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[House Report 110-294]
[From the U.S. Government Publishing Office]

110th Congress                                            Rept. 110-294
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================

 
                 IRAN COUNTER-PROLIFERATION ACT OF 2007

                                _______
                                

                 August 2, 2007.--Ordered to be printed

                                _______
                                

   Mr. Lantos, from the Committee on Foreign Affairs, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1400]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Foreign Affairs, to whom was referred the 
bill (H.R. 1400) to enhance United States diplomatic efforts 
with respect to Iran by imposing additional economic sanctions 
against Iran, and for other purposes, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.

                           TABLE OF CONTENTS

                                                                   Page
The Amendment....................................................     1
Purpose and Summary..............................................     9
Background and Need for the Legislation..........................     9
Hearings.........................................................    13
Committee Consideration..........................................    14
Votes of the Committee...........................................    14
Committee Oversight Findings.....................................    14
New Budget Authority and Tax Expenditures........................    14
Congressional Budget Office Cost Estimate........................    14
Performance Goals and Objectives.................................    18
Constitutional Authority Statement...............................    18
New Advisory Committees..........................................    18
Congressional Accountability Act.................................    18
Earmark Identification...........................................    18
Section-by-Section Analysis and Discussion.......................    18
Changes in Existing Law Made by the Bill, as Reported............    23

                             The Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Iran Counter-
Proliferation Act of 2007''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
Sec. 2. United States policy toward Iran.

  TITLE I--SUPPORT FOR DIPLOMATIC EFFORTS RELATING TO PREVENTING IRAN 
                     FROM ACQUIRING NUCLEAR WEAPONS

Sec. 101. Support for international diplomatic efforts.
Sec. 102. Peaceful efforts by the United States.

         TITLE II--ADDITIONAL BILATERAL SANCTIONS AGAINST IRAN

Sec. 201. Application to subsidiaries.
Sec. 202. Additional import sanctions against Iran.
Sec. 203. Additional export sanctions against Iran.

        TITLE III--AMENDMENTS TO THE IRAN SANCTIONS ACT OF 1996

Sec. 301. Multilateral regime.
Sec. 302. Mandatory sanctions.
Sec. 303. Authority to impose sanctions on principal executive 
officers.
Sec. 304. United States efforts to prevent investment.
Sec. 305. Clarification and expansion of definitions.
Sec. 306. Removal of waiver authority.

                     TITLE IV--ADDITIONAL MEASURES

Sec. 401. Additions to terrorism and other lists.
Sec. 402. Increased capacity for efforts to combat unlawful or 
terrorist financing.
Sec. 403. Exchange programs with the people of Iran.
Sec. 404. Reducing contributions to the World Bank.
Sec. 405. Restrictions on nuclear cooperation with countries assisting 
the nuclear program of Iran.
Sec. 406. Elimination of certain tax incentives for oil companies 
investing in Iran.

                   TITLE V--MISCELLANEOUS PROVISIONS

Sec. 501. Termination.

SEC. 2. UNITED STATES POLICY TOWARD IRAN.

  (a) Findings.--Congress finds the following:
          (1) The prospect of the Islamic Republic of Iran achieving 
        nuclear arms represents a grave threat to the United States and 
        its allies in the Middle East, Europe, and globally.
          (2) The nature of this threat is manifold, ranging from the 
        vastly enhanced political influence extremist Iran would wield 
        in its region, including the ability to intimidate its 
        neighbors, to, at its most nightmarish, the prospect that Iran 
        would attack its neighbors and others with nuclear arms. This 
        concern is illustrated by the statement of Hashemi Rafsanjani, 
        former president of Iran and currently a prominent member of 
        two of Iran's most important decisionmaking bodies, of December 
        14, 2001, when he said that it ``is not irrational to 
        contemplate'' the use of nuclear weapons.
          (3) The theological nature of the Iranian regime creates a 
        special urgency in addressing Iran's efforts to acquire nuclear 
        weapons.
          (4) Iranian regime leaders have persistently denied Israel's 
        right to exist. Current President Mahmoud Ahmadinejad has 
        called for Israel to be ``wiped off the map'' and the 
        Government of Iran has displayed inflammatory symbols that 
        express similar intent.
          (5) The nature of the Iranian threat makes it critical that 
        the United States and its allies do everything possible--
        diplomatically, politically, and economically--to prevent Iran 
        from acquiring nuclear-arms capability and persuade the Iranian 
        regime to halt its quest for nuclear arms.
  (b) Sense of Congress.--It is the sense of the Congress that--
          (1) Iranian President Ahmadinejad's persistent denials of the 
        Holocaust and his repeated assertions that Israel should be 
        ``wiped off the map'' may constitute a violation of the 
        Convention on the Prevention and Punishment of the Crime of 
        Genocide and should be brought before an appropriate 
        international tribunal for the purpose of declaring Iran in 
        breach of the Genocide Convention;
          (2) the United States should increase use of its important 
        role in the international financial sector to isolate Iran;
          (3) Iran should be barred from entering the World Trade 
        Organization (WTO) until all issues related to its nuclear 
        program are resolved;
          (4) all future free trade agreements entered into by the 
        United States should be conditioned on the requirement that the 
        parties to such agreements pledge not to invest and not to 
        allow companies based in its territory or controlled by its 
        citizens to invest in Iran's energy sector or otherwise to make 
        significant investment in Iran;
          (5) United Nations Security Council Resolution 1737 (December 
        23, 2006), which was passed unanimously and mandates an 
        immediate and unconditional suspension of Iran's nuclear 
        enrichment program, represents a critical gain in the worldwide 
        campaign to prevent Iran's acquisition of nuclear arms and 
        should be fully respected by all nations;
          (6) the United Nations Security Council should take further 
        measures beyond Resolution 1737 to tighten sanctions on Iran, 
        including preventing new investment in Iran's energy sector, as 
        long as Iran fails to comply with the international community's 
        demand to halt its nuclear enrichment campaign;
          (7) the United States should encourage foreign governments to 
        direct state-owned entities to cease all investment in Iran's 
        energy sector and all exports of refined petroleum products to 
        Iran and to persuade, and, where possible, require private 
        entities based in their territories to cease all investment in 
        Iran's energy sector and all exports of refined petroleum 
        products to Iran;
          (8) moderate Arab states have a vital and perhaps existential 
        interest in preventing Iran from acquiring nuclear arms, and 
        therefore such states, particularly those with large oil 
        deposits, should use their economic leverage to dissuade other 
        nations, including the Russian Federation and the People's 
        Republic of China, from assisting Iran's nuclear program 
        directly or indirectly and to persuade other nations, including 
        Russia and China, to be more forthcoming in supporting United 
        Nations Security Council efforts to halt Iran's nuclear 
        program;
          (9) the United States should take all possible measures to 
        discourage and, if possible, prevent foreign banks from 
        providing export credits to foreign entities seeking to invest 
        in the Iranian energy sector;
          (10) the United States should oppose any further activity by 
        the International Bank for Reconstruction and Development with 
        respect to Iran, or the adoption of a new Country Assistance 
        Strategy for Iran, including by seeking the cooperation of 
        other countries;
          (11) the United States should extend its program of 
        discouraging foreign banks from accepting Iranian state banks 
        as clients;
          (12) the United States should prohibit all Iranian state 
        banks from using the United States banking system;
          (13) United States Federal pension plans should divest 
        themselves of all non-United States companies investing more 
        than $20,000,000 in Iran's energy sector;
          (14) State and local government pension plans should divest 
        themselves of all non-United States companies investing more 
        than $20,000,000 in Iran's energy sector;
          (15) the United States should designate the Islamic 
        Revolutionary Guards Corps, which purveys terrorism throughout 
        the Middle East and plays an important role in the Iranian 
        economy, as a foreign terrorist organization under section 219 
        of the Immigration and Nationality Act, place the Islamic 
        Revolutionary Guards Corps on the list of specially designated 
        global terrorists, and place the Islamic Revolutionary Guards 
        Corps on the list of weapons of mass destruction proliferators 
        and their supporters;
          (16) United States concerns regarding Iran are strictly the 
        result of actions of the Government of Iran; and
          (17) the American people have feelings of friendship for the 
        Iranian people, regret that developments of recent decades have 
        created impediments to that friendship, and hold the Iranian 
        people, their culture, and their ancient and rich history in 
        the highest esteem.

  TITLE I--SUPPORT FOR DIPLOMATIC EFFORTS RELATING TO PREVENTING IRAN 
                     FROM ACQUIRING NUCLEAR WEAPONS

SEC. 101. SUPPORT FOR INTERNATIONAL DIPLOMATIC EFFORTS.

  It is the sense of the Congress that--
          (1) the United States should use diplomatic and economic 
        means to resolve the Iranian nuclear problem;
          (2) the United States should continue to support efforts in 
        the International Atomic Energy Agency and the United Nations 
        Security Council to bring about an end to Iran's uranium 
        enrichment program and its nuclear weapons program; and
          (3)(A) United Nations Security Council Resolution 1737 was a 
        useful first step toward pressing Iran to end its nuclear 
        weapons program; and
          (B) in light of Iran's continued defiance of the 
        international community, the United Nations Security Council 
        should adopt additional measures against Iran, including 
        measures to prohibit investments in Iran's energy sector.

SEC. 102. PEACEFUL EFFORTS BY THE UNITED STATES.

  Nothing in this Act shall be construed as authorizing the use of 
force or the use of the United States Armed Forces against Iran.

         TITLE II--ADDITIONAL BILATERAL SANCTIONS AGAINST IRAN

SEC. 201. APPLICATION TO SUBSIDIARIES.

  (a) In General.--Except as provided in subsection (b), in any case in 
which an entity engages in an act outside the United States which, if 
committed in the United States or by a United States person, would 
violate Executive Order No. 12959 of May 6, 1995, Executive Order No. 
13059 of August 19, 1997, or any other prohibition on transactions with 
respect to Iran that is imposed under the International Emergency 
Economic Powers Act (50 U.S.C. 1701 et seq.) and if that entity was 
created or availed of for the purpose of engaging in such an act, the 
parent company of that entity shall be subject to the penalties for 
such violation to the same extent as if the parent company had engaged 
in that act.
  (b) Exception.--Subsection (a) shall not apply to any act carried out 
under a contract or other obligation of any entity if such contract or 
obligation was entered into before the acquisition of such entity by 
the parent company unless such parent company acquired such entity 
knowing or having reason to know that such contract or other obligation 
existed or such contract or other obligation is expanded to cover 
additional activities beyond the terms of such contract or other 
obligation as it existed at the time of such acquisition.
  (c) Definitions.--In this section--
          (1) the term ``entity'' means a partnership, association, 
        trust, joint venture, corporation, or other organization;
          (2) an entity is a ``parent company'' of another entity if it 
        owns, directly or indirectly, more than 50 percent of the 
        equity interest in that other entity and is a United States 
        person; and
          (3) the term ``United States person'' means any United States 
        citizen, any alien lawfully admitted for permanent residence to 
        the United States, any entity organized under the laws of the 
        United States, or any person in the United States.

SEC. 202. ADDITIONAL IMPORT SANCTIONS AGAINST IRAN.

  Effective 120 days after the date of the enactment of this Act--
          (1) goods of Iranian origin that are otherwise authorized to 
        be imported under section 560.534 of title 31, Code of Federal 
        Regulations, as in effect on March 5, 2007, may not be imported 
        into the United States; and
          (2) activities otherwise authorized by section 560.535 of 
        title 31, Code of Federal Regulations, as in effect on March 5, 
        2007, are no longer authorized.

SEC. 203. ADDITIONAL EXPORT SANCTIONS AGAINST IRAN.

  Effective on the date of the enactment of this Act--
          (1) licenses to export or reexport goods, services, or 
        technology relating to civil aviation that are otherwise 
        authorized by section 560.528 of title 31, Code of Federal 
        Regulations, as in effect on March 5, 2007, may not be issued, 
        and any such license issued before such date of enactment is no 
        longer valid; and
          (2) goods, services, or technology described in paragraph (1) 
        may not be exported or reexported.

        TITLE III--AMENDMENTS TO THE IRAN SANCTIONS ACT OF 1996

SEC. 301. MULTILATERAL REGIME.

  Section 4(b) of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note) 
is amended to read as follows:
  ``(b) Reports to Congress.--Not later than 6 months after the date of 
the enactment of the Iran Counter-Proliferation Act of 2007 and every 
six months thereafter, the President shall transmit to the appropriate 
congressional committees a report regarding specific diplomatic efforts 
undertaken pursuant to subsection (a), the results of those efforts, 
and a description of proposed diplomatic efforts pursuant to such 
subsection. Each report shall include--
          ``(1) a list of the countries that have agreed to undertake 
        measures to further the objectives of section 3 with respect to 
        Iran;
          ``(2) a description of those measures, including--
                  ``(A) government actions with respect to public or 
                private entities (or their subsidiaries) located in 
                their territories, that are engaged in Iran;
                  ``(B) any decisions by the governments of these 
                countries to rescind or continue the provision of 
                credits, guarantees, or other governmental assistance 
                to these entities; and
                  ``(C) actions taken in international fora to further 
                the objectives of section 3;
          ``(3) a list of the countries that have not agreed to 
        undertake measures to further the objectives of section 3 with 
        respect to Iran, and the reasons therefor; and
          ``(4) a description of any memorandums of understanding, 
        political understandings, or international agreements to which 
        the United States has acceded which affect implementation of 
        this section or section 5(a).''.

SEC. 302. MANDATORY SANCTIONS.

  Section 5(a) of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note) 
is amended by striking ``2 or more of the sanctions described in 
paragraphs (1) through (6) of section 6'' and inserting ``the sanction 
described in paragraph (5) of section 6 and, in addition, one or more 
of the sanctions described in paragraphs (1), (2), (3), (4), and (6) of 
such section''.

SEC. 303. AUTHORITY TO IMPOSE SANCTIONS ON PRINCIPAL EXECUTIVE 
                    OFFICERS.

  Section 5 of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note) is 
amended by adding at the end the following:
  ``(g) Authority to Impose Sanctions on Principal Executive 
Officers.--
          ``(1) Sanctions under section 6.--In addition to the 
        sanctions imposed under subsection (a), the President may 
        impose any of the sanctions under section 6 on the principal 
        executive officer or officers of any sanctioned person, or on 
        persons performing similar functions as such officer or 
        officers. The President shall include on the list published 
        under subsection (d) the name of any person on whom sanctions 
        are imposed under this paragraph.
          ``(2) Additional sanctions.--In addition to the sanctions 
        imposed under paragraph (1), the President may block the 
        property of any person described in paragraph (1), and prohibit 
        transactions in such property, to the same extent as the 
        property of a foreign person determined to have committed acts 
        of terrorism for purposes of Executive Order 13224 of September 
        23, 2001 (50 U.S.C. 1701 note).''.

SEC. 304. UNITED STATES EFFORTS TO PREVENT INVESTMENT.

  Section 5 of the Iran Sanctions Act of 1996 is amended by adding the 
following new subsection at the end:
  ``(h) United States Efforts to Address Planned Investment.--
          ``(1) Reports on investment activity.--Not later than January 
        30, 2008, and every 6 months thereafter, the President shall 
        transmit to the Committee on Foreign Affairs of the House of 
        Representatives and the Committee on Foreign Relations of the 
        Senate a report on investment and pre-investment activity, by 
        any person or entity, that could contribute to the enhancement 
        of Iran's ability to develop petroleum resources in Iran. For 
        each such activity, the President shall provide a description 
        of the activity, any information regarding when actual 
        investment may commence, and what steps the United States has 
        taken to respond to such activity.
          ``(2) Definition.--In this subsection--
                  ``(A) the term `investment' includes the extension by 
                a financial institution of credit or other financing to 
                a person for that person's investment; and
                  ``(B) the term `pre-investment activity' means any 
                activity indicating an intent to make an investment, 
                including a memorandum of understanding among parties 
                indicating such an intent.''

SEC. 305. CLARIFICATION AND EXPANSION OF DEFINITIONS.

  (a) Person.--Section 14(13)(B) of the Iran Sanctions Act of 1996 (50 
U.S.C. 1701 note) is amended to read as follows:
                  ``(B)(i) a corporation, business association, 
                partnership, society, trust, financial institution, 
                insurer, underwriter, guarantor, and any other business 
                organization;
                  ``(ii) any foreign subsidiary of any entity described 
                in clause (i); and
                  ``(iii) any government entity operating as a business 
                enterprise, such as an export credit agency; and''.
  (b) Petroleum Resources.--Section 14(14) of the Iran Sanctions Act of 
1996 (50 U.S.C. 1701 note) is amended by inserting after ``petroleum'' 
the second place it appears the following: ``, petroleum refining 
capacity, liquefied natural gas, the sale of oil tankers or liquefied 
natural gas tankers,''.

SEC. 306. REMOVAL OF WAIVER AUTHORITY.

  (a) Six-Month Waiver Authority.--Section 4 of the Iran Sanctions Act 
of 1996 (50 U.S.C. 1701 note) is amended--
          (1) in subsection (d)(1), by striking ``except those with 
        respect to which the President has exercised the waiver 
        authority of subsection (c)'';
          (2) by striking subsection (c); and
          (3) by redesignating subsections (d), (e), and (f) as 
        subsections (c), (d), and (e), respectively.
  (b) General Waiver Authority.--Section 9 of the Iran Sanctions Act of 
1996 (50 U.S.C. 1701 note) is amended by striking subsection (c).
  (c) Construction.--The amendments made by this section shall not be 
construed to affect any exercise of the authority of section 4(c) or 
section 9(c) of the Iran Sanctions Act of 1996 as in effect on the day 
before the date of the enactment of this Act.

                     TITLE IV--ADDITIONAL MEASURES

SEC. 401. ADDITIONS TO TERRORISM AND OTHER LISTS.

  (a) Determinations and Report.--Not later than 120 days after the 
date of the enactment of this Act, the President shall--
          (1) determine whether the Islamic Revolutionary Guards Corps 
        should be--
                  (A) designated as a foreign terrorist organization 
                under section 219 of the Immigration and Nationality 
                Act (8 U.S.C. 1189);
                  (B) placed on the list of specially designated global 
                terrorists; and
                  (C) placed on the list of weapons of mass destruction 
                proliferators and their supporters; and
          (2) report the determinations under paragraph (1) to the 
        Committee on Foreign Affairs of the House of Representatives 
        and the Committee on Foreign Relations of the Senate, 
        including, if the President determines that such Corps should 
        not be so designated or placed on either such list, the 
        justification for the President's determination.
  (b) Extension of Authority.--The President may block all property and 
interests in property of the following persons, to the same extent as 
property and interests in property of a foreign person determined to 
have committed acts of terrorism for purposes of Executive Order 13224 
of September 21, 2001 (50 U.S.C. 1701 note) may be blocked:
          (1) Persons who assist or provide financial, material, or 
        technological support for, or financial or other services to or 
        in support of, the International Revolutionary Guards Corps 
        (IRGC) or entities owned or effectively controlled by the IRGC.
          (2) Persons otherwise associated with the IRGC or entities 
        referred to in paragraph (1).
  (c) Definitions.--In this section--
          (1) the term ``specially designated global terrorist'' means 
        any person included on the Annex to Executive Order 13224, of 
        September 23, 2001, and any other person identified under 
        section 1 of that Executive order whose property and interests 
        in property are blocked by that section; and
          (2) the term ``weapons of mass destruction proliferators and 
        their supporters'' means any person included on the Annex to 
        Executive Order 13382, of June 28, 2005, and any other person 
        identified under section 1 of that Executive order whose 
        property and interests in property are blocked by that section.

SEC. 402. INCREASED CAPACITY FOR EFFORTS TO COMBAT UNLAWFUL OR 
                    TERRORIST FINANCING.

  (a) Findings.--The work of the Office of Terrorism and Financial 
Intelligence of the Department of Treasury, which includes the Office 
of Foreign Assets Control and the Financial Crimes Enforcement Center, 
is critical to ensuring that the international financial system is not 
used for purposes of supporting terrorism and developing weapons of 
mass destruction.
  (b) Authorization.--There is authorized for the Secretary of the 
Treasury $59,466,000 for fiscal year 2008 and such sums as may be 
necessary for each of the fiscal years 2009 and 2010 for the Office of 
Terrorism and Financial Intelligence.
  (c) Authorization Amendment.--Section 310(d)(1) of title 31, United 
States Code, is amended by striking ``such sums as may be necessary for 
fiscal years 2002, 2003, 2004, and 2005'' and inserting ``$85,844,000 
for fiscal year 2008 and such sums as may be necessary for each of the 
fiscal years 2009 and 2010''.

SEC. 403. EXCHANGE PROGRAMS WITH THE PEOPLE OF IRAN.

  (a) Sense of Congress.--It is the sense of the Congress that the 
United States should seek to enhance its friendship with the people of 
Iran, particularly by identifying young people of Iran to come to the 
United States under United States exchange programs.
  (b) Exchange Programs Authorized.--The President is authorized to 
carry out exchange programs with the people of Iran, particularly the 
young people of Iran. Such programs shall be carried out to the extent 
practicable in a manner consistent with the eligibility for assistance 
requirements specified in section 302(b) of the Iran Freedom Support 
Act (Public Law 109-293).
  (c) Authorization.--Of the amounts available to the Department of 
State for ``Educational and Cultural Exchanges'' to carry out the 
Mutual Educational and Cultural Exchange Act of 1961, there is 
authorized to be appropriated to the President to carry out this 
section the sum of $10,000,000 for fiscal year 2008.

SEC. 404. REDUCING CONTRIBUTIONS TO THE WORLD BANK.

  The President of the United States shall reduce the total amount 
otherwise payable on behalf of the United States to the International 
Bank for Reconstruction and Development for each fiscal year by the 
percentage represented by--
          (1) the total of the amounts provided by the Bank to entities 
        in Iran, or for projects and activities in Iran, in the then-
        preceding fiscal year; divided by
          (2) the total of the amounts provided by the Bank to all 
        entities, or for all projects and activities, in the then-
        preceding fiscal year.

SEC. 405. RESTRICTIONS ON NUCLEAR COOPERATION WITH COUNTRIES ASSISTING 
                    THE NUCLEAR PROGRAM OF IRAN.

  (a) In General.--
          (1) Restriction.--Notwithstanding any other provision of law 
        or any international agreement--
                  (A) no agreement for cooperation between the United 
                States and the government of any country that is 
                assisting the nuclear program of Iran or transferring 
                advanced conventional weapons or missiles to Iran may 
                be submitted to the President or to Congress pursuant 
                to section 123 of the Atomic Energy Act of 1954 (42 
                U.S.C. 2153),
                  (B) no such agreement may enter into force with such 
                country,
                  (C) no license may be issued for export directly or 
                indirectly to such country of any nuclear material, 
                facilities, components, or other goods, services, or 
                technology that would be subject to such agreement, and
                  (D) no approval may be given for the transfer or 
                retransfer directly or indirectly to such country of 
                any nuclear material, facilities, components, or other 
                goods, services, or technology that would be subject to 
                such agreement,
        until the President makes the determination and report under 
        paragraph (2).
          (2) Determination and report.--The determination and report 
        referred to in paragraph (1) are a determination and report by 
        the President, submitted to the Committee on Foreign Relations 
        of the Senate and the Committee on Foreign Affairs of the House 
        of Representatives, that--
                  (A) Iran has ceased its efforts to design, develop, 
                or acquire a nuclear explosive device or related 
                materials or technology; or
                  (B) the government of the country that is assisting 
                the nuclear program of Iran or transferring advanced 
                conventional weapons or missiles to Iran--
                          (i) has suspended all nuclear assistance to 
                        Iran and all transfers of advanced conventional 
                        weapons and missiles to Iran; and
                          (ii) is committed to maintaining that 
                        suspension until Iran has implemented measures 
                        that would permit the President to make the 
                        determination described in subparagraph (A).
  (b) Construction.--The restrictions in subsection (a)--
          (1) shall apply in addition to all other applicable 
        procedures, requirements, and restrictions contained in the 
        Atomic Energy Act of 1954 and other laws; and
          (2) shall not be construed as affecting the validity of 
        agreements for cooperation that are in effect on the date of 
        the enactment of this Act.
  (c) Definitions.--In this section:
          (1) Agreement for cooperation.--The term ``agreement for 
        cooperation'' has the meaning given that term in section 11 b. 
        of the Atomic Energy Act of 1954 (42 U.S.C. 2014(b)).
          (2) Assisting the nuclear program of iran.--The term 
        ``assisting the nuclear program of Iran'' means the intentional 
        transfer to Iran by a government, or by a person subject to the 
        jurisdiction of a government with the knowledge and 
        acquiescence of that government, of goods, services, or 
        technology listed on the Nuclear Suppliers Group Guidelines for 
        the Export of Nuclear Material, Equipment and Technology 
        (published by the International Atomic Energy Agency as 
        Information Circular INFCIRC/254/Rev. 3/Part 1, and subsequent 
        revisions), or the Nuclear Suppliers Group Guidelines for 
        Transfers of Nuclear-Related Dual-Use Equipment, Material, and 
        Related Technology (published by the International Atomic 
        Energy Agency as Information Circular INFCIR/254/Rev. 3/Part 2, 
        and subsequent revisions).
          (3) Country that is assisting the nuclear program of iran or 
        transferring advanced conventional weapons or missiles to 
        iran.--The term ``country that is assisting the nuclear program 
        of Iran or transferring advanced conventional weapons or 
        missiles to Iran'' means--
                  (A) the Russian Federation; and
                  (B) any other country determined by the President to 
                be assisting the nuclear program of Iran or 
                transferring advanced conventional weapons or missiles 
                to Iran.
          (4) Transferring advanced conventional weapons or missiles to 
        iran.--The term ``transferring advanced conventional weapons or 
        missiles to Iran'' means the intentional transfer to Iran by a 
        government, or by a person subject to the jurisdiction of a 
        government with the knowledge and acquiescence of that 
        government, of goods, services, or technology listed on--
                  (A) the Wassenaar Arrangement list of Dual Use Goods 
                and Technologies and Munitions list of July 12, 1996, 
                and subsequent revisions; or
                  (B) the Missile Technology Control Regime Equipment 
                and Technology Annex of June 11, 1996, and subsequent 
                revisions.

SEC. 406. ELIMINATION OF CERTAIN TAX INCENTIVES FOR OIL COMPANIES 
                    INVESTING IN IRAN.

  (a) In General.--Subsection (h) of section 167 of the Internal 
Revenue Code of 1986 (relating to amortization of geological and 
geophysical expenditures) is amended by adding at the end the following 
new paragraph:
          ``(6) Denial when iran sanctions in effect.--
                  ``(A) In general.--If sanctions are imposed under 
                section 5(a) of the Iran Sanctions Act of 1996 
                (relating to sanctions with respect to the development 
                of petroleum resources of Iran) on any member of an 
                expanded affiliated group the common parent of which is 
                a foreign corporation, paragraph (1) shall not apply to 
                any expense paid or incurred by any such member in any 
                period during which the sanctions are in effect.
                  ``(B) Expanded affiliated group.--For purposes of 
                subparagraph (A), the term `expanded affiliated group' 
                means an affiliated group as defined in section 
                1504(a), determined--
                          ``(i) by substituting `more than 50 percent' 
                        for `at least 80 percent' each place it 
                        appears, and
                          ``(ii) without regard to paragraphs (2), (3), 
                        and (4) of section 1504(b).''.
  (b) Effective Date.--The amendment made by subsection (a) shall apply 
to expense paid or incurred on or after January 1, 2007.

                   TITLE V--MISCELLANEOUS PROVISIONS

SEC. 501. TERMINATION.

  (a) Termination.--The restrictions provided in sections 203, 404, and 
405 shall cease to be effective with respect to Iran on the date on 
which the President determines and certifies to the appropriate 
congressional committees that Iran--
          (1) has ceased its efforts to design, develop, manufacture, 
        or acquire--
                  (A) a nuclear explosive device or related materials 
                and technology;
                  (B) chemical and biological weapons; and
                  (C) ballistic missiles and ballistic missile launch 
                technology;
          (2) has been removed from the list of countries the 
        governments of which have been determined, for purposes of 
        section 6(j) of the Export Administration Act of 1979 (50 
        U.S.C. 2405(j)), section 620A of the Foreign Assistance Act of 
        1961, section 40 of the Arms Export Control Act, or any other 
        provision of law, to have repeatedly provided support for acts 
        of international terrorism; and
          (3) poses no significant threat to United States national 
        security, interests, or allies.
  (b) Definition.--In subsection (a), the term ``appropriate 
congressional committees'' means the Committee on Foreign Affairs of 
the House of Representatives and the Committee on Foreign Relations of 
the Senate.

                          Purpose and Summary

    H.R. 1400, the Iran Counter-Proliferation Act of 2007, is 
designed to deprive Iran of the funds and support it needs to 
pursue its efforts to develop nuclear weapons and the means to 
produce them. It includes a broad range of measures, including 
expanding United States sanctions on Iran, sanctioning 
companies that invest in Iran, prohibiting civilian nuclear 
cooperation with countries that support Iran's nuclear program, 
and expanding sanctions against Iranian entities that are the 
instruments for Iran's support of terrorism.

                Background and Need for the Legislation

    Iran poses a significant threat to the United States and 
our allies in the region. There is wide agreement that it is a 
vital U.S. national security priority to undertake steps to 
prevent Iran from acquiring weapons of mass destruction, in 
particular nuclear weapons, and to end its support for 
international terrorism. Given that Iran's economy, and its 
ability to influence events, is heavily dependent on the 
revenue derived from energy exports, recent U.S. efforts to 
prevent Iran from acquiring weapons of mass destruction have 
focused on seeking to deter foreign investment in Iran's 
petroleum sector, while prohibiting U.S. investment.
    H.R. 1400, the Iran Counter-Proliferation Act of 2007, is 
the most recent effort to tighten legislative sanctions on Iran 
to support such efforts. The legislation is aimed at deterring 
significant amounts of foreign investment in Iran's energy 
sector--specifically, any investment of $20 million or greater. 
U.S. individuals and companies have been prohibited from 
investing in Iran's petroleum sector since Executive Order 
12957 was issued on March 15, 1995 by President Bill Clinton in 
his response to his Administration's assessment that ``the 
actions and policies of the Government of Iran constitute an 
unusual and extraordinary threat to the national security, 
foreign policy, and economy of the United States.'' The White 
House spokesman at that time, Michael McCurry, made clear that 
the objectionable activities were Iran's pursuit of weapons of 
mass destruction, its support of international terrorism, and 
its efforts to undermine the Middle East peace process. 
Responding to the same concerns, a subsequent executive order, 
E.O. 12959, issued on May 8, 1995, banned all ``new 
investment'' in Iran by U.S. individuals and companies. The 
same executive order banned virtually all trade with Iran. In 
conjunction with the latter executive order, then-Secretary of 
State Warren Christopher warned the international community 
that the path Iran was following was a mirror image of the 
steps taken by other nations that had sought nuclear weapons 
capabilities.
    The larger goal of H.R. 1400 is two-fold: (1) to prevent 
Iran from securing nuclear arms and the means to produce them; 
and (2) to ensure that this goal is achieved in peaceful 
manner. In short, this legislation seeks to deprive Iran of a 
significant amount of the funds it needs to pursue its nuclear 
ambitions. The energy sector is the natural target of this 
legislation, as it was of the Iran Sanctions Act (ISA) of 1996 
and the Iran Freedom Support Act (IFSA) of 2006, for an obvious 
reason: energy sales, and especially oil, are Iran's primary 
source of revenue. In effect, this legislation seeks to present 
the Islamic Republic of Iran with a choice: either cease its 
nuclear program, or risk the political and economic future of 
the Iranian people.
    Although U.S. law prohibits American firms from investing 
in Iran, foreign entities that fall outside of typical U.S. 
sanctions continue to invest there. Such activity has enhanced 
the Iranian economy, allowed Iran access to sophisticated 
technology and know-how, as well as foreign currency, and 
thereby contributed significantly to Iran's ability to fund 
terror groups, and to finance the regime's weapons of mass 
destruction programs, including its nuclear program.
    The Iran Counter-Proliferation Act builds on over a decade 
of legislative and executive action on this issue. After 
numerous House and Senate hearings to address this problem, 
Congress passed, and President Clinton signed into law, P.L. 
104-172, the ``Iran and Libya Sanctions Act of 1996'' (ILSA). 
The purpose of this law was to discourage foreign entities from 
investing in Iran's petroleum sector by imposing certain 
sanctions on them. A five year extension to ILSA was signed 
into law by President George W. Bush on August 3, 2001.
    To further strengthen sanctions targeting these 
investments, on September 30, 2006, Congress passed, and 
President Bush signed into law, P.L. 109-293, the ``Iran 
Freedom Support Act'' (IFSA). Among other provisions, the IFSA 
strengthened sanctions under the Iran Sanctions Act (``ISA''--
as the former ``Iran and Libya Sanctions Act of 1996'' is now 
known), including by raising certain waiver thresholds to 
``vital to the national security interests of the United 
States,'' by enlarging the scope of those who might be subject 
to sanctions, and by enhancing tools for using financial means 
to address Iran's activities of concern.
    However, the enacted version of IFSA did not include 
language that would make export credit agencies, insurers, and 
other financial institutions subject to sanctions for their 
facilitation of investments in Iran's oil industry. To address 
these gaps, the House Foreign Affairs Committee passed H.R. 957 
on February 15, 2007. H.R. 957 also expands the activities 
covered under the law to include production of petrochemicals 
and liquefied natural gas. The provisions of H.R. 957 are 
included in H.R. 1400 to provide a comprehensive approach to 
the issues addressed in H.R. 1400. The House passed H.R. 957 on 
July 31, 2007, by a vote of 415-11.
    Although ISA was enacted over a decade ago, the 
Administration has never sanctioned a foreign entity for taking 
the objectionable step of investing $20 million or more in 
Iran's energy sector, even though there have been numerous 
instances of such investments since ISA became law. On one 
occasion, Presidential authority has been used to waive 
sanctions against foreign entities investing in Iran's 
petroleum sector, and a number of investigations of possible 
investment in Iran remain active. In this respect, the 
Committee believes that the laws which have been enacted, as 
enforced, and other steps taken by current and past 
Administrations, have proven inadequate. They have not 
succeeded in ending Iran's efforts to produce weapons of mass 
destruction or ending Iran's other, considerable threats to 
American national interests.
    Specifically with respect to ISA, the Committee is deeply 
dismayed that the current Administration, like the prior 
Administration, has not acted to sanction a single enterprise 
for investing in Iran, and has repeatedly delayed its decisions 
on whether ``alleged'' investments may be subject to sanctions.
    Despite this failure fully to implement its provisions, ISA 
has made a positive contribution to United States national 
security. First, certain concessions from countries whose 
companies would have been subject to sanctions were made with 
respect to those powers' dealings with Iran, in exchange for 
waivers of the law's operation, pursuant (in the view of the 
Administration) to the statute as enacted. In 1998, then-
Secretary of State Madeleine Albright found that an investment 
in Iran, by Total, a French firm, violated ILSA, but waived 
sanctions and indicated that additional waivers would be 
forthcoming if there was cooperation from European Union states 
on non-proliferation matters with respect to Iran. Views on the 
importance of those concessions and interpretations of the 
promises of future cooperation vary greatly. Second, the supply 
of capital to the Iranian petroleum sector has been constrained 
by the threat of sanctions, driving up the cost of capital--to 
the disadvantage of Iran. Third, by highlighting the threat 
from Iran, ILSA has emerged as a deterrent to investment. In 
2001, Iranian economic experts themselves noted that 
``sanctions result in contracts with second [-rate] companies'' 
and ``at least double the cost of [Iran's] oil extraction,'' 
requiring ``a significant part of [Iran's] economic and 
financial resources are expended to compensate for such 
limitations.'' This is one explanation for the widely disparate 
rate of investment in the energy sector in Iran, on the one 
hand, and its immediate neighbors, such as Qatar, on the other. 
For this reason, in 2001, the Congress extended ILSA, as 
mentioned above, for five years.
    The Committee acknowledges that the Administration, after a 
long and arduous effort, has been able to move the question of 
Iran's nuclear arms from the International Atomic Energy Agency 
(IAEA) to the United Nations Security Council (UNSC), where it 
has secured the passage and implementation of sanctions on 
Iran. This is an important achievement, but it must now be 
followed up by further decisive action both within the UNSC, 
and nationally by like-minded countries that share, in whole or 
in part, our concerns about Iran.
    H.R. 1400 seeks to strengthen the enforcement and 
implementation of existing law in three primary ways. First and 
foremost, it removes the Presidential waiver of ISA sanctions. 
Second, it requires that no U.S. contracts be signed with an 
offending entity, in addition to other sanctions the President 
is supposed to choose from the menu of sanctions listed in 
Section 6 of ISA. Third, it requires the President to submit a 
report every six months to appropriate congressional committees 
on foreign investment and pre-investment activity that could 
contribute to the enhancement of Iran's ability to develop 
petroleum resources in Iran. Although it does not require the 
President to make a determination as to whether such investment 
activity is sanctionable--or, in the case of pre-investment 
activity, would be sanctionable--the reporting requirement 
implicitly presses him to do just that. The reporting 
requirement also should have a deterrent effect on investment 
by putting offending entities on notice that they could be 
subject to ISA sanctions.
    Among other major elements of H.R. 1400 as reported by the 
Committee on Foreign Affairs are the following:

         LThe President is authorized to sanction CEO's 
        of offending entities, as well as the entities 
        themselves.

         LThe Administration will not be allowed to 
        sign a nuclear cooperation agreement with any nation 
        that aids Iran's nuclear program.

         LImport sanctions are to be re-imposed on all 
        Iranian exports to the United States. The Clinton 
        Administration lifted sanctions on Iranian carpets and 
        other exports in a gesture of goodwill and in an effort 
        to encourage a more forthcoming attitude from Tehran. 
        Nearly a decade later, however, it is clear that Iran 
        has not been responsive.

         LThe President is required to determine 
        whether the Iranian Revolutionary Guard Corps (IRGC) 
        should be designated as a foreign terrorist 
        organization, placed on the list of specially 
        designated global terrorists, and/or placed on the list 
        of weapons of mass destruction proliferators and their 
        supporters. It also provides blocking the assets and 
        interests of persons who provide support to the IRGC. 
        The IRGC and its Qods Force reportedly train terrorists 
        throughout the Middle East, including in Iraq and in 
        Lebanon. The IRGC is a major base of support for 
        Ahmadinejad and reportedly owns large economic 
        enterprises in Iran. Foreign banks would presumably be 
        reticent about dealing with these enterprises were the 
        IRGC to be declared a terrorist organization or a WMD 
        proliferator.

         LThe Treasury Department's Office of Terrorism 
        and Financial Intelligence is authorized $60 million 
        for fiscal year 2008.

         LFunds are authorized funds for programs to 
        enhance U.S.-Iranian friendship, especially by 
        organizing exchange programs for young Iranians.

         LTitle II of H.R. 1400, builds on provisions 
        within Public Law 109-293 by applying ISA sanctions to 
        parent companies of foreign subsidiaries which engage 
        in activity that ISA would prohibit for U.S. entities.

         LH.R. 1400 builds on the efforts of Public Law 
        109-293 and, in conjunction with H.R. 957, would expand 
        ISA sanctions to apply to a ``financial institution, 
        insurer, underwriter, guarantor, any other business 
        organization, including any foreign subsidiaries of the 
        foregoing.'' H.R. 1400, like H.R. 957, also applies ISA 
        to petroleum byproducts and liquefied natural gas, yet 
        H.R. 1400 also applies the ISA to the sale of oil or 
        liquefied natural gas tankers.

         LH.R. 1400 expresses the Sense of Congress 
        commending UNSCR 1737 and urging further such 
        resolutions.

         LH.R. 1400 contains a Sense of Congress that 
        the U.S. should try to prevent foreign banks from 
        providing export credits to foreign entities seeking to 
        invest in the Iranian energy sector, complementing 
        provisions in H.R. 957, and elsewhere in H.R. 1400, 
        that address these issues by including export credit 
        agencies in ISA sanctions.

         LH.R. 1400 expresses a Sense of Congress of 
        the American people's feelings of friendship with, and 
        esteem for, the Iranian people and praising Iranian 
        culture and history. It also regrets the 
        ``impediments'' to the U.S.-Iran relationship caused by 
        ``developments'' in recent decades.

    The Committee is convinced that the imminence and 
seriousness of the nuclear threat Iran would pose fully justify 
this legislation, and it hopes that our friends and allies will 
adopt similar measures and cut off further economic relations 
with Iran until it ends its quest for nuclear arms and stops 
its support for international terrorism. In the 1990s, some of 
our friends and allies were still holding out hope that Iran's 
nuclear efforts were strictly geared toward peaceful energy 
use. By now, however, virtually every one of them understands 
and acknowledges that Iran is determined to pursue its nuclear 
program up to and including the production of nuclear arms. 
Therefore, it is time for their actions and sense of urgency to 
catch up with their stated perceptions. The profitability of 
private companies pales in importance when compared to the 
dangers posed by a nuclear Iran. Moreover, investment in Iran's 
energy sector helps to sustain Iran's nuclear program and 
therefore strengthens the voices of those who claim that the 
urgency of the situation requires a solution by other than 
peaceful means. It is time for the international community 
simply to cease investing in Iran's energy industry, and this 
legislation is intended to help facilitate that result. 
Meanwhile, this legislation is intended to reinforce actions at 
the UNSC, not undermine them.

                                Hearings

    Over the years, the Committee has held multiple briefings 
and hearings related to the subject matter of H.R. 1400, 
particularly since 2003 and continuing into the 110th Congress. 
On January 11, 2007, the Full Committee held a briefing 
entitled, ``Next Steps in the Iran Crisis.'' The Committee was 
briefed by the Under Secretary of state for Political Affairs, 
Thomas R. Pickering, and the former Director of the Central 
Intelligence Agency, R. James Woolsey. The Full Committee held 
a hearing on January 31, 2007, entitled, ``Understanding the 
Iran Crisis.'' Testimony was heard from private witnesses. On 
March 6, 2007, the Committee held a hearing entitled, ``The 
Iranian Challenge,'' with testimony heard from the Under 
Secretary of State for Political Affairs, R. Nicholas Burns. On 
March 15, 2007, the Subcommittee on Terrorism, Nonproliferation 
and Trade, and the Subcommittee on the Middle East and South 
Asia held a joint hearing entitled, ``Iranian Nuclear Crisis: 
Latest Developments and Next Steps.''

                        Committee Consideration

    On June 26, 2007, the Committee met in open session and 
ordered favorably reported the bill H.R. 1400, as amended, by a 
vote of 37-1, a quorum being present.

                         Votes of the Committee

    Clause (3)(b) of rule XIII of the Rules of the House of 
Representatives requires that the results of each record vote 
on an amendment or motion to report, together with the names of 
those voting for or against, be printed in the committee 
report.
    H.R. 1400 was reported favorably to the House, as amended, 
by a vote of 37-1.

Voting yes: Lantos, Berman, Ackerman, Faleomavaega, Payne, 
        Sherman, Delahunt, Watson, Smith (WA), Green, Woolsey, 
        Jackson Lee, Hinojosa, Wu, Miller, Sanchez, Scott, 
        Costa, Sires, Giffords, Klein, Ros-Lehtinen, Smith 
        (NJ), Gallegly, Rohrabacher, Manzullo, Chabot, 
        Tancredo, Pence, Wilson, Boozman, Barrett, McCaul, Poe, 
        Inglis, Fortuno, and Bilirakis.

Voting no: Flake.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the committee reports that 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.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House Rule XIII is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the committee sets forth, with 
respect to the bill, H.R. 1400, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 11, 2007.
Hon. Tom Lantos, Chairman,
Committee on Foreign Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1400, the Iran 
Counter-Proliferation Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sam 
Papenfuss, who can be reached at 226-2840.
            Sincerely,
                                           Peter R. Orszag.
Enclosure

cc:
        Honorable Ileana Ros-Lehtinen
        Ranking Member
H.R. 1400--Iran Counter-Proliferation Act of 2007

                                SUMMARY

    H.R. 1400 would authorize the appropriation of funds for 
two specific programs within the Department of Treasury 
relating to financial crimes and terrorism. The bill also would 
authorize an exchange program with Iran. Additionally, the bill 
would ban the import of certain items from Iran and would allow 
the President to impose sanctions on certain individuals. 
Finally, the bill would prohibit the transfer of nuclear 
material, components, or technology to countries that are 
assisting Iran to develop nuclear technology.
    CBO estimates that implementing H.R. 1400 would cost $116 
million in 2008 and $490 million over the 2008-2012 period, 
assuming appropriation of the necessary funds. In addition, 
enacting the bill would reduce revenues by less than $500,000 
in 2008, by $2 million over the 2008-2012 period, and by $4 
million over the 2008-2017 period. Enacting H.R. 1400 would not 
affect direct spending.
    H.R. 1400 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA) and would not affect 
the budgets of state, local, or tribal governments.
    H.R. 1400 would impose private-sector mandates, as defined 
in UMRA, by requiring sanctions on certain imports and exports 
with Iran. Based on information from the Departments of 
Commerce and State, CBO expects that the direct cost of 
complying with the mandates would fall below the annual 
threshold for private-sector mandates established by UMRA ($131 
million in 2007, adjusted annually for inflation).

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 1400 is summarized 
in Table 1. The costs of this legislation falls within budget 
functions 150 (international affairs), 750 (administration of 
justice), and 800 (general government).

                                TABLE 1. ESTIMATED BUDGETARY IMPACT OF H.R. 1400
----------------------------------------------------------------------------------------------------------------
                                                                    By Fiscal Year, in Millions of Dollars
                                                            ----------------------------------------------------
                                                               2007     2008     2009     2010     2011    2012
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION\1\

Spending Under Current Law                                       110        0        0        0        0       0
  Budget Authority\2\
  Estimated Outlays                                              110       27        0        0        0       0

Proposed Changes                                                   0      145      149      153        0       0
  Department of Treasury Programs
  Estimated Authorization Level
  Estimated Outlays                                                0      111      147      151       36       0

  Exchange Programs                                                0       10       10       10       11      11
  Estimated Authorization Level
  Estimated Outlays                                                0        5        9       10       10      11

    Total Changes                                                  0      155      159      163       11      11
    Estimated Authorization Level
    Estimated Outlays                                              0      116      156      161       46      11

Spending Under H.R. 1400                                         110      155      159      163       11      11
  Estimated Authorization Level\2\
  Estimated Outlays                                              110      143      156      161       46      11
----------------------------------------------------------------------------------------------------------------
\1\In addition to the amounts shown above, enacting H.R. 1400 also would lower revenues by less than $500,000 a
  year over the 2008-2012 period, totaling $2 million over that period. For the changes in revenues over the 10-
  year period, see Table 2.
\2\The 2007 level is the estimated budget authority available for two programs in the Department of Treasury:
  the Office of Terrorism and Financial Intelligence ($39 million) and the Financial Crimes Enforcement Network
  ($71 million).

                           BASIS OF ESTIMATE

    For the purposes of this estimate, CBO assumes that the 
bill will be enacted before the start of fiscal year 2008 and 
that spending will follow historical outlay patterns for 
similar programs.
Spending Subject to Appropriation
    H.R. 1400 would authorize appropriations for specific 
programs within both the Department of Treasury and the 
Department of State. In total, CBO estimates that implementing 
these authorizations would cost $490 million over the 2008-2012 
period, assuming appropriation of the estimated amounts.
    Department of Treasury Programs. In total, section 402 
would authorize the appropriation of $145 million in 2008 and 
such sums as may be necessary for 2009 and 2010; $59 million 
for the Office of Terrorism and Financial Intelligence and $86 
million for the Financial Crimes Enforcement Network, both of 
which are in the Department of Treasury. Based on information 
from the Department of Treasury, CBO expects that $145 million, 
adjusted for inflation, would be sufficient for fiscal years 
2009 and 2010. Accordingly, CBO estimates that implementing 
section 402 would cost $111 million in 2008 and $445 million 
over the 2008-2012 period, assuming appropriation of the 
estimated amounts.
    Exchange Programs. Section 403 would authorize the 
President to implement an exchange program with Iran and would 
authorize the appropriation of $10 million in 2008 to implement 
that program. Because the exchange program has a permanent 
authorization, CBO estimates that the bill also would authorize 
funding for fiscal years 2009 through 2012 equal to the $10 
million authorized for 2008, adjusted for inflation. Thus, CBO 
estimates that implementing section 403 would cost $5 million 
in 2008 and $45 million over the 2008-2012 period, assuming 
appropriation of the estimated amounts.
Revenues
    Section 202 would disallow imports of certain foodstuffs 
and carpets from Iran. CBO estimates that this provision would 
reduce revenues by less than $500,000 in 2008, by $2 million 
over the 2008-2012 period, and by $4 million over the 2008-2017 
period, as shown in Table 2.

                                                 TABLE 2. ESTIMATED CHANGES IN REVENUES UNDER H.R. 1400
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        By Fiscal Year, in Millions of Dollars
                                                             -------------------------------------------------------------------------------------------
                                                               2008   2009   2010   2011   2012   2013   2014   2015   2016   2017  2008-2012  2008-2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Revenues                                                *      *      *      *      *      *      *      *     -1     -1        -2         -4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * = revenue loss of less than $500,000.

        ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

    H.R. 1400 contains no intergovernmental mandates as defined 
in UMRA and would not affect the budgets of state, local or 
tribal governments.

                 ESTIMATED IMPACT ON THE PRIVATE SECTOR

    H.R. 1400 would impose private-sector mandates, as defined 
in UMRA, by requiring sanctions on certain imports and exports 
with Iran. The bill would impose sanctions by terminating the 
authority contained in existing regulation that allow the 
import of carpets and certain foodstuffs into the United 
States. The bill also would impose other sanctions by 
prohibiting the export of civil aviation equipment to Iran. 
According to the Departments of Commerce and State, in 2006 the 
United States imported from Iran about $143 million in carpets 
and foodstuffs and exported to Iran about $15,000 in civil 
aviation equipment. While CBO lacks information on the value of 
lost profits to importers and exporters resulting from the 
prohibition on those items, CBO expects that the direct cost of 
complying with those mandates would fall below UMRA's annual 
threshold ($131 million in 2007, adjusted annually for 
inflation).

                         PREVIOUS CBO ESTIMATES

    On June 13, 2007, CBO transmitted a cost estimate for a 
similar bill, H.R. 2347, the Iran Sanctions Enabling Act of 
2007, as ordered reported by the House Committee on Financial 
Services on May 23, 2007. CBO determined that the bill 
contained a private-sector mandate on entities participating in 
certain private pension plans. CBO, however, could not 
determine whether the aggregate cost of the mandates would 
exceed the annual threshold.
    On February 27, 2007, CBO transmitted an estimate for H.R. 
957, a bill to amend the Iran Sanctions Act of 1996 to expand 
and clarify the entities against which sanctions may be 
imposed, as ordered reported by the House Committee on Foreign 
Affairs on February 15, 2007. That bill is similar to section 
304 of H.R. 1400 and the estimated costs are the same. CBO 
determined that the bill contained no new mandates as defined 
in UMRA.

                         ESTIMATE PREPARED BY:

Federal Spending: Sam Papenfuss and Sunita D'Monte (226-2840)
Federal Revenues: Emily Schlect (226-2680)
Impact on State, Local, and Tribal Governments: Neil Hood (225-
        3220)
Impact on the Private Sector: Paige Piper/Bach (226-2960)

                         ESTIMATE APPROVED BY:

G. Thomas Woodward
Assistant Director for Tax Analysis

Peter H. Fontaine
Deputy Assistant Director for Budget Analysis

                    Performance Goals and Objectives

    Pursuant to clause 3(c) of House rule XIII, upon enactment 
of this legislation, Iran would be further deprived of the 
funds and support it needs to pursue efforts to develop and 
produce nuclear weapons.

                   Constitutional Authority Statement

    Pursuant to clause 3(d) (1) of rule XIII of the Rules of 
the House of Representatives, the Committee finds the authority 
for this legislation in article I, section 8 of the 
Constitution.

                        New Advisory Committees

    H.R. 1400 does not establish or authorize any new advisory 
committees.

                    Congressional Accountability Act

    H.R. 1400 does not apply to the Legislative Branch.

                         Earmark Identification

    H.R. 1400 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e), or 9(f) of rule XXI.

               Section-by-Section Analysis and Discussion

Section 1. Short Title and Table of Contents.
    Section 1 provides that the Act may be referred to as the 
``Iran Counter-Proliferation Act of 2007'' and provides a table 
of contents.
Section 2. United States Policy Toward Iran.
    Section 2 finds that the prospect of the Islamic Republic 
of Iran achieving nuclear arms represents a grave threat to the 
United States and its allies and that radical statements by 
Iranian leaders suggest a nuclear Iran may not be preventable. 
It consequently finds that it is critical for the United States 
and its allies to do everything diplomatically, politically, 
and economically viable in order to dissuade the Iranian regime 
from its pursuit of nuclear arms.
    Section 2 also states the sense of Congress as to the 
following: that Iranian President Ahmadinejad's statements 
regarding the Holocaust and Israel may constitute a violation 
of the Convention on the Prevention and Punishment of the Crime 
of Genocide and should be brought before an international 
tribunal; that the United States should increase its efforts in 
the international financial sector to isolate Iran; that Iran 
should be barred from entering the World Trade Organization 
until all issues related to its nuclear program are resolved; 
that all future trade agreements involving Iran should be 
conditioned so as to preclude investment in Iran's energy 
sector; that UNSCR 1737 represents a ``critical gain'' in the 
campaign to prevent Iran's acquisition of nuclear arms and 
should be respected by all nations; that the UN should take 
further measures beyond Resolution 1737 to tighten sanctions on 
Iran; that moderate Arab states should exert leverage over 
other nations, including Russia and China, to be more 
forthcoming in supporting UN Security Council efforts to halt 
Iran's nuclear program; that the U.S. should discourage foreign 
banks from providing export credits to foreign entities seeking 
to invest in the Iranian energy sector; that the U.S. should 
continue discouraging foreign banks from accepting Iranian 
banks as clients; that the U.S. should prohibit all Iranian 
state banks from using the American banking system; that 
Federal, state, and local government pension plans should 
divest themselves of all non-U.S. companies investing more than 
$20 million in Iran's energy sector; and that the U.S. should 
designate the Iranian Revolutionary Guard Corps as a foreign 
terrorist organization and a Specially Designated Global 
Terrorist group and put it on the list of proliferators and 
supporters of weapons of mass destruction.

  TITLE I--SUPPORT FOR DIPLOMATIC EFFORTS RELATING TO PREVENTING IRAN 
                     FROM ACQUIRING NUCLEAR WEAPONS

Section 101. Support for International Diplomatic Efforts.
    Section 101 states the sense of Congress as to the 
following: that the United States should use diplomatic and 
economic means to resolve the Iranian nuclear problem; that the 
U.S. should continue to support efforts in the International 
Atomic Energy Agency and the UN Security Council to bring about 
an end to Iran's programs for uranium enrichment and nuclear 
weapons; that UNSCR 1737 was a useful first step toward these 
ends; and that the Security Council should adopt additional 
measures against Iran, include measures to prohibit investments 
in its energy sector.
Section 102. Peaceful Efforts by the United States.
    Section 102 states that nothing in H.R. 1400 shall be 
construed as authorizing the use of force or the use of the 
United States Armed Forces against Iran.

         TITLE II--ADDITIONAL BILATERAL SANCTIONS AGAINST IRAN

Section 201. Application to Subsidiaries.
    Section 201 generally declares that in cases in which an 
entity engages in an act outside the U.S. that would violate 
Executive Order No. 12959 of May 6, 1995; Executive Order 13059 
of August 19, 1997; or any other prohibition on transactions 
with respect to Iran that is imposed under the International 
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) and if 
that entity was created or availed for the purpose of engaging 
in such an act, the parent company of that entity shall be 
subject to the same penalties as if the parent company had 
engaged in that act. In this context a ``parent company'' is 
defined by owning, directly or indirectly, more than 50 percent 
equity interest in that other entity and is a United States 
person. ``Entity'' is defined as a ``partnership, associated, 
trust, joint venture, corporation, or other organization''.
    Although the IFSA codified Section 3 of Executive Order 
12959 (which authorizes the Secretary of the Treasury to take 
legal action against United States persons based on oil 
transactions engaged in by their foreign affiliates with Iran), 
and Section 2(f) of Executive Order 13059 (which includes 
foreign subsidiaries as entities subject to sanctions for 
violating U.S. law), concerns remained that existing law 
required the clarification that sanctions under the ISA should 
apply to certain foreign subsidiaries of U.S. companies.
    To eliminate these concerns, H.R. 957 was amended by an 
Amendment in the Nature of a Substitute, which was adopted 
during consideration of the bill by the House Foreign Affairs 
Committee on February 15, 2007. The amendment provided for 
imposition of liability on parent companies for violations of 
sanctions by their foreign subsidiaries. For completeness, this 
was included as Section 201 of the current bill.
Section 202. Additional Import Sanctions Against Iran.
    Section 202 terminates the authority contained in existing 
regulations to allow the import of carpets and certain 
foodstuffs into the United States.
Section 203. Additional Export Sanctions Against Iran.
    Section 203 prohibits the export of civil aviation 
equipment to Iran.

        TITLE III--AMENDMENTS TO THE IRAN SANCTIONS ACT OF 1996

Section 301. Multilateral Regime.
    Section 301 amends the Iran Sanctions Act to require 
additional reporting on specific U.S. diplomatic efforts to 
pursue a multilateral regime against Iran. The report shall 
include a list of countries that have agreed to undertake 
measures against Iran; a description of those measures; any 
decision by such governments to rescind or continue credits, 
guarantees or other governmental assistance; and actions taken 
in international fora. It also requires a list of countries 
that have not agreed to undertake such measures and a 
description of political understandings or international 
agreements to which the United States is a party and which 
affect the implementation of section 5 of the Act.
Section 302. Mandatory Sanctions.
    Section 302 amends section 5 of the Iran Sanctions Act to 
require that, at a minimum, companies that meet the investment 
threshold in the Act cannot sell to the U.S. government.
Section 303. Authority to Impose Sanctions on Principal Executive 
        Officers.
    Section 303 amends section 5 of the Iran Sanctions Act to 
add the authority to impose sanctions on principal executive 
officers of any sanctioned person, or on persons performing 
similar functions as such officer or officers. In addition, the 
President may block the property of any such persons.
Section 304. United States Efforts to Prevent Investment.
    Section 304 requires that the President submit a report 
every six months to appropriate congressional committees on 
investment and pre-investment activity that could significantly 
contribute to the enhancement of Iran's ability to develop 
petroleum resources in Iran; for each instance the report 
should include a description of the activity, any information 
regarding when the actual investment may commence, and what 
steps the U.S. has taken to respond to such activity. For the 
purposes of this requirement, ``investment'' is defined so as 
to include ``the extension by a financial institution of credit 
or other financing to a person for that person's investment'' 
and the term ``pre-investment activity'' is defined as ``any 
activity indicating an intent to make an investment, including 
a memorandum of understanding among parties indicating such an 
intent.''
Section 305. Clarification and Expansion of Definitions.
    Section 304 amends Section 14(13) of the Iran Sanctions Act 
of 1996 by adding any financial institution, insurer, 
underwriter, guarantor, any other business organization, 
including any foreign subsidiaries to be subject to sanctions. 
It further amends paragraph (13) to clarify that a foreign 
export credit agency may be subject to sanctions to the extent 
that such an agency is a governmental entity operating as a 
business enterprise. Under the underlying Iran Sanctions Act, 
if a foreign export credit agency engages in activity that 
would make such an agency subject to sanctions under the Act, 
such sanctions would apply to the foreign export credit agency 
itself, not against other parts of the foreign government 
associated with such agency. It also amends Section 14(14) to 
include petroleum by-products, liquefied natural gas, and the 
sale of oil or liquefied natural gas tankers. The Committee 
intends that section 5(a) of the ISA apply to any covered 
entity that sells such tankers to Iran.
Section 306. Removal of Waiver Authority.
    Section 306 eliminates the ability of the President to 
waive sanctions under the Iran Sanctions Act under section 4 or 
section 9.

                     TITLE IV--ADDITIONAL MEASURES

Section 401. Additions to Terrorism and Other List.
    Subsection (a) requires that the President determine within 
120 days of the bill's enactment whether the Iranian 
Revolutionary Guard Corps (IRGC) should be designated as a 
foreign terrorist organization, placed on the list of specially 
designated global terrorists, and/or placed on the list of 
weapons of mass destruction proliferators and their supporters, 
and report that determination to the House Committee on Foreign 
Affairs and the Senate Committee on Foreign Relations. 
Subsection (b) also extends the authority of the President to 
block all property and interest of persons who assist or 
otherwise support the IRGC or entities owned or effectively 
controlled by the IRGC.
Section 402. Increased Capacity for Efforts to Combat Unlawful or 
        Terrorist Financing
    Section 402 affirms the importance of the Office of 
Terrorism and Financial Intelligence of the Department of 
Treasury and authorizes $59,466,000 for the Office for fiscal 
year 2008 and such sums as may be necessary for fiscal years 
2009 and 2010. It also amends Section 301(d)(1) of title 31, 
United States Code to include authorizations of $85,844,000 for 
fiscal year 2008 and such sums as may be necessary for fiscal 
years 2009 and 2010 for the Financial Crimes Enforcement 
Network. The authorizations for fiscal year 2008 are the 
request levels for both entities.
Section 403. Exchange Programs with the People of Iran.
    Section 403 declares the sense of Congress that the United 
States should seek to enhance its friendship with the people of 
Iran, particularly by identifying young people of Iran to come 
to the United States under United States exchange programs. It 
also authorizes $10,000,000 for such programs to carry out that 
purpose and provides that such programs shall be carried out to 
the extent practicable in a manner consistent with the 
eligibility for assistance requirements specified in section 
302(b) of the Iran Freedom Support Act. The Committee does not 
intend to extend exchanges to Iranian officials or employees 
who are involved in the development of weapons of mass 
destruction, support for international terrorism, or other 
actions that harm U.S. interests.
Section 404. Reducing Contributions to the World Bank.
    Section 404 states that the United States shall decrease 
its overall contributions to the International Bank for 
Reconstruction and Development in accordance to the percentage 
of total Bank investments that were made in Iran the preceding 
year. This provision applies to capital replenishments of the 
World Bank, not to contributions made to the International 
Development Association.
Section 405. Restrictions on Nuclear Cooperation with Countries 
        Assisting the Nuclear Program of Iran.
    Section 405 provides that, notwithstanding any other 
provision of law or any international agreement, no bilateral 
U.S. cooperation agreements with Russia or with any other 
countries assisting Iran's nuclear or missile or advanced 
conventional weapons programs may be submitted to Congress 
pursuant to the Atomic Energy Act of 1954, no such agreement 
may enter into force, no license may be issued to export 
nuclear goods or services to such a country, and no approval 
may be given for such transfer, until the President determines 
and reports to the House Committee on Foreign Affairs and the 
Senate Committee on Foreign Relations certifying the following: 
that Iran has ceased its pursuit of a nuclear explosive device; 
and that the relevant government has suspended all such 
assistance to Iran and is committed to maintaining the 
suspension until Iran has implemented measures to cease its 
pursuit of a nuclear explosive device. These requirements shall 
apply to all other applicable procedures, requirements, and 
restrictions contained in the Atomic Energy Act of 1954 and 
other laws but shall not affect the validity of cooperation 
agreements already in effect upon the enactment of the Act.
Section 406 Elimination of Certain Tax Incentives for Oil Companies 
        Investing in Iran
    This section provides that the U.S. subsidiary of any 
company which is subject to sanctions under section 5(a) of the 
Iran Sanctions Act will no longer be eligible for tax benefits 
relating to geophysical exploration for petroleum resources in 
the United States under section 167(h) of the Internal Revenue 
Code of 1986.

                   TITLE V--MISCELLANEOUS PROVISIONS

Section 501. Termination.
    Section 501 states that the restrictions provided in 
sections 203, 404, and 405 shall no longer have force or effect 
if the President determines and certifies to the House 
Committee on Foreign Affairs and the Senate Committee on 
Foreign Relations that Iran has stopped pursuing a nuclear 
explosive device or related materials and technology, chemical 
and biological weapons, ballistic missiles and launch 
technology, has been removed from the list of countries 
sponsoring terrorism under the Export Administration Act of 
1979, and poses no significant threat to the United States or 
its allies.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                       IRAN SANCTIONS ACT OF 1996

           *       *       *       *       *       *       *
SEC. 4. MULTILATERAL REGIME.

  (a) * * *
  [(b) Reports to Congress.--The President shall report to the 
appropriate congressional committees, not later than 1 year 
after the date of the enactment of this Act, and periodically 
thereafter, on the extent that diplomatic efforts described in 
subsection (a) have been successful. Each report shall 
include--
          [(1) the countries that have agreed to undertake 
        measures to further the objectives of section 3 with 
        respect to Iran, and a description of those measures; 
        and
          [(2) the countries that have not agreed to measures 
        described in paragraph (1), and, with respect to those 
        countries, other measures (in addition to that provided 
        in subsection (d)) the President recommends that the 
        United States take to further the objectives of section 
        3 with respect to Iran.
  [(c) Waiver.--
          [(1) In general.--The President may, on a case by 
        case basis, waive for a period of not more than six 
        months the application of section 5(a) with respect to 
        a national of a country, if the President certifies to 
        the appropriate congressional committees at least 30 
        days before such waiver is to take effect that such 
        waiver is vital to the national security interests of 
        the United States.
          [(2) Subsequent renewal of waiver.--If the President 
        determines that, in accordance with paragraph (1), such 
        a waiver is appropriate, the President may, at the 
        conclusion of the period of a waiver under paragraph 
        (1), renew such waiver for subsequent periods of not 
        more than six months each.]
  (b) Reports to Congress.--Not later than 6 months after the 
date of the enactment of the Iran Counter-Proliferation Act of 
2007 and every six months thereafter, the President shall 
transmit to the appropriate congressional committees a report 
regarding specific diplomatic efforts undertaken pursuant to 
subsection (a), the results of those efforts, and a description 
of proposed diplomatic efforts pursuant to such subsection. 
Each report shall include--
          (1) a list of the countries that have agreed to 
        undertake measures to further the objectives of section 
        3 with respect to Iran;
          (2) a description of those measures, including--
                  (A) government actions with respect to public 
                or private entities (or their subsidiaries) 
                located in their territories, that are engaged 
                in Iran;
                  (B) any decisions by the governments of these 
                countries to rescind or continue the provision 
                of credits, guarantees, or other governmental 
                assistance to these entities; and
                  (C) actions taken in international fora to 
                further the objectives of section 3;
          (3) a list of the countries that have not agreed to 
        undertake measures to further the objectives of section 
        3 with respect to Iran, and the reasons therefor; and
          (4) a description of any memorandums of 
        understanding, political understandings, or 
        international agreements to which the United States has 
        acceded which affect implementation of this section or 
        section 5(a).
  [(d)] (c) Enhanced Sanction.--
          (1) Sanction.--With respect to nationals of countries 
        [except those with respect to which the President has 
        exercised the waiver authority of subsection (c)], at 
        any time after the first report is required to be 
        submitted under subsection (b), section 5(a) shall be 
        applied by substituting ``$20,000,000'' for 
        ``$40,000,000'' each place it appears, and by 
        substituting ``$5,000,000'' for ``$10,000,000''.

           *       *       *       *       *       *       *

  [(e)] (d) Interim Report on Multilateral Sanctions; 
Monitoring.--The President, not later than 90 days after the 
date of the enactment of this Act, shall report to the 
appropriate congressional committees on--
          (1) * * *

           *       *       *       *       *       *       *

  [(f)] (e) Investigations.--
          (1) * * *

           *       *       *       *       *       *       *

SEC. 5. IMPOSITION OF SANCTIONS.

  (a) Sanctions With Respect to the Development of Petroleum 
Resources of Iran.--Except as provided in subsection (f), the 
President shall impose [2 or more of the sanctions described in 
paragraphs (1) through (6) of section 6] the sanction described 
in paragraph (5) of section 6 and, in addition, one or more of 
the sanctions described in paragraphs (1), (2), (3), (4), and 
(6) of such section if the President determines that a person 
has, with actual knowledge, on or after the date of the 
enactment of this Act, made an investment of $40,000,000 or 
more (or any combination of investments of at least $10,000,000 
each, which in the aggregate equals or exceeds $40,000,000 in 
any 12-month period), that directly and significantly 
contributed to the enhancement of Iran's ability to develop 
petroleum resources of Iran.

           *       *       *       *       *       *       *

  (g) Authority to Impose Sanctions on Principal Executive 
Officers.--
          (1) Sanctions under section 6.--In addition to the 
        sanctions imposed under subsection (a), the President 
        may impose any of the sanctions under section 6 on the 
        principal executive officer or officers of any 
        sanctioned person, or on persons performing similar 
        functions as such officer or officers. The President 
        shall include on the list published under subsection 
        (d) the name of any person on whom sanctions are 
        imposed under this paragraph.
          (2) Additional sanctions.--In addition to the 
        sanctions imposed under paragraph (1), the President 
        may block the property of any person described in 
        paragraph (1), and prohibit transactions in such 
        property, to the same extent as the property of a 
        foreign person determined to have committed acts of 
        terrorism for purposes of Executive Order 13224 of 
        September 23, 2001 (50 U.S.C. 1701 note).
  (h) United States Efforts to Address Planned Investment.--
          (1) Reports on investment activity.--Not later than 
        January 30, 2008, and every 6 months thereafter, the 
        President shall transmit to the Committee on Foreign 
        Affairs of the House of Representatives and the 
        Committee on Foreign Relations of the Senate a report 
        on investment and pre-investment activity, by any 
        person or entity, that could contribute to the 
        enhancement of Iran's ability to develop petroleum 
        resources in Iran. For each such activity, the 
        President shall provide a description of the activity, 
        any information regarding when actual investment may 
        commence, and what steps the United States has taken to 
        respond to such activity.
          (2) Definition.--In this subsection--
                  (A) the term ``investment'' includes the 
                extension by a financial institution of credit 
                or other financing to a person for that 
                person's investment; and
                  (B) the term ``pre-investment activity'' 
                means any activity indicating an intent to make 
                an investment, including a memorandum of 
                understanding among parties indicating such an 
                intent.

           *       *       *       *       *       *       *

SEC. 9. DURATION OF SANCTIONS; PRESIDENTIAL WAIVER.

  (a) * * *

           *       *       *       *       *       *       *

  [(c) Presidential Waiver.--
          [(1) Authority.--The President may waive the 
        requirement in section 5 to impose a sanction or 
        sanctions on a person described in section 5(c), and 
        may waive the continued imposition of a sanction or 
        sanctions under subsection (b) of this section, 30 days 
        or more after the President determines and so reports 
        to the appropriate congressional committees that it is 
        important to the national interest of the United States 
        to exercise such waiver authority.
          [(2) Contents of report.--Any report under paragraph 
        (1) shall provide a specific and detailed rationale for 
        the determination under paragraph (1), including--
                  [(A) a description of the conduct that 
                resulted in the determination under section 
                5(a) or (b), as the case may be;
                  [(B) in the case of a foreign person, an 
                explanation of the efforts to secure the 
                cooperation of the government with primary 
                jurisdiction over the sanctioned person to 
                terminate or, as appropriate, penalize the 
                activities that resulted in the determination 
                under section 5(a) or (b), as the case may be;
                  [(C) an estimate of the significance of the 
                provision of the items described in section 
                5(a) or section 5(b) to Iran's ability to, 
                respectively, develop its petroleum resources 
                or its weapons of mass destruction or other 
                military capabilities; and
                  [(D) a statement as to the response of the 
                United States in the event that the person 
                concerned engages in other activities that 
                would be subject to section 5(a) or (b).
          [(3) Effect of report on waiver.--If the President 
        makes a report under paragraph (1) with respect to a 
        waiver of sanctions on a person described in section 
        5(c), sanctions need not be imposed under section 5(a) 
        or (b) on that person during the 30-day period referred 
        to in paragraph (1).]

           *       *       *       *       *       *       *

SEC. 14. DEFINITIONS.

  As used in this Act:
          (1) * * *

           *       *       *       *       *       *       *

          (13) Person.--The term ``person'' means--
                  (A) a natural person;
                  [(B) a corporation, business association, 
                partnership, society, trust, any other 
                nongovernmental entity, organization, or group, 
                and any governmental entity operating as a 
                business enterprise; and]
                  (B)(i) a corporation, business association, 
                partnership, society, trust, financial 
                institution, insurer, underwriter, guarantor, 
                and any other business organization;
                  (ii) any foreign subsidiary of any entity 
                described in clause (i); and
                  (iii) any government entity operating as a 
                business enterprise, such as an export credit 
                agency; and

           *       *       *       *       *       *       *

          (14) Petroleum resources.--The term ``petroleum 
        resources'' includes petroleum, petroleum refining 
        capacity, liquefied natural gas, the sale of oil 
        tankers or liquefied natural gas tankers, and natural 
        gas resources.

           *       *       *       *       *       *       *

                              ----------                              

                      TITLE 31, UNITED STATES CODE

           *       *       *       *       *       *       *
Subtitle I--General

           *       *       *       *       *       *       *

CHAPTER 3--DEPARTMENT OF THE TREASURY

           *       *       *       *       *       *       *

SUBCHAPTER I--ORGANIZATION

           *       *       *       *       *       *       *

Sec. 310. Financial Crimes Enforcement Network

  (a) * * *

           *       *       *       *       *       *       *

  (d) Authorization of Appropriations.--
          (1) In general.--There are authorized to be 
        appropriated for FinCEN [such sums as may be necessary 
        for fiscal years 2002, 2003, 2004, and 2005] 
        $85,844,000 for fiscal year 2008 and such sums as may 
        be necessary for each of the fiscal years 2009 and 
        2010.

           *       *       *       *       *       *       *

                              ----------                              

            SECTION 167 OF THE INTERNAL REVENUE CODE OF 1986

SEC. 167. DEPRECIATION.

  (a) * * *

           *       *       *       *       *       *       *

  (h) Amortization of Geological and Geophysical 
Expenditures.--
          (1) * * *

           *       *       *       *       *       *       *

          (6) Denial when iran sanctions in effect.--
                  (A) In general.--If sanctions are imposed 
                under section 5(a) of the Iran Sanctions Act of 
                1996 (relating to sanctions with respect to the 
                development of petroleum resources of Iran) on 
                any member of an expanded affiliated group the 
                common parent of which is a foreign 
                corporation, paragraph (1) shall not apply to 
                any expense paid or incurred by any such member 
                in any period during which the sanctions are in 
                effect.
                  (B) Expanded affiliated group.--For purposes 
                of subparagraph (A), the term ``expanded 
                affiliated group'' means an affiliated group as 
                defined in section 1504(a), determined--
                          (i) by substituting ``more than 50 
                        percent'' for ``at least 80 percent'' 
                        each place it appears, and
                          (ii) without regard to paragraphs 
                        (2), (3), and (4) of section 1504(b).

           *       *       *       *       *       *       *

                                  
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