I

104TH CONGRESS

2D SESSION H. R. 3107

To impose sanctions on persons exporting certain goods or technology that

would enhance Iran’s ability to explore for, extract, refine, or transport

by pipeline petroleum resources, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 19, 1996

Mr. GILMAN (for himself, Mr. BERMAN, Mr. GEJDENSON, Mr. BURTON of Indiana, Mr. KING, Mr. SHAW, and Mr. FORBES) introduced the following

bill; which was referred to the Committee on International Relations, and

in addition to the Committees on Banking and Financial Services, Ways

and Means, 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 persons exporting certain goods or

technology that would enhance Iran’s ability to explore

for, extract, refine, or transport by pipeline petroleum

resources, and for other purposes.

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 Oil Sanctions Act

5 of 1996’’.
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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 and its support of international ter6 rorism endanger potentially the national security

7 and foreign policy interests of the United States and

8 those countries with which it shares common strate9 gic and foreign policy objectives.

10 (2) The objective of preventing the proliferation

11 of weapons of mass destruction and international

12 terrorism through existing multilateral and bilateral

13 initiatives requires additional efforts to deny Iran

14 the financial means to sustain its nuclear, chemical,

15 biological, and missile weapons programs.

16 (3) The Government of Iran uses its diplomatic

17 facilities and quasi-governmental institutions outside

18 of Iran to promote acts of international terrorism

19 and assist its nuclear, chemical, biological, and mis20 sile weapons programs.

21 SEC. 3. DECLARATION OF POLICY.

22 The Congress declares that it is the policy of the

23 United States to deny Iran the ability to support inter24 national terrorism and to fund the development and acqui25 sition of weapons of mass destruction and the means to

26 deliver them by limiting the development of Iran’s ability
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1 to explore for, extract, refine, or transport by pipeline pe2 troleum resources of Iran.

3 SEC. 4. IMPOSITION OF SANCTIONS.

4 (A) IN GENERAL.—Except as provided in subsection

5 (d), the President shall impose 2 or more of the sanctions

6 described in paragraphs (1) through (5) of section 5 if

7 the President determines that a person has, with actual

8 knowledge or reason to know, on or after the date of the

9 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 (in this Act referred to as the

16 ‘‘List’’) if the provision of such goods or technology

17 would significantly and materially enhance Iran’s

18 ability to develop petroleum resources of Iran—

19 (A) whether or not the goods or technology

20 is exported from the United States; and

21 (B) whether or not the goods or technology

22 is subject to the jurisdiction of the United

23 States; or

24 (2) made an investment of $40,000,000 or

25 more (or any combination of investments of a least
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1 $10,000,000 each, which in the aggregate equals or

2 exceeds $40,000,000 in any 12-month period), that

3 directly contributed to the enhancement of Iran’s

4 ability to develop petroleum resources of Iran.

5 (b) PERSONS AGAINST WHICH THE SANCTIONS ARE

6 TO BE IMPOSED.—The sanctions described in subsection

7 (a) shall be imposed on—

8 (1) the person with respect to whom the Presi9 dent makes the determination subsection (a);

10 (2) any successor entity to the person with re11 spect to whom the President makes the determina12 tion subsection (a);

13 (3) any wholly owned subsidiary of the person

14 with respect to whom the President makes the deter15 mination subsection (a);

16 (4) any other subsidiary of the person with re17 spect to whom the President makes the determina18 tion under subsection (a) if that subsidiary, with ac19 tual knowledge or reason to know, engaged in the

20 activities which were the basis of that determination;

21 (5) any person that is a parent of the person

22 with respect to whom the President makes the deter23 mination under subsection (a) if that parent had ac24 tual knowledge or reason to know of the activities

25 which were the basis of that determination; and
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1 (6) any person that is an affiliate of the person

2 with respect to whom the President makes the deter3 mination under subsection (a) if that affiliate, with

4 actual knowledge or reason to know, engaged in the

5 activities which were the basis of that determination.

6 For purposes of this Act, any person or entity described

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

8 person’’.

9 (c) PUBLICATION IN FEDERAL REGISTER.—The

10 President shall cause to be published in the Federal Reg11 ister a current list of sanctioned persons. The removal of

12 names from, and the addition of names to, the list, shall

13 also be so published.

14 (d) EXCEPTIONS.—The President shall not be re15 quired to apply or maintain the sanctions under subsection

16 (a)—

17 (1) in the case of procurement of defense arti18 cles or defense services—

19 (A) under existing contracts or sub20 contracts, including the exercise of options for

21 production quantities to satisfy requirements

22 essential to the national security of the United

23 States;

24 (B) if the President determines in writing

25 that the person to which the sanctions would
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1 otherwise be applied is a sole source supplier of

2 the defense articles or services, that the defense

3 articles or services are essential, and that alter4 native sources are not readily or reasonably

5 available; or

6 (C) if the President determines in writing

7 that such articles or services are essential to the

8 national security under defense coproduction

9 agreements;

10 (2) to products or services provided under con11 tracts entered into before the date on which the

12 President publishes his intention to impose the sanc13 tions;

14 (3) to—

15 (A) spare parts which are essential to

16 United States products or production;

17 (B) component parts, but not finished

18 products, essential to United States products or

19 production; or

20 (C) routine servicing and maintenance of

21 products, to the extent that alternative sources

22 are not readily or reasonably available;

23 (4) to information and technology essential to

24 United States products or production; or
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1 (5) to medicines, medical supplies, or other hu2 manitarian items.

3 SEC. 5. DESCRIPTION OF SANCTIONS.

4 The sanctions to be imposed on a sanctioned person

5 under section 4(a) are as follows:

6 (1) EXPORT-IMPORT BANK ASSISTANCE FOR

7 EXPORTS TO SANCTIONED PERSONS.—The President

8 shall direct the Export-Import Bank of the United

9 States not to guarantee, insure, extend credit, or

10 participate in the extension of credit in connection

11 with the export of any goods or services to any sanc12 tioned person.

13 (2) TRADE SANCTION.—The President shall

14 both—

15 (A) order the United States Government

16 not to issue any specific license and not to

17 grant any other specific permission or authority

18 to export any goods or technology to a sanc19 tioned person under—

20 (i) the Export Administration Act of

21 1979;

22 (ii) the Arms Export Control Act;

23 (iii) the Atomic Energy Act of 1954;

24 or
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1 (iv) any other statute that requires

2 the prior review and approval of the Unit3 ed States Government as a condition for

4 the export or re-export of goods or serv5 ices; and

6 (B) prohibit the importation into the Unit7 ed States of products produced by any sanc8 tioned person.

9 Subparagraph (B) includes application to the impor10 tation of any finished product or component part,

11 whether shipped directly by the sanctioned person or

12 by another entity.

13 (3) LOANS FROM UNITED STATES FINANCIAL

14 INSTITUTIONS.—The United States Government

15 shall prohibit any United States financial institution

16 from making any loan or providing any credit to any

17 sanctioned person in an amount exceeding

18 $10,000,000 (or two or more loans of more than

19 $5,000,000 each in any 12-month period) unless

20 such person is engaged in activities to relieve human

21 suffering and the loan, loans, or credit is provided

22 for such activities.

23 (4) PROHIBITIONS ON FINANCIAL INSTITU24 TIONS.—The following prohibitions shall be imposed
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1 against a sanctioned person that is a financial insti2 tution:

3 (A) DESIGNATION AS PRIMARY DEALER.—

4 Neither the Board of Governors of the Federal

5 Reserve System nor the Federal Reserve Bank

6 of New York may designate, or permit the con7 tinuation of any prior designation of, such fi8 nancial institution as a primary dealer in Unit9 ed States Government debt instruments.

10 (B) GOVERNMENT FUNDS.—Such financial

11 institution shall not serve as agent of the Unit12 ed States Government or serve as repository for

13 United States Government funds.

14 (5) PROCUREMENT SANCTION.—The United

15 States Government shall not procure, or enter into

16 any contract for the procurement of, any goods or

17 services from a sanctioned person.

18 SEC. 6. ADVISORY OPINIONS.

19 The Secretary of State may, upon the request of any

20 person, issue an advisory opinion to that person as to

21 whether a proposed activity by that person would subject

22 that person to sanctions under this Act. Any person who

23 relies in good faith on such an advisory opinion which

24 states that the proposed activity would not subject a per25 son to much sanctions, and any person who thereafter en-
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1 gages in such activity, may not be made subject to such

2 sanctions on account of such activity.

3 SEC. 7. TERMINATION OF SANCTIONS.

4 The requirement under section 4 to impose sanctions

5 shall no longer have force or effect if the President deter6 mines and certifies to the appropriate congressional com7 mittees that Iran—

8 (1) has ceased its efforts to design, develop,

9 manufacture, or acquire—

10 (A) a nuclear explosive device or related

11 materials and technology;

12 (B) chemical and biological weapons; and

13 (C) ballistic missiles and ballistic missile

14 launch technology; and

15 (2) has been removed from the list of countries

16 the governments of which have been determined, for

17 purposes of section 6(j) of the Export Administra18 tion Act of 1979, to have repeatedly provided sup19 port for acts of international terrorism.

20 SEC. 8. DURATION OF SANCTIONS; PRESIDENTIAL WAIVER.

21 (a) DELAY OF SANCTIONS.—

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

23 determination described in section 4(a) with respect

24 to a foreign person, the Congress urges the Presi25 dent to initiate consultations immediately with the
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1 government with primary jurisdiction over that for2 eign person with respect to the imposition of sanc3 tions under this Act.

4 (2) ACTIONS BY GOVERNMENT OF JURISDIC5 TION.—In order to pursue such consultations with

6 the government, the President may delay imposition

7 of sanctions under this Act for up to 90 days. Fol8 lowing such consultation, the President shall imme9 diately impose sanctions unless the President deter10 mines and certifies to the Congress that the govern11 ment has taken specific and effective actions, includ12 ing, as appropriate, the imposition of appropriate

13 penalties, to terminate the involvement of the foreign

14 person in the activities that resulted in the deter15 mination by the President under section 4(a) con16 cerning such person.

17 (3) ADDITIONAL DELAY IN IMPOSITION OF

18 SANCTIONS.—The President may delay the imposi19 tion of sanctions for up to an additional 90 days if

20 the President determines and certifies to the Con21 gress that the government with primary jurisdiction

22 over the process of taking the actions described in

23 paragraph (2).

24 (4) REPORT TO CONGRESS.—Not later than 45

25 days after making a determination under section
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1 4(a), the President shall submit to the Committee on

2 Banking, Housing, and Urban Affairs of the Senate

3 and the Committee on International Relations of the

4 House of Representatives 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).

8 (b) DURATION OF SANCTIONS.—The requirement to

9 impose sanctions under section 4(a) shall remain in effect

10 until the President determines that the sanctioned person

11 is no longer engaging in the activity that led to the imposi12 tion of sanctions.

13 (c) PRESIDENTIAL WAIVER.—

14 (1) AUTHORITY.—The President may waive the

15 requirement in section 4(a) to impose a sanction or

16 sanctions on a person in section 4(b), and may waive

17 the continued imposition of a sanction or sanctions

18 under subsection (b) of this section, 30 days or more

19 after the President determines and so reports to the

20 Committee on Banking, Housing, and Urban Affairs

21 of the Senate and the Committee on International

22 Relations of the House of Representatives that it is

23 important to the national interest of the United

24 States to exercise such waiver authority.
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1 (2) CONTENTS OF REPORT.—Any such report

2 shall provide a specific and detailed rationale for

3 such determination, including—

4 (A) a description of the conduct that re5 sulted in the determination;

6 (B) in the case of a foreign person, an ex7 planation of the efforts to secure the coopera8 tion of the government with primary jurisdic9 tion of the sanctioned person to terminate or,

10 as appropriate, penalize the activities that re11 sulted in the determination;

12 (C) an estimate as to the significance of

13 the investment or the provision of the goods or

14 technology, as the case may be, to Iran’s ability

15 to develop its petroleum resources; and

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

17 United States in the event that such person en18 gages in other activities that would be subject

19 to section 4(a).

20 (3) EFFECT OF REPORT ON WAIVER.—If the

21 President makes a report under paragraph (1) with

22 respect to a waiver of sanctions on a person in sec23 tion 4(b), sanctions need not be imposed under sec24 tion 4(a) on that person during the 30-day period

25 referred to in paragraph (1).
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1 SEC. 9. GOODS AND TECHNOLOGY SUBJECT TO EXPORT

2 CONTROL RESTRICTIONS.

3 (a) CONTROL LIST.—

4 (1) CONTENTS OF LIST.—For purposes of the

5 determinations to be made under section 4(a), the

6 President, in consultation with the Secretary of

7 State and the Secretary of Energy, and the heads of

8 other appropriate departments and agencies, shall

9 establish and maintain the List of Petroleum and

10 Natural Gas-Related Goods and Technology. The

11 List shall consist of—

12 (A) all items listed in the Annex to Resolu13 tion 883 of the Security Council of the United

14 Nations, adopted November 11, 1993, and all

15 types of equipment, supplies, and grants of li16 censes prohibited by paragraph 5 of that resolu17 tion; and

18 (B) any other goods or technology (includ19 ing software and technical data) that the Presi20 dent determines could significantly or materially

21 contribute to Iran’s ability to develop its petro22 leum resources, including goods and technology

23 that are required for the development, produc24 tion, or use of facilities (including the repair,

25 maintenance, or operation of equipment) for the

26 development of petroleum resources.
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1 (2) PUBLICATION.—The President, within 60

2 days after the date of the enactment of this Act,

3 shall cause the List to be published in the Federal

4 Register, together with any regulations issued with

5 respect thereto. Thereafter, any revisions to the List

6 or amendments to the regulations shall be published

7 in the same manner.

8 (3) ADVANCE NOTICE TO CONGRESS.—Not less

9 than 30 days in advance of the publication of the

10 List, it shall be provided to the Committee on Bank11 ing, Housing, and Urban Affairs of the Senate and

12 to the Committee on International Relations of the

13 House of Representatives. The President shall con14 sult with such Committee regarding the content of

15 the List and shall respond to questions regarding

16 the basis for the inclusion on, or exclusion from, the

17 List of specified goods and technology.

18 (b) STATUTORY CONSTRUCTION.—Nothing in this

19 section prevents the inclusion on the List of any goods

20 or technology that may be produced in and traded inter21 nationally by persons or entities in countries other than

22 the United States.

23 SEC. 10. REPORTS REQUIRED.

24 (a) REPORT ON CERTAIN INTERNATIONAL INITIA25 TIVES.—Not later than 6 months after the date of the en-
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1 actment of this Act, and every 6 months thereafter, the

2 President shall transmit a report to the appropriate con3 gressional committees describing—

4 (1) the efforts of the President to mount a mul5 tilateral campaign to persuade all countries to pres6 sure Iran to cease its weapons of mass destruction

7 programs and its support of international terrorism;

8 (2) the efforts of the President to persuade

9 other governments to ask Iran to reduce the pres10 ence of Iranian diplomats and representatives of

11 other government and military or quasi-govern12 mental institutions of Iran and to withdraw any

13 such diplomats or representatives who participated

14 in the takeover of the United States embassy in

15 Tehran on November 4, 1979, or the subsequent

16 holding of United States hostages for 444 days;

17 (3) the extent to which the International

18 Atomic Energy Agency has established regular

19 inspections of all nuclear facilities in Iran, in20 cluding those presently under construction; and

21 (4) Iran’s use of Iranian diplomats and rep22 resentatives of other government and military or

23 quasi-governmental institutions of Iran to promote

24 acts of terrorism or to develop or sustain Iran’s nu-
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1 clear, chemical, biological, and missile weapons pro2 grams.

3 (b) OTHER REPORTS.—The President shall ensure

4 the continued transmittal to the Congress of reports de5 scribing—

6 (1) the nuclear and other military capabilities

7 of Iran, as required by section 601(a) of the Nuclear

8 Non-Proliferation act of 1978 and section 1607 of

9 the National Defense Authorization Act, Fiscal Year

10 1993; and

11 (2) the support provided by Iran for acts of

12 international terrorism, as part of the Department

13 of State’s annual report on international terrorism.

14 SEC. 11. APPLICATION OF THE ACT TO LIBYA.

15 (a) IN GENERAL.—The sanctions of this Act, includ16 ing the terms and conditions for the imposition, duration,

17 and termination of sanctions, shall apply to persons mak18 ing investments with respect to the development of petro19 leum resources of Libya, or exporting, transferring, or re20 leasing of certain goods or technology to Libya, nationals

21 of Libya, or entities owned or controlled by Libya, in the

22 same manner as those sanctions apply under this Act to

23 persons making investments with respect to the develop24 ment of petroleum resources of Iran, or exporting, trans-
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1 ferring, or releasing of certain goods or technology to Iran,

2 nationals of Iran, or entities owned or controlled by Iran.

3 (b) APPLICATION OF SPECIFIC PROVISIONS.—In ap4 plying the provisions of this Act with respect to Libya

5 under subsection (a) each reference to ‘‘Iran’’ shall be

6 deemed to be a reference to ‘‘Libya’’.

7 SEC. 12. DETERMINATIONS NOT REVIEWABLE.

8 A determination to impose sanctions under this Act

9 shall not be reviewable in any court.

10 SEC. 13. DEFINITIONS.

11 As used in this Act:

12 (1) ACT OF INTERNATIONAL TERRORISM.—The

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

14 act—

15 (A) which is violent or dangerous to

16 human life and that is a violation of the crimi17 nal laws of the United States or of any State

18 or that would be a criminal violation if commit19 ted within the jurisdiction of the United States

20 or any State; and

21 (B) which appears to be intended—

22 (i) to intimidate or coerce a civilian

23 population;

24 (ii) to influence the policy of a govern25 ment by intimidation or coercion; or
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1 (iii) to affect the conduct of a govern2 ment by assassination or kidnapping.

3 (2) AFFILIATE.—For purposes of section 4(b),

4 a person is an ‘‘affiliate’’ of another person if more

5 than 50 percent of the outstanding capital stock or

6 other beneficial interest in both persons is owned by

7 a third person or both persons are otherwise con8 trolled by a third person.

9 (3) APPROPRIATE CONGRESSIONAL COMMIT10 TEES.—The term ‘‘appropriate congressional com11 mittees’’ means the Committees on Banking, Hous12 ing, and Urban Affairs and Foreign Relations of the

13 Senate and the Committee on International Rela14 tions of the House of Representatives.

15 (4) COMPONENT PART.—The term ‘‘component

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

17 11A(e)(1) of the Export Administration Act of 1979

18 (50 U.S.C. App. 2410a(e)(1)).

19 (5) DEVELOP AND DEVELOPMENT.—To ‘‘de20 velop’’, or the ‘‘development’’ of, petroleum resources

21 means the exploration for, or the extraction, refin22 ing, or transportation by pipeline of, petroleum re23 sources.

24 (6) FINANCIAL INSTITUTION.—The term ‘‘fi25 nancial institution’’ includes—
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1 (A) a depository institution (as defined in

2 section 3(c)(1) of the Federal Deposit Insur3 ance Act), including a branch or agency of a

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

5 the International Banking Act of 1978);

6 (B) a credit union;

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

8 dealer;

9 (D) an insurance company, including an

10 agency or underwriter;

11 (E) any other company that provides fi12 nancial services; and

13 (F) any subsidiary of an entity described

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

15 (7) FINISHED PRODUCT.—The term ‘‘finished

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

17 11A(e)(2) of the Export Administration Act of 1979

18 (50 U.S.C. App. 2410a(e)(2)).

19 (8) FOREIGN PERSON.—The term ‘‘foreign per20 son’’ means—

21 (A) an individual who is not a United

22 States person or an alien lawfully admitted for

23 permanent residence into the United States; or
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1 (B) a corporation, partnership, or other

2 nongovernment entity which is not a United

3 States person.

4 (9) GOODS AND TECHNOLOGY.—The terms

5 ‘‘goods’’ and ‘‘technology’’ have the meanings given

6 those terms in section 16 of the Export Administra7 tion Act of 1979 (50 U.S.C. app. 2415).

8 (10) INVESTMENT.—The term ‘‘investment’’

9 means—

10 (A) the entry into a contract that includes

11 responsibility for the development of petroleum

12 resources located in Iran or Libya (as the case

13 may be), or the entry into a contract providing

14 for the general supervision and guarantee of an15 ther person’s performance of such a contract;

16 (B) the purchase of a share of ownership

17 in that development;

18 (C) the entry into a contract providing for

19 the participation in royalties, earnings, or prof20 its in that development, without regard to the

21 form of the participation; or

22 (D) the entry into or performance of—

23 (i) a contract for the financing of the

24 development of petroleum resources located

25 in Iran or Libya (as the case may be); or
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1 (ii) a guaranty of another person’s

2 performance under such a contract.

3 (11) IRAN.—The term ‘‘Iran’’ means—

4 (A) the territory of Iran; and

5 (B) any territory or marine areas over

6 which the Government of Iran claims sov7 ereignty, sovereign rights, or jurisdiction, if the

8 Government of Iran exercises partial or de facto

9 control over such territory or areas or derives a

10 benefit from economic activity in the territory

11 or area pursuant to an international agreement.

12 (12) IRANIAN DIPLOMATS AND REPRESENTA13 TIVES OF OTHER GOVERNMENT AND MILITARY OR

14 QUASI-GOVERNMENTAL INSTITUTIONS OF IRAN.—

15 The term ‘‘Iranian diplomats and representatives of

16 other government and military or quasi-govern17 mental institutions of Iran’’ includes employees, rep18 resentatives, or affiliates of Iran’s—

19 (A) Foreign Ministry;

20 (B) Ministry of Intelligence and Security;

21 (C) Revolutionary Guard Corps;

22 (D) Crusade for Reconstruction;

23 (E) Qods (Jerusalem) Forces;

24 (F) Interior Ministry;
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1 (G) Foundation for the Oppressed and

2 Disabled;

3 (H) Prophet’s Foundation;

4 (I) June 5th Foundation;

5 (J) Martyr’s Foundation;

6 (K) Islamic Propagation Organization; and

7 (L) Ministry of Islamic Guidance.

8 (13) LIBYA.—The term ‘‘Libya’’ means—

9 (A) the territory of Libya; and

10 (B) any territory or marine areas over

11 which the Government of Libya claims sov12 ereignty, sovereign rights, or jurisdiction, if the

13 Government of Libya exercises partial or de

14 facto control over such territory or area or de15 rives a benefit from economic activity in the ter16 ritory or area pursuant to an international

17 agreement.

18 (14) NUCLEAR EXPLOSIVE DEVICE.—The term

19 ‘‘nuclear explosive device’’ means any device, wheth20 er assembled or disassembled, that is designed to

21 produce an instantaneous release of an amount of

22 nuclear energy from special nuclear material (as de23 fined in section 11aa. of the Atomic Energy Act of

24 1954) that is greater than the amount of energy
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1 that would be released from the detonation of one

2 pound of trinitrotoluene (TNT).

3 (15) PARENT.—For purposes of section 4(b), a

4 person is a ‘‘parent’’ of another person if that per5 son owns, directly or indirectly, more than 50 per6 cent of the outstanding capital stock or other bene7 ficial interest in that other person, or otherwise con8 trols that other person.

9 (16) PERSON.—The term ‘‘person’’ means a

10 natural person as well as a corporation, business as11 sociation, partnership, society, trust, any other non12 governmental entity, organization, or group, and any

13 governmental entity operating as a business enter14 prise, and any successor to any such entity.

15 (18) PETROLEUM RESOURCES.—The term ‘‘pe16 troleum resources’’ includes petroleum and natural

17 gas resources.

18 (19) SUBSIDIARY.—(A) For purposes of section

19 4(b), and subject to subparagraph (B), a person is

20 a ‘‘subsidiary’’ of another person if that other per21 son owns, directly or indirectly, more than 50 per22 cent of the outstanding capital stock or other bene23 ficial interest in that person, or otherwise controls

24 that person.
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1 (B) A person is a ‘‘wholly owned’’ subsidiary of

2 another person if all the outstanding capital stock or

3 other beneficial interests of that person are owned

4 by that other person.

5 (20) UNITED STATES OR STATE.—The term

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

7 States, the District of Columbia, the Commonwealth

8 of Puerto Rico, the Commonwealth of the Northern

9 Mariana Islands, American Samoa, Guam, the

10 United States Virgin Islands, and any other terri11 tory or possession of the United States.

12 (21) UNITED STATES PERSON.—The term

13 ‘‘United States person’’ means—

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

15 United States or who owes permanent alle16 giance to the United States; and

17 (B) a corporation or other legal entity

18 which is organized under the laws of the United

19 States, any State or territory thereof, or the

20 District of Columbia, if natural persons de21 scribed in subparagraph (A) own, directly or in22 directly, more than 50 percent of the outstand23 ing capital stock or other beneficial interest in

24 such legal entity.

Æ