I 

114TH CONGRESS 

2D SESSION H. R. 4992 

To codify regulations relating to transfers of funds involving Iran, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 19, 2016 

Mr. ROYCE introduced the following bill; which was referred to the Committee 

on Financial Services 

A BILL 

To codify regulations relating to transfers of funds involving 

Iran, and for other purposes. 

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 ‘‘United States Finan5 cial System Protection Act of 2016’’. 

6 SEC. 2. FINDINGS, SENSE OF CONGRESS, AND STATEMENT 

7 OF POLICY. 

8 (a) FINDINGS.—Congress finds the following: 

9 (1) On November 8, 2011, the Department of 

10 the Treasury identified the Islamic Republic of Iran 


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1 as a jurisdiction of primary money laundering con2 cern pursuant to section 5318A of title 31, United 

3 States Code, including Iran’s Central Bank, private 

4 Iranian banks, branches, and subsidiaries of Iranian 

5 banks operating outside of Iran as posing illicit fi6 nance risks for the global financial system. 

7 (2) On November 6, 2008, the Department of 

8 the Treasury announced that it was revoking the 

9 ‘‘U-turn’’ license for Iran, stating that ‘‘as a mem10 ber of the Financial Action Task Force (FATF), the 

11 United States today fulfilled its obligation to 

12 strengthen measures to protect the financial sector 

13 from the risks posed to the international financial 

14 system by Iran’’. 

15 (3) On February 19, 2016, the Financial Ac16 tion Task Force (FATF), the global standard set17 ting body for anti-money laundering and combating 

18 the financing of terrorism which has determined that 

19 Iran is a ‘‘non-cooperating country or territory’’ in 

20 the fight against money laundering and terror fi21 nancing since 2008, stated that, ‘‘the FATF re22 mains particularly and exceptionally concerned about 

23 Iran’s failure to address the risk of terrorist financ24 ing and the serious threat this poses to the integrity 

25 of the international financial system’’. 


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1 (4) United States and foreign businesses oper2 ating or seeking to operate in Iran run significant 

3 risks, as corruption in Iran is endemic, with Trans4 parency International ranking Iran 130 out of 168 

5 countries. 

6 (b) SENSE OF CONGRESS.—It is the sense of Con7 gress that the entire financial sector of Iran, including 

8 Iran’s Central Bank, private Iranian banks and branches, 

9 and subsidiaries of Iranian banks operating outside of 

10 Iran, poses illicit finance risks for the global financial sys11 tem due to its proliferation, support for terrorism, and 

12 other illicit conduct. 

13 (c) STATEMENT OF POLICY.—It shall be the policy 

14 of the United States to— 

15 (1) deny Iran access to funds denominated in 

16 United States dollars, including through any off17 shore United States dollar clearing system for trans18 actions involving the Government of Iran or an Ira19 nian person; and 

20 (2) deny Iran access to United States dollars 

21 through any offshore United States dollar clearing 

22 system conducted or overseen by a foreign govern23 ment or a foreign financial institution for trans24 actions involving the Government of Iran or an Ira25 nian person. 


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1 SEC. 3. CODIFICATION OF REGULATIONS RELATING TO 

2 TRANSFERS OF FUNDS INVOLVING IRAN; 

3 CLARIFICATION OF APPLICATION OF REGU4 LATIONS TO FOREIGN DEPOSITORY INSTITU5 TIONS AND FOREIGN REGISTERED BROKERS 

6 AND DEALERS. 

7 (a) CODIFICATION OF REGULATIONS.—Section 

8 560.516 of title 31, Code of Federal Regulations, as in 

9 effect on January 1, 2016, shall apply with respect to 

10 transfers of funds to or from Iran, or for the direct or 

11 indirect benefit of an Iranian person or the Government 

12 of Iran, for the period beginning on or after January 1, 

13 2016, and ending on the date on which the President 

14 makes the certification to the appropriate congressional 

15 committees under section 401(a) of the Comprehensive 

16 Iran Sanctions, Accountability, and Divestment Act of 

17 2010 (22 U.S.C. 8551(a)). 

18 (b) CLARIFICATION OF APPLICATION OF REGULA19 TIONS TO FOREIGN FINANCIAL INSTITUTIONS AND FOR20 EIGN REGISTERED BROKERS AND DEALERS.— 

21 (1) FOREIGN FINANCIAL INSTITUTIONS.—Sub22 section (a) of section 560.516 of title 31, Code of 

23 Federal Regulations, as in effect on January 1, 

24 2016, shall apply with respect to foreign financial 

25 institutions to the same extent and in the same 

26 manner as such subsection applies with respect to 


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1 United States depository institutions if the funds 

2 that are to be transferred as described in such sub3 section are funds that are denominated in United 

4 States dollars. 

5 (2) FOREIGN REGISTERED BROKERS AND DEAL6 ERS.—Subsection (b) of section 560.516 of title 31, 

7 Code of Federal Regulations, as in effect on January 

8 1, 2016, shall apply with respect to foreign reg9 istered brokers or dealers in securities to the same 

10 extent and in the same manner as such subsection 

11 applies with respect to United States registered bro12 kers or dealers in securities if the funds that are to 

13 be transferred as described in such subsection are 

14 funds that are denominated in United States dollars. 

15 (3) SUSPENSION.—The President may suspend 

16 the application of paragraph (1) with respect to a 

17 foreign financial institution or the application of 

18 paragraph (2) with respect to a foreign registered 

19 broker or dealer in securities for a period not to ex20 ceed 60 days, and the President may renew the sus21 pension of the application of paragraph (1) or para22 graph (2), respectively, for additional periods of not 

23 more than 60 days, on and after the date on which 

24 the President certifies to the appropriate congres25 sional committees that during the preceding 60-day 


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1 period the Government of Iran is in compliance with 

2 the criteria described in section 401(a)(1) of the 

3 Comprehensive Iran Sanctions, Accountability, and 

4 Divestment Act of 2010 (22 U.S.C. 8551(a)(1)). 

5 (c) LICENSING RESTRICTIONS.— 

6 (1) IN GENERAL.—Except as provided in para7 graph (2), the President may not issue any license 

8 under the International Emergency Economic Pow9 ers Act (50 U.S.C. 1701 et seq.) or provide other 

10 guidance, including executive actions, rules, regula11 tions, frequently asked questions, written commu12 nications, or any other commitments, that permits— 

13 (A) a United States depository institution 

14 or United States registered broker or dealer in 

15 securities— 

16 (i) to conduct an offshore United 

17 States dollar clearing system for trans18 actions involving or for the benefit of the 

19 Government of Iran or an Iranian person, 

20 including to process transfers of funds to 

21 or from Iran under section 560.516 of title 

22 31, Code of Federal Regulations, as in ef23 fect on January 1, 2016; or 

24 (ii) to provide United States dollars 

25 for any offshore United States dollar clearVerDate Sep 11 2014 04:08 Apr 23, 2016 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4992.IH H4992

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1 ing system conducted or overseen by a for2 eign government or a foreign financial in3 stitution for transactions involving or for 

4 the benefit of the Government of Iran or 

5 an Iranian person, including to process 

6 transfers of funds to or from Iran under 

7 section 560.516 of title 31, Code of Fed8 eral Regulations, as in effect on January 

9 1, 2016; or 

10 (B) a foreign financial institution or for11 eign registered broker or dealer in securities— 

12 (i) to conduct an offshore United 

13 States dollar clearing system for trans14 actions involving or for the benefit of the 

15 Government of Iran or an Iranian person, 

16 including to process transfers of funds to 

17 or from Iran under section 560.516 of title 

18 31, Code of Federal Regulations, as in ef19 fect on January 1, 2016, and as applied 

20 under subsection (b); or 

21 (ii) to provide United States dollars 

22 for any offshore United States dollar clear23 ing system conducted or overseen by a for24 eign government or a foreign financial in25 stitution for transactions involving or for 


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1 the benefit of the Government of Iran or 

2 an Iranian person, including to process 

3 transfers of funds to or from Iran under 

4 section 560.516 of title 31, Code of Fed5 eral Regulations, as in effect on January 

6 1, 2016, and as applied under subsection 

7 (b). 

8 (2) EXCEPTION FOR HUMANITARIAN PUR9 POSES.—The President may, on a case-by-case 

10 basis, issue a license described in paragraph (1) to 

11 authorize the activities described in clause (i) or (ii) 

12 of paragraph (1)(A) or the activities described in 

13 clause (i) or (ii) of paragraph (1)(B) if— 

14 (A) such activities relate solely to— 

15 (i) the provision of agricultural com16 modities, food, medicine, or medical devices 

17 to Iran; or 

18 (ii) the provision of humanitarian as19 sistance to the people of Iran; and 

20 (B) the President submits to the appro21 priate congressional committees a copy of the li22 cense. 

23 (d) DEFINITIONS.—In this section: 


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1 (1) APPROPRIATE CONGRESSIONAL COMMIT2 TEES.—The term ‘‘appropriate congressional com3 mittees’’ means— 

4 (A) the Committee on Foreign Affairs and 

5 the Committee on Financial Services of the 

6 House of Representatives; and 

7 (B) the Committee on Foreign Relations 

8 and the Committee on Banking, Housing, and 

9 Urban Affairs of the Senate. 

10 (2) FOREIGN FINANCIAL INSTITUTION.—The 

11 term ‘‘foreign financial institution’’ has the meaning 

12 given such term in section 1010.605 of title 31, 

13 Code of Federal Regulations, as in effect on January 

14 1, 2016. 

15 (3) IRAN.—The term ‘‘Iran’’ has the meaning 

16 given the term in section 561.329 of title 31, Code 

17 of Federal Regulations, as in effect on January 1, 

18 2016. 

19 (4) IRANIAN PERSON.—The term ‘‘Iranian per20 son’’ means a person or entity (as such terms are 

21 defined in section 560.305 of title 31, Code of Fed22 eral Regulations, as in effect on January 1, 2016) 

23 that— 


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1 (A) is organized under the laws of Iran or 

2 any jurisdiction within Iran (including foreign 

3 branches); or 

4 (B) is a person in Iran. 

5 (5) TRANSFER OF FUNDS.—The term ‘‘transfer 

6 of funds’’— 

7 (A) has the meaning given the term ‘‘funds 

8 transfer’’ in section 1010.100 of title 31, Code 

9 of Federal Regulations, as in effect on January 

10 1, 2016; and 

11 (B) includes a transfer of funds or other 

12 property for the benefit of an Iranian financial 

13 institution that is made between accounts of the 

14 same financial institution even if that Iranian 

15 financial institution is not the direct recipient 

16 of the transfer. 

17 (6) UNITED STATES DEPOSITORY INSTITU18 TION.—The term ‘‘United States depository institu19 tion’’ has the meaning given such term in section 

20 560.319 of title 31, Code of Federal Regulations, as 

21 in effect on January 1, 2016. 

22 (7) UNITED STATES REGISTERED BROKER OR

23 DEALER IN SECURITIES.—The term ‘‘United States 

24 registered broker or dealers in securities’’ has the 

25 meaning given such term in section 560.321 of title 


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1 31, Code of Federal Regulations, as in effect on 

2 January 1, 2016. 

3 SEC. 4. CERTIFICATION REQUIREMENT FOR REMOVAL OF 

4 DESIGNATION OF IRAN AS A JURISDICTION 

5 OF PRIMARY MONEY LAUNDERING CONCERN. 

6 (a) IN GENERAL.—The President may not rescind a 

7 preliminary draft rule or final rule (as in effect on the 

8 day before the date of the enactment of this Act) that pro9 vides for the designation of Iran as a jurisdiction of pri10 mary money laundering concern pursuant to section 

11 5318A of title 31, United States Code, unless the Presi12 dent submits to the appropriate congressional committees 

13 a certification described in subsection (b) with respect to 

14 Iran. 

15 (b) CERTIFICATION.—The President may rescind a 

16 preliminary draft rule or final rule described in subsection 

17 (a) if the President submits to the appropriate congres18 sional committees a certification that the Government of 

19 Iran is no longer engaged in support for terrorism, pursuit 

20 of weapons of mass destruction, and any illicit and decep21 tive financial activities. 

22 (c) FORM.—The certification described in subsection 

23 (b) shall be submitted in unclassified form, but may con24 tain a classified annex. 


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1 (d) DEFINITION.—In this section, the term ‘‘appro2 priate congressional committees’’ means— 

3 (1) the Committee on Foreign Affairs and the 

4 Committee on Financial Services of the House of 

5 Representatives; and 

6 (2) the Committee on Banking, Housing, and 

7 Urban Affairs of the Senate. 

Æ 


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