[House Report 118-270]
[From the U.S. Government Publishing Office]
118th Congress} { REPT. 118-270
1st Session } HOUSE OF REPRESENTATIVES { Part 1
======================================================================
NO FUNDS FOR IRANIAN TERRORISM ACT
_______
November 9, 2023.--Ordered to be printed
_______
Mr. McCaul, from the Committee on Foreign Affairs,
submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 5961]
[Including cost estimate of the Congressional Budget Office]
The Committee on Foreign Affairs, to whom was referred the
bill (H.R. 5961) to freeze certain Iranian funds involved in
the 2023 hostage deal between the United States and Iran, and
for other purposes, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
CONTENTS
Page
Summary and Purpose.............................................. 2
Hearings......................................................... 3
Committee Consideration and Votes................................ 4
Oversight Findings and Recommendations........................... 5
New Budget Authority, Tax Expenditures, and Federal Mandates..... 5
Congressional Budget Office Cost Estimate........................ 5
Committee Cost Estimate.......................................... 6
Federal Mandates................................................. 6
Non-Duplication of Federal Programs.............................. 6
Performance Goals and Objectives................................. 7
Congressional Accountability Act................................. 7
New Advisory Committees.......................................... 7
Earmark Identification........................................... 7
Section-by-Section Analysis...................................... 7
Changes in Existing Law.......................................... 7
Dissenting Views................................................. 8
The amendment is as follows:
At the end of section 2, add the following:
(5) President Biden reached an agreement with the
Iranian regime to bring home Siamak Namazi, Morad
Tahbaz, Emad Shargi, and two additional American
hostages all of whom were wrongfully detained in Iran.
SUMMARY AND PURPOSE
H.R. 5961, the No Funds for Iranian Terrorism Act,
describes Iran's history of supporting the Foreign Terrorist
Organizations Hamas and Palestinian Islamic Jihad, which
launched a massive, unprovoked war on Israel on October 7,
2023. H.R. 5961 requires the President to impose property
blocking sanctions on any foreign financial institution or
international financial institution that processes,
participates in, or facilitates a transaction using or
involving the $6 billion in Iranian funds transferred from
South Korea to Qatar as part of the 2023 hostage deal wherein 5
U.S. citizen hostages held by Iran were freed. The purpose of
this legislation is to prevent Iran from accessing the $6
billion. Money is fungible, and as noted in the findings, Iran
has a long history of providing significant support to
terrorism. Were Iran to access these funds, it would make
available more Iranian funds to be spent supporting murderous
terrorist groups.
Throughout August and September 2023, it became apparent
that the Biden Administration and the Iranian regime had
reached an agreement to free five American citizens held
hostage by Iran. Under this deal, the United States freed five
Iranian criminals and waived sanctions to facilitate the
transfer of $6 billion in Iranian funds from banks in South
Korea to banks in Qatar. Disturbingly, the waiver was
transmitted to Congress on the anniversary of the September 11
terrorist attacks.
The freed American hostages arrived in the United States on
September 19. The Committee notes that the five innocent
Americans held hostage by Iran endured years of false
allegations, wretched conditions, and separation from their
loved ones simply because the regime believed it could profit
from them. The Committee is relieved that these American
citizens have been reunited with their families.
The Iranian regime, the world's number one state sponsor of
terror, utilizes hostage-taking as a negotiating tactic and
funding mechanism. Allowing Iran to utilize $6 billion in
exchange for innocent Americans has created a direct incentive
for future hostage-taking by U.S. adversaries, especially Iran.
This deal followed a dangerous precedent set by the Obama
Administration, which settled a $1.7 billion claim by Iran,
including a $400 million payment in pallets of cash, at the
same time that Iran released four U.S. hostages, even as some
U.S. government officials reportedly warned this could be seen
as ransom. If the United States government continues to pay for
hostages, Iran will keep taking them, and may demand a higher
price every time.
In addition to incentivizing hostage-taking, allowing Iran
to access these funds would free up an additional $6 billion
for the regime to finance its military program, terrorist
proxies, nuclear activities, and repression. Assurances that
the money will be spent on humanitarian goods are insufficient
because money is fungible. Iran has also previously lied about
such humanitarian transactions. The Department of Justice has
charged a bank for ``facilitating transactions fraudulently
designed to appear to be purchases of food and medicine by
Iranian customers, in order to appear to fall within the so-
called `humanitarian exception' to certain sanctions against
the Government of Iran, when in fact no purchases of food or
medicine actually occurred.'' Even worse, Iranian President
Raisi taunted the world by proclaiming that Iran would spend
the $6 billion ``wherever we need it.''
The Foreign Terrorist Organization Hamas is a longtime
beneficiary of Iran's support for terrorism, with unclassified
U.S. government reports stating that Iran has historically
provided up to $100 million annually in combined support to
Hamas and other Palestinian terrorist groups. On October 7,
2023, these Iran-backed terrorists unleashed a gruesome
terrorist rampage on southern Israel, slaughtering over 1,400
people, including more than 30 Americans, and taking over 240
hostages, including young children and the elderly. The
atrocities Hamas committed on October 7 are war crimes
reminiscent of ISIS' worst attacks, including beheadings,
rapes, and burning people alive. On October 10, National
Security Advisor Jake Sullivan stated, ``Iran is complicit in
this attack in a broad sense because they have provided the
lion's share of the funding for the military wing of Hamas,
they have provided training, they have provided capabilities,
they have provided support, and they have had engagement and
contact with Hamas over years and years.'' As of the date of
this report, the war Hamas started with Israel is ongoing, with
over 8,000 rockets launched by Hamas into Israel since the war
began.
Following Hamas' horrifying assault, the transfer of $6
billion in Iranian funds from South Korea to Qatar, facilitated
by the Administration's waiver of sanctions, came under even
more intense scrutiny. Secretary of State Antony Blinken stated
on October 8 regarding the $6 billion, ``As of now, not a
single dollar has been spent from that account.'' The purpose
of H.R. 5961 is to ensure the $6 billion in Iranian funds
currently held in Qatar remains permanently off limits to the
Iranian regime. At this moment of stark moral clarity, the
United States must take all available actions to guarantee that
hostage-taking does not pay and to prevent any further Iranian
support to Hamas and other terrorist groups and proxies.
HEARINGS
In compliance with clause 3(c)(6) of rule XIII of the rules
of the House of Representatives, the Committee held the
following hearings related to--and used to develop--the text of
H.R. 5961 that was favorably reported by the Committee:
On September 14, 2024, the Subcommittee on the
Middle East, North Africa, and Central Asia held a hearing on
``Iran's Escalating Threats: Assessing U.S. Policy Toward
Iran's Malign Activities.'' The recent hostage deal, and waiver
of sanctions to allow the transfer of $6 billion, was a major
focus of the hearing.
The September 28, 2023 full Committee hearing on
``Reclaiming Congress'' Article I Powers: Counterterrorism AUMF
Reform,'' with Undersecretary of State for Political Affairs
Victoria Nuland, included discussion of the hostage deal and
the $6 billion made available to Iran, providing an important
record of the Biden Administration's position on the deal.
COMMITTEE CONSIDERATION AND VOTES
The Committee considered H.R. 5961 pursuant to notice, in
open session, at a markup on November 7, 2023. The following
amendments were considered by the Committee:
Titus amendment #14 (Adding a finding naming the
wrongfully detained American hostages brought home) was adopted
by voice vote.
Meeks Amendment #9 (Adding a waiver to the bill)
was not adopted, by a record vote of 19 ayes and 25 noes.
Ayes (19): Meeks, Connolly, Bera,
Castro, Titus, Wild, Allred, Kim (NJ), Jacobs, Manning,
Cherfilus-McCormick, Stanton, Dean, Moskowitz, Jackson
(IL), Kamlager-Dove, Costa, Crow, Schneider.
Noes (25): McCaul, Smith, Wilson, Issa,
Wagner, Mast, Buck, Burchett, Green, Barr, Jackson
(TX), Kim (CA), Salazar, Huizenga, Hill, Davidson,
Baird, Waltz, Kean, Lawler, Mills, McCormick, James,
Self, Sherman.
Cherfilus-McCormick Amendment #16 (Adding a
finding supporting humanitarian assistance for the people of
Iran) was not adopted, by a record vote of 20 ayes and 24 noes.
Ayes (20): Meeks, Sherman, Connolly,
Bera, Castro, Titus, Wild, Allred, Kim (NJ), Jacobs,
Manning, Cherfilus-McCormick, Stanton, Dean, Moskowitz,
Jackson (IL), Kamlager-Dove, Costa, Crow, Schneider.
Noes (24): McCaul, Smith, Wilson, Issa,
Wagner, Mast, Buck, Burchett, Green, Barr, Jackson
(TX), Kim (CA), Salazar, Huizenga, Hill, Davidson,
Baird, Waltz, Kean, Lawler, Mills, McCormick, James,
Self.
Crow Amendment #7 (Adding an exception for
humanitarian transactions) was not adopted, by a record vote of
19 ayes and 25 noes.
Ayes (19): Meeks, Connolly, Bera,
Castro, Titus, Wild, Allred, Kim (NJ), Jacobs, Manning,
Cherfilus-McCormick, Stanton, Dean, Moskowitz, Jackson
(IL), Kamlager-Dove, Costa, Crow, Schneider.
Noes (25): McCaul, Smith, Wilson, Issa,
Wagner, Mast, Buck, Burchett, Green, Barr, Jackson
(TX), Kim (CA), Salazar, Huizenga, Hill, Davidson,
Baird, Waltz, Kean, Lawler, Mills, McCormick, James,
Self, Sherman.
Jackson (of Illinois) Amendment #12 (Adding a
five-year sunset) was not adopted, by a record vote of 15 ayes
and 29 noes.
Ayes (15): Meeks, Connolly, Bera,
Castro, Titus, Allred, Kim (NJ), Jacobs, Cherfilus-
McCormick, Stanton, Dean, Jackson (IL), Kamlager-Dove,
Costa, Crow.
Noes (29): McCaul, Smith, Wilson, Issa,
Wagner, Mast, Buck, Burchett, Green, Barr, Jackson
(TX), Kim (CA), Salazar, Huizenga, Hill, Davidson,
Baird, Waltz, Kean, Lawler, Mills, McCormick, James,
Self, Sherman, Wild, Manning, Moskowitz, Schneider.
Kamlager-Dove Amendment #13 to H.R. 5961
(Explicitly excluding the $6 billion transferred in September
from the sanctions in the bill) was not adopted, by a record
vote of 13 ayes and 31 noes.
Ayes (13): Meeks, Connolly, Bera,
Castro, Titus, Kim (NJ), Jacobs, Cherfilus-McCormick,
Dean, Moskowitz, Jackson (IL), Kamlager-Dove, Crow.
Noes (31): McCaul, Smith, Wilson, Issa,
Wagner, Mast, Buck, Burchett, Green, Barr, Jackson
(TX), Kim (CA), Salazar, Huizenga, Hill, Davidson,
Baird, Waltz, Kean, Lawler, Mills, McCormick, James,
Self, Sherman, Wild, Allred, Manning, Stanton, Costa,
Schneider.
H.R. 5961 was ordered favorably reported to the House, as
amended, by a record vote of 29 ayes and 15 noes.
Ayes (29): McCaul, Smith, Wilson, Issa, Wagner,
Mast, Buck, Burchett, Green, Barr, Jackson (TX), Kim (CA),
Salazar, Huizenga, Hill, Davidson, Baird, Waltz, Kean, Lawler,
Mills, McCormick, James, Self, Sherman, Manning, Stanton,
Costa, Schneider.
Noes (15): Meeks, Connolly, Bera, Castro, Titus,
Wild, Allred, Kim (NJ), Jacobs, Cherfilus-McCormick, Dean,
Moskowitz, Jackson (IL), Kamlager-Dove, Crow.
OVERSIGHT FINDINGS AND RECOMMENDATIONS
In compliance with Clause 3(c)(1) of rule XIII of the rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under Clause 2(b)(1) of rule X of the
House of Representatives, are incorporated in the ``Summary and
Purpose'' section of this report, above.
NEW BUDGET AUTHORITY, TAX EXPENDITURES,
AND FEDERAL MANDATES
Clause 3(c)(2) of House rule XIII is inapplicable because
this bill does not provide new budget authority or increased
tax expenditures.
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
H.R. 5961 would direct the Administration to sanction any
foreign or international financial institution that facilitates
the transfer of $6 billion in Iranian assets that were released
from sanctions in September 2023. Those funds are currently
being held and monitored in a bank in Qatar. In October 2023,
the Administration indicated that the Iranian government would
no longer have access to those released funds.
Under the bill, if a financial institution facilitates the
transfer of those funds, the Administration would be required
to block any transactions involving assets owned by that
institution that are in the United States or that come under
the control of a person of the United States. That requirement
would increase the number of people subject to civil or
criminal monetary penalties for violating those sanctions. Such
penalties are recorded as revenues, and a portion can be spent
without further appropriation.
Using data about similar sanctions, CBO estimates that any
additional blocked transactions would affect a small number of
people; thus, enacting H.R. 5961 would have insignificant
effects on revenues and direct spending, and would, on net,
reduce deficits by insignificant amounts over the 2024-2033
period.
H.R. 5961 would impose a private-sector mandate as defined
in the Unfunded Mandates Reform Act (UMRA). Sanctions would
prohibit individuals or entities in the United States from
engaging in transactions involving assets and property that
have been frozen. Those transactions are otherwise permitted
under current law. The cost of the mandate would be any income
lost because of the prohibition. CBO expects that because a
small number of people or entities would be affected, the loss
of income from any incremental increase in restrictions imposed
by the bill would be small as well. CBO estimates that the cost
of the mandate would fall well below the annual threshold
established in UMRA for private-sector mandates ($198 million
in 2023, adjusted annually for inflation).
H.R. 5961 contains no intergovernmental mandates as defined
in UMRA.
The CBO staff contacts for this estimate are Emma Uebelhor
(for federal costs) and Brandon Lever (for mandates). The
estimate was reviewed by Christina Hawley Anthony, Deputy
Director of Budget Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.
COMMITTEE COST ESTIMATE
The Committee adopts as its own the Congressional Budget
Office cost estimate on this measure.
FEDERAL MANDATES
The Committee adopts as its own the identification,
description, and assessment of federal mandates contained in
the Congressional Budget Office cost estimate on this measure.
NON-DUPLICATION OF FEDERAL PROGRAMS
Clause 3(c)(5) of House rule XIII is not applicable to this
measure, as it is not a bill or joint resolution that
establishes or reauthorizes a federal program.
PERFORMANCE GOALS AND OBJECTIVES
The goal of H.R. 5961 is to prevent Iran from accessing the
$6 billion in funds sitting in banks in Qatar by imposing
sanctions on any financial institution that processes,
participates in, or facilitates a transaction using such funds.
CONGRESSIONAL ACCOUNTABILITY ACT
H.R. 5961 does not apply to terms and conditions of
employment or to access to public services or accommodations
within the legislative branch.
NEW ADVISORY COMMITTEES
H.R. 5961 does not establish or authorize any new advisory
committees.
EARMARK IDENTIFICATION
H.R. 5961 contains no congressional earmarks, limited tax
benefits, or limited tariff benefits as described in clauses
9(e), 9(f), and 9(g) of House rule XXI.
SECTION-BY-SECTION ANALYSIS
Sec 1. Short Title. The short title of this bill is the No
Funds for Iranian Terrorism Act.
Sec 2. Findings. Congress finds that on October 7, 2023,
the foreign terrorist organization Hamas launched a massive,
unprovoked war on Israel, killing over 1,300 people. This
section also finds that Iran is complicit in this attack by
funding and supporting Hamas.
Sec 3. Imposition of Sanctions With Respect to Covered
Iranian Assets. This section requires the President to impose
property blocking sanctions on foreign financial institutions
and international financial institutions that process,
participate in, or facilitate transactions using or involving
the Iranian funds that were transferred from accounts in the
Republic of Korea to Qatar pursuant to or under the authority
or guaranty of a waiver, license, assurance letter, or other
guidance issued by the Biden Administration as part of the
September 2023 hostage deal. The section states that sanctions
will terminate when Iran no longer provides support for
international terrorism and has ceased its nuclear, biological,
and chemical weapons programs and its ballistic missile
program.
Sec. 4. Definitions. This section defines key terms used in
this bill.
CHANGES IN EXISTING LAW
The bill, as reported, does not propose to repeal or amend
a statute or part thereof.
DISSENTING VIEWS
COMMITTEE REPORT ON H.R. 5961, NO FUNDS FOR
IRANIAN TERRORISM ACT
We believe President Biden did the right thing--he brought
five Americans home who were rotting in Iran's notorious Evan
prison. Every member of Congress who was aware of these cases
wanted our fellow citizens to come home. With a bipartisan
voice we promised their families we'd fight to bring them home.
We were all calling on the President to make it happen.
President Biden succeeded in doing what his predecessors
could not. No hostage agreement with an enemy is pleasant or
easy. And no deal with Iran, a murderous and corrupt regime, is
pleasant or easy. But thanks to this agreement, five American
families are now whole again, and Iran has lost the leverage of
holding these Americans hostage.
H.R. 5961 would sanction parties that carry out the
financial terms of the hostage agreement in question. Let us
consider the facts:
Billions of Iran's own profits from oil sales were sitting
in a restricted account in South Korea, established by the
Trump Administration, for Iran to make approved humanitarian
purchases. The United States had no control over this account.
The agreement moved that $6 billion from the restricted
account in South Korea, converted it to Euros, and relocated it
into a restricted account in Qatar--which now has United States
visibility. Not a single penny has moved into Iran.
Under the terms of the agreement, Iran can use the money in
Qatar to make approved humanitarian purchases to acquire
medicine, medical equipment, agricultural goods, and food. Iran
will never touch this money. The entirety of the transaction
occurs outside of Iran and Iran only receives the vetted
humanitarian goods. Thus far, Iran has not made any requests of
this humanitarian fund. Again, nothing has been gained by Iran.
All of the money remains in the account; an account the
United States can watch. We have leverage over that account due
to our relationships with the correspondent banks in Europe
that would help process any transactions. In other words, we
now have more control over this money than we did when it was
in Korea. In fact, this account provides us with leverage, not
the other way around.
Furthermore, following the horrific attacks in Israel on
October 7th, the United States and Qatar froze the humanitarian
fund. No humanitarian purchases will be approved anytime soon.
Again, nothing has changed, the money remains in the account,
and we continue to have leverage.
But if H.R. 5961 is passed into law, that leverage will be
gone. We will also lose our ability to conduct diplomacy with
Iran and others in the future. If we blow up this agreement by
passing this bill, we, the United States, will be the ones
breaking yet another sensitive negotiated agreement with Iran.
Our word and integrity will no longer be good in negotiations.
The United States must continue to address Iran's backing
of groups like Hezbollah and Hamas. The Iranian-supported Hamas
terrorists unleased pure evil when they broke a ceasefire in
the attacks of October 7th. The population of Gaza would not be
engulfed in war were it not for Hamas.
But we must also remain sober and serious about the
challenge of Iran's nefarious nuclear program. None of the bad
options we possess to stop Iran's nuclear ambitions are better
than the diplomatic track, which has already proven successful.
It was the United States who violated the JCPOA, not Iran.
Pulling out of this hostage agreement will be the second time
we violated an agreement with Iran's leaders. Passage of this
bill would mean potentially slamming the door closed on future
diplomacy, leaving us only with dangerous and highly risky
options of confronting Iran's nuclear program.
The prisoner swap confirms to the Iranian regime that the
U.S. is a reliable negotiation partner. This is a crucial basis
for the reopening of formal nuclear negotiations in the future.
We must keep this possibility alive.
To conclude, the agreement has freed five Americans who
were suffering in an Iranian prison. It shifted Iran's own
money from an account in Korea we did not control, to one where
we play a role. Not a single penny has left the account or
entered Iran. And this fund remains frozen indefinitely by the
U.S. and Qatar. There is no reason to jeopardize future
negotiations or further enflame an already dangerous situation
by passing this bill.
Democratic Members offered a suite of amendments that would
have made this bill more reasonable. Sanctions laws without
waivers, sunsets, or key exceptions are virtually unheard of
for a reason. Waivers give the President the flexibility to
account for America's myriad national security interests around
the globe. Exceptions for basic humanitarian goods have been
widely agreed upon in a bipartisan way in the past and ensure
that the United States' sanctions programs carry moral
credibility. And a sunset provision ensures that Congress
rethinks the issue as the world changes and preserves Article I
prerogatives. But the Republican majority rejected five
Democratic amendments that would have inserted these types of
commonsense additions into their bill.
Committee Democrats don't want Iran's leaders to benefit
from our actions in any way. As this hostage agreement stands
today, we don't believe they have. Unfortunately, this
legislation will shoot American global credibility in the foot
without even touching Iranian regime leaders. We encourage this
House not to rush into passing this bill and to keep the door
open on future nuclear diplomacy with Iran.
Sincerely,
Gregory W. Meeks,
Ranking Member.
[all]