I

104TH CONGRESS

1ST SESSION H. R. 2458

To impose sanctions on foreign persons exporting certain goods or technology

that would enhance Iran’s ability to extract, refine, store, process, or

transport petroleum products or natural gas.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 11, 1995

Mr. GILMAN (for himself, Mr. KING, Mr. SHAW, Mr. BERMAN, and Mr.

FORBES) introduced the following bill; which was referred to the Committee on International Relations, and in addition to the Committees on

Ways and Means, Banking and Financial Services, Commerce, and Government Reform and Oversight, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions

as fall within the jurisdiction of the committee concerned

A BILL

To impose sanctions on foreign persons exporting certain

goods or technology that would enhance Iran’s ability

to extract, refine, store, process, or transport petroleum

products or natural gas.

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

3 SECTION 1. SHORT TITLE.

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

2 The Congress makes the following findings:

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

4 acquire weapons of mass destruction and the means

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

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

9 (2) The objective of preventing the proliferation

10 of weapons of mass destruction through existing

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

13 sustain its nuclear, chemical, biological, and missile

14 weapons programs.

15 SEC. 3. DECLARATION OF POLICY.

16 The Congress declares that it is the policy of the

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

19 the means to deliver them by preventing Iran from acquir20 ing equipment that would enhance Iran’s ability to extract,

21 refine, process, store, or transport petroleum, petroleum

22 products, or natural gas.
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1 SEC. 4. IMPOSITION OF SANCTIONS ON FOREIGN PERSONS

2 EXPORTING CERTAIN GOODS OR TECH3 NOLOGY TO IRAN.

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

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

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

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

9 the date of the enactment of this Act, exported, trans10 ferred, or released to Iran, nationals of Iran, or entities

11 owned or controlled by Iran or nationals of Iran any goods

12 or technology identified on the List of Petroleum and Nat13 ural Gas-Related Goods and Technology established under

14 section 9 (hereafter in this Act referred to as the

15 ‘‘List’’)—

16 (1) through the export from the United States

17 of any goods or technology identified in the List, or

18 (2) through the export from any other country

19 or territory of any goods or technology identified in

20 the List, whether or not the goods or technology is

21 subject to the jurisdiction of the United States.

22 (b) PERSONS AGAINST WHICH THE SANCTIONS ARE

23 TO BE IMPOSED.—The sanctions described in subsection

24 (a) shall be imposed on—
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1 (1) the foreign person with respect to whom the

2 President makes the determination described in that

3 subsection;

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

5 (3) any foreign person that is a parent or sub6 sidiary of that person if that parent or subsidiary

7 with requisite knowledge engaged in the activities

8 which were the basis of that determination; and

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

10 that person if that affiliate with requisite knowledge

11 engaged in the activities which were the basis of that

12 determination and if that affiliate is controlled in

13 fact by that person.

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

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

16 foreign person’’.

17 SEC. 5. DESCRIPTION OF SANCTIONS.

18 The sanctions to be imposed on a sanctioned foreign

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

20 (1) MANDATORY SANCTIONS.—

21 (A) PROCUREMENT SANCTION.—The Unit22 ed States Government shall not procure, or

23 enter into any contract for the procurement of,

24 any goods or services from the sanctioned for25 eign person.
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1 (B) EXPORT SANCTION.—The United

2 States Government shall not, for a period of 3

3 years, issue any license or grant any other per4 mission or authority to export any goods or

5 technology to a sanctioned foreign person

6 under—

7 (i) the Export Administration Act of

8 1979;

9 (ii) the Arms Export Control Act; or

10 (iii) the Atomic Energy Act of 1954.

11 (C) PROHIBITION AGAINST EXPORT-IM12 PORT BANK ASSISTANCE FOR EXPORTS TO FOR13 EIGN PERSONS.—The Export-Import Bank of

14 the United States may not guarantee, insure,

15 extend credit, or participate in the extension of

16 credit in connection with the export of any

17 goods or services to any sanctioned foreign per18 son.

19 (2) DISCRETIONARY SANCTIONS.—

20 (A) INVESTMENT IN THE UNITED STATES;

21 AUTHORITY TO REVIEW CERTAIN MERGERS, AC22 QUISITIONS, AND TAKEOVERS.—The President

23 may exercise his authority under section 721(d)

24 of the Defense Production Act of 1950 (50

25 U.S.C. App. 2170(d)) to investigate and pro-
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1 hibit mergers, acquisitions, takeovers, and other

2 similar investments in the United States by per3 sons engaged in interstate commerce—

4 (i) if such actions involve any sanc5 tioned foreign person; and

6 (ii) if the President finds, in addition

7 to the requirements of section 721(e) of

8 such Act, that the participation of any

9 sanctioned foreign person in activities to

10 assist, directly or indirectly, Iran to in11 crease the revenue available to that govern12 ment by extracting petroleum, petroleum

13 products, natural gas, or engaging in other

14 activities described in section 9(a)(1)

15 threatens to impair the national security

16 and foreign policy interests of the United

17 States.

18 (B) IMPORT SANCTION.—(i) The importa19 tion into the United States of products pro20 duced by any sanctioned foreign person may be

21 prohibited.

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

23 (I) the entry of any finished product

24 or component part, whether shipped di-
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1 rectly by the sanctioned foreign person or

2 by another entity; and

3 (II) the contracting with a sanctioned

4 foreign person for the provision of services

5 in the United States or abroad by United

6 States persons and by foreign persons in

7 the United States.

8 (C) LOANS FROM UNITED STATES FINAN9 CIAL INSTITUTIONS.—The United States Gov10 ernment may prohibit any United States finan11 cial institution from making any loan or provid12 ing any credit to any sanctioned foreign person

13 unless such foreign person is engaged in activi14 ties to relieve human suffering, within the

15 meaning of section 203(b)(2) of the Inter16 national Emergency Economic Powers Act (50

17 U.S.C. 1702(b)(2)).

18 (D) PROHIBITIONS ON FOREIGN FINAN19 CIAL INSTITUTIONS.—The following prohibi20 tions may be imposed against a sanctioned for21 eign person that is a financial institution:

22 (i) DESIGNATION AS PRIMARY DEAL23 ER.—Neither the Board of Governors of

24 the Federal Reserve System nor the Fed25 eral Reserve Bank of New York may des-
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1 ignate, or permit the continuation of any

2 prior designation of, such financial institu3 tion as a primary dealer in United States

4 Government debt instruments.

5 (ii) GOVERNMENT FUNDS.—Such fi6 nancial institution shall not serve as agent

7 of the United States Government or serve

8 as repository for United States Govern9 ment funds.

10 (iii) RESTRICTIONS ON OPER11 ATIONS.—Such financial institutions shall

12 not, directly or indirectly—

13 (I) commence any line of busi14 ness in the United States in which it

15 was not engaged as of the date of the

16 determination by the President under

17 section 4(a) leading to the imposition

18 of sanctions; or

19 (II) conduct business from any

20 location in the United States at which

21 it did not conduct business as of the

22 date of such determination by the

23 President under section 4(a).
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1 SEC. 6. WAIVER AUTHORITY REGARDING SANCTIONS

2 AGAINST IRAN.

3 The sanctions under section 5 shall not apply if the

4 President determines and certifies to the appropriate con5 gressional committees that Iran—

6 (1) has substantially improved its adherence to

7 internationally recognized standards of human

8 rights;

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

10 manufacture, or acquire—

11 (A) a nuclear explosive device or related

12 materials and technology;

13 (B) chemical and biological weapons;

14 (C) missiles and missile launch technology;

15 and

16 (D) any missile or other delivery system

17 capable of reaching the territory of a country

18 the government of which shares strategic inter19 ests with the United States and is engaged in

20 defense cooperation, including the acquisition of

21 items identified in the United States Munitions

22 List, with the United States; and

23 (3) has ceased all forms of support for inter24 national terrorism.
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1 SEC. 7. WAIVER OF SANCTIONS AGAINST FOREIGN PER2 SONS.

3 (a) CONSULTATION WITH FOREIGN GOVERN4 MENTS.—

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

6 determination described in section 4(a) with respect

7 to a foreign person, the Congress urges the Presi8 dent to initiate consultations immediately with the

9 foreign government with primary jurisdiction over

10 that foreign person with respect to the imposition of

11 the sanctions pursuant to this Act.

12 (2) ACTIONS BY GOVERNMENT OF JURISDIC13 TION.—In order to pursue such consultations with

14 that government, the President may delay imposition

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

16 Following such consultations, the President shall im17 mediately impose sanctions unless the President de18 termines and certifies to the Congress that the gov19 ernment has taken specific and effective actions, in20 cluding the imposition of appropriate penalties, to

21 terminate the involvement of the foreign person in

22 the activities that resulted in the imposition of sanc23 tions against the foreign person.

24 (3) ADDITIONAL DELAY IN IMPOSITION OF

25 SANCTIONS.—The President may delay the imposi26 tion of sanctions for up to an additional 45 days if
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1 the President determines and certifies to the Con2 gress that the government with primary jurisdiction

3 over the foreign person is in the process of taking

4 the actions described in paragraph (2).

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

6 days after making a determination under section

7 4(a), the President shall submit to the appropriate

8 congressional committees a report on the status of

9 consultations with the appropriate foreign govern10 ment under this subsection, and the basis for any

11 determination under paragraph (3) that such gov12 ernment has taken specific corrective actions.

13 (b) ASSURANCES FROM FOREIGN PERSONS.—The

14 President may terminate the sanctions against a sanc15 tioned foreign person, if the foreign person provides assur16 ances to the Secretary that the actions that resulted in

17 the determination to impose sanctions have been termi18 nated and has provided specific assurances that it will nei19 ther directly nor indirectly, or through any other person,

20 including subsidiaries and affiliates, direct or participate

21 in any activity to provide to Iran items on the List.

22 (c) EXCEPTIONS.—The President shall not be re23 quired to apply or maintain a sanction under section

24 4(a)—
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1 (1) in the case of procurement of defense arti2 cles or defense services—

3 (A) under existing contracts or sub4 contracts, including the exercise of options for

5 production quantities to satisfy requirements

6 essential to the national security of the United

7 States;

8 (B) if the President determines in writing

9 that the person or other entity to which the

10 sanction would otherwise be applied is a sole

11 source supplier of the defense articles or serv12 ices, that the defense articles or services are es13 sential, and that alternative sources are not

14 readily or reasonably available; or

15 (C) if the President determines in writing

16 that such articles or services are essential to the

17 national security under defense coproduction

18 agreements;

19 (2) to products or services provided under con20 tracts entered into before the date on which the

21 President publishes his intention to impose the sanc22 tion;

23 (3) to—

24 (A) spare parts which are essential to

25 United States products or production;
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1 (B) component parts, but not finished

2 products, essential to United States products or

3 production; or

4 (C) routine servicing and maintenance of

5 products, to the extent that alternative sources

6 are not readily or reasonably available;

7 (4) to information and technology essential to

8 United States products or production; or

9 (5) to medicines, medical supplies, or other hu10 manitarian items.

11 (d) PRESIDENTIAL NATIONAL SECURITY WAIVER.—

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

13 4(a) to impose a sanction or sanctions on a foreign person

14 in section 4(b), for an export, transfer, or release of goods

15 or technology that are not subject to the jurisdiction of

16 the United States, 15 days after the President determines

17 and so reports to the appropriate congressional commit18 tees that it is essential to the national interest of the Unit19 ed States to exercise such waiver authority.

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

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

23 identification of the goods or technology involved in

24 the violation, that resulted in the determination of a

25 violation or violations;
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1 (B) an explanation of the efforts to secure the

2 cooperation of the government with primary jurisdic3 tion of the foreign person committing the violation

4 to terminate or penalize the activities that resulted

5 in the determination of a violation;

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

7 goods or technology exported to Iran on that coun8 try’s ability to extract, refine, process, store, or

9 transport petroleum, petroleum products, or natural

10 gas; and

11 (D) a statement as to the response of the Unit12 ed States in the event that such foreign person en13 gages in other activities that under this Act would

14 constitute an additional violation.

15 SEC. 8. TERMINATION OF SANCTIONS.

16 (a) DURATION OF SANCTIONS.—The sanctions im17 posed pursuant to this Act shall apply for a period of not

18 less than 12 months following the determination by the

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

20 thereafter only if the President determines and certifies

21 to the Congress that reliable information indicates that

22 the foreign person with respect to which the determination

23 was made under section 4(a) has ceased to aid or abet

24 Iran, any national of Iran, or any entity owned or con-
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1 trolled by Iran or nationals of Iran, to acquire goods and

2 technology on the List.

3 (b) WAIVER.—

4 (1) CRITERION FOR WAIVER.—The President

5 may waive the continued application of any sanction

6 imposed on any foreign person pursuant to this Act,

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

8 the date on which that sanction was imposed on that

9 person, if the President determines and certifies to

10 the Congress that the continued imposition of the

11 sanction would have a serious adverse effect on

12 United States national security.

13 (2) NOTIFICATION OF AND REPORT TO CON14 GRESS.—If the President decides to exercise the

15 waiver authority provided in paragraph (1), the

16 President shall so notify the Congress not less than

17 30 days before the waiver takes effect. Such notifica18 tion shall include a report fully articulating the ra19 tionale and circumstances which led the President to

20 exercise the waiver authority.

21 SEC. 9. GOODS AND TECHNOLOGY SUBJECT TO EXPORT

22 CONTROL RESTRICTIONS.

23 (a) CONTROL LIST.—(1) For purposes of the deter24 minations to be made pursuant to section 4(a), the Presi25 dent, in consultation with the Secretary of State and the
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1 Secretary of Energy, and the heads of other appropriate

2 departments and agencies, shall establish and maintain

3 the List of Petroleum and Natural Gas-Related Goods and

4 Technology, consisting of goods or technology (including

5 software and technical data) that the President deter6 mines would materially contribute to the extraction, refin7 ing, production, storage, or transportation of petroleum,

8 petroleum products, or natural gas and the products

9 thereof in or by Iran, including goods and technology that

10 are required for the development, production, or use of

11 facilities (including the repair, maintenance, or operation

12 of equipment) for the petroleum and natural gas activities

13 described in this subsection.

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

15 the enactment of this Act, shall cause the List to be pub16 lished in the Federal Register, together with any regula17 tions issued with respect thereto. Thereafter, any revisions

18 to the List or amendments to the regulations shall be pub19 lished in the same manner.

20 (3) Not less than 30 days in advance of the publica21 tion of the List, it shall be provided to the Committee on

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

23 to the Committee on International Relations of the House

24 of Representatives. The President shall consult with such

25 Committees regarding the content of the List and shall
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1 respond to questions regarding the basis for the inclusion

2 on, or exclusion from, the List of specified goods and tech3 nologies.

4 (4) The President may delegate the functions of this

5 subsection to the Secretary of Commerce.

6 (b) STATUTORY CONSTRUCTION.—Nothing in this

7 section prevents the inclusion on the List of any goods

8 or technology that may be produced in and traded inter9 nationally by persons or entities in countries other than

10 the United States.

11 SEC. 10. REGULATORY AUTHORITY.

12 The President may issue such regulations as may be

13 necessary to carry out this Act.

14 SEC. 11. REPORT REQUIRED.

15 Beginning 60 days after the date of the enactment

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

17 shall transmit to the appropriate congressional committees

18 a report describing—

19 (1) the nuclear and other military capabilities

20 of Iran; and

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

22 acts of international terrorism.

23 SEC. 12. DEFINITIONS.

24 As used in this Act:
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1 (1) ACT OF INTERNATIONAL TERRORISM.—The

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

3 act—

4 (A) which is violent or dangerous to

5 human life and that is a violation of the crimi6 nal laws of the United States or of any State

7 or that would be a criminal violation if commit8 ted within the jurisdiction of the United States

9 or any State; and

10 (B) which appears to be intended—

11 (i) to intimidate or coerce a civilian

12 population;

13 (ii) to influence the policy of a govern14 ment by intimidation or coercion; or

15 (iii) to affect the conduct of a govern16 ment by assassination or kidnapping.

17 (2) APPROPRIATE CONGRESSIONAL COMMIT18 TEES.—The term ‘‘appropriate congressional com19 mittees’’ means the Committees on Banking, Hous20 ing and Urban Affairs and Foreign Relations of the

21 Senate and the Committee on International Rela22 tions of the House of Representatives.

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

24 part’’ has the meaning given that term in section
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1 11A(e)(1) of the Export Administration Act of 1979

2 (50 U.S.C. App. 2410a(e)(1)).

3 (4) FINANCIAL INSTITUTION.—The term ‘‘fi4 nancial institution’’ includes—

5 (A) a depository institution (as defined in

6 section 3(c)(1) of the Federal Deposit Insur7 ance Act), including a branch or agency of a

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

9 the International Banking Act of 1978);

10 (B) a credit union;

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

12 dealer;

13 (D) an insurance company, including an

14 agency or underwriter;

15 (E) any other company that provides fi16 nancial services; and

17 (F) any subsidiary of an entity described

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

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

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

21 11A(e)(2) of the Export Administration Act of 1979

22 (50 U.S.C. App. 2410a(e)(2)).

23 (6) FOREIGN PERSON.—The term ‘‘foreign per24 son’’ means—
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1 (A) an individual who is not a United

2 States national or an alien admitted for perma3 nent residence to the United States; or

4 (B) a corporation, partnership, or other

5 nongovernment entity which is not a United

6 States national.

7 (7) GOODS AND TECHNOLOGY.—The terms

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

9 those terms in section 16 of the Export Administra10 tion Act of 1979 (50 U.S.C. App. 2415).

11 (8) IRAN.—The term ‘‘Iran’’ includes any agen12 cy or instrumentality of Iran.

13 (9) NUCLEAR EXPLOSIVE DEVICE.—The term

14 ‘‘nuclear explosive device’’ means any device, wheth15 er assembled or disassembled, that is designed to

16 produce an instantaneous release of an amount of

17 nuclear energy from special nuclear material that is

18 greater than the amount of energy that would be re19 leased from the detonation of one pound of trinitro20 toluene (TNT).

21 (10) PERSON.—

22 (A) The term ‘‘person’’ means a natural

23 person, as well as a corporation, business asso24 ciation, partnership, society, trust, any other

25 nongovernmental entity, organization, or group,
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1 and any governmental entity operating as a

2 business enterprise, and any successor of any

3 such entity.

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

5 be impossible to identify a specific governmental

6 entity referred to in subparagraph (A), the

7 term ‘‘person’’ means—

8 (i) all activities of the government of

9 the country relating to the development or

10 production of any missile equipment or

11 technology; and

12 (ii) all activities of that government

13 affecting the development or production of

14 aircraft, electronics, and space systems or

15 equipment.

16 (11) PETROLEUM PRODUCTS.—The term ‘‘pe17 troleum products’’ means crude oil, residual fuel oil,

18 and any refined petroleum product.

19 (12) REQUISITE KNOWLEDGE.—The term ‘‘req20 uisite knowledge’’ means situations in which a per21 son ‘‘knows’’, as ‘‘knowing’’ is defined in section 104

22 of the Foreign Corrupt Practices Act of 1977 (15

23 U.S.C. 78dd–2).

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

25 ‘‘United States’’ or ‘‘State’’ means the several
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1 States, the District of Columbia, the Commonwealth

2 of Puerto Rico, the Commonwealth of the Northern

3 Mariana Islands, American Samoa, Guam, the

4 United States Virgin Islands, and any other terri5 tory or possession of the United States.

6 (14) UNITED STATES NATIONAL.—The term

7 ‘‘United States national’’ means—

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

9 United States or who owes permanent alle10 giance to the United States;

11 (B) a corporation or other legal entity

12 which is organized under the laws of the United

13 States, any State or territory thereof, or the

14 District of Columbia, if natural persons who are

15 nationals of the United States own, directly or

16 indirectly, more than 50 percent of the out17 standing capital stock or other beneficial inter18 est in such legal entity; and

19 (C) any foreign subsidiary of a corporation

20 or other legal entity described in subparagraph

21 (B).

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