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NUCLEAR IRAN PREVENTION ACT OF 2013

MARKUP

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS

FIRST SESSION

ON

H.R. 850

MAY 22, 2013

Serial No. 113–27

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ADAM KINZINGER, Illinois 

MO BROOKS, Alabama 

TOM COTTON, Arkansas 

PAUL COOK, California 

GEORGE HOLDING, North Carolina 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

STEVE STOCKMAN, Texas 

RON DESANTIS, Florida 

TREY RADEL, Florida 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

LUKE MESSER, Indiana 

ELIOT L. ENGEL, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

JUAN VARGAS, California 

BRADLEY S. SCHNEIDER, Illinois 

JOSEPH P. KENNEDY III, Massachusetts 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

(III)

C O N T E N T S 

Page

MARKUP OF 

H.R. 850, To impose additional human rights and economic and financial 

sanctions with respect to Iran, and for other purposes .................................... 2

Amendment in the nature of a substitute to H.R. 850 offered by the Honorable Edward R. Royce, a Representative in Congress from the State 

of California, and chairman, Committee on Foreign Affairs ........................ 29

En block amendments to H.R. 850 offered by various members ...................... 84

Amendment to the amendment in the nature of a substitute to H.R. 850 

offered by the Honorable Edward R. Royce .................................................... 144

Amendment to the Royce amendment to the amendment in the nature 

of a substitute to H.R. 850 offered by the Honorable Alan Grayson, 

a Representative in Congress from the State of Florida ............................... 148

Amendments to the amendment in the nature of a substitute to H.R. 

850 offered by: ...................................................................................................

The Honorable Alan Grayson ....................................................................... 151

The Honorable Alan Grayson ....................................................................... 155

The Honorable Tom Cotton, a Representative in Congress from the 

State of Arkansas ...................................................................................... 156

The Honorable Alan Grayson ....................................................................... 157

The Honorable Tom Cotton .......................................................................... 158

The Honorable Alan Grayson ....................................................................... 164

The Honorable Alan Grayson ....................................................................... 167

The Honorable Alan Grayson ....................................................................... 169

The Honorable Edward R. Royce; the Honorable Eliot L. Engel, a 

Representative in Congress from the State of New York; the Honorable Tom Cotton; the Honorable Brad Sherman, a Representative 

in Congress from the State of California ................................................. 172

APPENDIX 

Markup notice .......................................................................................................... 176

Markup minutes ...................................................................................................... 177

Markup summary .................................................................................................... 179

The Honorable Edward R. Royce: Material submitted for the record ................. 181

The Honorable Christopher H. Smith, a Representative in Congress from 

the State of New Jersey: Prepared statement ................................................... 182

The Honorable George Holding, a Representative in Congress from the State 

of North Carolina: Prepared statement .............................................................. 183

(1)

NUCLEAR IRAN PREVENTION ACT OF 2013

WEDNESDAY, MAY 22, 2013

HOUSE OF REPRESENTATIVES,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The committee met, pursuant to notice, at 10:15 a.m., in room 

2172 Rayburn House Office Building, Hon. Edward Royce (chairman of the committee) presiding. 

Chairman ROYCE. The hearing will come to order pursuant to notice. We meet today to mark up H.R. 850, the Nuclear Iran Prevention Act of 2013. 

The Chair calls up the bill. And without objection, the bipartisan 

amendment in the nature of a substitute that was sent to your offices on Monday is considered base text, and is considered read and 

open for amendment at any point. 

[H.R. 850 and the amendment in the nature of a substitute referred to follow:]

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Chairman ROYCE. After recognizing myself and the ranking 

member to explain the bill, I will call up a package of bipartisan 

amendments to be considered en bloc, at which point I would be 

glad to recognize any members seeking recognition to speak. Without objection, all members may have 5 days to submit statements 

for the record on the bill or statements on the amendments. 

I now recognize myself to describe the base text. 

Last week the committee heard testimony from senior administration officials on the threat of a nuclear Iran. As I said then, 

there is no higher priority for this committee than stopping Iran’s 

nuclear weapons drive. 

Thanks to the tools provided by Congress, sanctions have been 

stepped up over the past year and a half. Consequently, Iran’s oil 

revenue has been dropped now by 40 percent. Inflation in Iran has 

climbed to 30 percent. Those are the official numbers. The unofficial numbers are twice that. 

But as impressive as this is, it is not enough. A loophole in existing sanctions has allowed, for example, the transfer of $6 billion of 

gold into Iran to buttress their reserves. And Iran is advancing its 

nuclear program with great determination. The number of installed 

centrifuges has doubled since the fall of 2011. These centrifuges are 

getting more advanced. Iran’s nuclear activities are falling farther 

out of view of international inspectors who are being stonewalled. 

Without question, we have to play every card, and we have to 

pull every lever that we have. This legislation, developed with 

Ranking Member Engel, aims to do just that. In short, we attack 

Iran’s oil exports, we hit its brutal leaders, and we crimp its access 

to overseas cash. 

Since key oil sanctions were passed—and, by the way, that was 

over administration objections at the time—but since those key oil 

sanctions were passed in December 2011, 1 million barrels of Iranian crude per day have been taken off the market, yet countries 

still buying Iran’s oil continue to receive a ‘‘significant reduction exemption’’ from the administration. 

This bill would compel that another 1 million barrels per day be 

taken off of the market. Now is the time to snap Tehran’s Achilles 

heel. Simply put, without oil revenue, there is no cash for atomic 

weapons. And without oil revenue, hopefully, we also crimp the 

funding for Hezbollah. 

With this bill, we will work to limit Iran’s access to overseas foreign currency reserves, blacklist more sectors of the economy, and 

begin to target significant commercial trade with Iran. Shipping is 

targeted in this legislation as well. We squeeze, and then we 

squeeze some more. 

Importantly, this bill seeks to ensure that when the administration imposes sanctions on any entity that provides precious metals 

to Iran, like gold, that they have every sanction available to them. 

And we extend sanctions aimed at curbing terrorism and proliferation to human rights violators, standing by the Iranian people who 

are suffering abuse and yearning for freedom. The Iranian regime 

also systematically denies the Iranian people humanitarian supplies, as we heard from the administration last week in their testimony. 

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I should recognize that Chairman Emeritus Ros-Lehtinen and 

former chairman Howard Berman helped put in place many of the 

sanctions we are building on today. This committee has historically 

led the way on Iran sanctions, and always in a bipartisan way. 

Today, we continue moving ahead with a bill that now has over 

330 co-sponsors. It is critical that the administration aggressively 

impose all Iran sanctions. This is a very tough bill, as it should be. 

The threat is grave. And at the end of the day, I know the committee wants to see Iran’s nuclear weapons effort ended by peaceful 

means. That can only happen with crippling sanctions. 

I now recognize the ranking member, the co-author of this bill, 

Eliot Engel from the Bronx in New York City, for his opening remarks. 

Mr. ENGEL. Thank you very much, Mr. Chairman. Thank you for 

calling today’s markup on H.R. 850, the Nuclear Iran Prevention 

Act of 2013. 

You and I have worked closely together on this bill in a bipartisan way, which is one of the reasons this committee works so 

well. I think we have more bipartisanship on this committee than 

virtually any other committee. Perhaps we can lead the way for the 

rest of the Congress. 

It has been a pleasure working with you and your staff, again, 

in a bipartisan manner to craft this important legislation, which 

now, as you have pointed out, has more than 330 co-sponsors from 

both sides of the aisle. I am very glad that our freshmen on both 

sides of the aisle are here so early in their congressional career 

having a markup, which is of course so important to the well-being 

of our nation. 

Mr. Chairman, we share the goal of preventing a nuclear-capable 

Iran, which would pose a grave threat to the United States and our 

allies, and I could not ask for a better partner than you in this effort. 

Last week the State Department’s lead negotiator in the P5+1 

negotiations with Iran, Ambassador Wendy Sherman, appeared before this committee. Her testimony confirmed that Iran continues 

to reject diplomatic efforts to resolve this crisis and is not prepared 

to abandon its dangerous and illegal nuclear weapons program. 

As I mentioned at the hearing, I don’t think Iran will ever negotiate in good faith unless we ratchet up the pressure, and that is 

the purpose of the legislation before us today. Previous sanctions 

legislation reduced Iran’s oil exports by 1 million barrels a day, 

from roughly 2.5 million barrels a day to less than 1.5 million barrels. 

We have written this bill to cut Iran’s oil exports by yet another 

million barrels a day, a reduction of two-thirds from Iran’s current 

exports. Shrinking Iran’s oil exports to less than 0.5 million barrels 

a day will be the strongest step we have taken thus far to pressure 

Iran to stop its nuclear weapons program and end its support for 

terrorism. 

The legislation also strengthens existing sanctions by authorizing 

the President to restrict significant commercial trade with Iran. It 

uses the same model, sanctioning transactions through the central 

bank of Iran or a designated Iranian bank, that has successfully 

targeted Iran’s oil trade over the past year. 

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In addition, the bill seeks to deny the Iranian regime hard currency by enhancing our ability to work with our European allies in 

cutting off Iran’s access to euro-dominated transactions. And, finally, our bill imposes new sanctions against Iranian shipping imports and expands existing sanctions against Iranian human rights 

violators and those who aid and abet human rights abuses by 

transferring certain technologies to Iran. 

Today, members will have the opportunity to offer amendments 

to improve this legislation, and hopefully make our sanctions regime even more effective. I look forward to supporting those 

amendments. 

With Iran moving full speed ahead on its nuclear weapons program, time is of the essence. It is clear that Iran is playing for 

time. They want to keep making excuses until their having a bomb 

becomes a fait accompli. We will not allow that to happen, and this 

legislation is a very important piece of that puzzle. 

I hope we can bring this bill to the floor as soon as possible, work 

out differences with our partners in the Senate, and get it to the 

President’s desk without delay. 

Mr. Chairman, again, I am proud to be part of this bipartisan effort to address the most critical national security challenge facing 

our nation today, and I look forward to working with you to ensure 

that the strongest possible sanctions are enacted into law. 

Thank you, Mr. Chairman. 

Chairman ROYCE. I thank my friend for his remarks, and I also 

thank him for the contributions that he has made to this legislation. And as your offices were previously notified, I will now call 

up the bipartisan en bloc, and then we will recognize any members 

wishing to speak on the bill or wishing to speak on those en bloc 

amendments after we have done that. 

So without objection——

Mr. GRAYSON. Point of order. 

Chairman ROYCE [continuing]. The following amendments provided——

Mr. GRAYSON. Sorry, Mr. Chairman. This is a point of order. I 

think that we should have at least a voice vote on the amendment 

in the nature of a substitute. We have a bill. We have an amendment in the nature of a substitute. We have not had a vote yet on 

the amendment in the nature of a substitute. I think under Rule 

5 we should have such a vote. 

It can be very brief; I want to move along here. But I think we 

do need such a vote under Rule 5. 

Chairman ROYCE. Well, if I could, Mr. Grayson, my intention 

was to go to a vote on that after the amendments. What you are 

suggesting is that rather than recognizing the en bloc amendment 

first, you would prefer to have that vote prior to accepting the en 

bloc amendments? 

Mr. GRAYSON. Yes, Mr. Chairman. Exactly. The amendment in 

the nature of a substitute should have a vote before we have the 

en bloc amendments, because my understanding is that the en bloc 

amendments are based upon the amendment in the nature of a 

substitute, or, as you put it, the base language. 

Chairman ROYCE. Well, we are in the process of amending the 

base text, so that we have base language. Then, if you wished to 

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call up a vote on that, we could be recorded, because at this point 

these amendments—the base text is pending these amendments. 

That’s the circumstance we are now in. 

Mr. GRAYSON. So if I understand the chairman correctly, the 

chairman does contemplate a vote on the amendment in the nature 

of a substitute, but only after all other amendments to that amendment have been resolved. 

Chairman ROYCE. Well, after the amendments that we have already resolved en bloc. All right? So that is the suggestion I am 

making. 

Mr. GRAYSON. I understand. I withdraw my objection. 

Chairman ROYCE. And I think that might be acceptable to you. 

Mr. GRAYSON. Yes, it is, Mr. Chairman. Thank you. 

Chairman ROYCE. I thank the gentleman from Florida. 

Okay. Without objection, the following amendments provided to 

all members yesterday, and which you have in front of you, will be 

considered en bloc, Royce Amendment 22; Connolly Amendment 39; 

Cotton Amendments 4 and 20; Deutch Amendments 22, 23, and 25; 

Duncan Amendment 16; Frankel Amendment 3; Grayson Amendments 101, 103, 108, and 110; Marino Amendment 19; Poe Amendment 38; Ros-Lehtinen Amendment 18; Schneider Amendment 2; 

and Sherman Amendments 74, 75, 76, and 79. 

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Chairman ROYCE. And I think at this time it would be appropriate to ask if any members want to speak either on the en bloc 

amendments or on the underlying bill, and we will go to Mr. Sherman. 

Mr. SHERMAN. Thank you, Mr. Chairman. I want to thank you 

and the ranking member for your work on this important legislation. It builds upon the key work, particularly the Menendez-Kirk 

Amendment, that has had such an effect of making it difficult for 

Iran to sell its oil. 

As you point out, Iran is now down to 1.2–1.5 million barrels, 

and those who want to do business with the central bank of Iran 

without obtaining U.S. sanctions have to get waivers from the 

United States. And for those waivers to continue, we need to see 

dramatic reductions in oil purchases from Iran. 

As to the en bloc amendment, I should explain some of the provisions in it that stem from the four amendments that I had pending 

individually. First, and perhaps most important, it imposes sanctions on those who sell mining and milling equipment to Iran that 

can be used by Iran to exploit its own uranium ore. 

Second, it strengthens the sanctions on those who would provide 

WMD technology to Iran, and also strengthens the sanctions on 

those who would give the Iranian Government the technology to 

suppress the communications of its own citizens and the social 

media that was so important in the, unfortunately, unsuccessful 

Green Revolution or insurrection. 

Perhaps most importantly, we have a situation where we have to 

make sure that the sanctions are enforced. One thing that is already in our law that is self-enforcing is that those getting Federal 

Government contracts have to certify that that contracting entity 

is not violating U.S. sanctions law. 

So even if an administration were to do nothing unless corporate 

executives are willing to risk imprisonment, they are going to have 

to choose between doing business with the Federal Government 

and doing business with Iran in a manner that is sanctioned under 

our laws. 

Unfortunately, current statute applies that certification only to 

the entity contracting with the Federal Government and its subsidiaries. This en bloc amendment would broaden that to apply to 

the entire corporate group, so that the certification would be on behalf of the parent corporation and all of the brother-sister corporations, all of the corporations under joint control. 

So I think that the bill is a major step forward. The en bloc 

amendment deserves support. 

One thing that we need to work out with other committees is the 

issue of whether some in the administration would say, ‘‘Well, 

there is this or that part of the Iran sanctions bill that we would 

like to enforce, but our lawyers say that we can’t because of some 

treaty or trade treaty, or whatever.’’ You can always find a lawyer 

in this town that can tell you that you can’t do this or that, especially if you don’t want to do it. 

The fact is that we have—that none of our sanctions against Iran 

have been adjudicated by any competent international jurists or domestic tribunal to be in violation of any of our trade agreements. 

And I am certain that the members of the Ways and Means ComVerDate 0ct 09 2002 08:13 Jun 24, 2013 Jkt 000000 PO 00000 Frm 00134 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\052213M\81168 HFA PsN: SHIRL
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mittee are as dedicated as all Americans to preventing Iran from 

developing a nuclear weapon, and that ultimately they will want 

to see in this bill provisions that say that all American sanctions 

need to be enforced, notwithstanding some argument about some 

treaty, trade treaty or otherwise, unless and until there is an adjudication from a competent tribunal, which I am sure would not 

happen. And even if it did, it would happen many, many years 

down the road. 

Finally, I want to mention that an interesting bill was introduced 

in the Senate yesterday, the Iran Export Embargo Act, that would 

sanction those who buy non-energy exports from the Government 

of Iran. And as this bill goes forward, we may find provisions of 

that bill ought to be added to this bill. 

So this may be the most important legislation the committee 

deals with all year. It is something that I would like to commend 

the chair and the ranking member for preparing, and I yield back. 

Chairman ROYCE. I thank the gentleman from California. 

We go now to Mr. Smith from New Jersey. 

Mr. SMITH. Thank you very much, Mr. Chairman. And I want to 

thank you for authoring a truly important bipartisan piece of legislation. I think the Royce-Engel bill will make a serious difference 

in the fight to combat Iran’s efforts to acquire a nuclear weapons 

of mass destruction capability. 

Oil revenues remain, as we all know, Tehran’s economic lifeline, 

and I do believe we are at a tipping point. It may now be a matter 

of when, and not if, that Iran procures these weapons of mass destruction. But we have got to make this last economic effort to try 

to say not now, not ever, while this dictatorship continues to pose 

threats to its neighbors, to Europe, to the United States, and, really, to the world. 

I think it is very important that the legislation targets oil. As I 

pointed out, as so many of us pointed out again and again, especially when Wendy Sherman testified, when you can sell oil to 

China and a whole host of other nations and derive huge amounts 

of hard currency and the ability to sustain the European and 

American sanctions, we have not done all that can be done economically to try to mitigate this threat. So I do think this legislation takes us in a very significant way in the direction of finally 

saying, ‘‘We are not kidding. This has got to stop.’’ We are a tipping 

point, like I said. 

Again, I want to thank you—I would ask unanimous consent that 

my full statement be made a part of the record. But I do want to 

thank you, Chairman Royce. You know, Ileana Ros-Lehtinen championed the legislation in the last Congress. And as you pointed out, 

it was bipartisan. Howard Berman was certainly a key factor in 

that legislation. 

And we know the administration is not favorable to this. We 

know it. Last Congress, over and over again, they tried to throw 

hurdles, speed bumps, and moguls in front of the legislation, and 

now it is a matter of more effective implementation of all current 

sanctions, but also the new, and I think significant, sanctions that 

you include in this legislation. 

So thank you, Mr. Chairman, and I yield back the balance of my 

time. 

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Chairman ROYCE. Thank you. We will go now to Mr. Sires of 

New Jersey. 

Mr. SIRES. Thank you, Mr. Chairman. Let me first compliment 

you and Mr. Engel for working together on this. 

Iran continues to ignore international law, and it is moving forward with its nuclear program. While our current sanctions are 

having an impact on Iran, more can be done and we must act now. 

I am a strong supporter of H.R. 850 and the amendments to the 

Nuclear Iran Prevention Act, and I thank the chairman and the 

ranking member for bringing this bill before the committee today. 

This legislation would allow the United States to employ more tools 

to combat Iran’s nuclear program. H.R. 850 strengthens sanctions 

against human rights violators and the corrupt Iran actors that 

steal humanitarian aid for their own benefits. 

H.R. 850 also tightens sanctions against companies who invest in 

Iran’s energy sector and work with Iran’s central bank. This bill 

also takes strong steps in having the Iran Revolutionary Guard 

Corps designated as a foreign terrorist organization by the U.S. 

State Department. H.R. 850 targets Iran’s leadership to help end 

the threat of nuclear Iran and to stop the oppression of the Iranian 

people. Combating the threat of Iran is critical for the future safety 

and stability of the region, and the United States must continue to 

lead the fight in sanctioning this dangerous regime. 

I am proud to co-sponsor H.R. 850, and I urge my colleagues to 

support this bill. 

I yield back. 

Chairman ROYCE. I thank the gentleman. 

We go now to Mr. Chabot of Ohio. 

Mr. CHABOT. Thank you, Mr. Chairman. I will be brief. I do support this legislation. I commend you and the ranking member for 

offering it, and I intend to vote for it. I have to say, however, I am 

not optimistic that ultimately sanctions against Iran will work. 

I believe Iran is bound and determined to obtain nuclear weapons, and I think only if Iran is absolutely convinced that military 

action will be taken against them, if they don’t back down from the 

program that they will actually back down. I don’t think they are 

convinced of that. 

I think this administration, for years now, has basically sent a 

mixed message to Iran saying one thing, but at the same time saying something entirely different, sending mixed signals. So, again, 

I commend you for doing this, I think it is the right thing to do, 

and I do intend to support it. I don’t think Iran is convinced that 

military action will be taken against them, therefore, I think they 

are going full speed ahead with their nuclear weapons program 

Thank you. I yield back. 

Chairman ROYCE. I thank the gentleman. 

We go to Mr. Connolly from Virginia. 

Mr. CONNOLLY. Thank you, Mr. Chairman. And I also want to 

express my appreciation to you and the ranking member for your 

leadership on this issue and for the bipartisan comity that has 

characterized the progress of this legislation. 

I support the amendment in the form of a substitute for H.R. 

850, and I also am supportive of the en bloc amendment package. 

I particularly appreciate you and your staff and that of Mr. Engel, 

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willing to accept the Connolly-Ros-Lehtinen Amendment that further clarifies internet access for democratization within Iran. We 

believe that the social media can really play a big role, despite the 

actions of the government in Iran. And I, again, thank you and Mr. 

Engel for working with us to accept that language. 

I would just say, Mr. Chairman, I hear some discord in notes on 

the otherwise bipartisan cooperation and tone today. I have to say, 

I respectfully disagree with my friend from Ohio. I think this administration most certainly does take sanctions against Iran very 

seriously, has enforced them. They are some of the toughest sanctions ever adopted against any country, and I don’t think the administration has sent mixed signals to Tehran. 

I think Tehran sometimes hears what it wants to hear, but I am 

very gratified that both the United States and Israeli Governments 

have worked closely together in a policy to try to prevent nuclear 

development in Iran. And I think we will continue to do so, and I 

think this legislation will be welcome and will strengthen the administration’s hands. 

And with that, I yield back. 

Chairman ROYCE. We will go now to Mr. McCaul of Texas. 

Mr. MCCAUL. I want to thank the chairman and ranking member 

for this legislation, and also for adopting my language to designate 

the Quds Force as a foreign terrorist organization. They have been 

behind some of the deadliest attacks of the past three decades, including the killing of American troops in Iraq and Afghanistan, the 

’96 Khobar Tower bombing in Saudi Arabia, the ’94 attack on the 

Jewish Community Center in Buenos Aires, which I visited, the 

1983/’84 bombings on the U.S. Embassy in Beirut, the ’83 bombing 

of the Marine barracks in Beirut killing 299 Americans. 

They fit squarely within the definition of a foreign terrorist organization. I believe the designation is long overdue. And I just want 

to thank the chairman and the ranking member for including this 

language in this bill, which I strongly support. 

With that, I yield back. 

Chairman ROYCE. Well, thank you, Mr. McCaul. 

We now go to Mr. Vargas of California. 

Mr. VARGAS. Thank you very much, Mr. Chair, for the opportunity to speak. I also want to thank you and the ranking member 

for this bill. 

I strongly support it, and I believe that we need to tighten economic sanctions against Iran as tight as possible. And the reason 

I think is quite simple, and that is because these sanctions are 

really in lieu of military action, because I don’t think that the message has been clear enough, and I don’t think that the Iranians 

have taken us seriously that we will use any means necessary to 

prevent them from gaining a nuclear weapon. 

We had testimony before, and I was able to ask the question to 

the experts that were here, if they believed that the Iranian regime 

was attempting to gain a nuclear weapon. All of them agreed. They 

disagreed on many things, but they didn’t disagree on that point. 

They all agreed that Iran was continuing that process to gain a nuclear weapon. 

So I think that these sanctions are very necessary. I think that 

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rorist nation. There is no doubt about that. And, again, I thank you 

for bringing this forward. And any way that we can tighten these 

even further, I would be in favor of. So thank you. 

Chairman ROYCE. Thank you. 

Mr. Duncan of South Carolina is recognized. 

Mr. DUNCAN. Yes. Thank you, Mr. Chairman. And I want to 

thank you and the other members for the bipartisan effort on H.R. 

850, and for including my amendment as part of the en bloc 

amendment. 

Just a few talking points that I would like to cover about Iran’s 

nuclear program which threatens the safety and security of the 

U.S. and many of our allies and partners around the world. And 

although the U.S. has had sanctions on Iran since 1979, with 

sharpening sanctions in more recent years, and while the U.N. and 

the EU have passed sanctions on Iran, we continue to see countries 

purchasing oil or natural gas from Iran with gold. 

Although the President has had the authority to impose sanctions on gold exports to the Iranian Government since July 2012, 

to date the administration has not penalized any entity on these 

grounds. In the meantime, lack of U.S. action has real and tangible 

ramifications. 

A recent report by the Foundation for Defense of Democracies 

and the Roubini Global Economics found that between July 2012 

and March 2013 Iran received $6 billion in payment in the form 

of gold for energy exports. My amendment to H.R. 850 seeks to 

close this gold for gas loophole by requiring greater transparency 

and accountability from the President to ensure that the President 

implements sanctions on gold exports to the Government of Iran. 

I appreciate the support of this, and I yield back. 

Chairman ROYCE. Thank you. 

We go to Mr. Deutch of Florida. 

Mr. DEUTCH. Thank you. Chairman Royce, Ranking Member 

Engel, thank you for your commitment to advancing this legislation 

today. You acted swiftly to bring the bill up before this committee, 

and I hope that it continues to the floor as soon as possible because, as we all know, time is of the essence. 

We have seen how sanctions can cripple the Iranian regime’s financial lifeline with strict implementation and enforcement. But 

we have also seen the regime become adept at finding mechanisms 

to skirt sanctions. This legislation will close those existing loopholes and make it more and more difficult for Iran to avoid the economic pain of sanctions. 

Today I offer three amendments, two of them addressing critical 

issues that dominate today’s headlines, and a third continuing my 

work on divestment. 

As we saw yesterday, tensions in Iran are rising as Presidential 

elections draw near. The disqualification of former President 

Rafsanjani, a supporter of the 2009 Reformists, is further proof 

that the Ayatollah is willing to violate any and all international 

election standards that might threaten his hold on power. 

According to reports from Rafsanjani’s daughter, a reason for his 

disqualification is yet to be provided, but we knew that the 

unelected, unchecked Guardian Council would disqualify anyone 

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seen as a threat to the regime, as well as any religious minority 

or women candidates. 

As Iran expert Karim Sadjadpour said recently, ‘‘Increasingly 

looking like Iran’s Presidential election will be one man, one vote. 

That one man’s name is Ayatollah Khamenei.’’ In fact, this morning there are reports that members of Rafsanjani’s campaign staff 

had been arrested. 

To prevent any chance of a post-2009 uprising, we are already 

seeing the regime’s efforts to crack down on communication, with 

reports of drastically slowed internet speed and people unable to 

access technology necessary to help circumvent the regime’s ban on 

international Web sites. 

News out of Iran reports that Reformist candidate and opposition 

Web sites have been filtered. Mr. Chairman, that is why the passage of my amendment today is so critical. With this amendment, 

Congress will send a clear message to the Iranian people that we 

stand with them in their quest for democracy, and we unequivocally support their right to free and fair elections. 

For years the Iranian regime has been engaged in a systematic 

campaign to deny the Iranian people access to unbiased information and to prevent them from exercising basic human freedoms of 

expression and assembly. And as we saw yesterday, as this election 

draws closer, the regime will try to cement its firm grip over the 

Iranian people. With elections just weeks away, it is vital that we 

do not let Iran achieve its goal of dropping an electronic curtain on 

its people. 

In response to what we have already seen happening in Iran, I 

am also pleased to offer an amendment that will expose those that 

continue to import to Iran technologies that are used for repression, tracking movements, monitoring of email and texts, and jamming of access to the internet, as more sanctions to those companies. 

As more and more citizens of Iran use the internet and new 

media as an alternative source for news and political debate, the 

regime has responded by monitoring and filtering internet content, 

limiting or suspending access to the internet, satellite jamming, 

outlawing foreign information. The amendment will also expedite 

licenses for those who seek to provide technologies that promote 

the free flow of information. 

Finally, Mr. Chairman, I would like to offer an amendment that 

furthers an issue that I have worked on for many years. In 2007, 

the State of Florida passed the nation’s first Iran divestment legislation requiring state pensions to withdraw funds from any company doing business in Iran’s energy sector. 

My third amendment today will broaden the ability of states to 

divest their funds from companies who continue to support the Iranian regime. This amendment will also allow states to deny business licenses to companies engaged in business with Iran. Twentyeight states now have divestment policy, and, as a result, billions 

of dollars of investment in Iran has been lost. 

Mr. Chairman, I want to thank you and the ranking member for 

working with us in such an inclusive bipartisan manner on this 

bill. The Nuclear Iran Prevention Act will continue to advance 

what has become the most rigorous U.S. sanctions policy to date, 

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aimed at bringing maximum pressure on this regime and ultimately halting Iran’s drive for a nuclear weapon once and for all. 

And I yield back the balance of my time. 

Chairman ROYCE. Well, thank you, Mr. Deutch. I do think your 

amendment sent a strong message, and I think it is interesting 

that this markup comes a day after, as you eloquently expressed, 

another example of this rigged sham of an election, one more case 

of evidence in terms of the way in which the will of the people in 

Iran has been overturned by this decision. 

We now go to Mr. Cotton. We recognize Mr. Cotton of Arkansas. 

Mr. COTTON. Thank you, Mr. Chairman. I want to express my 

thanks to you and the ranking member for your efforts on this very 

important bipartisan legislation. I agree with my colleague from 

Ohio that this legislation may be the last best chance to stop Iran’s 

nuclear weapons program before an act of war, whether a passive 

act like a blockade, or an active act of war like an attack, may be 

necessary. I hope it will be successful. We don’t know for sure, but 

it is certainly worth the effort. 

I have offered two en bloc amendments and will offer standalone 

amendments as well. All of these amendments have one underpinning. They are designed to accelerate and improve the reporting of 

this legislation. I think the timeline on which we are operating is 

very short. We are not operating on a 3- to 5-year timeline. We are 

operating on a 1-year timeline, give or take a few months. 

I do believe this is necessary, because Western intelligence services, including our own, have a history of underestimating the 

timelines that covert weapons programs take to reach full development, for example, Saddam Hussein’s program that was destroyed 

by Israel in 1981, thankfully. 

In my en bloc amendments, the first is an amendment to Section 

102. It would require reporting about the net worth of certain Iranian officials. Iran suffers from double digit unemployment and 

staggering inflation, yet the elites of the regime continue to profit 

at the expense of common Iranian people, because of the regime’s 

tight control over information. Many Iranian people don’t know 

this. To put this on the internet I think would help ferment some 

of the civil unrest in the country. 

The second amendment to Section 301 would, again, help 

strengthen reporting requirements. It would eliminate the nuclear 

clock and the economic clock that Iran currently has. It would do 

things like require more reporting on weapons grade uranium production, plutonium production, Iran’s capital accounts, foreign exchange reserves, and an estimated timeline with respect to its macroeconomic viability. I think this will provide sorely needed accountability and transparency. 

I am happy and honored to be offering this bipartisan amendment with my colleagues from Massachusetts and Illinois, and I 

will yield 2 minutes to the gentleman from Massachusetts at this 

point. 

Mr. KENNEDY. Thank you, Mr. Cotton. It is a privilege to be able 

to—and it has been a privilege to be able to work with you on these 

amendments as well, and I want to thank and recognize the chair 

and the ranking member of the committee for putting forth such 

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a strong bill that has received such strong bipartisan support 

throughout this committee and in the House. 

I just wanted to speak briefly and echo a bit of what Mr. Cotton 

had said. This amendment essentially speeds up the reporting 

timeline, so that Congress is able to get this critical information as 

quickly as possible. It requires a more detailed analysis of Iran’s 

nuclear timeline, the procurement network, and the capital accounts, all necessary details to fully understand how effective our 

sanctions are and whether there are areas that need to be improved. 

Our amendment ensures that we are going to be able to move 

forward with tougher sanctions and that there is a thorough and 

consistent communication between the State Department and Congress regarding any new threats and developments. The United 

States has to continue to lead the way with these crippling sanctions and must continue to stay active and engaged in their implementation and oversight. 

And for a couple more comments, I will yield to Mr. Schneider. 

Chairman ROYCE. We recognize the gentleman from Illinois. 

Mr. SCHNEIDER. Thank you—and, again, I want to thank Congressman Cotton and Congressman Kennedy—for your help, Mr. 

Chairman. I am pleased to support the bipartisan effort of this bill 

and support the en bloc amendment. 

The provisions included in the legislation before us are some of 

the most important policy necessities we will consider before this 

committee. Sanctioning Iran and its affiliates is crucial to our national security strategy and those of our allies in the Middle East. 

With this in mind, I was quite happy to work with my colleagues 

on both sides of the aisle to improve upon the basic text of this bill, 

particularly in this amendment with Representative Cotton and 

Representative Kennedy in crafting compromise language that 

strengthens our oversight of the sanctions process and places a new 

emphasis on the speed and frequency in which we impose economic 

hardship on the Iranian regime. 

The amendment clarifies the distinct process and deliberate pace 

we must take to successfully degrade the Iranian regime’s ability 

to develop a nuclear weapon and isolate them in the international 

community. The amendment would set in motion a process in 

which the administration will make an initial assessment of the 

current state of Iran’s isolation, develop a strategic framework for 

how to address those challenges, and further report back to Congress on a regular interval on new emerging trends, challenges, 

and potential threats that are being continually observed and addressed throughout implementation. 

The renewed emphasis on reporting will allow us to better evaluate how and when sanctions are being effective and what tools are 

presenting us with the greatest opportunity to successfully deter 

Iran’s aggression. 

We know that we are reaching a point of breakout in terms of 

Iran’s capabilities. It is essential that we develop a sanctions and 

reporting process that is frequent, aggressive, and offers us the 

greatest mobility at addressing Iran’s attempts to diversify its 

economy and circumvent U.S. and European efforts at isolation. 

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Language included in this will not only provide an operational 

and strategic approach to sanctions, but will also require periodic 

reporting on what new emerging threats, challenges, and opportunities are being identified, so swift action can be taken to take full 

advantage of the points of exploitation as they emerge. 

I am also proud to offer an amendment seeking to report on 

Iran’s efforts to diversify its economy and that will specifically 

evaluate the ability of Iran to diversify in such a way that will lessen the impact of sanctions on their economic and financial sections 

and their energy sectors. 

As we continue to go through this process of amendment and deliberation, I look forward to working with the chairman and the 

ranking member and my colleagues to further clarify our period reviews of how sanctions are being developed. 

Thank you for working in such a bipartisan way. And with that, 

I yield back my time. 

Chairman ROYCE. Well, we thank the gentleman from Massachusetts, as well as Illinois, and the gentleman from Arkansas, for 

their amendment. 

We now go to Ms. Meng of New York City. Ms. Meng is not 

present at the moment, so let us go to Ms. Frankel of Florida. 

Ms. FRANKEL. Thank you, Mr. Chairman. You know, I think 

most Americans are wondering whether this Congress can ever get 

along, so I just want to reiterate and thank the chairman and the 

ranking member for a very bipartisan approach to a very critical 

issue. And I join with my colleagues, first of all, to say I support 

the bill and the amendment and the amendments en bloc. 

And I will go on record again saying that this extreme regime is 

the largest state sponsor of terror. It cannot be allowed to acquire 

the world’s most dangerous weapon, and, as we heard Under Secretary Sherman say, that a nuclear Iran would trigger a nuclear 

arms race throughout the region that would destabilize the world 

order. So thank you for strengthening the sanctions with this Act. 

I also want to thank Mr. Royce and Mr. Engel for advancing 

human rights. There is always this delicate balance. These sanctions are, rightfully, aimed at causing economic unrest in Iran. And 

we want these strategies to work in a way that the Iranian people, 

the unrest, that they turn against their government, not have sanctions that further support of a government. And so thank you for 

adding the advancement of human rights. 

I just wanted to give folks an example of what it is like for 

women in Iran. For example, women convicted of adultery, they are 

buried in the sand up to their shoulders and small stones are 

thrown at them until they die. That is just one example of the cruelty of the Iranian regime. 

And with this en bloc amendment is a provision that asks the 

Secretary of State to designate a position in the Bureau of Near 

Eastern Affairs to facilitate cooperation across departments for the 

purpose of advancing human rights and political participation for 

women in Iran, as well as to prepare evidence and information on 

women’s rights violations to be used in identifying Iranian officials 

for designation as human rights violators. 

We need both men and women’s voices to be heard to alter the 

actions of a very, very cruel, extreme Iranian regime. 

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Thank you, Mr. Chair. 

Chairman ROYCE. Well, we thank the gentlelady for her contribution to this measure. 

And we go now to Mr. Poe of Texas. 

Mr. POE. Move to strike the last word, Mr. Chairman. Thank you 

for the diligence on this bill. As the gentleman from the Bronx 

mentioned, 330 co-sponsors on a piece of legislation in Congress, I 

don’t know that we have ever had that many agree on anything, 

and that should be a sign not only to the American people, and the 

Iranian people, but the rogue government in Iran, that we mean 

business about sanctions, and we are united on the issue of making 

sure that the little tyrant from the desert, Ahmadinejad, is not able 

to have nuclear capability, nuclear weapons. 

The supreme leader took a heavy hand against his own people 

after the 2009 massive protest and the illegal government of 

Ahmadinejad took control. The Iran Revolutionary Guard was let 

loose on the people, tramping down, stomping, and killing all because of the right of free speech. 

According to numerous accounts, one of those protesters was a 

young lady. Her name was Taraneh Mousavi. One of her friends 

described her as beautiful and very kind, and she had a warm voice 

and played the piano with great skill. Taraneh disappeared during 

the protests of 2009. She was arrested by security forces. Weeks 

later her mother received an anonymous call—the call in the 

night—from the government, a government agent, saying her 

daughter had been hospitalized listing injuries that could only 

come from an assault, a rape. 

When her family went to the hospital, Taraneh was not there. 

According to one account, the family was told by government thugs 

not to tell people when she disappeared nor any information about 

the kind of injuries she suffered. So when her charred body was 

discovered a month after her arrest, her family was again told not 

to hold a funeral ceremony for her and not to tell anyone about the 

way she had been killed. 

The report of Taraneh’s rape and murder is not the only example 

of torture and abuse in Iran’s prisons by the Iranian Government 

against its people. According to the U.N. Special Rapporteur’s September 13 report, human rights defenders reported being arrested 

and held in secret for periods ranging from several weeks to 3 

years without charge or access to legal counsel. 

They reported being subject to severe torture, beatings with batons, mock hangings, electrocution, rape, sleep deprivation, and denial of food or water. The State Department’s Iran Human Rights 

Report of 2012 confirms exactly the same thing. 

The amendment that I have offered that is en bloc expands the 

list of those Iranian Government officials that this administration 

must report on. The new list includes those responsible for human 

rights violations, and there are a lot of those in Iran, human rights 

violations like the one that happened to Taraneh, such as those 

who work in the prisons and the Ministry of the Interior. 

Now, unless it would justify in a report why it believes they 

would not be subject to sanctions, the bill will force the administration to sanction these officials personally. It is important that we 

make it clear that our quarrel is not with the Iranian people. Our 

140

quarrel is with the government of Ahmadinejad and his being controlled by the supreme leader, who denies the people of Iran basic 

human rights. 

Many of those individuals are in different countries. Some are 

held, I think, hostage in Camp Liberty in Iraq. Many of their family members are in the United States. It is imperative that we 

make the little fellow from the desert, Ahmadinejad, understand 

that human rights violations are not tolerated, and that we support 

those who hope for a peaceful regime change in Iran. 

I thank the chairman for the time, and I yield back my time. 

Chairman ROYCE. We go now to Mr. Cicilline of Rhode Island. 

Mr. CICILLINE. Thank you, Chairman Royce and Ranking Member Engel, for your leadership and for holding this markup on this 

important legislation, a legislation which becomes even more important every single day. I support the en bloc amendments and 

the underlying bill, and I particularly want to thank my friend, the 

gentlelady from Florida, for her excellent words and her amendment relating to human rights. 

The continuing threat that Iran poses to international stability 

is of paramount concern to the United States and to the world. Addressing this threat must be a top priority of U.S. foreign policy as 

Iran continues to defy the international community with its pursuit 

of nuclear weapons. In addition, the specter of violence and the 

suppression of basic human rights loom over the upcoming elections in Iran, just as they did in 2009. 

The threat of an Iran with nuclear weapons capability is serious 

and must be prevented. According to a report from the International Atomic Energy Agency, Iran is steadily increasing its nuclear capability by installing new, more advanced centrifuges. If 

Iran is allowed to bring these centrifuges online, they will significantly reduce the time that is needed to produce enough weapons 

grade uranium to construct a nuclear weapon. 

In addition, Iran continues its construction of heavy water reactor, in defiance of U.N. Security Council regulations. The spent fuel 

from such a reactor could be reprocessed to produce plutonium. 

These conditions are unacceptable to the United States and to the 

international community. 

In June, Iran will hold its first Presidential election since 2009’s 

fraudulent vote, which sparked widespread protest and worldwide 

condemnation. Thousands of demonstrators were jailed, injured, or 

killed at the hands of the Iranian Government, particularly by the 

Iranian Revolutionary Guard. 

This year, the prospects of a fair and democratic election in Iran 

remain remote. Of an estimated 700 candidates who have registered, the Iranian Government has restricted those who are able 

to run by excluding a vast majority of those it deems to be disloyal 

to the regime. 

Regardless of the outcome of this year’s election, it will do little 

to slow the expansion of Iran’s nuclear program. Decisions over the 

program’s future will remain in the hands of the supreme leader 

who continues to stifle all attempts at a diplomatic solution. It is 

critical, therefore, that efforts to curb Iran’s nuclear ambitions and 

its abuses of human rights be enhanced to exert increased pressure 

upon the regime. 

141

The Nuclear Iran Prevention Act of 2013 will impose harsher 

penalties for violations of human rights of the Iranian people. It 

will broaden the scope of these sanctions to make the Iranian Government more accountable for human rights violations and impose 

harsh penalties on financial institutions that provide aid to those 

who commit these violations. 

This bill will strengthen existing sanctions by requiring other nations to reduce their imports of Iranian crude oil by 1 million barrels within 1 year’s time, and authorizes the President to penalize 

foreign nationals who engage in significant trade with Iran. It also 

calls for an expansion of the blacklisting of industries that are strategically important to the Iranian regime. 

This bill also recognizes that we cannot accomplish our goals by 

acting alone. It calls on the administration to work closely with our 

European allies to curb Iranians’ financial capabilities and to provide a comprehensive U.S. strategy to weaken Iran’s economy and 

to prevent Iran from further developing a nuclear capability. 

The message that we send must be clear and unequivocal. A nuclear armed Iran will not be tolerated, and the United States will 

stand on the side of democracy and freedom. A clearly defined national strategy that further pressures Iran to end her nuclear ambition and strengthen economic sanctions is absolutely necessary. 

I thank, again, the chairman for his leadership. I thank my colleagues for their excellent amendments, and the ranking member, 

and I yield back the balance of my time. 

Chairman ROYCE. We go now to Mr. Rohrabacher of California. 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman, and 

congratulations to you and to Ranking Member Engel for working 

together and coming up with a very good package for us. This legislation focuses on exercising economic power to provide incentive for 

Iran’s mullah regime to back away from the development of a nuclear weapon. 

This legislation is a good step in the right direction, but it is not 

going to make us safer. At best, we will get the status quo—no 

nukes. To make the world safer, we must understand that the 

world will not be safer until the mullah dictatorship is replaced by 

a government that is not dedicated to destroying Israel or supporting terrorists throughout the Western world. That will require 

us to support those brave souls who live in Iran, who seek to 

change the regime in that country. 

This administration has not been aggressive in supporting those 

who are opposing the mullah regime in Iran, and we have heard 

several descriptions about the last elections and how the students 

were pleading for help. 

And they did plead for help, and America’s weak response to the 

suppression and the brutal putdown of those students who were requesting an honest election—our actually weak response was embarrassing to us, and certainly did not in any way encourage those 

people who really seek democracy in that part of the world to have 

any faith that we would back them up in their efforts. 

There are repressed—not only are there just regular Iranians 

and the push for democracy, but we also have to realize within 

Iran there is other leverage to try to come to a more peaceful regime, and that is we can support those minority groups in Iran 

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that also would like some independence and seek their own freedom. 

There are more Kurds in Iran, for example, than there are in 

Iraq. There are millions upon millions of Azaris. There are Baluch 

in the southern part of the country and other various groups that 

deserve our support in their struggle against the repression of the 

mullah regime. 

We aren’t even broadcasting to Iran in their languages. We need 

to convince the people of Iran and of every ethnic makeup that we 

are on their side in their struggle for freedom. It is this struggle 

for freedom and its success that will make the world a safer place 

by replacing brutal dictators who are willing to murder their own 

people with people who are trying to make their country better and 

will live in peace and respect the freedom of other peoples in the 

world. 

So, Mr. Chairman, this is a great step in the right direction. But 

if we are going to really tackle this problem, it is going to require 

more than just a step in the right direction. It is going to require—

and a prevention of a nuclear armed Iran, but it is to require us 

to support those people who struggle for freedom in that country 

as well. 

Thank you very much. I yield back the balance of my time. 

Chairman ROYCE. Thank you, Mr. Rohrabacher. 

We now go to Ms. Gabbard of Hawaii. 

Ms. GABBARD. Thank you very much, Mr. Chairman and Ranking Member Engel, for introducing and bringing this very important bill before the committee. As a new member of the committee, 

I have been impressed and very encouraged by the level of bipartisanship that has been displayed in the quick progress of this important bill. And I am also proud to be a co-sponsor of the underlying measure and will be supporting it as we move it forward 

today. 

As we have seen other attempts being made in the past to prevent Iran from acquiring a nuclear weapon, seeing the lack of 

progress that has been made, I am encouraged to see this bill move 

forward because it will add and tighten the sanctions greatly on 

Iran. It is absolutely vital that the United States take steps to curb 

Iran’s progress in this direction and believe that the bill’s provisions to broaden economic sanctions and target human rights violators will help to increase this pressure. 

Additionally, we know that Iran and North Korea have developed 

a close working relationship in many of its ballistic missile programs. For constituents in my district in Hawaii, as well as places 

like Guam, CNMI, and Alaska, as well as our allies in the region, 

this is an issue of great importance. 

And just as we have seen great progress and support on moving 

this measure forward, Mr. Chairman and Ranking Member, I hope 

we can also work together to move forward your bill, H.R. 1771, the 

North Korea Sanctions Enforcement Act, through the committee 

and to the floor. 

The work done on this measure absolutely shows that we can 

come together to make progress on such important issues that we 

are united on and that we see our challenges facing our country, 

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and I look forward to being able to continue to work with you as 

we take a similar path on dealing with North Korea. 

Thank you, Mr. Chairman. 

Mr. SMITH [presiding]. The Chair recognizes Mr. Castro from 

Texas. 

[No response.] 

Mr. SMITH Mr. Keating from Massachusetts. 

Mr. KEATING. Thank you, Mr. Chair. I would like to congratulate 

the committee on the timeliness of this important legislation, and 

I would also like to express my gratitude for the inclusion of a provision that Mr. McCaul and myself worked on together in a bipartisan manner. 

Under our amendment, the Secretary of State is required to 

make a determination as to whether Iran’s Revolutionary Guard 

Corps is a foreign terrorist organization, and, if so, to implement 

sanctions. However, if the Secretary should determine that the Iranian Revolutionary Guard Corps is not a foreign terrorist organization, our amendment requires that not only must the Secretary 

provide a report that details how he came to that conclusion, but 

also that sanctions currently in place against FTOs be applied to 

Iran’s Revolutionary Guard Corps’ Quds Force. 

The IRGC’s covert Quds Force presents a direct and immediate 

threat to the United States and our allies. They are responsible for 

some of the deadliest attacks in recent decades. Moreover, these attacks and assassinations take place outside of Iran’s borders. Today 

they continue to support and oversee weapons deliveries to pro-Iranian factions, more recently to the Assad regime in Syria, and 

Hezbollah in Lebanon. In the course of just a year, the Quds Force 

influence has been witnessed in attempted and successful terror 

plots in Turkey, Pakistan, Thailand, Azerbaijan, India, Georgia, 

Kenya, and Bulgaria. 

Subjecting the Quds Force to further sanctions can only aid our 

attempts to limit their resources and, in turn, the danger that they 

present. 

So I applaud today’s markup, and I applaud the important legislation that we have, and I thank the chairman and ranking member for their inclusion of this important amendment. 

With that, I yield back my time. 

Mr. SMITH. Mr. Lowenthal. 

Mr. LOWENTHAL. Thank you, Mr. Chair. I, too, join with voices 

of all of my other colleagues in commending the chair, Mr. Royce, 

and the ranking member, Mr. Engel, for bringing forth this bipartisan measure. I think it is really important that the American 

public hear that under their leadership we have come together to 

support this legislation. 

I not only believe that we have come together to support this legislation but that the administration supports this legislation and 

that all Americans support this legislation. Not only is it really important to Israel that we not have an Iran with nuclear weapons, 

but this legislation sends a message to all of the other countries of 

the Middle East who are also terribly threatened by an Iranian nuclear power that this shall not be tolerated, and that the United 

States will play a leadership role in protecting and supporting all 

nations of the world in moving Iran away from nuclear weapons. 

144

I, again, want to commend the leadership for bringing us together, and I also want to support all of the amendments en bloc. 

And I yield back my time and thank you. 

Mr. SMITH. Do any other members seek recognition? 

[No response.] 

Chairman ROYCE [presiding]. Do any other members, again, wish 

to speak on either the en bloc amendments or the underlying bill? 

[No response.] 

Chairman ROYCE If not, the question occurs on agreeing to the 

amendments being considered en bloc. All those in favor say aye. 

All those opposed, no. 

In the opinion of the Chair, the ayes have it, and the amendments considered en bloc are agreed to. 

Before taking up other amendments, the Chair has an amendment at the desk, and the clerk will report the amendment. And 

I would hope, if the clerk’s office could distribute the amendment 

as well at this time. 

Ms. MARTER. Amendment to the amendment in the nature of a 

substitute to H.R. 850 offered by Mr. Royce of California. On page 

29, line 19, strike ‘‘the date that is 90 days after such date of enactment’’ and insert ‘‘May 22, 2013.’’

[The information referred to follows:]

Chairman ROYCE. I recognize myself to explain the amendment. 

Section 205 of the bill imposes sanctions on certain transactions in 

foreign currencies. This section seeks to prohibit the conversion 

and repatriation of Iran’s overseas foreign currency reserves back 

into Iran. 

The bill authorizes the President to impose sanctions on any foreign bank involved in facilitating transactions in foreign currencies 

over which it does not have primary jurisdiction, on behalf of the 

central bank of Iran, or another designed Iranian bank. 

The objective is to further enable the administration to render 

Iran’s foreign exchange reserves inaccessible, make it impossible 

for those reserves to come back into Iran. This is a key provision 

in the bill. There are concerns that waiting for enactment would 

allow Iran to engage in this activity in the interim. 

Therefore, this amendment changes the enactment date of the 

provision to today’s date. This will bolster our ability to target this 

activity, and, most importantly, put banks on notice that as of 

today they will be sanctioned for helping Iran access their overseas 


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hard currency. And I would ask my colleagues’ support on this 

measure. 

Do any other members wish to be recognized on this amendment, 

on the date change? 

Mr. GRAYSON. Yes. I would like to recognized, Mr. Chairman. 

Chairman ROYCE. Mr. Engel. 

Mr. ENGEL. Yes. Thank you, Mr. Chairman. I agree with everything you’ve said about this amendment. I think it is very important that we enact it. I know that our colleague, Mr. Sherman, was 

working on this legislation as well, on this very important issue as 

well. And, again, I think this is something that is bipartisan and 

very, very important to be added to this bill. 

I think it closes a loophole, and I urge its—I urge a yes vote for 

this amendment, and I yield back. 

Chairman ROYCE. I thank the gentleman from New York. 

We will go to Mr. Poe of Texas. 

Mr. POE. Thank you, Mr. Chairman. I want to show the committee the reality of living as a political prisoner in Iran. Here we 

have two young men that were hung publicly for just being political 

prisoners opposing the Iranian Government, the little fellow from 

the desert, and his oppression of human rights to people of Iran. 

And, unfortunately, these are not the only two that were hung in 

Tehran in recent years for being opposed to the regime. 

And I yield back. Thank you, Mr. Chairman. 

Chairman ROYCE. I thank the gentleman. 

We go now to the gentleman from Florida, Mr. Grayson. 

Mr. GRAYSON. Mr. Chairman, I understand and agree with the 

principle involved here, in other words, what it is that I think that 

the chair is trying to accomplish through this amendment. However, this is a bill that, among other things, can be enforced by a 

penalty of 20 years in prison. I believe that this amendment would 

represent a violation of the ex post facto provision in the Constitution. 

What you are contemplating here is to say that activities that 

take place before the enactment of this bill will become illegal upon 

the enactment of this bill dating back to May 22, 2013. I don’t see 

any way to reconcile that, unfortunately, with the ex post facto prohibition in the constitution. I would point out that this provision 

appears not to be severable from the Act, and, arguably, puts the 

entire Act at risk for including it. 

I was not aware of this amendment before it was offered today. 

I would have been happier to be able to have addressed this before 

today. I regret the fact that I have to raise this point at this now 

late date. But given the fact that I didn’t see this amendment until 

literally 10 minutes ago, there was no earlier opportunity. 

If there is some way to make this work, I would love to see this 

in an amendment before this bill goes to the floor. But I think putting this in the bill at this point risks torpedoing the entire bill. 

Chairman ROYCE. Let me respond to the gentleman, if I could. 

I have no reason to expect that this bill would be implemented in 

a way that would be unconstitutional. However, I would be happy 

to work with the gentleman on this issue going forward. 

In the meantime, let me recognize some of the other members 

that are here. Mr. Cicilline. 

146

Mr. CICILLINE. Mr. Chairman, I would offer a friendly amendment that I think might accomplish that. If the amendment were 

to insert instead, ‘‘The date of enactment shall be the date upon 

which the legislation is passed,’’ I think we would avoid what my 

friend from Florida has raised and would not give an additional 90 

days, but it would happen on the day of enactment. 

Mr. GRAYSON. Would the gentleman yield to me? Would the gentleman from Rhode Island yield to me? 

Mr. CICILLINE. Sure. Certainly. 

Mr. GRAYSON. I agree that if the penalties under this Act do not 

apply to any action before enactment, then the ex post facto provision has not been violated. 

I yield back. 

Chairman ROYCE. Again, so that the members of the committee 

understand the consequences, the provision in the bill, by changing 

this date of enactment, would enable the administration, which I 

believe could still utilize this tool and do it in a constitutional way, 

to prevent Iran during this interim period, before the legislation is 

finally enacted, from repatriating its overseas earnings. 

And the difficulty of the situation is that in advancing this bill 

out of committee today there is going to be an enormous pressure 

inside the regime to find ways to circumvent this law. And the 

most effective way to do so would be to immediately begin a process through third parties of trying to figure out the repatriation 

scheme. 

So if we stick with the amendment that I am suggesting, which 

would make the date—it is effective the date it is passed out of 

committee—we do a lot to offset the ability of the Iranian central 

bank to circumvent the sanctions. 

But let me go to Mr. Cotton of Arkansas to recognize him for 5 

minutes. 

Mr. COTTON. Thank you, Mr. Chairman. I would like to speak in 

support of this amendment, which I had originally planned to introduce with Mr. Sherman. I am not the distinguished lawyer that 

the gentleman from Florida is. I only practiced for a couple of years 

before my skills required me to leave and join the Army as an infantry officer. 

I understand concerns about the ex post facto clause as well. I 

do think, though, that the case law is somewhat complicated on 

that, and this is not final passage of the bill into law. We have several quarters left to go in this game. We have the Rules Committee, we have the floor, we have a Senate version, we will have 

a conference committee to address, in light of Supreme Court case 

law in the ex post facto clause. 

I would encourage all of my colleagues to vote yes. As the chairman said, this helps indicate the intent of this committee, this Congress, to hold the Iranian regime to the strictest standards possible, and then work with committee counsel, as well as legislative 

counsel, to address any concerns that may or may not arise. 

When I left the law and went to the infantry in Iraq, I was a 

platoon leader in the 101st Airborne where, as Mr. McCaul said 

earlier, the Iranian regime, the Quds Force in particular, were 

shipping in a particularly lethal kind of improvised explosive deVerDate 0ct 09 2002 08:13 Jun 24, 2013 Jkt 000000 PO 00000 Frm 00150 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\052213M\81168 HFA PsN: SHIRL
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vice, explosively foreign projectiles, that would kill any soldier that 

they hit. Our armor simply could not resist them. 

I had to tell soldiers of mine that came in, when they asked 

about roadside bombs, to trust your armor and trust your leadership. And they asked me, ‘‘What about EFPs from Iran?’’ and I 

said, ‘‘Just hope today is not your today.’’ That is the kind of enemy 

against which we are fighting this multi-front campaign. And the 

only thing they understand is iron will, and I think this amendment shows the iron will of the committee to stop or take all measures necessary to stop the Iranian regime from obtaining nuclear 

weapons. 

I urge a yes vote. 

Mr. GRAYSON. Will the gentleman yield? 

Mr. COTTON. I will yield. 

Mr. GRAYSON. Thank you. Listen, I indicated earlier that I think 

that this is a good idea if it were constitutional. I think it is a very 

dangerous precedent to set that we pass a provision that is on its 

face unconstitutional for the sake of showing an iron will, whatever 

that may mean. 

On the contrary, our strength in this country comes from the fact 

that we are a nation of laws, and we need to respect the highest 

law of all. That is the Constitution. 

Mr. Cicilline has suggested one potential fix for this provision. I 

would like to suggest another. If the chairman would consider this, 

I think that if we had a severance provision in this amendment, 

then that might potentially remedy the problem. 

We would still have to deal with the possibility that the courts 

might rule that our severance provision is itself not severable, but, 

in any event, perhaps the chairman would consider this amendment to your amendment that would read as follows: ‘‘Should this 

provision be found unconstitutional, it is severed from the remainder of the bill.’’

That means that at least we have allowed for that possibility and 

done so in such a way so that a finding that this amendment is 

unconstitutional, which, frankly, I think is more likely than not, 

that that would not end up destroying all of the effort this committee has put into this bill. 

I yield back. 

Chairman ROYCE. If I could ask the gentleman from Arkansas to 

yield. 

Mr. COTTON. Yes, I will yield. 

Chairman ROYCE. Might I suggest to Mr. Cicilline, if in substitute to your amendment, if Mr. Grayson’s amendment was offered, I would accept Mr. Grayson’s amendment, if that—if you 

consider that appropriate, if you withdraw your amendment? 

Mr. CICILLINE. Yes, Mr. Chairman, I will withdraw my amendment, and I will second Mr. Grayson’s amendment. 

Chairman ROYCE. I thank the gentleman. Let me comment that 

it is not without precedent, Mr. Grayson. I understand your point, 

but it is not without precedent in that our legislation on CISADA, 

and the first legislation we passed on Iran sanctions, did have this 

provision. But, Mr. Grayson, as you point out, later in the process 

that was adjusted. 

148

Let us accept your amendment, Mr. Grayson, or why don’t we go 

for a vote on Mr. Grayson’s amendment at this time. Do you have 

an amendment at the desk, Mr. Grayson? 

Mr. GRAYSON. I will hand it to the chair, because I am not familiar with exactly where it needs to end up. 

Chairman ROYCE. We are going to ask the clerk to read the 

amendment. Madam Clerk. Now, what I am going to suggest, 

Madam Clerk, is that you read the amendment, and then the 

clerk’s office make copies of the amendment for the members, and 

then we will——

Mr. GRAYSON. That is language to be added. 

Chairman ROYCE. And I am going to ask that leg counsel, if you 

hand it to leg counsel after you read it. 

Ms. MARTER. Grayson amendment to the Royce amendment to 

the amendment in the nature of a substitute to H.R. 850. Should 

this provision be found unconstitutional, it is severed from the remainder of the bill. 

[The information referred to follows:]

Chairman ROYCE. And I would ask, then, that the clerk’s office 

make copies after review by leg counsel. I think the terminology is 

straightforward enough there, but we will have them review it. 

And we could do technical corrections later anyway, so let us make 

those copies. 

And now I recognize for 5 minutes the gentleman from Arkansas, 

Mr. Cotton, on this amendment. 

Mr. COTTON. Appreciate the amendment offered by the gentleman from Florida. I think a severability clause is the best way 

at the moment to address his concerns. One question I have, 

though, is, should that provision be held unconstitutional, and, 

therefore, severed, would we revert back to a date of enactment, or 

would we have no date to go into effect and, therefore, make the 

provision ineffective? 

And I would yield to the gentleman from Florida. 


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Chairman ROYCE. Mr. Cotton, we would have the date of enactment as the controlling date in that case, and we will work with 

legislative counsel to so designate. 

Mr. COTTON. I yield back the balance of my time. 

Chairman ROYCE. Any other commentary on this amendment? 

The gentleman from California. 

Mr. SHERMAN. I think this due date provision is constitutional. 

It does not relate to a criminal sanction so much as civil sanctions. 

I think that we ought to explore adding just a general boilerplate 

severability provision for the whole bill. That would be a standard 

part of many major pieces of legislation. 

I don’t think there is anything in the bill that is unconstitutional. 

I don’t think any of the amendments will cause it to be unconstitutional. But I would sure hate to lose the whole bill because there 

was some legal argument I hadn’t thought of. 

Chairman ROYCE. Let me recognize Mr. Grayson from Florida for 

any thoughts on that resolution. 

Mr. GRAYSON. Well, with regard to what the gentleman from 

California said, the penalties provision in the bill that we are voting on specifically refers to another Act, incorporates it by reference, and that other Act provides for a 20-year criminal penalty. 

So I have to respectfully disagree with the gentleman from California. 

Chairman ROYCE. And if I could——

Mr. SHERMAN. I believe I was recognized for——

Chairman ROYCE. I will allow the gentleman from California to 

proceed. 

Mr. SHERMAN. I thank the gentleman from Florida for his comments, and I think it illustrates why we should have his severability provision on this particular provision. Mr. Cotton is right 

that we should indicate that if for some reason the particular effective date provision is found to be unconstitutional, the date of enactment should be the replacement effective date, and that a general severability clause be added to the end of the bill. 

And I thank the chairman for seeing the importance that we 

make sure that banks aren’t rushing to ‘‘beat the deadline.’’ Mr. 

Cotton and I were going to introduce an amendment very similar 

to the chairman’s amendment, which shows that we are all thinking along the same lines. 

So I think Mr. Grayson is right, Mr. Cotton is right, the chairman is right, and we can put together a bill that will both deter 

those banks that might try to act between now and date of enactment, and at the same time protect everything in the bill from any 

claim of constitutional violation. 

Chairman ROYCE. If the gentleman will yield. 

Mr. SHERMAN. I would yield. 

Chairman ROYCE. I believe that is correct. But I am going to 

raise with Mr. Grayson the issue of a general severability clause, 

because I believe it will accomplish what he wishes to accomplish 

with his amendment, and, as you have suggested, Mr. Sherman, 

will also clarify in the case of any other provisions in the measure 

that might subsequently be found to be unconstitutional, that it 

would satisfy that concern as well. 

150

Let me go, again, to the gentleman from Florida and ask Mr. 

Grayson for his thoughts on simply working with leg counsel for a 

vote later today on an amendment which we will have before us, 

Mr. Grayson, which you could be involved in helping to draft, 

which would be a more general provision of clarification on the severability clause. 

Mr. GRAYSON. Mr. Chairman, I agree with you and the gentleman from California that a general severability clause is, in 

some respects, preferable to the narrow severability clause that I 

just drafted. I also agree with the gentleman from California and 

the gentleman from Rhode Island that we should try to specify 

what would happen in the event that a retroactive application of 

this provision was found unconstitutional, what the effective date 

would be. 

So I agree with that suggestion as well. I am very agreeable 

today. 

Chairman ROYCE. I assume that you would concur that it would 

be date of enactment. Very good. 

Will the gentleman, then, withdraw his amendment at this time, 

with the understanding that we will work with leg counsel on that 

language as we just discussed? 

Mr. GRAYSON. Well, respectfully, Mr. Chairman, I think that it 

is the amendment that was initially offered that should be withdrawn, with the understanding that it will be voted on as we discussed just now in some slightly altered form later today. 

Chairman ROYCE. I am going to withdraw my amendment, then, 

also at this moment. We will consider it in a new form, which I 

think will be mutually agreeable to the members of the committee. 

Mr. GRAYSON. Yes, Mr. Chairman. 

Chairman ROYCE. All right. Let us continue. Are there any further amendments? 

[No response.] 

Chairman ROYCE Mr. Grayson, I think you have an additional 

amendment at the desk. 

All right. I am going to ask the clerk to report your amendment. 

Ms. MARTER. Which amendment, Mr. Grayson? 

Mr. GRAYSON. I believe we are going to start with Grayson Number 109. Is that all right, Mr. Chairman? 

Chairman ROYCE. 109. Clerk, if you would read that amendment? 

Ms. MARTER. Amendment to the amendment in the nature of a 

substitute to H.R. 850 offered by Mr. Grayson of Florida. Page 16, 

line 5, insert ‘‘or a foreign central bank’’ after ‘‘foreign financial institution.’’

[The information referred to follows:]

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Chairman ROYCE. The Chair recognizes the author for 5 minutes 

to explain the amendment. And let us have the amendment distributed to the members. 

Mr. GRAYSON. Thank you very much. The general purpose of this 

amendment is to make sure that the term ‘‘foreign financial institution,’’ as described in this legislation, and the particular provision that we discussed, which is Section 202, includes foreign central banks. I believe that the intent was to have it include foreign 

central banks, but it does not actually do so. Regulations that were 

promulgated by the administration leave the question at best 

cloudy. 

The amendment at the desk is a simple one. It would ensure that 

foreign central banks are sanctioned for facilitating significant financial transactions on behalf of companies that are owned or controlled by designated Iranian nationals. 

Section 202 of this bill is short and sweet. It says that if you are 

a foreign financial institution and helps out companies owned by 

the bad guys, you will be sanctioned. You, as a foreign financial institution, will not be permitted to open or maintain correspondent 

or payable accounts in the United States. You won’t be able to receive deposits from or make payments on behalf of a foreign financial institution, and your customers will be effectively shut out of 

banking activities within the United States. That is exactly what 

we hope to accomplish in this bill. 

Unfortunately, we, in drafting this initial bill, missed an extremely important group of foreign financial institutions when we 

defined this term. We took a shortcut. In 22 USC Section 

8801(a)(5), the governing definition for the statute, we said that 

foreign financial institution says, what the Secretary of the Treasury says it says and means pursuant to 22 USC Section 8513. In 

other words, we delegated the definition to the Secretary of the 

Treasury. 

Well, what that says is that ‘‘foreign financial institution’’ means 

whatever the Secretary of the Treasury says it means. And Secretary Geithner, when he got around to making a list of what a foreign financial institution constitutes late last year, and the Department finally published it on November 8, and published it at 31 

CFR 561.308, created a long list. And it says it is not limited solely 

to the items on the list, but it does get so specific that it spells out 


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things like employee benefit plans and dealers in precious metals, 

stones, or jewels. 

Clearly, the Treasury Department put some thought into the list. 

There are 17 specific entities that are singled out, but foreign central banks are conspicuously absent. And, therefore, by the delegation and law that is already in existence, it is by implication excluded from the definition of a foreign financial institution. 

It is interesting that Congress, when drafting the Fiscal Year 

2012 NDAA, decided to include an entire section covering foreign 

central banks’ financial transactions for the sale or purchase of petroleum or petroleum products with Iran. In fact, other than financial institutions located in Iran, foreign central banks were the only 

other entities explicitly mentioned and addressed within the section to all 45 sanctions that deal with imposition of sanctions with 

respect to the financial sector of Iran. 

The Treasury, in its own wisdom, decided to choose to gloss over 

those banks most directly tied to a nation in its definition of foreign 

financial institutions. The problem here is easy to solve. By not including foreign central banks in this section, and by not explicitly 

mentioning them in the Treasury CFR definition, the President, 

unfortunately, unless we act, will not be required by the legislation 

we pass today to punish nations whose foreign central banks facilitate transactions on behalf of companies owned by designated Iranians. 

If President Obama or the State Department wished to ignore 

such actions that would otherwise lead to sanctions with regard to 

another financial institution, they may. They would be free to be 

given a free pass to any country they wish for whatever reason 

they wish on account of exclusion of foreign central banks from this 

important provision. 

I would urge my fellow committee members to join me in clarifying for the President, and for his Treasury Department, and for 

his State Department, exactly what a foreign financial institution 

looks like; specifically, the fact that it includes a foreign central 

bank. 

I urge you to join me in supporting this amendment. 

Thank you. I yield back. 

Chairman ROYCE. Thank you. I will attempt to articulate Treasury’s position, and then I will ask Mr. Grayson if he finds these arguments compelling. 

But your amendment would amend Section 202 of the bill and 

would have the sanctions apply to foreign financial institutions and 

a foreign central bank. Now, from the perspective of Treasury, central banks, as they have articulated this, already are included in 

the definition of foreign financial institution. Okay? 

Central banks are already included in the definition of foreign financial institutions. So then you go to the definition of foreign financial institution, 561.308. The term means any foreign entity 

that is engaged in the business of accepting deposits; making, 

granting, transferring, holding, or brokering loans or credits; or 

purchasing or selling foreign exchange securities, commodity futures, or options; or procuring purchasers and sellers of as a principal or agent. 

153

It includes, but is not limited to, depository institutions, banks, 

savings banks, money service businesses, trust companies, securities brokerages, dealers, commodity futures options brokers and 

dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment 

companies, employee benefit plans, as you pointed out, dealers in 

precious metals, stones, jewels, holding companies, affiliates, or 

subsidiaries. 

Now, those that implement these laws every day tell us that a 

foreign central bank fits under this definition, and they point out 

that the term foreign financial institution, the Treasury already 

says includes central banks, appears very often in U.S. law. 

And now here is the problem, from their perspective, on this. If 

you spell it out here, some say you may create confusion in the law. 

Lawyers will ask, why is foreign central bank noted here, but not 

elsewhere? So from their vantage point on this, it, in their minds, 

fixes a problem that doesn’t exist, but may actually create a problem for them given that perspective. 

I would ask the gentleman from Florida his thoughts on that. 

Mr. GRAYSON. Well, I thank the chairman for spelling out an interesting and perhaps valid perspective on the amendment that 

has been offered. I would point out to the chairman that, with regard to the provision that we have been discussing, Section 561.308 

of Title 31 of the Code of Federal Regulations, it would have been 

extremely simple—extremely simple—for the Secretary of the 

Treasury to actually include in this long, long list of institutions 

the foreign central banks themselves. 

The Treasury Secretary chose not to do that. One could argue 

that at this point in saying that foreign central banks are included, 

when not having included it in a promulgated regulation by the 

Secretary himself, arguably the Secretary is speaking out of both 

sides of his mouth. 

However, with regard to the specific language that is being discussed, I understand and I take the chairman’s point that having 

foreign financial institutions be appended by ‘‘or a foreign central 

bank’’ could arguably imply that a foreign central bank is in fact 

something different from a foreign financial institution. 

We are trying to make it clear that a foreign central bank is included in the definition of foreign financial institution, rather than 

excluded or not enumerated in the way that the Treasury has done. 

So what I would suggest, if the chairman would entertain this 

at this point, would be instead of saying ‘‘foreign financial institution or a foreign central bank,’’ we say ‘‘foreign financial institution, including, but not limited to, a foreign central bank.’’

Chairman ROYCE. I think the gentleman has devised a framework here that works. And in an abundance of caution, I think the 

committee is happy to accept your amendment with those changes. 

Mr. COLLINS. Mr. Chair? 

Chairman ROYCE. Let me recognize the gentleman from Georgia. 

Mr. COLLINS. I do have a concern that just came up in listening 

to the gentleman from Florida. I appreciate his concern, but I am 

concerned even with this language you could be setting up a duality in the system here in which, one, you are setting it up as someVerDate 0ct 09 2002 08:13 Jun 24, 2013 Jkt 000000 PO 00000 Frm 00157 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\052213M\81168 HFA PsN: SHIRL
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thing different than a financial service, a foreign financial institution here. 

I appreciate the concern that the gentleman is raising. However, 

at this point in time, I think by amending it to add that you are 

adding more confusion to this, and I would, at this point, be cautious at best of approving this moving forward, especially in light 

of what the chairman has spoken of as Treasury’s definition of this. 

I appreciate his intent and his amendment here. I am just afraid 

we are——

Chairman ROYCE. I appreciate the comment from the gentleman 

from Georgia, because he has raised an issue that perhaps the 

Treasury Department would like to opine on in terms of the 

changes in the wording. What I am going to suggest is we accept 

the amendment with this change, and then work with Treasury, 

and I will work with Mr. Grayson’s office, and work with your office as well, Mr. Collins, to make certain that we end up with the 

intent that Mr. Grayson is laying out here in the final legislation. 

Is that acceptable to you, Mr. Collins? 

Mr. COLLINS. I would assume, Mr. Chairman, you are speaking 

of maybe before Rules? Is that when we are looking at actually 

adding or changing language if we are amending this bill now? 

Otherwise, I would state at this point, if there becomes a need 

to change—I would rather err, personally, on the side of, if there 

is a need to change it from this, change it later, since he has raised 

a good point, we will ask; instead of changing it now and then 

going back to the process. 

Chairman ROYCE. Well, Mr. Collins, I believe we are going to 

have multiple opportunities to change this bill, including before 

Rules, of course. And I think at this point we would probably be 

best served by accepting this amendment, working with Treasury, 

because, Mr. Collins, if Treasury indicates that they don’t have a 

problem with this, then I think we have solved the problem. 

Mr. COLLINS. Mr. Chairman, I will defer to your wisdom. 

Mr. SMITH. Mr. Chairman? 

Chairman ROYCE. Yes. Appreciate that. 

We will go now to Mr. Smith of New Jersey. 

Mr. SMITH. And I do think if we factor in all of this, if we were 

to construe this to be a restatement, which Treasury seems to indicate it is, it would avoid, I think, some of the unwitting consequences you alluded to, so a restatement of what is already current law. 

Chairman ROYCE. Without objection, the committee will now consider the amendment to the amendment in the nature of a substitute to H.R. 850 offered by Mr. Grayson of Florida, as modified 

by Mr. Grayson. 

[The information referred to follows:]

155

Chairman ROYCE. All those in favor please signify by saying aye. 

All those opposed? Without objection, in the opinion of the Chair, 

the ayes have it and we will proceed to the next amendment. Are 

there other amendments to be offered? 

Mr. COTTON. Mr. Chairman. 

Chairman ROYCE. Mr. Cotton for an amendment. 

Mr. COTTON. I would like to call up Cotton-2. 

Chairman ROYCE. Chair reserves a point of order and recognizes 

the author for 5 minutes to explain the amendment. 

Well, Clerk, would you read the amendment? 

Ms. MARTER. Amendment to the amendment in the nature of a 

substitute to H.R. 850 offered by Mr. Cotton of Arkansas. Page 13, 

line 4, strike ‘‘180 days’’ and insert ‘‘60 days’’. Page 14, line 15, 

strike ‘‘180-day’’ and insert ‘‘60-day’’. Page 14, line 18, strike ‘‘180-

day’’ and insert ‘‘60-day’’. 

[The information referred to follows:]


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Chairman ROYCE. Mr. Cotton. 

Mr. COTTON. Thank you, Mr. Chairman. 

This is a relatively straightforward amendment. Section 201 of 

the underlying text provides for sanctions against persons engaged 

in certain significant non-oil international trade with Iran, unless 

that trade falls significantly in 180 days. 

My amendment would simply change that period from 180 days 

to 60 days. I believe that this information is largely known. The 

fact that this Congress is pursuing more sanctions against Iran is 

largely known. The opportunities to reduce trade are significant 

and straightforward, and simply put, if you don’t want to be sanctioned by the United States don’t engage in trade with a theocratic 

tyranny. 

I yield back the balance of my time. 

Chairman ROYCE. Do any other members seek recognition on Mr. 

Cotton’s amendment? 

Okay. The Chair withdraws the point of order. Hearing no further requests for recognition, the question occurs on the amendment. All those in favor say aye. 

Mr. GRAYSON. Mr. Chairman, I’d like clarification of what we’re 

voting on right now, if you don’t mind. 

Chairman ROYCE. Absolutely. Cotton-2 is the amendment before 

us, and I think we have that amendment—I think that amendment 

has been distributed. 

Mr. GRAYSON. Yes. Thank you, Mr. Chairman. 

Chairman ROYCE. All those in favor please signify by saying aye. 

Opposed? In the opinion of the Chair, the ayes have it, and the 

amendment is agreed to. 

Are there any other amendments? Mr. Grayson, I think you have 

another amendment at the desk, and in the interim I’m working 

on the amendment that I’ve offered with your suggested change. 

Mr. GRAYSON. Thank you, Mr. Chairman. 

Chairman ROYCE. So, if we could go to your amendment, that 

would be appropriate. 

Mr. GRAYSON. Yes, I have other amendments. My understanding 

is that the chair is calling the amendments in an order decided by 

the chair, so I will go ahead with one of these amendments at this 

point. 

Mr. Chairman, I’m calling Grayson-102. 


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Chairman ROYCE. Madam Clerk, could you report the amendment? 

Ms. MARTER. Amendment to the amendment in the nature of a 

substitute to H.R. 850 offered by Mr. Grayson of Florida. 

Chairman ROYCE. Let’s distribute the amendment. 

Ms. MARTER. Page 14, beginning on line 11, strike ‘‘of goods’’ and 

all that follows through line 13 and insert the following: ‘‘of both—

(A) goods and services between such country and Iran; and (B) petroleum and petroleum products between such country and Iran.’’

[The information referred to follows:]

Chairman ROYCE. Mr. Grayson is recognized for 5 minutes. 

Mr. GRAYSON. Thank you, Mr. Chairman. 

There’s a provision in this bill that I was uncomfortable with for 

a specific reason, and this amendment was intended to address 

that. 

The basic problem here is that we are through this bill trying to 

implement a 1-million-barrel-per-day reduction in Iranian oil exports that would be divided among the five remaining countries 

that import Iranian oil. 

There is no guidance in the bill itself about how that is to be allocated among those five except for the fact that each one has to 

make a significant reduction. And if one makes a significant reduction, then arguably the President can allow those imports to continue even if the 1-million-barrel-a-day reduction is not reached. 

We drafted this amendment, Grayson-102 in order to try to address that with the idea that we would try to put some teeth into 

this reduction by making it pro rata. There were very extensive, 

and I think productive discussions between my staff and the committee staff which, unfortunately, did not reach a conclusion that 

I’m comfortable with. 

I think the problem with the bill remains; however, I think that 

the best course right now is to ask the chairman’s indulgence to 

withdraw this amendment and to see whether we can continue this 


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conversation so that we reach some productive conclusion with the 

hope that the chairman will entertain some inclusion of this type 

of amendment in the manager’s bill if this bill—the manager’s 

amendment if this bill reaches the floor. 

Chairman ROYCE. If the member is willing to withdraw the proposed amendment then I’m prepared to work in good faith to see 

that we can try to incorporate, perhaps, some of these—this provision in our committee report or through the other committees of referral to address the member’s stated concerns. 

Mr. GRAYSON. Then, Mr. Chairman, I withdraw the amendment. 

Chairman ROYCE. I thank the gentleman for withdrawing the 

amendment. 

Are there any other amendments? Mr. Cotton. 

Mr. COTTON. Mr. Chairman, I’d like to call for Cotton Amendment 7. 

Chairman ROYCE. Madam Clerk. 

Ms. MARTER. Amendment to the amendment in the nature of a 

substitute to H.R. 850 offered by Mr. Cotton of Arkansas. Page 7, 

line 16, after ‘‘paragraph (1)’’ insert ‘‘and any family member of 

such official (to include a spouse and any relative to the third degree of consanguinity)’’. Page 9, line 5, after ‘‘official’’ insert ‘‘and 

any family member of such official (to include a spouse and any relative to the third degree of consanguinity)’’. Page 9, line 12, after 

‘‘official’’ insert ‘‘and any family member of such official (to include 

a spouse and any relative to the third degree of consanguinity)’’. 

[The information referred to follows:]

Chairman ROYCE. Mr. Cotton is recognized for 5 minutes. 

Mr. COTTON. Thank you, Mr. Chairman. 


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I did not introduce this amendment to tongue tie the clerk of the 

committee, but to fix what I think is a potential gap in our sanctions regime. 

Section 102 imposes sanctions for persons responsible for Human 

Rights violations, for engaging in censorship or otherwise diverting 

goods designated for common Iranian people to their own purposes. 

I think that’s very important. 

The whole point of the section is to impose financial pain and 

hardship on those malefactors, people listed in the section like the 

Supreme Leader of Iran, and the President, and so on and so forth. 

However, I think it is pointless if we let them simply divert assets 

and income to relatives, so this amendment would also add to the 

list of sanctions anyone married to those persons or to the third degree of consanguinity which in plain English are parents, children, 

aunts, uncles, nephews, nieces, grandparents, great-grandparents, 

grandkids, great-grandkids. 

We’ve seen tyrants around the world use family members to 

evade sanctions regime. You only need mention the name Suha 

Arafat to understand what I am talking about, and I urge the committee to support the amendment. 

Chairman ROYCE. Any other members wish to speak on this 

amendment? Mr. Castro. 

Mr. CASTRO. I have a question for Congressman Cotton, if you 

would allow me. 

Mr. COTTON. Yes. 

Mr. CASTRO. Congressman, under your amendment, if they’re 

trying to funnel resources to family members, how would we investigate and come to that conclusion? 

Chairman ROYCE. Mr. Cotton, you’re recognized. 

Mr. COTTON. There would be no investigation. If the prime malefactor of the family is identified as on the list for sanctions, then 

everyone within their family would automatically come within the 

sanctions regime, as well. It would be very hard to investigate and 

demonstrate through conclusive proof, and I think that we would 

leave a gaping loophole if we didn’t adopt this amendment. 

Mr. CASTRO. Thanks. 

Chairman ROYCE. Mr. Grayson. 

Mr. GRAYSON. Mr. Chairman, again, we all understand the underlying purpose of this bill, and we all, I think, will be found to 

be in favor when the final vote comes, but in this case an amendment is being offered literally to allow the sins of the uncles to descend on the nephews. 

Again, this is a bill that provides for a prison term of 20 years 

potentially for people who violate this bill. The amendment that’s 

being offered doesn’t even indicate a requirement of knowing violation. 

Again, my conception of the due process provision in the Fifth 

Amendment to the Constitution does not comport with this amendment. I will vote against it if it comes to a vote. And, also, I hope 

that we do now have a provision in the bill that indicates that 

there’s severability at every provision in this bill if this provision 

is incorporated in the bill because I really question the constitutionality of a provision that punishes nephews on account of the actions of uncles. 

160

I yield back. 

Mr. COTTON. Iranian citizens do not have constitutional rights 

under the United States Constitution. I sympathize with their 

plight if they are harmless, innocent civilians in Iran. I doubt that 

that is often the case, and the stakes of this bill in our confrontation with Iran could not be any higher. 

Chairman ROYCE. Here’s the suggestion I’m going to make, if the 

gentleman would yield. 

Mr. COTTON. Yes. 

Chairman ROYCE. We are familiar with past activities of sanctions on Human Rights abusers who then utilized family members 

in order to circumvent the sanction either by carrying cash out of 

the country, or similar examples. 

With the gentleman’s acquiescence, what we’d like to do is work 

with you on this amendment in concept but refine the language 

going forward since we will have the opportunity to do that, and 

we have one of two options here; to have you withdraw the amendment, or if it’s acceptable to Mr. Grayson, I will take the amendment as worded and work going forward with the gentleman from 

Florida and the gentleman from Arkansas to address the concept 

but do it in a way which is a little more refined. 

Let me ask, if I could; Mr. Cotton, your amendments are pending. Would you yield time to the gentleman from Florida for a 

minute so he might respond to the suggestion that I’ve just suggested? 

Mr. COTTON. Yes, sir, I will yield. 

Mr. GRAYSON. Thank you. I agree that relatives who are knowingly involved in a way that intentionally subverts the sanctions 

that are being discussed here are people who should be punished 

to the extent the Constitution permits that. And I would be happy 

to see such a provision that comports with the Constitutional limitations in this bill when one is drafted. 

I respectfully submit that this provision does not comport with 

those limitations. 

Chairman ROYCE. Let me suggest then, if you withdraw at this 

time, Mr. Cotton, that we work with legislative counsel in the interim and see if we cannot at this time develop language which will 

address this issue and maybe refine the definition. 

I am suggesting that we have the vote on the markup today, but 

I’m suggesting that the amendment before us might be rewritten 

in a way in short here with leg counsel’s assistance that would 

allow it to move forward without objection. 

Mr. COTTON. Is the——

Chairman ROYCE. Let me——

Mr. COTTON [continuing]. Is the procedure you’re proposing that 

we work on the amendment in the coming hours and we have a 

vote later? 

Chairman ROYCE. Yes, sir. That was my suggestion. I would 

sooner get this done now rather than later in terms of trying to refine the amendment. That was my suggestion. And if you’ll indulge 

me for a moment, I’d like to recognize Mr. Vargas for 5 minutes 

for his observations. 

Mr. VARGAS. Thank you very much, Mr. Chair. 

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I think what Congressman Cotton’s attempting to do is very important. I think what he’s attempting to do is to make sure that 

it’s not circumvented through a family member. I think that’s the 

point, and I think the point is well made. 

How to get there, I think, is the issue that we’re discussing, and 

I think maybe some more time in drawing it up in a way that is 

Constitutional, but I think he has a very valid point. It would be 

easily circumventable if it just simply was money being transferred 

to a son. It’s not the sin of the father being transferred to the son, 

it’s the common sin of all, you know, the circumventing of the law. 

I think that’s what you’re attempting to do, and I think that’s a 

very important aspect of this, and I would support that. How you 

achieve that, I think, is something that we could discuss, but I 

think the point is well made. 

Chairman ROYCE. Mr. Cotton. 

Mr. COTTON. I’m happy to follow the procedure you just proposed 

that we work on language of the amendment in the coming minutes and hours, and then have a final vote on a revised version 

later, but there is substantive matters here when we’re working on 

the language, and I am still somewhat confused about the gentleman from Florida’s Constitutional concerns given that we’re not 

talking about American citizens. 

Second, I am worried that if we include any kind of mens rea 

provision like knowing then how is the United States Government 

going to prove what was and was not a knowing transfer inside the 

Iranian regime that has an ironclad grip on information. The 

money may not ever have to be transferred, it may be provided directly from vendors or other people who are offering bribes to senior officials, to children, or spouses, or parents and so forth. But I 

am certainly willing to work on the language. 

Mr. KINZINGER. Will the gentleman yield for a second? 

Mr. COTTON. Yes, I will yield. 

Mr. KINZINGER. I just want to add to that. I really like what 

you’re doing. I’m confused, frankly, at why we’re talking about Constitutional rights in this process when it comes to, frankly, enemies 

of the United States. 

From my understanding, Constitutional rights are earned by and 

granted to U.S. citizens, so I would hope, Mr. Chairman, as we do 

go forward in this, if this is something we can rectify, if this is a 

big difference between us in terms of saying to Iranian citizens or 

foreign citizens have the same Constitutional rights as Americans, 

that’s something that we probably ought to have a substantive debate about. So, I yield back. 

Mr. GRAYSON. Will the gentleman yield? Will the gentleman 

yield? 

Mr. COTTON. Yes, I will yield. 

Mr. GRAYSON. Thank you. The law is perfectly clear on this subject. 

This is a bill that is enforced through sanctions that are enforced 

and instituted by the U.S. Government regardless of whom they’re 

directed against, whether it’s Iranian citizens, U.S. citizens, or anyone else. 

When the government enforces this provision it either institutes 

a civil fine, or it institutes a criminal penalty. Every criminal deVerDate 0ct 09 2002 08:13 Jun 24, 2013 Jkt 000000 PO 00000 Frm 00165 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\052213M\81168 HFA PsN: SHIRL
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fendant in our system is entitled to the Constitutional rights including, among others, the right under the Fifth Amendment to 

due process of law. 

Honestly, this matter has been resolved through Supreme Court 

decisions that go back literally decades. I understand that certain 

members on the other side of the aisle wish to make some kind of 

point that citizenship conveys Constitutional rights that non-citizens don’t have, but I assure them that it’s a matter that’s been 

resolved many, many years ago by the U.S. Supreme Court that 

every criminal defendant, regardless of citizenship, is covered by 

the Fifth Amendment to the Constitution. 

I yield back. 

Mr. COTTON. And I assure the gentleman that anyone who is targeted for sanctions has those due process rights. You are conflating 

that person, though, and the Iranian citizens that are supposedly 

not receiving knowledge of these transfers. 

Iranian citizens do not have due process rights under our Constitution; certainly, the spouses, or the children, or the siblings of 

the worst most evil members of that regime. If we specify someone 

who has—is on a sanctions list that does not violate the due process rights of any company or any person outside of Iran who is an 

American citizen, who is entitled to due process rights, of those due 

process rights. 

Mr. GRAYSON. Will the gentleman yield? 

Mr. COTTON. I would be happy to. 

Mr. GRAYSON. If the gentleman is seriously suggesting that a 

grandchild of a high Iranian public official is subject to sanctions, 

including 20 years of imprisonment under our laws and our Constitutions, all I can say is that the gentleman is completely mistaken, completely and utterly mistaken. And, frankly, the fact that 

you would even entertain the possibility that we would put such 

people in jail in the United States, that we would imprison them 

in the United States shows that the gentleman may not well understand the Fifth Amendment to the Constitution and underscores 

my concern. 

Chairman ROYCE. Mr. Cicilline. 

Mr. CICILLINE. Thank you, Mr. Chairman. 

I think there’s something very fundamental that’s being misinterpreted here. I think the legislation already covers anyone who 

conspires, or assists, or participates in any prohibited activity. It’s 

already covered. 

What your amendment would do, ultimately, is say if someone—

and this is the persons who are designated to be on a list of individuals subject to sanctions. So, what it says is if you have, in fact, 

been identified as a high-level Iranian official or engaged in prohibited activities you could be subject to sanctions. And your amendment says, and so can your children and great-grandchildren. 

It’s not a question of unconstitutional, it’s a question of do we 

want to use the appropriately severe sanctions to impose upon 

someone who, in fact, has not engaged in prohibited activity. And 

I think the answer is no, that we actually do want to make sure 

that these sanctions work, that they severely impose penalties on 

people engaged in prohibited activity. If there are children, or 

grandchildren, or nephews who in any way participate in that and 

163

conspire to participate, facilitate they’re already covered by the Act. 

To simply say because you are related that you are subject to 

criminal penalties, it seems to me that we—no one would want to 

do that. 

I don’t think that’s your intention, so I would just urge you in 

drafting the language to maybe reaffirm that, you know, what I 

think is already in here, that if, in fact, they have engaged or assisted in the facilitation of a prohibited activity, they will have violated the Sanctions Act themselves, so they’re already covered. But 

simply to say you’re subject to these criminal and civil penalties 

simply because you’re related to someone who is engaged in that 

behavior would not be something that we would want to do. 

Mr. GRAYSON. Will the gentleman yield? 

Mr. CICILLINE. Yes. 

Mr. GRAYSON. Thank you. I agree with the gentleman wholeheartedly, the existing provisions in the bill cover conspiracy to violate the bill. Clearly, the scenario that’s been provided or suggested 

by the offeror of this amendment is covered when, in fact, there’s 

a conspiracy to violate the bill already without any amendment 

being required. 

I’d also mention that apart from the due process limitations in 

the Constitution, the Constitution specifically provides that people 

are not subject to punishment because they are related to other 

people. Thank you. 

I yield back. 

Mr. COTTON. Will the gentleman yield? 

Chairman ROYCE. Let me recognize the gentleman from Arkansas, but I would ask that you yield to me for a minute to make an 

observation. 

Mr. COTTON. I will yield to the chair. 

Chairman ROYCE. We know, Mr. Cotton, from past experience 

that we do indeed have a problem with family members trying to 

circumvent sanctions. And I can think of two examples in particular in which a spouse was able to transfer money out of the 

country, despite the fact that in one case, there was subsequently 

conviction for crimes against humanity in the International Criminal Court. So this is, in fact, a challenge in terms of trying to figure 

out how we have those who are subject to sanctions not circumventing those sanctions. 

I suspect there is a way to draft this amendment, to refine this 

amendment so as to address that issue but also to do it in a way 

that meets some of the concerns of Mr. Cicilline as well as Mr. 

Grayson. And so if we could ask you to withdraw and work with 

leg counsel, it is possible that we would be able to get that refinement of this legislation. 

One way or the other, I would like to proceed with an amendment that would address this issue, but I think you could probably 

do it in a way which garners greater support. 

Mr. COTTON. Thank you, Mr. Chair. 

As I indicated, I am happy to do that. I am glad that the gentleman from Rhode Island agrees this is not a matter of constitutional law but a matter of taking prudential preventive measures. 

I think Mr. Grayson has raised at least one hypothetical in which 

my amendment could be over-broad if someone in the third degree 

164

of consanguinity has naturalized and become an American citizen. 

And that is one example of how we could welcome this amendment. 

With that, I am happy to yield back the balance of my time and 

withdraw the amendment and begin that work. 

Chairman ROYCE. I appreciate the gentleman’s work. And if we 

could designate leg counsel to work with you today, then before the 

final vote, we will probably have that amendment in order. 

If I could go now to Mr. Grayson? I think you have a couple of 

additional amendments at the desk. 

Mr. GRAYSON. Yes. Mr. Chairman, I call for amendment number 

104. And I have that amendment at the desk. 

Chairman ROYCE. Clerk, would you report the amendment and 

distribute as well? Thank you. 

Ms. MARTER. Amendment to the amendment in the nature of a 

substitute to H.R. 850 offered by Mr. Grayson of Florida. Page 17, 

after line 16, insert the following: (1) by inserting ‘‘value and’’ before ‘‘volume’’; page 17, lines 17 and 19, redesignate paragraphs (1) 

and (2) as paragraphs (2) and (3), respectively. 

[The information referred to follows:]

Chairman ROYCE. Mr. Grayson, you are recognized for 5 minutes 

to explain your amendment. 

Mr. GRAYSON. Thank you. 

Mr. Chairman, this is a result of what were highly productive 

conversations between our staff and your staff that did not quite 

reach the conclusion that we were looking for. And at this point, 

we are looking for a very minor modest modification to the language that has to do with the fact that the price of oil fluctuates. 

This is something that I think everybody on the committee and everybody who fills a tank of gas in his car, it is a fact that they are 

familiar with. 

In this situation, what we have is a commitment to the reduction 

of the volume in Iranian oil that is imported by five remaining 

countries who import Iranian oil but not a reduction in the value. 

So, for instance, let’s say that it, unfortunately, happens that the 

price of oil triples in the next 12 months while we are trying to impose these sanctions. If we simply allow a continuation of the existVerDate 0ct 09 2002 08:13 Jun 24, 2013 Jkt 000000 PO 00000 Frm 00168 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\052213M\81168 HFA PsN: SHIRL

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ing volume, then the income to Iran from these oil exports will triple. In that situation, the purpose of these sanctions would be utterly defeated because Iran would have more money, more oil 

money, to use in order to continue its nuclear program. 

Our solution to addressing that problem is simple. We would say 

that the sanctions require a reduction not only in the volume of oil 

but also in the value of oil. And so we propose simply to add the 

words ‘‘value and’’ to the word ‘‘volume’’ in order to prevent that 

scenario. 

Now, you will note, Mr. Chairman, that the opposite is not true. 

If the value of oil were to decline, let’s say, the price of oil were 

to decline, by two-thirds during this 1-year period that we are imposing these sanctions, it, nevertheless, would remain true that the 

volume limitation would continue to bite. 

So here by this amendment, we end up with the best of both 

worlds. If the value of oil, the price of oil, goes up, then by adding 

this language, we prevent the Iranians from benefitting from that. 

If the price of oil goes down, then the existing language protects 

us and makes sure that these sanctions continue to have bite. That 

is the purpose of this simple amendment. It is only two words. 

I yield back. 

Mr. CHABOT [presiding]. The gentleman yields back. Do any 

other members seek time to speak on the amendment? 

[No response.] 

Mr. CHABOT. If not, speaking on behalf of the chair, I think we 

are in a position to accept the gentleman’s amendment. Hearing no 

further requests for recognition, the question occurs on the amendment. 

Excuse me. The gentleman from Florida seeks recognition. The 

gentleman is recognized for 5 minutes. 

Mr. DEUTCH. Thank you. 

I just have a question for my friend from Florida. I just want to 

understand. If the price of oil goes up, does that mean that the reduction in the volume can be less than it would have been before 

in order to—how do you prioritize? If you could just walk through 

what would happen if the price goes up? 

Mr. GRAYSON. The reduction in the oil would be more, not less, 

under that scenario because what this does is it limits Iran to a 

reduction in total income. So, for instance, in the scenario that I 

believe that the gentleman from Florida is describing, let’s say hypothetically the price of oil doubled. 

In that case, the target for reduction in Iranian oil exports would 

actually be increased. And the oil exports themselves would be decreased as a result. So by adding this language, what we are ensuring is that fluctuations in the price of oil do not accrue to the benefit of Iran and implicitly weaken the sanctions that we are trying 

to impose here. 

Does that answer the gentleman’s question? 

Mr. DEUTCH. I thank my friend. If oil spiked to $150 a barrel, 

if the gentleman from Florida could just walk through what would 

happen without having ‘‘greater of’’ language or something that requires that we take the biggest bite possible, my concern is that 

if the price of oil spikes, that you can use the value piece, satisfy 

166

the value piece, but ultimately not impact the volume as significantly. 

I am struggling my way through this. I have not seen it before. 

Mr. GRAYSON. Well, will the gentleman yield? 

Mr. DEUTCH. Of course. 

Mr. GRAYSON. All right. Thank you. I will try to explain this further. Under section 203(a), we are dealing with exceptions to the 

applicability of sanctions. So we are dealing with the scenario 

under what conditions can the President say that an exception can 

be made and that oil imports by a foreign country can continue 

without sanctions under this act? 

So what we are doing is we are applying an alternative test. The 

President has to determine that both, both the value and the volume, have decreased before he can issue if he wants to issue an 

exception to the applicability of the sanctions. If the volume has decreased but the price of oil goes up, then the value has increased. 

And that would defeat the purpose of these sanctions. 

So what we are saying is for the President to make an exception, 

both the value and the volume have to decrease. That is why we 

use the word ‘‘and.’’

Mr. DUNCAN. Will the gentleman from Florida yield? 

Mr. DEUTCH. Yes. 

Mr. DUNCAN. I think by using the word ‘‘and,’’ you are putting 

two values, so to speak, in place that both have to happen in order 

for the sanction to kick in. I am troubled by the word and the use 

of ‘‘and,’’ ‘‘volume and value.’’ I would be more comfortable with an 

amendment that used the word ‘‘or’’ so we would have an either/

or situation. The word ‘‘and’’ troubles me, and I would oppose this 

amendment because of that. 

Mr. GRAYSON. Will the gentleman yield? 

Mr. DUNCAN. I will. 

Mr. GRAYSON. Okay. Again, what we are doing here is we are 

looking at an amendment to page 17 of the current draft, the 

amendment and the alternative that substitutes for the entire bill. 

And, again, we are not judging under what circumstances the sanctions are imposed. Quite the opposite, we are judging under what 

circumstances the sanctions are excepted. They are relaxed. We are 

judging under what circumstances the President has the authority 

to say that oil imports by a foreign country can continue. 

And, therefore, I think the gentleman actually would be right if 

we were talking about under what circumstances the sanctions 

apply. Actually, we are talking about under what circumstances 

the sanctions are accepted. And, therefore, it makes eminent sense, 

I think, to have both a value test and a volume test. Otherwise, 

if the price of oil increases, as I indicated before, the President will 

have the authority to exempt a foreign country as long as they decrease their volume but don’t decrease their value. 

Mr. DEUTCH. I am reclaiming my time. I thank my friend from 

Florida. I thank my friend for explaining that. I think ‘‘and’’ actually, the use of the word ‘‘and’’ actually, makes it tougher. I appreciate him walking through that, and I will——

Mr. DUNCAN. Will the gentleman yield back? I agree with you. 

It has been clarified now. So I will retract my earlier statement. 

I yield back. 

167

Mr. DEUTCH. Okay. So I yield back my time. 

Mr. CHABOT. All right. The gentleman’s time has expired. Do any 

other members seek recognition? 

[No response.] 

Mr. CHABOT. If not, the question occurs on the amendment. All 

those in favor say aye. 

[Chorus of ayes.] 

Mr. CHABOT. All those opposed say nay. 

[No response.] 

Mr. CHABOT. It appears the ayes have it, and the amendment is 

agreed to. 

Do any other members seek recognition for the purpose of offering an amendment? The gentleman from Florida is recognized. 

Mr. GRAYSON. Thank you. Mr. Chairman, I have an amendment 

at the desk. It is amendment Grayson 111. 

Mr. CHABOT. The clerk will read the amendment. 

Ms. MARTER. Amendment to the amendment in the nature of a 

substitute to H.R. 850 offered by Mr. Grayson of Florida. Redesignate section 305 as section 306. Insert after section 304 the following new section: Section 305. Amendment to Definitions of ‘‘Significant Reduction’’ under Section 1245 of the National Defense Authorization Act for Fiscal Year 2012. Section 1245(h)(3) of the National Defense Authorization Act for Fiscal Year 2012 (22 

U.S.C.——

[The information referred to follows:]


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Mr. CHABOT. Without objection, the amendment will be considered as read. The gentleman from Florida is recognized. 

Mr. GRAYSON. Mr. Chairman, this amendment simply applies the 

same principle as the amendment that we just passed to a different 

section of the bill. 

I yield back. 

Mr. CHABOT. The gentleman yields back. Are there any other 

members who seek recognition? 

[No response.] 

Mr. CHABOT. As the chair had previously indicated, he would 

support this amendment as well. If no one else seeks recognition, 

the question occurs on the amendment. All of those in favor will 

say aye. 

[Chorus of ayes.] 

Mr. CHABOT. All those opposed say nay. 

[No response.] 

Mr. CHABOT. It appears the ayes have it. The ayes have it, and 

the amendment is agreed to. 

Do any other members seek recognition for the purpose of offering an amendment? The gentleman from Florida, Mr. Grayson, is 

recognized for the purpose of offering an amendment. 

Mr. GRAYSON. Mr. Chairman, this is the last amendment that I 

will offer before the committee today. And the crowd cheered. 

[Laughter.] 

Do I hear any amens? 

[Chorus of amens.] 

Mr. GRAYSON. Amen. Amen. I am sure that pleases everybody as 

much as it pleases me. 

[The information referred to follows:]

169

Mr. GRAYSON. With this amendment, again, I find myself drawn 

to the definition of a significant reduction under the previous sanctions passed, Fiscal Year 2012, NDAA. And I think it is really important to get this right because it is the underpinning of the 

mechanism by which the remaining five countries that purchase oil 

from Iran receive exemptions from losing their access to the American banking system. 

How we define what it means to significantly reduce in section 

1245 of the Fiscal Year 2012 NDAA, how we define the term ‘‘significantly reduce’’ directly impacts the measurements used when 

determining compliance for the sake of granting exemptions. 

It is important to note that under the current soft standard in 

place, every importer of Iranian oil has received an exemption from 

the sanctions that are available to be levied pursuant to section 

1245. If we really expect these sanctions to bite, I think we have 

to change that. It is time. The time has come to review these standards and make them firm. 

Currently the definition of significant reduction in the statute is 

as follows: ‘‘The terms ‘reduce significantly,’ ‘significant reduction,’ 

and ‘significantly reduced’ with respect to purchases from Iran of 


81168o.eps
170

petroleum and petroleum products includes a reduction in such 

purchases in terms of price or volume toward a complete cessation 

of such purchases.’’

So, just to be clear about this, the statute does not provide for 

any amount any percentage any standard other than to say it is 

a reduction toward a complete cessation. One could say that you 

can go from 100 percent down to 99.99 percent and that is a reduction toward complete cessation that allows the administration to 

exclude these countries. Basically what it says is just reduce your 

purchases downward without any specific requirement. 

Frankly, that is not good enough. Mr. Chairman, I commend you 

and your staff for the work that you put into this bill and for what 

I view to be the first real attempt at benchmarking what a significant reduction looks like in terms of the number of barrels of crude 

oil that must be reduced. 

On pages 19 and 20 of this bill, you have taken the bold step of 

setting a hard mark of a reduction of at least an average of 1 million barrels of crude oil per day by the end of a 1-year period. Seeing that this was a figure that this committee could support, my 

search for finding a benchmark for what significant reductions look 

like in the real world was over. You have provided it in this 

amendment in the nature of a substitute. 

My amendment does nothing more than to tie the rest of section 

1245 to the new benchmark that you drafted by adding the 1 million barrel of crude oil figure to the definition of significant reduction. 

Section 1245, again, governs the imposition of sanctions with respect to the financial sector of Iran and the governance of petroleum transactions with Iran. It is so crucial that there be an explicit mention of it in the rule of construction located on page 13 

of this bill. 

I think it is only appropriate to merge the new law that we will 

be creating here today with the existing law. And I feel that we 

should leave no doubt as to what a significant reduction will look 

like going forward. It looks like a reduction on the average of 1 million barrels of crude oil per day that applies for all five of these 

countries individually. And that is exactly what this amendment 

attempts to do. 

With that, Mr. Speaker, I thank you for the time and for your 

important work on this important bill. 

Chairman ROYCE [presiding]. Well, I want to thank the gentleman from Florida. And if I could recognize myself for 5 minutes? 

I just want to express my appreciation for your contribution to this 

measure. I think I certainly support this amendment. 

Are there any other members who would like to speak on this 

amendment before the body? 

[No response.] 

Chairman ROYCE. If not, the question is before the committee. 

All those in favor signify by saying aye. 

[Chorus of ayes.] 

Chairman ROYCE. All those opposed, no. 

[No response.] 

Chairman ROYCE. In the opinion of the Chair, the ayes have it, 

and the amendment is agreed to. 

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We are in the process of having received back from leg counsel 

the language, the severability language, of making copies for the 

members and distributing that to the members, as Mr. Grayson 

and others have an opportunity to review that language. We will 

recess for 10 minutes. 

[Brief recess.] 

Chairman ROYCE. We are going to reconvene the committee, the 

markup, at this time. I am going to ask the members to please take 

your seats. And the Chair recognizes himself to offer a new effective date and severability amendment offered by me, Mr. Engel, 

Mr. Cotton, and Mr. Sherman, which all the members have at their 

desks. The clerk will report the amendment. 

Ms. MARTER. Amendment to the amendment in the nature of a 

substitute to H.R. 850 offered by Mr. Royce of California, Mr. Engel 

of New York, Mr. Cotton of Arkansas, and Mr. Sherman of California. Page 29, beginning on line 19, strike ‘‘the date that is 90 

days after such date of enactment’’ and insert ‘‘May 22, 2013.’’

At the end of title III add the following: Section 306. Severability. 

(a) In general—if any provision of this act, or the application of 

such provision to any person or circumstance, is found to be unconstitutional, the remainder of this act, or the application of that provision to other persons or circumstances, shall not be affected. (b) 

Effective date——

[The information referred to follows:]

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Chairman ROYCE. Without objection, the amendment will be considered as read. And let me yield myself some time to just share 

with the members that we were pleased to work with Mr. Grayson 

and with other colleagues to work out the language, which I think 

was mutually acceptable. And I would ask if any members wish to 

speak now on the amendment. 

[No response.] 

Chairman ROYCE. Mr. Grayson, I will acknowledge your time. 

Five minutes. 

Mr. GRAYSON. Thank you very much, Mr. Chairman. I think that 

this shows the process worked extremely well. I appreciate the 

chairman’s consideration. I am very happy with the result. 

Thank you again. I yield back. 

Chairman ROYCE. Thank you, Mr. Grayson. Hearing no further 

requests for recognition——

Mr. COLLINS. Mr. Chairman? 

Chairman ROYCE. Mr. Radel? 

Mr. COLLINS. No. Collins. 

Chairman ROYCE. Mr. Collins? 


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Mr. COLLINS. Just a clarification. And I know—because there 

was a lot of amendments going on while this was written. And I 

know this—you are adding section 306. And a couple of Mr. Grayson’s amendments redesignated 305, added a 306 in this process. 

So——

Chairman ROYCE. Well, this particular amendment addresses the 

severability issue. 

Mr. COLLINS. I understand that, sir. I get the—I am just designating the proper section. You already have——

Chairman ROYCE. Oh. I understand your point now, Mr. Collins. 

Mr. COLLINS. You already have a 306. 

Chairman ROYCE. You are concerned. As a technical matter, we 

will make certain that the numbers correspond correctly after the 

markup. 

Mr. COLLINS. I just wanted—because I know it was in process, 

but it was just designated wrong. 

Chairman ROYCE. Yes. Good point, Mr. Collins. All right. 

Any other members seek to speak on the amendment? 

[No response.] 

Chairman ROYCE. In that case, I will ask all of those in favor to 

say aye. 

[Chorus of ayes.] 

Chairman ROYCE. All opposed, no. 

[No response.] 

Chairman ROYCE. In the opinion of the Chair, the ayes have it, 

and the amendment is agreed to. 

Are there any further amendments? 

[No response.] 

Chairman ROYCE. Might I suggest, Mr. Cotton, if we were to 

pledge to work with you going forward on your amendment—the 

leg counsel has not worked their magic yet and produced or rewritten that amendment. Would that be amenable to you or would you 

sooner have us go into recess until we have that amendment before 

us? 

We would prefer to move forward, obviously. 

Mr. COTTON. I understand. I am amenable to that. 

Chairman ROYCE. Okay. All right. Then in that case, hearing no 

further amendments to this measure, the question occurs on agreeing to the base amendment in the nature of a substitute, as amended. All those in favor indicating by saying aye. 

[Chorus of ayes.] 

Chairman ROYCE. All those opposed, no. 

[No response.] 

Chairman ROYCE. In the opinion of the Chair, the ayes have it, 

and the amendment in the nature of a substitute, as amended, is 

agreed to. Without objection, the underlying bill, H.R. 850, as 

amended, is agreed to, is ordered favorably reported, and will be 

reported as a single amendment in the nature of a substitute. 

Also, without objection, staff is directed to make technical and 

conforming changes. And the Chairman is authorized to seek 

House consideration of H.R. 850 under suspension of the rules. 

I want to thank Ranking Member Engel. And I want to thank 

all of our committee members for their contributions to this critiVerDate 0ct 09 2002 08:13 Jun 24, 2013 Jkt 000000 PO 00000 Frm 00177 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\052213M\81168 HFA PsN: SHIRL
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cally important legislation and their assistance with today’s markup. And the committee now stands adjourned. 

[Whereupon, at 12:53 p.m., the committee was adjourned.] 

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