SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Isolating ISIS Act''.

SEC. 2. SANCTIONS WITH RESPECT TO FOREIGN FINANCIAL INSTITUTIONS THAT 
              ENGAGE IN CERTAIN TRANSACTIONS.

    (a) Prohibitions and Conditions With Respect to Certain Accounts 
Held by Foreign Financial Institutions.--
            (1) In general.--Not later than 120 days after the date of 
        the enactment of this Act, the Secretary of the Treasury, in 
        consultation with the Secretary of State and the heads of other 
        applicable Federal departments and agencies, shall 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 
        of the Treasury determines, on or after the date of the 
        enactment of this Act, engages in an activity described in 
        paragraph (2).
            (2) Activities described.--A foreign financial institution 
        engages in an activity described in this paragraph if the 
        foreign financial institution--
                    (A) knowingly facilitates a transaction or 
                transactions for the Islamic State of Iraq and Syria;
                    (B) knowingly facilitates a transaction or 
                transactions of a person designated for acting on 
                behalf of or at the direction of, or owned or 
                controlled by, the Islamic State of Iraq and Syria;
                    (C) knowingly engages in money laundering to carry 
                out an activity described in subparagraph (A) or (B);
                    (D) knowingly facilitates a transaction or 
                transactions or provides financial services to carry 
                out an activity described in subparagraph (A), (B), or 
                (C), including--
                            (i) facilitating a transaction or 
                        transactions; or
                            (ii) providing financial services that 
                        involve a transaction of any goods; or
                    (E)(i) knowingly facilitates, or participates or 
                assists in, an activity described in subparagraph (A), 
                (B), (C), or (D), including by acting on behalf of, at 
                the direction of, or as an intermediary for, or 
                otherwise assisting, another person with respect to the 
                activity described in any such subparagraph;
                    (ii) knowingly attempts or conspires to facilitate 
                or participate in an activity described in subparagraph 
                (A), (B), (C), or (D); or
                    (iii) is owned or controlled by a foreign financial 
                institution that the Secretary finds knowingly engages 
                in an activity described in subparagraph (A), (B), (C), 
                or (D).
            (3) Penalties.--The penalties provided for in subsections 
        (b) and (c) of section 206 of the International Emergency 
        Economic Powers Act (50 U.S.C. 1705) shall apply to a person 
        that violates, attempts to violate, conspires to violate, or 
        causes a violation of the prohibition or strict conditions 
        referred to in paragraph (1) of this subsection to the same 
        extent that such penalties apply to a person that commits an 
        unlawful act described in subsection (a) of such section 206.
            (4) Regulations.--The Secretary of the Treasury shall 
        prescribe and implement regulations to carry out this 
        subsection.
    (b) Waiver.--
            (1) In general.--The Secretary of the Treasury, in 
        consultation with the Secretary of State and the heads of other 
        applicable Federal departments and agencies, may waive, on a 
        case-by-case basis, the application of a prohibition or 
        condition imposed with respect to a foreign financial 
        institution pursuant to subsection (a) for a period of not more 
        than 180 days, and may renew that waiver for additional periods 
        of not more than 180 days, on and after the date that the 
        Secretary of the Treasury, in consultation with the Secretary 
        of State--
                    (A) determines that such a waiver is in the 
                national security interests of the United States; and
                    (B) submits to the appropriate congressional 
                committees a report describing the reasons for the 
                determination.
            (2) Form.--The report required by subparagraph (1) shall be 
        submitted in unclassified form, but may contain a classified 
        annex.
    (c) Provisions Relating to Foreign Financial Institutions.--
            (1) Report.--Not later than 45 days after the date of the 
        enactment of this Act and every 180 days thereafter, the 
        Secretary of the Treasury shall submit to the appropriate 
        congressional committees a report that--
                    (A) identifies each foreign central bank that the 
                Secretary determines engages in one or more activities 
                described in subsection (a)(2)(D); and
                    (B) provides a detailed description of each such 
                activity.
            (2) Special rule to allow for termination of sanctionable 
        activity.--The Secretary of the Treasury shall not be required 
        to apply sanctions to a foreign financial institution described 
        in subsection (a) if the Secretary of the Treasury, in 
        consultation with the Secretary of State and the heads of other 
        applicable Federal departments and agencies, certifies in 
        writing to the appropriate congressional committees that--
                    (A) the foreign financial institution--
                            (i) is no longer engaging in an activity 
                        described in subsection (a)(2); or
                            (ii) has taken and is continuing to take 
                        significant verifiable steps toward terminating 
                        the activity described in subsection (a)(2); 
                        and
                    (B) the Secretary has received reliable assurances 
                from the government with primary jurisdiction over the 
                foreign financial institution that the foreign 
                financial institution will not engage in any activity 
                described in subsection (a)(2) in the future.
    (d) Definitions.--
            (1) In general.--In this section:
                    (A) Account; correspondent account; payable-through 
                account.--The terms ``account'', ``correspondent 
                account'', and ``payable-through account'' have the 
                meanings given those terms in section 5318A of title 
                31, United States Code.
                    (B) Financial institution.--The term ``financial 
                institution'' means a financial institution specified 
                in subparagraph (A), (B), (C), (D), (E), (F), (G), (H), 
                (I), (J), (K), (M), (N), (P), (R), (T), (Y), or (Z) of 
                section 5312(a)(2) of title 31, United States Code.
                    (C) Foreign financial institution.--The term 
                ``foreign financial institution'' has the meaning of 
                such term in section 1010.605 of title 31, Code of 
                Federal Regulations, and includes a foreign central 
                bank.
                    (D) Money laundering.--The term ``money 
                laundering'' means any of the activities described in 
                paragraph (1), (2), or (3) of section 1956(a) of title 
                18, United States Code, with respect to which penalties 
                may be imposed pursuant to such section.
            (2) Other definitions.--The Secretary of the Treasury may 
        further define the terms used in this section in the 
        regulations prescribed under this section.

SEC. 3. IMPOSITION OF SANCTIONS WITH RESPECT TO UNITED STATES PERSONS 
              THAT ENGAGE IN TRANSACTIONS WITH CERTAIN FOREIGN PERSONS.

    (a) In General.--The President shall impose sanctions in accordance 
with subsection (c) with respect to each person on the list required by 
subsection (b).
    (b) List.--
            (1) In general.--Not later than 90 days after the date of 
        the enactment of this Act, the President shall submit to the 
        appropriate congressional committees a list of United States 
        persons that the President determines have knowingly engaged in 
        an activity described in paragraph (2) on or after such date of 
        enactment.
            (2) Activity described.--
                    (A) In general.--A person engages in an activity 
                described in this paragraph if the person knowingly 
                engages in a transaction or transactions with a foreign 
                person that transfers or receives, or facilitates the 
                transfer or receipt of, any goods or services to or 
                from the Islamic State of Iraq and Syria.
                    (B) Applicability to contracts and other 
                agreements.--A person engages in an activity described 
                in subparagraph (A) without regard to whether the 
                activity is carried out pursuant to a contract or other 
                agreement entered into before, on, or after the date of 
                the enactment of this Act.
            (3) Special rule to allow for termination of sanctionable 
        activity.--The President shall not be required to include a 
        person on the list required by paragraph (1) if the President 
        certifies in writing to the appropriate congressional 
        committees that--
                    (A) the person is no longer engaging in, or has 
                taken significant verifiable steps toward stopping, the 
                activity described in paragraph (2) for which the 
                President would otherwise have included the person on 
                the list; and
                    (B) the President has received reliable assurances 
                that the person will not knowingly engage in any 
                activity described in paragraph (2) in the future.
            (4) Updates of list.--The President shall submit to the 
        appropriate congressional committees an updated list under 
        paragraph (1) as new information becomes available.
            (5) Form of report; public availability.--
                    (A) Form.--The list required by paragraph (1) shall 
                be submitted in unclassified form but may contain a 
                classified annex.
                    (B) Public availability.--The unclassified portion 
                of the list required by paragraph (1) shall be made 
                available to the public and posted on the websites of 
                the Department of the Treasury and the Department of 
                State.
    (c) Application of Sanctions.--
            (1) In general.--The President shall impose sanctions 
        described in paragraph (2) with respect to a person on the list 
        required by subsection (b).
            (2) Sanctions.--The sanctions described in this paragraph 
        are the following:
                    (A) No assistance may be provided to the person 
                under the Foreign Assistance Act of 1961 (22 U.S.C. 
                2151 et seq.) or the Arms Export Control Act (22 U.S.C. 
                2751 et seq.).
                    (B) The United States Government may not procure, 
                or enter into any contract for the procurement of, any 
                goods or services from the person.
                    (C) The President may impose additional sanctions, 
                as appropriate, with respect to the person in 
                accordance with the International Emergency Economic 
                Powers Act (50 U.S.C. 1701 et seq.).
    (d) Definitions.--In this section:
            (1) Foreign person.--The term ``foreign person'' means--
                    (A) an individual who is not a United States person 
                or an alien lawfully admitted for permanent residence 
                into the United States; or
                    (B) a corporation, partnership, or other 
                nongovernmental entity which is not a United States 
                person.
            (2) Person.--
                    (A) In general.--The term ``person'' means--
                            (i) a natural person;
                            (ii) a corporation, business association, 
                        partnership, society, trust, financial 
                        institution, insurer, underwriter, guarantor, 
                        and any other business organization, any other 
                        nongovernmental entity, organization, or group, 
                        and any governmental entity operating as a 
                        business enterprise; and
                            (iii) any successor to any entity described 
                        in clause (ii).
                    (B) Application to governmental entities.--The term 
                ``person'' does not include a government or 
                governmental entity that is not operating as a business 
                enterprise.
            (3) United states person.--The term ``United States 
        person'' means--
                    (A) a natural person who is a citizen of the United 
                States or who owes permanent allegiance to the United 
                States; and
                    (B) a corporation or other legal entity which is 
                organized under the laws of the United States, any 
                State or territory thereof, or the District of 
                Columbia, if natural persons described in subparagraph 
                (A) own, directly or indirectly, more than 50 percent 
                of the outstanding capital stock or other beneficial 
                interest in such legal entity.

SEC. 4. REGULATORY AUTHORITY.

    (a) In General.--Not later than 90 days after the date of the 
enactment of this Act, the President shall promulgate regulations as 
necessary for the implementation of this Act.
    (b) Notification to Congress.--Not later than 10 days before the 
promulgation of regulations under subsection (a), the President shall 
notify the appropriate congressional committees of such proposed 
regulations.

SEC. 5. TERMINATION.

    This Act shall cease to be in effect beginning 30 days after the 
date on which the President certifies to Congress that the Islamic 
State of Iraq and Syria--
            (1) is no longer designated as a foreign terrorist 
        organization pursuant to section 219 of the Immigration and 
        Nationality Act (8 U.S.C. 1189);
            (2) is no longer listed in the Annex to Executive Order No. 
        13224 (September 23, 2001; relating to blocking property and 
        prohibiting transactions with persons who commit, threaten to 
        commit, or support terrorism); and
            (3) poses no significant threat to United States national 
        security, interests, or allies.

SEC. 6. RULE OF CONSTRUCTION.

    Nothing in this Act shall apply to the authorized intelligence 
activities of the United States.

SEC. 7. DEFINITIONS.

    In this Act:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Foreign Affairs and the 
                Committee on Financial Services of the House of 
                Representatives; and
                    (B) the Committee on Foreign Relations and the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate.
            (2) Islamic state of iraq and syria.--The term ``Islamic 
        State of Iraq and Syria'' includes--
                    (A) any person--
                            (i) the property of or interests in 
                        property of which are blocked pursuant to the 
                        International Emergency Economic Powers Act (50 
                        U.S.C. 1701 et seq.); and
                            (ii) who is identified on the list of 
                        specially designated nationals and blocked 
                        persons maintained by the Office of Foreign 
                        Asset Control of the Department of the Treasury 
                        as an agent, instrumentality, or affiliate of 
                        the Islamic State of Iraq and Syria; and
                    (B) the entity designated by the Secretary of State 
                as a foreign terrorist organization pursuant to section 
                219 of the Immigration and Nationality Act (8 U.S.C. 
                1189).
Isolating ISIS Act - Directs the Secretary of the Treasury 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 knowingly:  facilitates a transaction for the Islamic State of Iraq and Syria (ISIS);  facilitates a transaction of a person designated for acting on behalf of or at the direction of, or owned or controlled by, ISIS;  engages in money laundering to carry out such an activity;  facilitates a transaction or provides financial services to carry out such an activity; or facilitates such an activity, conspires to facilitate or participate in such an activity, or is owned or controlled by a foreign financial institution that knowingly engages in such an activity.   Applies specified penalties under the International Emergency Economic Powers Act for violations of this Act.  Authorizes the Secretary to waive the application of a prohibition for up to 180 days (with renewable 180-day waivers) if in U.S. national security interests, and with congressional notification.  Directs the Secretary to identify to Congress every 180 days each foreign central bank that carries out a prohibited activity.  Directs the President to transmit to Congress a list of, and impose specified sanctions against, any person who knowingly engages in a transaction with a foreign person that transfers or receives, or facilitates the transfer or receipt of, any goods or services to or from ISIS.  States that the President shall not be required to include a person on this list if: (1) that person is no longer engaging in or has taken significant steps toward stopping sanctioned activities, and (2) the President has received reliable assurances that such person will not knowingly engage in any new sanctioned activity.  States that nothing in this Act shall apply to authorized U.S. intelligence activities.
Isolating ISIS Act