery as soon as practicable. Upon receipt of the notice and 
if so directed by the President of the United States, the Board 
of Directors of the Bank shall not give approval to guarantee, 
insure, extend credit, or participate in the extension of 
credit in connection with the purchase of any good or service 
by the military or Government of the Russian Federation.
  (13) Prohibition on assistance to develop or promote certain 
railway connections and railway-related connections.--The Bank 
shall not guarantee, insure, or extend (or participate in the 
extension of) credit in connection with the export of any good 
or service relating to the development or promotion of any 
railway connection or railway-related connection that does not 
traverse or connect with Armenia and does traverse or connect 
Baku, Azerbaijan, Tbilisi, Georgia, and Kars, Turkey.
          (14) Prohibition on support involving persons 
        connected with North Korea.--The Bank may not 
        guarantee, insure, or extend credit, or participate in 
        the extension of credit in connection with the export 
        of a good or service to a covered person (as defined 
        under section 7 of the Impeding North Korea's Access to 
        Finance Act of 2017).
  (c)(1) The Bank shall charge fees and premiums commensurate, 
in the judgment of the Bank, with risks covered in connection 
with the contractual liability that the Bank incurs for 
guarantees, insurance, coinsurance, and reinsurance against 
political and credit risks of loss.
  (2) The Bank may issue such guarantees, insurance, 
coinsurance, and reinsurance to or with exporters, insurance 
companies, financial institutions, or others, or groups 
thereof, and where appropriate may employ any of the same to 
act as its agent in the issuance and servicing of such 
guarantees, insurance, coinsurance, and reinsurance, and the 
adjustment of claims arising thereunder.
  (3) Transferability of Guarantees.--
          (A) In general.--With respect to medium-term and 
        long-term obligation insured or guaranteed by the Bank 
        after the date of the enactment of the Export-Import 
        Bank Act Amendments of 1986, the Bank shall authorize 
        the unrestricted transfer of such obligations by the 
        originating lenders or their transferees to other 
        lenders without affecting, limiting, or terminating the 
        guarantee or insurance provided by the Bank.
          (B) Guarantee coverage.--For the guarantee program 
        provided for in this subsection, the Bank may provide 
        up to 100 percent coverage of the interest and 
        principal if the Board of Directors determines such 
        coverage to be necessary to ensure acceptance of Bank 
        guarantees by financial institutions for any 
        transaction in any export market in which the Bank is 
        open for business.
  (d)(1) In carrying out its responsibilities under this Act, 
the Bank shall work to ensure that United States companies are 
afforded an equal and nondiscriminatory opportunity to bid for 
insurance in connection with transactions assisted by the Bank.
  (2) Competitive opportunity for insurance companies.--In the 
case of any long-term loan or guarantee of not less than 
$25,000,000, the Bank shall seek to ensure that United States 
insurance companies are accorded a fair and open competitive 
opportunity to provide insurance against risk of loss in 
connection with any transaction with respect to which such loan 
or guarantee is provided.
  (3) Responsive actions.--If the Bank becomes aware that a 
fair and open competitive opportunity is not accorded to any 
United States insurance company in a foreign country with 
respect to which the Bank is considering a loan or guarantee, 
the Bank--
          (A) may approve or deny the loan or guarantee after 
        considering whether such action would be likely to 
        achieve competitive access for United States insurance 
        companies; and
          (B) shall forward information regarding any foreign 
        country that denies United States insurance companies a 
        fair and open competitive opportunity to the Secretary 
        of Commerce and to the United States Trade 
        Representative for consideration of a recommendation to 
        the President that access by such country to export 
        credit of the United States should be restricted.
  (4) Notice of approval.--If the Bank approves a loan or 
guarantee with respect to a foreign country notwithstanding 
information regarding denial by that foreign country of 
competitive opportunities for United States insurance 
companies, the Bank shall include notice of such approval and 
the reason for such approval in the report on competition in 
officially supported export credit required under subsection 
(b)(1)(A).
  (5) Definitions.--For purposes of this section--
          (A) the term ``United States insurance company''--
                  (i) includes an individual, partnership, 
                corporation, holding company, or other legal 
                entity which is authorized (or in the case of a 
                holding company, subsidiaries of which are 
                authorized) by a State to engage in the 
                business of issuing insurance contracts or 
                reinsuring the risk underwritten by insurance 
                companies; and
                  (ii) includes foreign operations, branches, 
                agencies, subsidiaries, affiliates, or joint 
                ventures of any entity described in clause (i); 
                and
          (B) the term ``fair and open competitive 
        opportunity'' means, with respect to the provision of 
        insurance by a United States insurance company, that 
        the company--
                  (i) has received notice of the opportunity to 
                provide such insurance; and
                  (ii) has been evaluated for such opportunity 
                on a nondiscriminatory basis.
  (e) Limitation on Assistance Which Adversely Affect the 
United States.--
          (1) In General.--The Bank may not extend any direct 
        credit of financial guarantee for establishing or 
        expanding production of any commodity for export by any 
        country other than the United States, if--
                  (A) the Bank determines that--
                          (i) the commodity is likely to be in 
                        surplus on world markets at the time 
                        the resulting commodity will first be 
                        sold; or
                          (ii) the resulting production 
                        capacity is expected to compete with 
                        United States production of the same, 
                        similar, or competing commodity; and
                  (B) the Bank determines that the extension of 
                such credit or guarantee will cause substantial 
                injury to United States producers of the same, 
                similar, or competing commodity.
        In making the determination under subparagraph (B), the 
        Bank shall determine whether the facility that would 
        benefit from the extension of a credit or guarantee is 
        reasonably likely to produce a commodity in addition 
        to, or other than, the commodity specified in the 
        application and whether the production of the 
        additional commodity may cause substantial injury to 
        United States producers of the same, or a similar or 
        competing, commodity.
          (2) Outstanding orders and preliminary injury 
        determinations.--
                  (A) Orders.--The Bank shall not provide any 
                loan or guarantee to an entity for the 
                resulting production of substantially the same 
                product that is the subject of--
                          (i) a countervailing duty or 
                        antidumping order under title VII of 
                        the Tariff Act of 1930; or
                          (ii) a determination under title II 
                        of the Trade Act of 1974.
                  (B) Affirmative determination.--Within 60 
                days after the date of the enactment of this 
                paragraph, the Bank shall establish procedures 
                regarding loans or guarantees provided to any 
                entity that is subject to a preliminary 
                determination of a reasonable indication of 
                material injury to an industry under title VII 
                of the Tariff Act of 1930. The procedures shall 
                help to ensure that these loans and guarantees 
                are likely to not result in a significant 
                increase in imports of substantially the same 
                product covered by the preliminary 
                determination and are likely to not have a 
                significant adverse impact on the domestic 
                industry. The Bank shall report to the 
                Committee on Financial Services of the House of 
                Representatives and the Committee on Banking, 
                Housing, and Urban Affairs of the Senate on the 
                implementation of these procedures.
                  (C) Comment period.--The Bank shall establish 
                procedures under which the Bank shall notify 
                interested parties and provide a comment period 
                of not less than 14 days (which, on request of 
                any affected party, shall be extended to a 
                period of not more than 30 days) with regard to 
                loans or guarantees reviewed pursuant to 
                subparagraph (B) or (D).
                  (D) Consideration of investigations under 
                title ii of the trade act of 1974.--In making 
                any determination under paragraph (1) for a 
                transaction involving more than $10,000,000, 
                the Bank shall consider investigations under 
                title II of the Trade Act of 1974 that have 
                been initiated at the request of the President 
                of the United States, the United States Trade 
                Representative, the Committee on Finance of the 
                Senate, or the Committee on Ways and Means of 
                the House of Representatives, or by the 
                International Trade Commission on its own 
                motion.
                  (E) Anti-circumvention.--The Bank shall not 
                provide a loan or guarantee if the Bank 
                determines that providing the loan or guarantee 
                will facilitate circumvention of an order or 
                determination referred to in subparagraph (A).
          (3) Exception.--Paragraphs (1) and (2) shall not 
        apply in any case where, in the judgment of the Board 
        of Directors of the Bank, the short- and long-term 
        benefits to industry and employment in the United 
        States are likely to outweigh the short- and long-term 
        injury to United States producers and employment of the 
        same, similar, or competing commodity.
          (4) Definition.--For purposes of paragraph (1)(B), 
        the extension of any credit or guarantee by the Bank 
        will cause substantial injury if the amount of the 
        capacity for production established, or the amount of 
        the increase in such capacity expanded, by such credit 
        or guarantee equals or exceeds 1 percent of United 
        States production.
          (5) Designation of sensitive commercial sectors and 
        products.--Not later than 120 days after the date of 
        the enactment of this Act, the Bank shall submit a list 
        to the Committee on Banking, Housing, and Urban Affairs 
        of the Senate and the Committee on Financial Services 
        of the House of Representatives, which designates 
        sensitive commercial sectors and products with respect 
        to which the provision of financing support by the Bank 
        is deemed unlikely by the President of the Bank due to 
        the significant potential for a determination that such 
        financing support would result in an adverse economic 
        impact on the United States. The President of the Bank 
        shall review on an annual basis thereafter the list of 
        sensitive commercial sectors and products and the Bank 
        shall submit an updated list to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate and 
        the Committee on Financial Services of the House of 
        Representatives of such sectors and products.
          (6) Financial threshold determinations.--For purposes 
        of determining whether a proposed transaction exceeds a 
        financial threshold under this subsection or under the 
        procedures or rules of the Bank, the Bank shall 
        aggregate the dollar amount of the proposed transaction 
        and the dollar amounts of all loans and guarantees, 
        approved by the Bank in the preceding 24-month period, 
        that involved the same foreign entity and substantially 
        the same product to be produced.
          (7) Procedures to reduce adverse effects of loans and 
        guarantees on industries and employment in united 
        states.--
                  (A) Consideration of economic effects of 
                proposed transactions.--If, in making a 
                determination under this paragraph with respect 
                to a loan or guarantee, the Bank conducts a 
                detailed economic impact analysis or similar 
                study, the analysis or study, as the case may 
                be, shall include consideration of--
                          (i) the factors set forth in 
                        subparagraphs (A) and (B) of paragraph 
                        (1); and
                          (ii) the views of the public and 
                        interested parties.
                  (B) Notice and comment requirements.--
                          (i) In general.--If, in making a 
                        determination under this subsection 
                        with respect to a loan or guarantee, 
                        the Bank intends to conduct a detailed 
                        economic impact analysis or similar 
                        study, the Bank shall publish in the 
                        Federal Register a notice of the 
                        intent, and provide a period of not 
                        less than 14 days (which, on request by 
                        any affected party, shall be extended 
                        to a period of not more than 30 days) 
                        for the submission to the Bank of 
                        comments on the economic effects of the 
                        provision of the loan or guarantee, 
                        including comments on the factors set 
                        forth in subparagraphs (A) and (B) of 
                        paragraph (1). In addition, the Bank 
                        shall seek comments on the economic 
                        effects from the Department of 
                        Commerce, the Office of Management and 
                        Budget, the Committee on Banking, 
                        Housing, and Urban Affairs of the 
                        Senate, and the Committee on Financial 
                        Services of the House of 
                        Representatives.
                          (ii) Content of notice.--The notice 
                        shall include appropriate, 
                        nonproprietary information about--
                                  (I) the country to which the 
                                goods involved in the 
                                transaction will be shipped;
                                  (II) the type of goods being 
                                exported;
                                  (III) the amount of the loan 
                                or guarantee involved;
                                  (IV) the goods that would be 
                                produced as a result of the 
                                provision of the loan or 
                                guarantee;
                                  (V) the amount of increased 
                                production that will result 
                                from the transaction;
                                  (VI) the potential sales 
                                market for the resulting goods; 
                                and
                                  (VII) the value of the 
                                transaction.
                          (iii) Procedure regarding materially 
                        changed applications.--
                                  (I) In general.--If a 
                                material change is made to an 
                                application for a loan or 
                                guarantee from the Bank after a 
                                notice with respect to the 
                                intent described in clause (i) 
                                is published under this 
                                subparagraph, the Bank shall 
                                publish in the Federal Register 
                                a revised notice of the intent, 
                                and shall provide for a comment 
                                period, as provided in clauses 
                                (i) and (ii).
                                  (II) Material change 
                                defined.--As used in subclause 
                                (I), the term ``material 
                                change'', with respect to an 
                                application, includes--
                                          (aa) a change of at 
                                        least 25 percent in the 
                                        amount of a loan or 
                                        guarantee requested in 
                                        the application; and
                                          (bb) a change in the 
                                        principal product to be 
                                        produced as a result of 
                                        any transaction that 
                                        would be facilitated by 
                                        the provision of the 
                                        loan or guarantee.
                  (C) Requirement to address views of adversely 
                affected persons.--Before taking final action 
                on an application for a loan or guarantee to 
                which this section applies, the staff of the 
                Bank shall provide in writing to the Board of 
                Directors the views of any person who submitted 
                comments pursuant to subparagraph (B).
                  (D) Publication of conclusions.--Within 30 
                days after a party affected by a final decision 
                of the Board of Directors with respect to a 
                loan or guarantee makes a written request 
                therefor, the Bank shall provide to the 
                affected party a non-confidential summary of 
                the facts found and conclusions reached in any 
                detailed economic impact analysis or similar 
                study conducted pursuant to subparagraph (B) 
                with respect to the loan or guarantee, that 
                were submitted to the Board of Directors.
                  (E) Maintenance of documentation.--The Bank 
                shall maintain documentation relating to 
                economic impact analyses and similar studies 
                conducted under this subsection in a manner 
                consistent with the Standards for Internal 
                Control of the Federal Government issued by the 
                Comptroller General of the United States.
                  (F) Rule of interpretation.--This paragraph 
                shall not be construed to make subchapter II of 
                chapter 5 of title 5, United States Code, 
                applicable to the Bank.
                  (G) Regulations.--The Bank shall implement 
                such regulations and procedures as may be 
                appropriate to carry out this paragraph.
  (f) Authority To Deny Application for Assistance Based on 
Fraud or Corruption by Party Involved in the Transaction.--In 
addition to any other authority of the Bank, the Bank may deny 
an application for assistance with respect to a transaction if 
the Bank has substantial credible evidence that any party to 
the transaction or any party involved in the transaction has 
committed an act of fraud or corruption in connection with the 
transaction.
  (g) Process for Notifying Applicants of Application Status.--
The Bank shall establish and adhere to a clearly defined 
process for--
          (1) acknowledging receipt of applications;
          (2) informing applicants that their applications are 
        complete or, if incomplete or containing a minor 
        defect, of the additional material or changes that, if 
        supplied or made, would make the application eligible 
        for consideration; and
          (3) keeping applicants informed of the status of 
        their applications, including a clear and timely 
        notification of approval or disapproval, and, in the 
        case of disapproval, the reason for disapproval, as 
        appropriate.
  (h) Response to Application for Financing; Implementation of 
Online Loan Request and Tracking Process.--
          (1) Response to applications.--Within 5 days after 
        the Bank receives an application for financing, the 
        Bank shall notify the applicant that the application 
        has been received, and shall include in the notice--
                  (A) a request for such additional information 
                as may be necessary to make the application 
                complete;
                  (B) the name of a Bank employee who may be 
                contacted with questions relating to the 
                application; and
                  (C) a unique identification number which may 
                be used to review the status of the application 
                at a website established by the Bank.
          (2) Website.--Not later than September 1, 2007, the 
        Bank shall exercise the authority granted by 
        subparagraphs (E)(x) and (J) of subsection (b)(1) to 
        establish, and thereafter to maintain, a website 
        through which--
                  (A) Bank products may be applied for; and
                  (B) information may be obtained with respect 
                to--
                          (i) the status of any such 
                        application;
                          (ii) the Small Business Division of 
                        the Bank; and
                          (iii) incentives, preferences, 
                        targets, and goals relating to small 
                        business concerns (as defined in 
                        section 3(a) of the Small Business 
                        Act), including small business concerns 
                        exporting to Africa.
  (i) Due Diligence Standards for Lender Partners.--The Bank 
shall set due diligence standards for its lender partners and 
participants, which should be applied across all programs 
consistently. To minimize or prevent fraudulent activity, the 
Bank should require all delegated lenders to implement ``Know 
your customer practices''.
  (j) Non-subordination Requirement.--In entering into 
financing contracts, the Bank shall seek a creditor status 
which is not subordinate to that of all other creditors, in 
order to reduce the risk to, and enhance recoveries for, the 
Bank.
  (k) Prohibition on Discrimination Based on Industry.--
          (1) In general.--Except as provided in this Act, the 
        Bank may not--
                  (A) deny an application for financing based 
                solely on the industry, sector, or business 
                that the application concerns; or
                  (B) promulgate or implement policies that 
                discriminate against an application based 
                solely on the industry, sector, or business 
                that the application concerns.
          (2) Applicability.--The prohibitions under paragraph 
        (1) apply only to applications for financing by the 
        Bank for projects concerning the exploration, 
        development, production, or export of energy sources 
        and the generation or transmission of electrical power, 
        or combined heat and power, regardless of the energy 
        source involved.

           *       *       *       *       *       *       *

                              ----------                              


INTERNATIONAL FINANCIAL INSTITUTIONS ACT

           *       *       *       *       *       *       *



TITLE XVI--HUMAN WELFARE

           *       *       *       *       *       *       *



SEC. 1629. SUPPORT FOR CAPACITY OF THE INTERNATIONAL MONETARY FUND TO 
                    PREVENT MONEY LAUNDERING AND FINANCING OF 
                    TERRORISM.

  The Secretary of the Treasury shall instruct the United 
States Executive Director at the International Monetary Fund to 
support the use of the administrative budget of the Fund for 
technical assistance that strengthens the capacity of Fund 
members to prevent money laundering and the financing of 
terrorism.

           *       *       *       *       *       *       *


                            ADDITIONAL VIEWS

    The alarming, rapid acceleration in the scale and range of 
North Korea's nuclear and long-range missile programs, 
including the launch of an intercontinental ballistic missile 
in July that appeared to have the range to hit major U.S. 
cities, followed by an announcement in September that North 
Korea had tested a hydrogen bomb, have led many lawmakers to 
believe that a new policy towards North Korea involving a 
maximum pressure campaign of financial isolation is the best 
chance we have to resolve this situation peacefully. Such a 
strategy must entail a massive, immediate and qualitatively 
different level of pressure, the likes of which the North 
Koreans have yet to experience, and which could threaten Kim 
Jong-un's very hold on power.
    H.R. 3898 calls for just such a U.S. policy approach to 
North Korea, one that also draws us away from a military-first 
response. The legislation takes a page from the Iran sanctions 
playbook by mandating the use of powerful secondary sanctions, 
which were widely credited with ultimately forcing Iran to the 
negotiating table.
    In the context of North Korea, an American program of 
secondary sanctions wouldn't just ban U.S. companies from doing 
business with North Korea, it would also force companies, 
individuals, banks and governments to make a choice: stop doing 
business with North Korea and its enablers or lose access to 
the United States financial system.
    Although we saw in the Iran context just how powerful this 
approach can be when carefully fashioned as part of a broad 
coalition, we must remember that sanctions alone are not a 
strategy. Sanctions are a tool, and in order for them to work, 
they must be linked to a broader strategic effort, with a high 
level of skill in their design and implementation, and with a 
clear understanding of the policy goals we are trying to 
achieve. While much attention has been given to the work done 
by the Treasury Department, and the Office of Foreign Assets 
Control (OFAC) in particular, and our intelligence agencies, in 
terms of getting effective, crippling sanctions in place on 
Iran, the diplomatic outreach needed to make those sanctions 
work and to make them stick was equally important.
    According to Adam Szubin, who formerly served as the Under 
Secretary of the Treasury for Terrorism and Financial Crimes, 
when Congress considered a series of secondary sanction 
measures in 2010 aimed at containing Iran's nuclear program, 
the Administration was staffed and ready to immediately deploy 
senior officials to every corner of the world upon passage. 
What followed was a massive and sustained effort involving 
hundreds of thousands of hours of visits to different capitals 
everywhere from Azerbaijan to Singapore to ensure that bankers, 
traders and regulators were enforcing the sanctions in a tough 
and meaningful way.\1\ The result was the most effective 
sanctions campaign the world had ever seen.
---------------------------------------------------------------------------
    \1\Testimony of Adam J. Szubin, Senate Banking Subcommittee on 
National Security and International Trade and Finance hearing titled 
``Secondary Sanctions against Chinese Institutions: Assessing their 
Utility for Constraining North Korea'' (May 10, 2017).
---------------------------------------------------------------------------
    Today, there is widespread recognition that any successful 
strategy to isolate and pressure North Korea must not only 
entail the effective implementation of sanctions, but also a 
similarly active, global engagement by the United States, 
including complex negotiations with North Korea, skilled policy 
coordination with our allies, and careful diplomacy with China.
    It is extremely concerning, therefore, that President Trump 
has shown virtually no appetite for the type of diplomatic 
engagement necessary to secure concessions from North Korea, or 
made a serious or concerted effort to enlist China and other 
key players to do their part to isolate the Kim regime.
    In fact, President Trump's reckless threats, his promise of 
``fire and fury,'' his vow to destroy the Kim regime, his name-
calling, warmongering, and rejection of diplomacy directly 
contradict his leading cabinet officials who continue to stress 
the importance of imposing pressure on the Kim regime. It also 
demonstrates a commander-in-chief who lacks the discipline and 
the capacity to convince our allies to join us in dealing with 
the North Korean threat.
    Given the high-stakes objectives; the lack of a unified, 
coherent policy from the executive branch; and concern about 
U.S. credibility on the global stage, we view this legislation 
as an opportunity for Congress to show that the voice of 
America still matters, that the United States is committed to 
policy consistency, and that the world should not view the 
Trump doctrine as a broader signal of American unreliability.
                                   Maxine Waters.
                                   Ed Perlmutter.
                                   Vicente Gonzalez.
                                   Emanuel Cleaver.
                                   Al Green.
                                   Gwen Moore.
                                   Brad Sherman.
                                   Nydia M. Velazquez.
                                   Stephen F. Lynch.
                                   Michael E. Capuano.

                                  [all]