I

104TH CONGRESS

1ST SESSION H. R. 2619

To impose sanctions on foreign persons exporting certain goods or technology

that would enhance Iran’s ability to explore, extract, refine, or produce

petroleum products or natural gas.

IN THE HOUSE OF REPRESENTATIVES

NOVEMBER 10, 1995

Mr. GEJDENSON (for himself and Mr. BURTON of Indiana) introduced the following bill; which was referred to the Committee on International Relations, and in addition to the Committees on Ways and Means, Banking

and Financial Services, and Government Reform and Oversight, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To impose sanctions on foreign persons exporting certain

goods or technology that would enhance Iran’s ability

to explore, extract, refine, or produce petroleum products

or natural gas.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Iran Foreign Oil Sanc5 tions Act of 1995’’.
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1 SEC. 2. FINDINGS.

2 The Congress makes the following findings:

3 (1) The efforts of the Government of Iran to

4 acquire weapons of mass destruction and the means

5 to deliver them endanger potentially the national se6 curity and foreign policy interests of the United

7 States and those countries with which it shares com8 mon strategic and foreign policy objectives.

9 (2) The objective of preventing the proliferation

10 of weapons of mass destruction through existing

11 multilateral and bilateral initiatives requires addi12 tional efforts to deny Iran the financial means to

13 sustain its nuclear, chemical, biological, and missile

14 weapons programs.

15 SEC. 3. DECLARATION OF POLICY.

16 The Congress declares that it is the policy of the

17 United States to deny Iran the ability to fund the develop18 ment and acquisition of weapons of mass destruction and

19 the means to deliver them by preventing Iran from acquir20 ing equipment or services that would enhance Iran’s abil21 ity to extract, refine, process, store, or transport petro22 leum, petroleum products, or natural gas.
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1 SEC. 4. IMPOSITION OF SANCTIONS ON FOREIGN PERSONS

2 EXPORTING CERTAIN GOODS OR TECH3 NOLOGY TO IRAN.

4 (a) IN GENERAL.—The President shall impose the

5 mandatory sanctions described in section 5(1) and may

6 impose one or more of the discretionary sanctions de7 scribed in section 5(2), if the President determines that

8 a foreign person has, with requisite knowledge, on or after

9 the date of the enactment of this Act—

10 (1) exported, transferred, or released to Iran,

11 nationals of Iran, or entities owned or controlled by

12 Iran or nationals of Iran any goods or technology

13 identified on the List of Petroleum and Natural

14 Gas-Related Goods and Technology established

15 under section 9 (hereafter in this Act referred to as

16 the ‘‘List’’)—

17 (A) through the export from the United

18 States of any goods or technology identified in

19 the List, or

20 (B) through the export from any other

21 country or territory of any goods or technology

22 identified in the List, whether or not the goods

23 or technology is subject to the jurisdiction of

24 the United States,

25 for use in the exploration, extraction, refining, or

26 production of petroleum, petroleum products, or nat-
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1 ural gas or the products thereof in Iran, or in areas

2 in which Iran has rights to explore for or extract pe3 troleum, petroleum products, or natural gas; or

4 (2) engaged in the exploration, extraction, re5 fining, or production of petroleum, petroleum prod6 ucts, or natural gas or the products thereof in Iran,

7 or in areas in which Iran has rights to explore for

8 or extract petroleum, petroleum products, or natural

9 gas.

10 (b) PERSONS AGAINST WHICH THE SANCTIONS ARE

11 TO BE IMPOSED.—The sanctions described in subsection

12 (a) shall be imposed on—

13 (1) the foreign person with respect to whom the

14 President makes the determination described in that

15 subsection;

16 (2) any successor entity to that foreign person;

17 (3) any foreign person that is a parent or sub18 sidiary of that person if that parent or subsidiary

19 with requisite knowledge engaged in the activities

20 which were the basis of that determination; and

21 (4) any foreign person that is an affiliate of

22 that person if that affiliate with requisite knowledge

23 engaged in the activities which were the basis of that

24 determination and if that affiliate is controlled in

25 fact by that person.
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1 For purposes of this Act, any person or entity described

2 in this subsection shall be referred to as a ‘‘sanctioned

3 foreign person’’.

4 SEC. 5. DESCRIPTION OF SANCTIONS.

5 The sanctions to be imposed on a sanctioned foreign

6 person under section 4(a) are as follows:

7 (1) MANDATORY SANCTIONS.—

8 (A) PROCUREMENT SANCTION.—The

9 United States Government shall not procure, or

10 enter into any contract for the procurement of,

11 any goods or services from the sanctioned for12 eign person.

13 (B) EXPORT SANCTION.—(i) The United

14 States Government shall not issue any license

15 or grant any other permission or authority to

16 export any goods or technology to a sanctioned

17 foreign person under—

18 (I) the Export Administration Act of

19 1979;

20 (II) the Arms Export Control Act;

21 (III) the Atomic Energy Act of 1954;

22 or

23 (IV) any other statute that requires

24 the prior review and approval of the

25 United States Government as a condition
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1 for the exportation of goods and services,

2 or their reexport, to any sanctioned foreign

3 person.

4 (ii) The head of the appropriate depart5 ment or agency shall periodically publish a list

6 of all sanctioned foreign persons denied licenses

7 under clause (i).

8 (C) IMPORT SANCTION.—(i) The importa9 tion into the United States of products pro10 duced by any sanctioned foreign person shall be

11 prohibited.

12 (ii) Clause (i) includes application to—

13 (I) the entry of any finished product

14 or component part, whether shipped di15 rectly by the sanctioned foreign person or

16 by another entity; and

17 (II) the contracting with a sanctioned

18 foreign person for the provision of services

19 in the United States or abroad by United

20 States persons and by foreign persons in

21 the United States.

22 (D) PROHIBITION AGAINST EXPORT-IM23 PORT BANK ASSISTANCE FOR EXPORTS TO FOR24 EIGN PERSONS.—The Export-Import Bank of

25 the United States may not guarantee, insure,
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1 extend credit, or participate in the extension of

2 credit in connection with the export of any

3 goods or services to any sanctioned foreign per4 son.

5 (2) DISCRETIONARY SANCTIONS.—

6 (A) INVESTMENT IN THE UNITED STATES;

7 AUTHORITY TO REVIEW CERTAIN MERGERS, AC8 QUISITIONS, AND TAKEOVERS.—The President

9 may exercise his authority under section 721(d)

10 of the Defense Production Act of 1950 (50

11 U.S.C. App. 2170(d)) to investigate and pro12 hibit mergers, acquisitions, takeovers, and other

13 similar investments in the United States by per14 sons engaged in interstate commerce—

15 (i) if such actions involve any sanc16 tioned foreign person; and

17 (ii) if the President finds, in addition

18 to the requirements of section 721(e) of

19 such Act, that the participation of any

20 sanctioned foreign person in activities to

21 assist, directly or indirectly, Iran to in22 crease the revenue available to that govern23 ment by extracting petroleum, petroleum

24 products, natural gas, or engaging in other

25 activities described in section 9(a)(1)
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1 threatens to impair the national security

2 and foreign policy interests of the United

3 States.

4 (B) LOANS FROM UNITED STATES FINAN5 CIAL INSTITUTIONS.—The United States Gov6 ernment may prohibit any United States finan7 cial institution from making any loan or provid8 ing any credit to any sanctioned foreign person

9 except with respect to activities engaged in by

10 such foreign person to relieve human suffering,

11 within the meaning of section 203(b)(2) of the

12 International Emergency Economic Powers Act

13 (50 U.S.C. 1702(b)(2)).

14 (C) PROHIBITIONS ON FOREIGN FINANCIAL

15 INSTITUTIONS.—The following prohibitions may

16 be imposed against a sanctioned foreign person

17 that is a financial institution:

18 (i) DESIGNATION AS PRIMARY DEAL19 ER.—Neither the Board of Governors of

20 the Federal Reserve System nor the Fed21 eral Reserve Bank of New York may des22 ignate, or permit the continuation of any

23 prior designation of, such financial institu24 tion as a primary dealer in United States

25 Government debt instruments.
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1 (ii) GOVERNMENT FUNDS.—Such fi2 nancial institution shall not serve as agent

3 of the United States Government or serve

4 as repository for United States Govern5 ment funds.

6 (iii) RESTRICTIONS ON OPER7 ATIONS.—Such financial institutions shall

8 not, directly or indirectly—

9 (I) commence any line of busi10 ness in the United States in which it

11 was not engaged as of the date of the

12 determination by the President under

13 section 4(a) leading to the imposition

14 of sanctions; or

15 (II) conduct business from any

16 location in the United States at which

17 it did not conduct business as of the

18 date of such determination by the

19 President under section 4(a).

20 SEC. 6. WAIVER AUTHORITY REGARDING SANCTIONS

21 AGAINST IRAN.

22 The sanctions under section 5 shall not apply if the

23 President determines and certifies to the appropriate con24 gressional committees that Iran—
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1 (1) has substantially improved its adherence to

2 internationally recognized standards of human

3 rights;

4 (2) has ceased its efforts to design, develop,

5 manufacture, or acquire—

6 (A) a nuclear explosive device or related

7 materials and technology;

8 (B) chemical and biological weapons;

9 (C) missiles and missile launch technology;

10 and

11 (D) any missile or other delivery system

12 capable of reaching the territory of a country

13 the government of which shares strategic inter14 ests with the United States and is engaged in

15 defense cooperation, including the acquisition of

16 items identified in the United States Munitions

17 List, with the United States; and

18 (3) has ceased all forms of support for inter19 national terrorism.

20 SEC. 7. WAIVER OF SANCTIONS AGAINST FOREIGN PER21 SONS.

22 (a) CONSULTATION WITH FOREIGN GOVERN23 MENTS.—

24 (1) CONSULTATIONS.—If the President makes a

25 determination described in section 4(a) with respect
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1 to a foreign person, the Congress urges the Presi2 dent to initiate consultations immediately with the

3 foreign government with primary jurisdiction over

4 that foreign person with respect to the imposition of

5 the sanctions pursuant to this Act.

6 (2) ACTIONS BY GOVERNMENT OF JURISDIC7 TION.—In order to pursue such consultations with

8 that government, the President may delay imposition

9 of the sanctions under section 5 for up to 90 days.

10 Following such consultations, the President shall im11 mediately impose sanctions unless the President de12 termines and certifies to the Congress that the gov13 ernment has taken specific and effective actions, in14 cluding the imposition of appropriate penalties, to

15 terminate the involvement of the foreign person in

16 the activities that resulted in the imposition of sanc17 tions against the foreign person.

18 (3) ADDITIONAL DELAY IN IMPOSITION OF

19 SANCTIONS.—The President may delay the imposi20 tion of sanctions for up to an additional 45 days if

21 the President determines and certifies to the Con22 gress that the government with primary jurisdiction

23 over the foreign person is in the process of taking

24 the actions described in paragraph (2).
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1 (4) REPORT TO CONGRESS.—Not later than 45

2 days after making a determination under section

3 4(a), the President shall submit to the appropriate

4 congressional committees a report on the status of

5 consultations with the appropriate foreign govern6 ment under this subsection, and the basis for any

7 determination under paragraph (3) that such gov8 ernment has taken specific corrective actions.

9 (b) ASSURANCES FROM FOREIGN PERSONS.—The

10 President may terminate the sanctions against a sanc11 tioned foreign person, if the foreign person provides assur12 ances to the Secretary that the actions that resulted in

13 the determination to impose sanctions have been termi14 nated and has provided specific assurances that it will nei15 ther directly nor indirectly, or through any other person,

16 including subsidiaries and affiliates, direct or participate

17 in any activity described in section 4(a)(1) or to engage

18 in activities described in section 4(a)(2).

19 (c) EXCEPTIONS.—The President shall not be re20 quired to apply or maintain a sanction under section

21 4(a)—

22 (1) in the case of procurement of defense arti23 cles or defense services—

24 (A) under existing contracts or sub25 contracts, including the exercise of options for
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1 production quantities to satisfy requirements

2 essential to the national security of the United

3 States;

4 (B) if the President determines in writing

5 that the person or other entity to which the

6 sanction would otherwise be applied is a sole

7 source supplier of the defense articles or serv8 ices, that the defense articles or services are es9 sential, and that alternative sources are not

10 readily or reasonably available; or

11 (C) if the President determines in writing

12 that such articles or services are essential to the

13 national security under defense coproduction

14 agreements;

15 (2) to products or services provided under con16 tracts entered into before the date on which the

17 President publishes his intention to impose the sanc18 tion;

19 (3) to—

20 (A) spare parts which are essential to

21 United States products or production;

22 (B) component parts, but not finished

23 products, essential to United States products or

24 production; or
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1 (C) routine servicing and maintenance of

2 products, to the extent that alternative sources

3 are not readily or reasonably available;

4 (4) to information and technology essential to

5 United States products or production; or

6 (5) to medicines, medical supplies, or other hu7 manitarian items.

8 (d) PRESIDENTIAL NATIONAL SECURITY WAIVER.—

9 (1) The President may waive the requirement in section

10 4(a) to impose a sanction or sanctions on a foreign person

11 in section 4(b)—

12 (A) for an export, transfer, or release of goods

13 or technology that are not subject to the jurisdiction

14 of the United States, or

15 (B) for any activity described in section 4(a)(2),

16 15 days after the President determines and so reports to

17 the appropriate congressional committees that it is essen18 tial to the national interest of the United States to exer19 cise such waiver authority.

20 (2) Any such report shall provide a specific and de21 tailed rationale for such determination, including—

22 (A) a description of the conduct, including (in

23 the case of activity described in section 4(a)(1)) the

24 identification of the goods or technology involved in
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1 the violation, that resulted in the determination of a

2 violation or violations;

3 (B) an explanation of the efforts to secure the

4 cooperation of the government with primary jurisdic5 tion of the foreign person committing the violation

6 to terminate or penalize the activities that resulted

7 in the determination of a violation;

8 (C) an estimate as to the significance of the

9 goods or technology exported to Iran, or the activi10 ties described in section 4(a)(2), as the case may be,

11 on that country’s ability to extract, refine, process,

12 store, or transport petroleum, petroleum products,

13 or natural gas; and

14 (D) a statement as to the response of the

15 United States in the event that such foreign person

16 engages in other activities that under this Act would

17 constitute an additional violation.

18 SEC. 8. TERMINATION OF SANCTIONS.

19 (a) DURATION OF SANCTIONS.—The sanctions im20 posed pursuant to this Act shall apply for a period of not

21 less than 12 months following the determination by the

22 President under section 4(a) and shall cease to apply

23 thereafter only if the President determines and certifies

24 to the Congress that reliable information indicates that

25 the foreign person with respect to which the determination
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1 was made under section 4(a) has ceased to aid or abet

2 Iran, any national of Iran, or any entity owned or con3 trolled by Iran or nationals of Iran, to acquire goods and

4 technology on the List for uses described in section

5 4(a)(1), or has ceased to engage in activities described in

6 section 4(a)(2), as the case may be.

7 (b) WAIVER.—

8 (1) CRITERION FOR WAIVER.—The President

9 may waive the continued application of any sanction

10 imposed on any foreign person pursuant to this Act,

11 after the end of the 12-month period beginning on

12 the date on which that sanction was imposed on that

13 person, if the President determines and certifies to

14 the Congress that the continued imposition of the

15 sanction would have a serious adverse effect on

16 United States national security.

17 (2) NOTIFICATION OF AND REPORT TO CON18 GRESS.—If the President decides to exercise the

19 waiver authority provided in paragraph (1), the

20 President shall so notify the Congress not less than

21 30 days before the waiver takes effect. Such notifica22 tion shall include a report fully articulating the ra23 tionale and circumstances which led the President to

24 exercise the waiver authority.
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1 SEC. 9. GOODS AND TECHNOLOGY SUBJECT TO EXPORT

2 CONTROL RESTRICTIONS.

3 (a) CONTROL LIST.—(1) For purposes of the deter4 minations to be made pursuant to section 4(a), the Presi5 dent shall establish and maintain the List of Petroleum

6 and Natural Gas-Related Goods and Technology, consist7 ing of goods or technology (including software and tech8 nical data) that the President determines would materially

9 contribute to the exploration, extraction, refining, or pro10 duction of petroleum, petroleum products, or natural gas

11 and the products thereof in or by Iran, including goods

12 and technology that are required for the development, pro13 duction, or use of facilities (including the repair, mainte14 nance, or operation of equipment) for the petroleum and

15 natural gas activities described in this subsection.

16 (2) The President, within 60 days after the date of

17 the enactment of this Act, shall cause the List to be pub18 lished in the Federal Register, together with any regula19 tions issued with respect thereto. Thereafter, any revisions

20 to the List or amendments to the regulations shall be pub21 lished in the same manner.

22 (3) Not less than 30 days in advance of the publica23 tion of the List, it shall be provided to the Committee on

24 Banking, Housing, and Urban Affairs of the Senate and

25 to the Committee on International Relations of the House

26 of Representatives.
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1 (b) STATUTORY CONSTRUCTION.—Nothing in this

2 section prevents the inclusion on the List of any goods

3 or technology that may be produced in and traded inter4 nationally by persons or entities in countries other than

5 the United States.

6 SEC. 10. ENFORCEMENT AUTHORITY.

7 The President may exercise the authorities under the

8 Export Administration Act of 1979 in order to carry out

9 this Act.

10 SEC. 11. REPORT REQUIRED.

11 Beginning 60 days after the date of the enactment

12 of this Act, and every 90 days thereafter, the President

13 shall transmit to the appropriate congressional committees

14 a report describing—

15 (1) the nuclear and other military capabilities

16 of Iran; and

17 (2) the support, if any, provided by Iran for

18 acts of international terrorism.

19 SEC. 12. DEFINITIONS.

20 As used in this Act:

21 (1) ACT OF INTERNATIONAL TERRORISM.—The

22 term ‘‘act of international terrorism’’ means an

23 act—

24 (A) which is violent or dangerous to

25 human life and that is a violation of the crimi-
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1 nal laws of the United States or of any State

2 or that would be a criminal violation if commit3 ted within the jurisdiction of the United States

4 or any State; and

5 (B) which appears to be intended—

6 (i) to intimidate or coerce a civilian

7 population;

8 (ii) to influence the policy of a govern9 ment by intimidation or coercion; or

10 (iii) to affect the conduct of a govern11 ment by assassination or kidnapping.

12 (2) APPROPRIATE CONGRESSIONAL COMMIT13 TEES.—The term ‘‘appropriate congressional com14 mittees’’ means the Committee on Banking, Hous15 ing, and Urban Affairs of the Senate and the Com16 mittee on International Relations of the House of

17 Representatives.

18 (3) COMPONENT PART.—The term ‘‘component

19 part’’ has the meaning given that term in section

20 11A(e)(1) of the Export Administration Act of 1979

21 (50 U.S.C. App. 2410a(e)(1)).

22 (4) FINANCIAL INSTITUTION.—The term ‘‘fi23 nancial institution’’ includes—

24 (A) a depository institution (as defined in

25 section 3(c)(1) of the Federal Deposit Insur-
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1 ance Act), including a branch or agency of a

2 foreign bank (as defined in section 1(b)(7) of

3 the International Banking Act of 1978);

4 (B) a credit union;

5 (C) a securities firm, including a broker or

6 dealer;

7 (D) an insurance company, including an

8 agency or underwriter;

9 (E) any other company that provides fi10 nancial services; and

11 (F) any subsidiary of an entity described

12 in any of subparagraphs (A) through (E).

13 (5) FINISHED PRODUCT.—The term ‘‘finished

14 product’’ has the meaning given that term in section

15 11A(e)(2) of the Export Administration Act of 1979

16 (50 U.S.C. App. 2410a(e)(2)).

17 (6) FOREIGN PERSON.—The term ‘‘foreign per18 son’’ means—

19 (A) an individual who is not a United

20 States national or an alien admitted for perma21 nent residence to the United States; or

22 (B) a corporation, partnership, or other

23 nongovernment entity which is not a United

24 States national.
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1 (7) GOODS AND TECHNOLOGY.—The terms

2 ‘‘goods’’ and ‘‘technology’’ have the meaning given

3 those terms in section 16 of the Export Administra4 tion Act of 1979 (50 U.S.C. App. 2415).

5 (8) IRAN.—The term ‘‘Iran’’ includes any agen6 cy or instrumentality of Iran.

7 (9) NUCLEAR EXPLOSIVE DEVICE.—The term

8 ‘‘nuclear explosive device’’ means any device, wheth9 er assembled or disassembled, that is designed to

10 produce an instantaneous release of an amount of

11 nuclear energy from special nuclear material that is

12 greater than the amount of energy that would be re13 leased from the detonation of one pound of trinitro14 toluene (TNT).

15 (10) PERSON.—(A) The term ‘‘person’’ means

16 a natural person, as well as a corporation, business

17 association, partnership, society, trust, any other

18 nongovernmental entity, organization, or group, and

19 any governmental entity operating as a business en20 terprise, and any successor of any such entity.

21 (B) In the case of a country where it may be

22 impossible to identify a specific governmental entity

23 referred to in subparagraph (A), the term ‘‘person’’

24 means all activities of the government of the country
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1 relating to the production, sale, or transfer of goods

2 or technology on the List.

3 (11) PETROLEUM PRODUCTS.—The term ‘‘pe4 troleum products’’ means crude oil, residual fuel oil,

5 and any refined petroleum product.

6 (12) REQUISITE KNOWLEDGE.—The term ‘‘req7 uisite knowledge’’ means situations in which a per8 son ‘‘knows’’, as ‘‘knowing’’ is defined in section 104

9 of the Foreign Corrupt Practices Act of 1977 (15

10 U.S.C. 78dd–2).

11 (13) UNITED STATES OR STATE.—The term

12 ‘‘United States’’ or ‘‘State’’ means the several

13 States, the District of Columbia, the Commonwealth

14 of Puerto Rico, the Commonwealth of the Northern

15 Mariana Islands, American Samoa, Guam, the Unit16 ed States Virgin Islands, and any other territory or

17 possession of the United States.

18 (14) UNITED STATES NATIONAL.—The term

19 ‘‘United States national’’ means—

20 (A) a natural person who is a citizen of the

21 United States or who owes permanent alle22 giance to the United States;

23 (B) a corporation or other legal entity

24 which is organized under the laws of the United

25 States, any State or territory thereof, or the
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1 District of Columbia, if natural persons who are

2 nationals of the United States own, directly or

3 indirectly, more than 50 percent of the out4 standing capital stock or other beneficial inter5 est in such legal entity; and

6 (C) any foreign subsidiary of a corporation

7 or other legal entity described in subparagraph

8 (B).

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