II 

109TH CONGRESS 

1ST SESSION S. 1428 

To stop corporations from financing terrorism. 

IN THE SENATE OF THE UNITED STATES 

JULY 20, 2005 

Mr. LAUTENBERG (for himself, Mr. CORZINE, Mrs. CLINTON, and Mr. FEINGOLD) introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To stop corporations from financing terrorism. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Business With 

5 Terrorists Act of 2005’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act: 

8 (1) CONTROL IN FACT.—The term ‘‘control in 

9 fact’’, with respect to a corporation or other legal 

10 entity, includes— 

11 (A) in the case of— 
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1 (i) a corporation, ownership or control 

2 (by vote or value) of at least 50 percent of 

3 the capital structure of the corporation; 

4 and 

5 (ii) any other kind of legal entity, 

6 ownership or control of interests rep7 resenting at least 50 percent of the capital 

8 structure of the entity; or 

9 (B) control of the day-to-day operations of 

10 a corporation or entity. 

11 (2) PERSON SUBJECT TO THE JURISDICTION OF

12 THE UNITED STATES.—The term ‘‘person subject to 

13 the jurisdiction of the United States’’ means— 

14 (A) an individual, wherever located, who is 

15 a citizen or resident of the United States; 

16 (B) a person actually within the United 

17 States; 

18 (C) a corporation, partnership, association, 

19 or other organization or entity organized under 

20 the laws of the United States, or of any State, 

21 territory, possession, or district of the United 

22 States; 

23 (D) a corporation, partnership, association, 

24 or other organization, wherever organized or 

25 doing business, that is owned or controlled in 
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1 fact by a person or entity described in subpara2 graph (A) or (C); and 

3 (E) a successor, subunit, or subsidiary of 

4 an entity described in subparagraph (C) or (D). 

5 (3) FOREIGN PERSON.—The term ‘‘foreign per6 son’’ means— 

7 (A) an individual who is an alien; 

8 (B) a corporation, partnership, association, 

9 or any other organization or entity that is orga10 nized under the laws of a foreign country or has 

11 its principal place of business in a foreign coun12 try; 

13 (C) a foreign governmental entity oper14 ating as a business enterprise; and 

15 (D) a successor, subunit, or subsidiary of 

16 an entity described in subparagraph (B) or (C). 

17 SEC. 3. CLARIFICATION OF SANCTIONS. 

18 (a) PROHIBITIONS ON ENGAGING IN TRANSACTIONS

19 WITH FOREIGN PERSONS.— 

20 (1) IN GENERAL.—In the case of a person sub21 ject to the jurisdiction of the United States that is 

22 prohibited as described in subsection (b) from en23 gaging in a transaction with a foreign person, that 

24 prohibition shall also apply to— 
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1 (A) each subsidiary and affiliate, wherever 

2 organized or doing business, of the person pro3 hibited from engaging in such a transaction; 

4 and 

5 (B) any other entity, wherever organized 

6 or doing business, that is controlled in fact by 

7 that person. 

8 (2) PROHIBITION ON CONTROL.—A person sub9 ject to the jurisdiction of the United States that is 

10 prohibited as described in subsection (b) from en11 gaging in a transaction with a foreign person shall 

12 also be prohibited from controlling in fact any for13 eign person that is engaged in such a transaction 

14 whether or not that foreign person is subject to the 

15 jurisdiction of the United States. 

16 (b) IEEPA SANCTIONS.—Subsection (a) applies in 

17 any case in which— 

18 (1) the President takes action under the Inter19 national Emergency Economic Powers Act (50 

20 U.S.C. 1701 et seq.) or the Trading with the Enemy 

21 Act (50 U.S.C. App.) to prohibit a person subject to 

22 the jurisdiction of the United States from engaging 

23 in a transaction with a foreign person; or 

24 (2) the Secretary of State has determined that 

25 the government of a country that has jurisdiction 
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1 over a foreign person has repeatedly provided sup2 port for acts of international terrorism under section 

3 6(j) of the Export Administration Act of 1979 (as 

4 in effect pursuant to the International Emergency 

5 Economic Powers Act (50 U.S.C. 1701 et seq.)), or 

6 any other provision of law, and because of that de7 termination a person subject to the jurisdiction of 

8 the United States is prohibited from engaging in 

9 transactions with that foreign person. 

10 (c) CESSATION OF APPLICABILITY BY DIVESTITURE

11 OR TERMINATION OF BUSINESS.— 

12 (1) IN GENERAL.—In any case in which the 

13 President has taken action described in subsection 

14 (b) and such action is in effect on the date of enact15 ment of this Act, the provisions of this section shall 

16 not apply to a person subject of the jurisdiction of 

17 the United States if such person divests or termi18 nates its business with the government or person 

19 identified by such action within 90 days after the 

20 date of enactment of this Act. 

21 (2) ACTIONS AFTER DATE OF ENACTMENT.—In 

22 any case in which the President takes action de23 scribed in subsection (b) on or after the date of en24 actment of this Act, the provisions of this section 

25 shall not apply to a person subject to the jurisdiction 
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1 of the United States if such person divests or termi2 nates its business with the government or person 

3 identified by such action within 90 days after the 

4 date of such action. 

5 (d) PUBLICATION IN FEDERAL REGISTER.—Not 

6 later than 90 days after the date of enactment of this Act, 

7 the President shall publish in the Federal Register a list 

8 of persons with respect to whom there is in effect a sanc9 tion described in section 3(b) and shall publish notice of 

10 any change to that list in a timely manner. 

11 SEC. 4. NOTIFICATION OF CONGRESS OF TERMINATION OF 

12 INVESTIGATION BY OFFICE OF FOREIGN AS13 SETS CONTROL. 

14 (a) REQUIREMENT FOR NOTIFICATION.—The Office 

15 of Federal Procurement Policy Act (41 U.S.C. 403 et seq.) 

16 is amended by adding at the end the following new section: 

17 ‘‘SEC. 42. NOTIFICATION OF CONGRESS OF TERMINATION 

18 OF INVESTIGATION BY OFFICE OF FOREIGN 

19 ASSETS CONTROL. 

20 ‘‘The Director of the Office of Foreign Assets Control 

21 shall notify Congress upon the termination of any inves22 tigation by the Office of Foreign Assets Control of the 

23 Department of the Treasury if any sanction is imposed 

24 by the Director of such office as a result of the investiga25 tion.’’. 
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1 (b) CLERICAL AMENDMENT.—The table of contents 

2 in subsection (b) of such Act is amended by adding at 

3 the end the following new item: 

‘‘Sec. 42. Notification of Congress of termination of investigation by Office 

of Foreign Assets Control.’’. 

4 SEC. 5. ANNUAL REPORTING. 

5 (a) SENSE OF CONGRESS.—It is the sense of the Con6 gress that investors and the public should be informed of 

7 activities engaged in by a person that may threaten the 

8 national security, foreign policy, or economy of the United 

9 States, so that investors and the public can use the infor10 mation in their investment decisions. 

11 (b) REGULATIONS.— 

12 (1) IN GENERAL.—Not later than 120 days 

13 after the date of enactment of this Act, the Securi14 ties and Exchange Commission shall issue regula15 tions that require any person subject to the annual 

16 reporting requirements of section 13 of the Securi17 ties Exchange Act of 1934 (15 U.S.C. 78m) to dis18 close in that person’s annual reports— 

19 (A) any ownership stake of at least 10 per20 cent (or less if the Commission deems appro21 priate) in a foreign person that is engaging in 

22 a transaction prohibited under section 3(a) of 

23 this Act or that would be prohibited if such per-
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1 son were a person subject to the jurisdiction of 

2 the United States; and 

3 (B) the nature and value of any such 

4 transaction. 

5 (2) PERSON DESCRIBED.—A person described 

6 in this section is an issuer of securities, as that term 

7 is defined in section 3 of the Securities Exchange 

8 Act of 1934 (15 U.S.C. 78c), that is subject to the 

9 jurisdiction of the United Sates and to the annual 

10 reporting requirements of section 13 of the Securi11 ties Exchange Act of 1934 (15 U.S.C. 78m). 

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