[House Report 118-806]
[From the U.S. Government Publishing Office]
118th Congress } { Rept. 118-806
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
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FREEZING AND HALTING ANY MORE ALLEVIATION OF SANCTIONS ACT
_______
December 5, 2024.--Ordered to be printed
_______
Mr. McHenry, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 5945]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 5945) to reinstate certain sanctions imposed
with respect to Iran, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Related Hearing.................................................. 2
Committee Consideration.......................................... 2
Committee Votes.................................................. 2
Committee Oversight Findings..................................... 4
Performance Goals and Objectives................................. 4
Congressional Budget Office Estimates............................ 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 5
Federal Mandates Statement....................................... 5
Advisory Committee Statement..................................... 5
Applicability to Legislative Branch.............................. 5
Earmark Identification........................................... 5
Duplication of Federal Programs.................................. 5
Section-by-Section Analysis of the Legislation................... 5
Minority Views................................................... 7
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Freezing and Halting Any More
Alleviation of Sanctions Act'' or the ``Freezing HAMAS Act''.
SEC. 2. REINSTATEMENT OF CERTAIN SANCTIONS IMPOSED WITH RESPECT TO
IRAN.
Any statutory sanctions imposed with respect to the Islamic Republic
of Iran pursuant to section 1244(c)(1) or 1247(a) of the Iran Freedom
and Counter-Proliferation Act of 2012 (22 U.S.C. 8803(c)(1) and
8806(a)) or section 1245(d)(1) of the National Defense Authorization
Act for Fiscal Year 2012 (22 U.S.C. 8513a(d)(1)), that were waived,
suspended, reduced, or otherwise relieved pursuant to any waiver that
is the subject of the document entitled ``Waiver of Sanctions with
Respect to the Transfer of Funds from the Republic of Korea to Qatar''
and transmitted to Congress on September 11, 2023, are hereby
reinstated.
PURPOSE AND SUMMARY
Introduced on October 12, 2023, by Representative Dan
Meuser, H.R. 5945, the Freezing-HAMAS Act, rescinds any waiver
of sanctions issued pursuant to a U.S. agreement with Iran,
including the waiver transmitted to Congress on September 11,
2023, that permitted Iranian access to certain funds held
abroad.
BACKGROUND AND NEED FOR LEGISLATION
Waivers issued by the Secretary of the Department of State
on September 11, 2023, authorized the transfer of $6 billion in
Iranian funds from South Korea to Qatar. The waiver was part of
an agreement between the U.S. and Iran to release five American
hostages. Shortly thereafter, on October 7, Hamas launched its
terrorist attack on Israel. Rescinding the September 11, 2023,
waiver is vital to sending a strong message to Tehran.
HEARING
Pursuant to clause 3(c)(6) of rule XIII, the following
hearing was used to develop H.R. 5945: The Subcommittee on
National Security, Illicit Finance, and International Financial
Institutions of the Committee on Financial Services held a
hearing on October 25, 2023, titled ``How America and Its
Allies Can Stop Hamas, Hezbollah, and Iran from Evading
Sanctions and Financing Terror.''
COMMITTEE CONSIDERATION
The Committee on Financial Services met in open session on
November 14, 2023, and ordered H.R. 5945 to be reported
favorably to the House as amended by a recorded vote of 37 ayes
to 13 nays (Record vote no. FC-115), a quorum being present.
Before the question was called to order the bill favorably
reported, the Committee adopted an amendment in the nature of a
substitute offered by Mr. Meuser 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 order to report legislation and amendments thereto. H.R.
5945 was ordered reported favorably to the House as amended by
a recorded vote of 37 ayes to 13 nays (Record vote no. FC-115),
a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 5945 is to negate
any waiver of sanctions issued pursuant to a U.S. agreement
with Iran, including the waiver transmitted to Congress on
September 11, 2023, that permitted Iranian access to certain
funds held abroad.
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:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
H.R. 5945 would reinstate sanctions that were waived in
order to facilitate the transfer of $6 billion in frozen
Iranian assets from the Republic of Korea to a monitored bank
in Qatar in September 2023. In October 2023, the Administration
took steps to prevent the government of Iran from accessing
those funds. Because the funds are currently being held in an
account that would be used exclusively for humanitarian
assistance should the Administration lift its current hold on
the funds, they are now exempt from the sanctions that would be
reimposed by the bill. If the funds were used for a purpose
other than humanitarian assistance, sanctions under current law
would apply. Thus, enacting the bill would not affect the
federal budget.
On December 18, 2023, CBO transmitted a cost estimate for
H.R. 6000, the Revoke Iranian Funding Act of 2023 as ordered
reported by House Committee on Financial Services on November
14, 2023. That bill would have the same effect on sanctions--
and thus on direct spending and revenue--as H.R. 5945. H.R.
6000 also would require a report, which would increase spending
subject to appropriation by less than $500,000.
The CBO staff contact for this estimate is Emma Uebelhor.
The estimate was reviewed by Christina Hawley Anthony, Deputy
Director of Budget Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY,
AND TAX EXPENDITURES
Pursuant to 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
1973.
FEDERAL MANDATES STATEMENT
Pursuant to section 423 of the Unfunded Mandates Reform
Act, the Committee adopts as its own the estimate of the
Federal mandates prepared by the Director of the Congressional
Budget Office.
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 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
Pursuant to 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 a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
This Act may be cited as the ``Freezing and Halting Any
More Alleviation of Sanctions Act'' or the ``Freezing-HAMAS
Act''.
Section 2. Reinstatement of certain sanctions imposed with respect to
Iran
This section reinstates any statutory sanctions imposed
with respect to the Islamic Republic of Iran pursuant to the
Iran Freedom and Counter-Proliferation Act of 2012 or the
National Defense Authorization Act for Fiscal Year 2012, that
were waived, suspended, reduced, or otherwise relieved pursuant
to any waiver that is the subject of the document entitled,
``Waiver of Sanctions with Respect to the Transfer of Funds
from the Republic of Korea to Qatar'' and transmitted to
Congress on September 11, 2023.
MINORITY VIEWS
H.R. 5945 would reverse a deal negotiated by the Biden
administration, compromising the credibility of the U.S. on the
international stage and the ability of the U.S. now, and under
any future administration, to negotiate future deals.
In September 2023, the U.S. successfully negotiated for the
release of five American citizens being detained or jailed in
Iran.\1\ In exchange for their return to the United States, the
U.S. agreed to allow $6 billion of Iranian funds held in a
South Korean bank account owned by Iran, to be transferred to
an account in Qatar and used for humanitarian activities. The
$6 billion in Iranian funds represented proceeds of energy
sales between Iran and South Korea that were permitted under
sanctions waivers issued by the Trump Administration.\2\
President Biden's Secretary of State, Anthony Blinken,
emphasized on October 31, 2023, that under the terms of the
agreement negotiated by the Biden administration, ``The [$6
billion] never goes and would never go to Iran. It can only be
used for authorized transactions overseen by our Treasury
Department and only for things like food, medicine, and other
authorized humanitarian purposes. To date, not a single dollar
has been expended from that account.'' To underscore this, the
Biden administration, along with Qatar's government, has said
that there are no current plans to use the funds.\3\
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\1\AP, E. Knickmeyer, J. Gambrell, L. Jo, Americans released by
Iran arrive home, tearfully embrace their loved ones and declare:
`Freedom!'. (Sep. 19, 2020)
\2\Newsweek, E. Palmer, How Donald Trump's Oil Waiver Gave Iran $6
Billion. (Oct. 11, 2023)
\3\NBCNews.com, M. Alba, E. Perlmutter-Gumbiner, K. Doyle, U.S. and
Qatar agree not to release Iran's $6B. (Oct. 12, 2023)
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Despite these actions and reassurances from the Biden
administration, H.R. 5945 would permanently freeze the $6
billion of Iranian funds, preventing its use, now and in the
future, for any reason. The bill has no sunset or discretion
for the administration to apply any kind of waiver. This bill
directly undermines President Biden's agreement to secure the
release of five Americans who were unlawfully detained in Iran.
It undermines the credibility of the U.S. and the ability of
all future U.S. Presidents to negotiate with other countries.
While there may be differences in opinion on whether this
hostage exchange was a worthwhile deal, reversing it in this
manner would create an underlying mistrust of America's ability
to follow through on our commitments.
Further, the bill is based on the misguided premise that
humanitarian exceptions to sanctions are a significant source
of funding that allows Iran to support terrorism. The flawed
assertion is either that the funds are themselves diverted for
terrorist activity or that because money is fungible, any funds
spent on goods and services for the people of Iran will free up
an equal amount for Iran's terrorist activities. However, it is
important to note that Iran's government never receives the
funds transferred for humanitarian transactions through
sanctions waivers and licenses; they are generally spent by
non-governmental organizations (NGOs) which provide goods and
services directly to the Iranian people. For example, an NGO
might buy pharmaceuticals from a drug company and be paid
through a funding channel with U.S. government approval or it
might pay for crates of food to be delivered directly to people
in need.\4\ There are also safeguards in place to prevent
diversions due to corruption, theft, or extortion, and all such
transactions require U.S. approval and verification. Moreover,
for the fungibility argument to be true, it would also have to
be true that the Iranian government is spending significant
sums of money on humanitarian activities, which could be
supplanted by funds freed up for humanitarian purposes under
waivers. But Iran's brutal, selfish regime, however, has never
prioritized its people, choosing instead to spend billions,
annually on kleptocracy,\5\ its nuclear proliferation program,
and terrorist proxies, including Hamas.\6\ This is one reason
that Iran, the fifth richest-in-resources nation,\7\ is a
longtime recipient of the World Food Programme's services\8\
and why over 30% of Iran's people live below the poverty
line.\9\ To the contrary, history has shown that regardless of
the funds available to the Iranian government, it chooses to
spend its ill-gotten funds on its terrorist proxies, including
Hamas.\10\
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\4\SwissInfo.ch, Swiss humanitarian channel with Iran open for
business. (Feb. 27, 2020)
\5\Hudson Institute, N. Sibley, How to Target Iran's Kleptocracy.
(Oct. 11, 2022)
\6\State Department, Outlaw Regime: A Chronicle of Iran's
Destructive Activities. (2020)
\7\Investopedia, C. Anthony, 10 Countries With the Most Natural
Resources. (Sep. 23, 2023)
\8\World Food Programme, Iran. (Accessed Dec. 4, 2023)
\9\Arab Center, K. Ziabari, Iran: A Resource-Rich Country Reeling
from Rampant Poverty. (Apr. 3, 2023)
\10\House Financial Services Committee, Testimony of Dr. Matthew
Levitt for a hearing entitled, ``Hearing: How America and Its Allies
Can Stop Hamas, Hezbollah, and Iran from Evading Sanctions and
Financing Terror.'' (Oct. 25, 2023)
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Finally, the bill states that ``any statutory sanctions
imposed with respect to Iran . . . are hereby reinstated . .
.'' This language does absolutely nothing because sanctions
were never revoked or lifted. As John Kirby, White House
coordinator for strategic communications stated, ``we haven't
lifted a single one of our sanctions on Iran--Iran will be
getting no sanctions relief.''\11\ In fact, the entire
underlying premise that Biden Administration has somehow
weakened sanctions on Iran couldn't be further from the truth.
Under the Biden Administration, the Iran program contains the
most extensive set of comprehensive sanctions maintained on any
country.\12\ The Biden administration has ramped up pressure on
Iran since the Trump administration by designating for
sanctions hundreds of additional individuals and entities for
activity related to Iran, including the illicit sale of Iranian
oil.\13\ The Biden administration also successfully seized a
tanker carrying Iranian oil, which was ``the first-ever
criminal resolution involving a company that violated sanctions
by facilitating the illicit sale and transport of Iranian
oil,'' according to the Department of Justice.\14\ At a recent
press conference, Treasury Secretary Yellen reaffirmed that,
``We have not in any way relaxed our sanctions on Iranian oil''
and indicated that without a change in behavior, further
sanctions would come.\15\
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\11\CNN, K. Feldscher, J. Hansler, How Iran can use the $6 billion
involved in the release of 5 Americans. (Sep. 18, 2023)
\12\See CRS Report: U.S. Sanctions on Iran.
\13\Ibid.
\14\Justice Department, Press Release Announcing First Criminal
Resolution Involving the Illicit Sale and Transport of Iranian Oil in
Violation of U.S. Sanctions. (Sep. 8, 2023)
\15\FT, C. Smith, F. Schwartz, Janet Yellen warns Iran that nothing
is `off the table' for sanctions. (Oct 11, 2023)
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For these reasons, we oppose H.R. 5945.
Sincerely,
Maxine Waters,
Ranking Member.
Nydia M. Velazquez,
Gregory W. Meeks,
Stephen F. Lynch,
Al Green,
Emanuel Cleaver II,
Bill Foster,
Joyce Beatty,
Juan Vargas,
Sean Casten,
Ayanna Pressley,
Rashida Tlaib,
Sylvia R. Garcia,
Nikema Williams,
Members of Congress.
[all]