To require that certain measures be taken with respect to countries of concern regarding terrorist financing.

Summary: Directs the Secretary of the Treasury to identify and report annually on countries of concern whose governments, nationals, or entities finance domestic or international terrorism.

Requires with respect to such countries: (1) withholding of 50 percent of bilateral assistance; and (2) withholding of access to financial institution multilateral assistance.

Authorizes the Secretary to require domestic financial institutions to take special measures with respect to a country of concern, including financial institutions operating outside the United States engaging in financial transactions in such country to the same extent as if such country or financial institution were of primary money laundering concern.

Exempts a country from such prohibitions if the President certifies to Congress that: (1) during the previous year the country has cooperated fully with the United States or has taken adequate steps to terminate financial support for terrorism; or (2) for a country that would not otherwise qualify for such certification, vital U.S. national interests apply.

SECTION 1. ANNUAL REPORT BY SECRETARY OF THE TREASURY.

    Not later than March 1 of each year, the Secretary of the Treasury 
shall submit to the Congress a report that identifies each country that 
is a country of concern because the government of that country, or 
persons or entities that are in, or are nationals of, that country, are 
providing financial support for domestic terrorism or international 
terrorism. The report shall include the information on which the 
Secretary relied in determining whether or not each country is such a 
country of concern.

SEC. 2. WITHHOLDING OF ASSISTANCE; WITHHOLDING OF ACCESS TO FINANCIAL 
              INSTITUTIONS; SPECIAL MEASURES.

    (a) Withholding of Bilateral Assistance; Opposition to Multilateral 
Development Assistance; Special Measures.--
            (1) Bilateral assistance.--Fifty percent of the United 
        States assistance allocated each fiscal year in the report 
        required by section 653 of the Foreign Assistance Act of 1961 
        for each country of concern listed in the report submitted to 
        Congress under section 1 shall be withheld from obligation and 
        expenditure, except as provided in subsection (c). This 
        paragraph shall not apply with respect to a country if the 
        President determines that its application to that country would 
        be contrary to the national interest of the United States, 
        except that any such determination shall not take effect until 
        at least 15 days after the President submits written 
        notification of that determination to the appropriate 
        congressional committees in accordance with the procedures 
        applicable to reprogramming notifications under section 634A of 
        the Foreign Assistance Act of 1961.
            (2) Multilateral assistance.--The Secretary of the Treasury 
        shall instruct the United States Executive Director of each 
        multilateral development bank to vote, on and after March 1 of 
        each year, against any loan or other utilization of the funds 
        of their respective institution to or for any country of 
        concern listed in the report submitted under section 1, except 
        as provided in subsection (c). For purposes of this paragraph, 
        the term ``multilateral development bank'' means the 
        International Bank for Reconstruction and Development, the 
        International Development Association, the Inter-American 
        Development Bank, the Asian Development Bank, the African 
        Development Bank, and the European Bank for Reconstruction and 
        Development.
            (3) Special measures.--The Secretary of the Treasury may 
        require domestic financial agencies to take 1 or more of the 
        special measures described in section 5318A(c) of title 31, 
        United States Code, with respect to a country of concern 
        identified in the most recent report submitted under section 1, 
        including financial institutions operating outside the United 
        States engaging in financial transactions in that country with 
        nationals or entities of that country, to the same extent as if 
        such country or financial institution were of primary money 
        laundering concern under such section 5318A.
    (b) Certification Procedures.--
            (1) What must be certified.--Subject to subsection (c), the 
        assistance withheld from a country pursuant to subsection 
        (a)(1) may be obligated and expended, the requirement of 
        subsection (a)(2) to vote against multilateral development bank 
        assistance to a country shall not apply, and subsection (a)(3) 
        shall not apply, if the President determines and certifies to 
        the Congress, at the time of the submission of the report 
        required by section 1, that--
                    (A) during the previous year the country has 
                cooperated fully with the United States, or has taken 
                adequate steps on its own, to terminate the provision 
                of financial support for domestic terrorism or 
                international terrorism, as the case may be, by the 
                government of that country or by persons or entities 
                that are in, or are nationals of, that country; or
                    (B) for a country that would not otherwise qualify 
                for certification under subparagraph (A), the vital 
                national interests of the United States require that 
                the assistance withheld pursuant to subsection (a)(1) 
                be provided, that the United States not vote against 
                multilateral development bank assistance for that 
                country pursuant to subsection (a)(2), and that 
                subsection (a)(3) not apply to that country.
            (2) Information to be included in national interest 
        certification.--If the President makes a certification with 
        respect to a country pursuant to paragraph (1)(B), the 
        President shall include in such certification--
                    (A) a full and complete description of the vital 
                national interests placed at risk if United States 
                bilateral assistance to that country is terminated 
                pursuant to this section, multilateral development bank 
                assistance is not provided to such country, and special 
                measures are imposed under subsection (a)(3) with 
                respect to that country; and
                    (B) a statement weighing the risk described in 
                subparagraph (A) against the risks posed to the vital 
                national interests of the United States by the failure 
                of such country to cooperate fully with the United 
                States, or to take adequate steps on its own, to 
                terminate the provision of financial support for 
                domestic terrorism or international terrorism, as the 
                case may be.
    (c) Congressional Review.--Subsection (d) shall apply if, within 30 
calendar days after receipt of a certification submitted under 
subsection (b) at the time of submission of the report required by 
section 1, the Congress enacts a joint resolution disapproving the 
determination of the President contained in such certification.
    (d) Consequences for Countries Decertified.--If the President does 
not make a certification under subsection (b) with respect to a country 
or the Congress enacts a joint resolution disapproving such 
certification, then until such time as the conditions specified in 
subsection (e) are satisfied--
            (1) funds may not be obligated for United States assistance 
        for that country, and funds previously obligated for United 
        States assistance for that country may not be expended for the 
        purpose of providing assistance for that country;
            (2) the requirement to vote against multilateral 
        development bank assistance pursuant to subsection (a)(2) shall 
        apply with respect to that country, without regard to the date 
        specified in that subsection; and
            (3) subsection (a)(3) shall apply with respect to that 
        country.
    (e) Recertification.--Subsection (d) shall apply to a country 
described in that subsection until--
            (1) the President, at the time of submission of the report 
        required by section 1, makes a certification under subsection 
        (b)(1)(A) or (b)(1)(B) with respect to that country, and the 
        Congress does not enact a joint resolution under subsection (d) 
        disapproving the determination of the President contained in 
        that certification; or
            (2) the President, at any other time, makes the 
        certification described in subsection (b)(1)(B) with respect to 
        that country, except that this paragraph applies only if 
        either--
                    (A) the President also certifies that--
                            (i) that country has undergone a 
                        fundamental change in government; or
                            (ii) there has been a fundamental change in 
                        the conditions that were the reason--
                                    (I) why the President had not made 
                                a certification with respect to that 
                                country under subsection (b)(1)(A); or
                                    (II) if the President had made such 
                                a certification and the Congress 
                                enacted a joint resolution disapproving 
                                the determination contained in the 
                                certification, why the Congress enacted 
                                that joint resolution; or
                    (B) the Congress enacts a joint resolution 
                approving the determination contained in the 
                certification under subsection (b)(1)(B).
Any certification under subparagraph (A) of paragraph (2) shall discuss 
the justification for the certification.
    (f) Senate Procedures.--Any joint resolution under this section 
shall be considered in the Senate in accordance with the provisions of 
section 601(b) of the International Security Assistance and Arms Export 
Control Act of 1976.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Financial support.--The term ``financial support'' 
        includes funds, currency or monetary instruments or financial 
        securities, and financial sources.
            (2) Terrorism.--The terms ``domestic terrorism'' and 
        ``international terrorism'' have the meanings given those terms 
        in section 2331 of title 18, United States Code.