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Union Calendar No. 269 

118TH CONGRESS 

1ST SESSION H. R. 6365 

[Report No. 118–330] 

To protect against illicit oil shipments, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 13, 2023 

Ms. WATERS introduced the following bill; which was referred to the 

Committee on Financial Services 

DECEMBER 19, 2023 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on November 13, 2023] 

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A BILL 

To protect against illicit oil shipments, and for other 

purposes. 

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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 ‘‘Stopping Illicit Oil 

5 Shipments Act of 2023’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 

8 (1) When countries are designated under eco9 nomic and trade sanctions by the United States and 

10 its allies, they are largely excluded from the licit glob11 al financial system, including the movement, sale, 

12 and profit derived from their oil and gas resources. 

13 (2) For U.S. persons, American maritime sanc14 tions, including on nations like Iran, Russia, and 

15 North Korea, restrict the financing of vessels and 

16 cargo, insurance and re-insurance, companies using 

17 vessels to transport their goods, shipowners, 

18 charterers, and those providing maritime services 

19 such as classification and certification. 

20 (3) One method by which Iran and Russia fre21 quently attempt to evade these U.S. sanctions on oil 

22 is to ‘‘false flag’’, which means to avoid sanctions 

23 scrutiny by registering a vessel in a permissive coun24 try or by sailing under another country’s flag without 

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1 communicating this to the country whose flag is being 

2 used. 

3 (4) According to Foreign Policy, approximately 

4 two million barrels of oil from sanctioned countries, 

5 including Iran and Russia, are transported under 

6 false flags every day. 

7 (5) In order to evade a sanctions regime, vessels 

8 transporting oil and gas resources from sanctioned 

9 countries must carry insurance policies to allow them 

10 to dock at a port, unload their goods, or use a port’s 

11 services, such as refueling. 

12 (6) The veracity of a vessel’s flag is subject to ex13 amination by port authorities, but verification by the 

14 port and service providers does not always occur. 

15 (7) Given the lack of comprehensive checks on the 

16 veracity of flags, this Act will force a change in be17 havior within the maritime shipping industry by 

18 limiting the availability of insurance products to 

19 those not verifying flag registration and providing a 

20 direct route for the Office of Foreign Assets Control 

21 (‘‘OFAC’’) to gain possibly actionable information 

22 that could lead to OFAC enforcement actions as well 

23 as additional targets for sanctions designations. 

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1 SEC. 3. MATERIAL MISREPRESENTATION. 

2 (a) IN GENERAL.—In maritime insurance contracts, 

3 failure to verify a vessel’s registration shall be deemed a 

4 material misrepresentation by the policyholder. 

5 (b) RULEMAKING.—The Undersecretary for Terrorism 

6 and Financial Crimes shall issue rules to carry out this 

7 section. 

8 SEC. 4. IDENTIFICATION OF VESSELS WITH ILLICIT MARI9 TIME INSURANCE. 

10 (a) IN GENERAL.—The primary insurance regulatory 

11 authority of a State may report to the Undersecretary for 

12 Terrorism and Financial Crimes when, in the sole discre13 tion of the primary insurance regulatory authority, the pri14 mary insurance regulatory authority has determined that 

15 the conditions exist for a maritime insurance contract to 

16 be voidable pursuant to section 3. 

17 (b) LIMITATIONS.—With respect to a maritime insur18 ance contract, a report may only be made under subsection 

19 (a) if the primary insurance regulatory authority— 

20 (1) establishes that the maritime insurance con21 tract has been issued by an insurer subject to the au22 thority of the primary insurance regulatory author23 ity; 

24 (2) establishes that the maritime insurance con25 tract satisfies the conditions established by the UnderVerDate Sep 11 2014 00:17 Dec 20, 2023 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H6365.RH H6365
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1 secretary for Terrorism and Financial Crimes to be 

2 voidable pursuant to section 3; and 

3 (3) possesses, to the satisfaction of the primary 

4 insurance regulatory authority, clear and compelling 

5 credible factual evidence that a policyholder has failed 

6 to verify the registration of a vessel. 

7 SEC. 5. REPORT. 

8 (a) IN GENERAL.—Not later than the end of the 180- 

9 day period beginning on the date of the enactment of this 

10 Act, and annually thereafter for 5 years, the Secretary of 

11 the Treasury shall issue a report to the appropriate commit12 tees of the Congress— 

13 (1) detailing any reports received by the Under14 secretary for Terrorism and Financial Crimes from a 

15 primary insurance regulatory authority under section 

16 4; 

17 (2) detailing any steps taken by the Secretary of 

18 the Treasury on the receipt of that information; 

19 (3) describing of activities taken by the Secretary 

20 of the Treasury, including meetings and advisories, to 

21 engage with the maritime community, foreign govern22 ments, and civil society to improve outreach and un23 derstanding of the compliance expectations related to 

24 maritime sanctions evasion; and 

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1 (4) describing any proposed improvements to ex2 isting authorities or resources that could be provided 

3 by Congress. 

4 (b) EXCEPTION FOR ONGOING INVESTIGATIONS.—The 

5 Secretary of the Treasury may not include information in 

6 a report required under subsection (a) related to ongoing 

7 investigations. 

8 SEC. 6. REPORT. 

9 Not later than the end of the 180-day period beginning 

10 on the date of the enactment of this Act, the Secretary of 

11 the Treasury shall issue a report to the appropriate commit12 tees of the Congress containing recommendations for receiv13 ing determinations described under section 4 from persons 

14 other than a primary insurance regulatory authority of a 

15 State, including establishing a whistleblower program. 

16 SEC. 7. DEFINITIONS. 

17 In this Act: 

18 (1) APPROPRIATE COMMITTEES OF THE CON19 GRESS.—The term ‘‘appropriate committees of the 

20 Congress’’ means the Committee on Financial Serv21 ices of the House of Representatives and the Com22 mittee on Banking, Housing, and Urban Affairs of 

23 the Senate. 

24 (2) MARITIME INSURANCE.—The term ‘‘maritime 

25 insurance’’— 

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1 (A) means insurance coverage for physical 

2 loss or damage of vessels, cargo, terminals, and 

3 any transport by which the cargo is transferred, 

4 acquired, or held between the points of origin 

5 and the final destination; and 

6 (B) includes cargo insurance, freight insur7 ance, hull insurance, and protection and indem8 nity. 

9 (3) REGISTRATION.—The term ‘‘registration’’ 

10 means the process— 

11 (A) by which a vessel is formally recognized 

12 by a country’s maritime authority, resulting in 

13 the vessel’s inclusion in the national vessel reg14 istry; and 

15 (B) conferring upon a vessel the nationality 

16 of the registering state; 

17 (C) entailing the right to fly the flag of such 

18 registering state; and 

19 (D) subjecting a vessel to the responsibility 

20 to adhere to maritime laws and regulations en21 forced by such registering state. 

22 (4) STATE.—The term ‘‘State’’ means any of the 

23 several States, the District of Columbia, a territory of 

24 the United States, an Indian Tribe, and a jurisdicVerDate Sep 11 2014 00:17 Dec 20, 2023 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H6365.RH H6365
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1 tion subject to the Compact of Free Association Act of 

2 2003. 

3 (5) VESSEL.—The term ‘‘vessel’’ has the meaning 

4 given such term in section 3 of title 1, United States 

5 Code. 

Union Calendar No. 269 

118TH CONGRESS 

1ST SESSION H. R. 6365 

[Report No. 118–330] 

A BILL 

To protect against illicit oil shipments, and for 

other purposes. 

DECEMBER 19, 2023 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union,