II 

Calendar No. 939 

110TH CONGRESS 

2D SESSION S. 3445 

[Report No. 110–443] 

To impose sanctions with respect to Iran, to provide for the divestment 

of assets in Iran by State and local governments and other entities, 

to identify locations of concern with respect to transshipment, reexportation, or diversion of certain sensitive items to Iran, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 1, 2008 

Mr. DODD, from the Committee on Banking, Housing, and Urban Affairs, reported the following original bill; which was read twice and placed on the 

calendar 

A BILL 

To impose sanctions with respect to Iran, to provide for 

the divestment of assets in Iran by State and local governments and other entities, to identify locations of concern with respect to transshipment, reexportation, or diversion of certain sensitive items to 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, 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Comprehensive Iran Sanctions, Accountability, and Di4 vestment Act of 2008’’. 

5 (b) TABLE OF CONTENTS.—The table of contents for 

6 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—SANCTIONS 

Sec. 101. Definitions. 

Sec. 102. Clarification and expansion of definitions. 

Sec. 103. Economic sanctions relating to Iran. 

Sec. 104. Liability of parent companies for violations of sanctions by foreign 

subsidiaries. 

Sec. 105. Increased capacity for efforts to combat unlawful or terrorist financing. 

Sec. 106. Reporting requirements. 

Sec. 107. Sense of Congress regarding the imposition of sanctions on the Central Bank of Iran. 

TITLE II—DIVESTMENT FROM CERTAIN COMPANIES THAT 

INVEST IN IRAN 

Sec. 201. Definitions. 

Sec. 202. Authority of State and local governments to divest from certain companies that invest in Iran. 

Sec. 203. Safe harbor for changes of investment policies by asset managers. 

Sec. 204. Sense of Congress regarding certain ERISA plan investments. 

TITLE III—PREVENTION OF TRANSSHIPMENT, REEXPORTATION, 

OR DIVERSION OF SENSITIVE ITEMS TO IRAN 

Sec. 301. Definitions. 

Sec. 302. Identification of locations of concern with respect to transshipment, 

reexportation, or diversion of certain items to Iran. 

Sec. 303. Destinations of Possible Diversion Concern and Destinations of Diversion Concern. 

Sec. 304. Report on expanding diversion concern system to countries other than 

Iran. 

TITLE IV—EFFECTIVE DATE; SUNSET 

Sec. 401. Effective date; sunset. 

7 TITLE I—SANCTIONS 

8 SEC. 101. DEFINITIONS. 

9 In this title: 


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1 (1) AGRICULTURAL COMMODITY.—The term 

2 ‘‘agricultural commodity’’ has the meaning given 

3 that term in section 102 of the Agricultural Trade 

4 Act of 1978 (7 U.S.C. 5602). 

5 (2) APPROPRIATE CONGRESSIONAL COMMIT6 TEES.—The term ‘‘appropriate congressional com7 mittees’’ has the meaning given that term in section 

8 14(2) of the Iran Sanctions Act of 1996 (Public 

9 Law 104–172; 50 U.S.C. 1701 note). 

10 (3) EXECUTIVE AGENCY.—The term ‘‘executive 

11 agency’’ has the meaning given that term in section 

12 4 of the Office of Federal Procurement Policy Act 

13 (41 U.S.C. 403). 

14 (4) FAMILY MEMBER.—The term ‘‘family mem15 ber’’ means, with respect to an individual, the 

16 spouse, children, grandchildren, or parents of the in17 dividual. 

18 (5) INFORMATION AND INFORMATIONAL MATE19 RIALS.—The term ‘‘information and informational 

20 materials’’— 

21 (A) means information and informational 

22 materials described in section 203(b)(3) of the 

23 International Emergency Economic Powers Act 

24 (50 U.S.C. 1702(b)(3)); and 


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1 (B) does not include information or infor2 mational materials— 

3 (i) the exportation of which is other4 wise controlled— 

5 (I) under section 5 of the Export 

6 Administration Act of 1979 (50 

7 U.S.C. App. 2404) (as in effect pur8 suant to the International Emergency 

9 Economic Powers Act (50 U.S.C. 

10 1701 et seq.)); or 

11 (II) under section 6 of that Act 

12 (50 U.S.C. App. 2405), to the extent 

13 that such controls promote the non14 proliferation or antiterrorism policies 

15 of the United States; or 

16 (ii) with respect to which acts are pro17 hibited by chapter 37 of title 18, United 

18 States Code. 

19 (6) INVESTMENT.—The term ‘‘investment’’ has 

20 the meaning given that term in section 14(9) of the 

21 Iran Sanctions Act of 1996 (Public Law 104–172; 

22 50 U.S.C. 1701 note). 

23 (7) IRANIAN DIPLOMATS AND REPRESENTA24 TIVES OF OTHER GOVERNMENT AND MILITARY OR

25 QUASI-GOVERNMENTAL INSTITUTIONS OF IRAN.— 


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1 The term ‘‘Iranian diplomats and representatives of 

2 other government and military or quasi-govern3 mental institutions of Iran’’ has the meaning given 

4 that term in section 14(11) of the Iran Sanctions 

5 Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 

6 note). 

7 (8) MEDICAL DEVICE.—The term ‘‘medical de8 vice’’ has the meaning given the term ‘‘device’’ in 

9 section 201 of the Federal Food, Drug, and Cos10 metic Act (21 U.S.C. 321). 

11 (9) MEDICINE.—The term ‘‘medicine’’ has the 

12 meaning given the term ‘‘drug’’ in section 201 of the 

13 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

14 321). 

15 SEC. 102. CLARIFICATION AND EXPANSION OF DEFINI16 TIONS. 

17 (a) PERSON.—Section 14(13)(B) of the Iran Sanc18 tions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 

19 note) is amended— 

20 (1) by inserting ‘‘financial institution, insurer, 

21 underwriter, guarantor, and any other business or22 ganization, including any foreign subsidiary, parent, 

23 or affiliate of the foregoing,’’ after ‘‘trust,’’; and 

24 (2) by inserting ‘‘, such as an export credit 

25 agency’’ before the semicolon. 


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1 (b) PETROLEUM RESOURCES.—Section 14(14) of the 

2 Iran Sanctions Act of 1996 (Public Law 104–172; 50 

3 U.S.C. 1701 note) is amended by striking ‘‘petroleum and 

4 natural gas resources’’ and inserting ‘‘petroleum, petro5 leum by-products, oil or liquefied natural gas, oil or lique6 fied natural gas tankers, and products used to construct 

7 or maintain pipelines used to transport oil or liquefied nat8 ural gas’’. 

9 SEC. 103. ECONOMIC SANCTIONS RELATING TO IRAN. 

10 (a) IN GENERAL.—Notwithstanding any other provi11 sion of law, and in addition to any other sanction in effect, 

12 beginning on the date that is 15 days after the effective 

13 date of this Act, the economic sanctions described in sub14 section (b) shall apply with respect to Iran. 

15 (b) SANCTIONS.—The sanctions described in this 

16 subsection are the following: 

17 (1) PROHIBITION ON IMPORTS.— 

18 (A) IN GENERAL.—Except as provided in 

19 subparagraph (B), no article that is the growth, 

20 product, or manufacture of Iran may be im21 ported directly or indirectly into the United 

22 States. 

23 (B) EXCEPTION.—The prohibition in sub24 paragraph (A) does not apply to imports from 


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1 Iran of information and informational mate2 rials. 

3 (2) PROHIBITION ON EXPORTS.— 

4 (A) IN GENERAL.—Except as provided in 

5 subparagraph (B), no article that is the growth, 

6 product, or manufacture of the United States 

7 may be exported directly or indirectly to Iran. 

8 (B) EXCEPTIONS.—The prohibition in sub9 paragraph (A) does not apply to exports to Iran 

10 of— 

11 (i) agricultural commodities, food, 

12 medicine, or medical devices; 

13 (ii) articles exported to Iran to pro14 vide humanitarian assistance to the people 

15 of Iran; 

16 (iii) information or informational ma17 terials; or 

18 (iv) goods, services, or technologies 

19 necessary to ensure the safe operation of 

20 commercial passenger aircraft produced in 

21 the United States if the exportation of 

22 such goods, services, or technologies is ap23 proved by the Secretary of the Treasury, in 

24 consultation with the Secretary of Com25 merce, pursuant to regulations for licensVerDate Aug 31 2005 23:39 Aug 01, 2008 Jkt 069002 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3445.PCS S3445

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1 ing the exportation of such goods, services, 

2 or technologies, if appropriate. 

3 (3) FREEZING ASSETS.— 

4 (A) IN GENERAL.—At such time as the 

5 United States has access to the names of per6 sons in Iran, including Iranian diplomats and 

7 representatives of other government and mili8 tary or quasi-governmental institutions of Iran, 

9 that are determined to be subject to sanctions 

10 imposed under the authority of the Inter11 national Emergency Economic Powers Act (50 

12 U.S.C. 1701 et seq.) or any other provision of 

13 law relating to the imposition of sanctions with 

14 respect to Iran, the President shall take such 

15 action as may be necessary to freeze imme16 diately the funds and other assets belonging to 

17 anyone so named and any family members or 

18 associates of those so named to whom assets or 

19 property of those so named were transferred on 

20 or after January 1, 2008. The action described 

21 in the preceding sentence includes requiring any 

22 United States financial institution that holds 

23 funds and assets of a person so named to re24 port promptly to the Office of Foreign Assets 


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1 Control information regarding such funds and 

2 assets. 

3 (B) ASSET REPORTING REQUIREMENT.— 

4 Not later than 14 days after a decision is made 

5 to freeze the property or assets of any person 

6 under this paragraph, the President shall report 

7 the name of such person to the appropriate con8 gressional committees. 

9 (4) UNITED STATES GOVERNMENT CON10 TRACTS.—The head of an executive agency may not 

11 procure, or enter into a contract for the procurement 

12 of, any goods or services from a person that meets 

13 the criteria for the imposition of sanctions under 

14 section 5(a) of the Iran Sanctions Act of 1996 (Pub15 lic Law 104–172; 50 U.S.C. 1701 note). 

16 (c) WAIVER.—The President may waive the applica17 tion of the sanctions described in subsection (b) if the 

18 President— 

19 (1) determines that such a waiver is in the na20 tional interest of the United States; and 

21 (2) submits to the appropriate congressional 

22 committees a report describing the reasons for the 

23 determination. 


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1 SEC. 104. LIABILITY OF PARENT COMPANIES FOR VIOLA2 TIONS OF SANCTIONS BY FOREIGN SUBSIDI3 ARIES. 

4 (a) DEFINITIONS.—In this section: 

5 (1) ENTITY.—The term ‘‘entity’’ means a part6 nership, association, trust, joint venture, corpora7 tion, or other organization. 

8 (2) OWN OR CONTROL.—The term ‘‘own or con9 trol’’ means, with respect to an entity— 

10 (A) to hold more than 50 percent of the 

11 equity interest by vote or value in the entity; 

12 (B) to hold a majority of seats on the 

13 board of directors of the entity; or 

14 (C) to otherwise control the actions, poli15 cies, or personnel decisions of the entity. 

16 (3) SUBSIDIARY.—The term ‘‘subsidiary’’ 

17 means an entity that is owned or controlled, directly 

18 or indirectly, by a United States person. 

19 (4) UNITED STATES PERSON.—The term 

20 ‘‘United States person’’ means— 

21 (A) a natural person who is a citizen, resi22 dent, or national of the United States; and 

23 (B) an entity that is organized under the 

24 laws of the United States, any State or terri25 tory thereof, or the District of Columbia, if natVerDate Aug 31 2005 23:39 Aug 01, 2008 Jkt 069002 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3445.PCS S3445

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1 ural persons described in subparagraph (A) own 

2 or control the entity. 

3 (b) IN GENERAL.—A United States person shall be 

4 subject to a penalty for a violation of the provisions of 

5 Executive Order 12959 (50 U.S.C. 1701 note) or Execu6 tive Order 13059 (50 U.S.C. 1701 note), or any other pro7 hibition on transactions with respect to Iran imposed 

8 under the authority of the International Emergency Eco9 nomic Powers Act (50 U.S.C. 1701 et seq.), if— 

10 (1) the President determines that the United 

11 States person establishes or maintains a subsidiary 

12 outside of the United States for the purpose of cir13 cumventing such provisions; and 

14 (2) that subsidiary engages in an act that, if 

15 committed in the United States or by a United 

16 States person, would violate such provisions. 

17 (c) WAIVER.—The President may waive the applica18 tion of subsection (b) if the President— 

19 (1) determines that such a waiver is in the na20 tional interest of the United States; and 

21 (2) submits to the appropriate congressional 

22 committees a report describing the reasons for the 

23 determination. 

24 (d) EFFECTIVE DATE.— 


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1 (1) IN GENERAL.—Subsection (b) shall take ef2 fect on the date of the enactment of this Act and 

3 apply with respect to acts described in subsection 

4 (b)(2) that are— 

5 (A) commenced on or after the date of the 

6 enactment of this Act; or 

7 (B) except as provided in paragraph (2), 

8 commenced before such date of enactment, if 

9 such acts continue on or after such date of en10 actment. 

11 (2) EXCEPTION.—Subsection (b) shall not 

12 apply with respect to an act described in paragraph 

13 (1)(B) by a subsidiary owned or controlled by a 

14 United States person if the United States person di15 vests or terminates its business with the subsidiary 

16 not later than 90 days after such date of enactment. 

17 SEC. 105. INCREASED CAPACITY FOR EFFORTS TO COMBAT 

18 UNLAWFUL OR TERRORIST FINANCING. 

19 (a) FINDING.—Congress finds that the work of the 

20 Office of Terrorism and Financial Intelligence of the De21 partment of the Treasury, which includes the Office of 

22 Foreign Assets Control and the Financial Crimes Enforce23 ment Network, is critical to ensuring that the inter24 national financial system is not used for purposes of supVerDate Aug 31 2005 23:39 Aug 01, 2008 Jkt 069002 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S3445.PCS S3445

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1 porting terrorism and developing weapons of mass de2 struction. 

3 (b) AUTHORIZATION OF APPROPRIATIONS FOR OF4 FICE OF TERRORISM AND FINANCIAL INTELLIGENCE.— 

5 There is authorized to be appropriated to the Secretary 

6 of the Treasury for the Office of Terrorism and Financial 

7 Intelligence— 

8 (1) $61,712,000 for fiscal year 2009; and 

9 (2) such sums as may be necessary for each of 

10 the fiscal years 2010 and 2011. 

11 (c) AUTHORIZATION OF APPROPRIATIONS FOR THE

12 FINANCIAL CRIMES ENFORCEMENT NETWORK.—Section 

13 310(d)(1) of title 31, United States Code, is amended by 

14 striking ‘‘such sums as may be necessary for fiscal years 

15 2002, 2003, 2004, and 2005’’ and inserting ‘‘$91,335,000 

16 for fiscal year 2009 and such sums as may be necessary 

17 for each of the fiscal years 2010 and 2011’’. 

18 SEC. 106. REPORTING REQUIREMENTS. 

19 (a) FOREIGN INVESTMENT IN IRAN.— 

20 (1) IN GENERAL.—Not later than 180 days 

21 after the date of the enactment of this Act, the 

22 President shall submit to the appropriate congres23 sional committees a report on— 

24 (A) any foreign investments of 

25 $20,000,000 or more made in Iran’s energy 


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1 sector on or after January 1, 2008, and before 

2 the date on which the President submits the re3 port; and 

4 (B) the determination of the President on 

5 whether each such investment qualifies as a 

6 sanctionable offense under section 5(a) of the 

7 Iran Sanctions Act of 1996 (Public Law 104– 

8 172; 50 U.S.C. 1701 note). 

9 (2) SUBSEQUENT REPORTS.—Not later than 1 

10 year after the date of the enactment of this Act, and 

11 every 180 days thereafter, the President shall sub12 mit to the appropriate congressional committees a 

13 report on— 

14 (A) any foreign investments of 

15 $20,000,000 or more made in Iran’s energy 

16 sector during the 180-day period preceding the 

17 submission of the report; and 

18 (B) the determination of the President on 

19 whether each such investment qualifies as a 

20 sanctionable offense under section 5(a) of the 

21 Iran Sanctions Act of 1996 (Public Law 104– 

22 172; 50 U.S.C. 1701 note). 

23 (b) FORM OF REPORTS.—The reports required under 

24 subsection (a) shall be submitted in unclassified form, but 

25 may contain a classified annex. 


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1 SEC. 107. SENSE OF CONGRESS REGARDING THE IMPOSI2 TION OF SANCTIONS ON THE CENTRAL BANK 

3 OF IRAN. 

4 Congress urges the President, in the strongest terms, 

5 to consider immediately using the authority of the Presi6 dent to impose sanctions on the Central Bank of Iran and 

7 any other Iranian bank engaged in proliferation activities 

8 or support of terrorist groups. 

9 TITLE II—DIVESTMENT FROM 

10 CERTAIN COMPANIES THAT 

11 INVEST IN IRAN 

12 SEC. 201. DEFINITIONS. 

13 In this title: 

14 (1) ENERGY SECTOR.—The term ‘‘energy sec15 tor’’ refers to activities to develop petroleum or nat16 ural gas resources or nuclear power. 

17 (2) FINANCIAL INSTITUTION.—The term ‘‘fi18 nancial institution’’ has the meaning given that term 

19 in section 14(5) of the Iran Sanctions Act of 1996 

20 (Public Law 104–172; 50 U.S.C. 1701 note). 

21 (3) IRAN.—The term ‘‘Iran’’ includes any agen22 cy or instrumentality of Iran. 

23 (4) PERSON.—The term ‘‘person’’ means— 

24 (A) a natural person, corporation, com25 pany, business association, partnership, society, 


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1 trust, or any other nongovernmental entity, or2 ganization, or group; 

3 (B) any governmental entity or instrumen4 tality of a government, including a multilateral 

5 development institution (as defined in section 

6 1701(c)(3) of the International Financial Insti7 tutions Act (22 U.S.C. 262r(c)(3))); and 

8 (C) any successor, subunit, parent com9 pany, or subsidiary of any entity described in 

10 subparagraph (A) or (B). 

11 (5) STATE.—The term ‘‘State’’ means each of 

12 the several States, the District of Columbia, the 

13 Commonwealth of Puerto Rico, the United States 

14 Virgin Islands, Guam, American Samoa, and the 

15 Commonwealth of the Northern Mariana Islands. 

16 (6) STATE OR LOCAL GOVERNMENT.—The term 

17 ‘‘State or local government’’ includes— 

18 (A) any State and any agency or instru19 mentality thereof; 

20 (B) any local government within a State, 

21 and any agency or instrumentality thereof; 

22 (C) any other governmental instrumen23 tality; and 


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1 (D) any public institution of higher edu2 cation within the meaning of the Higher Edu3 cation Act of 1965 (20 U.S.C. 1001 et seq.). 

4 SEC. 202. AUTHORITY OF STATE AND LOCAL GOVERN5 MENTS TO DIVEST FROM CERTAIN COMPA6 NIES THAT INVEST IN IRAN. 

7 (a) SENSE OF CONGRESS.—It is the sense of Con8 gress that the United States Government should support 

9 the decision of any State or local government to divest 

10 from, or to prohibit the investment of assets of the State 

11 or local government in, a person that the State or local 

12 government determines poses a financial or reputational 

13 risk. 

14 (b) AUTHORITY TO DIVEST.—Notwithstanding any 

15 other provision of law, a State or local government may 

16 adopt and enforce measures that meet the requirements 

17 of subsection (d) to divest the assets of the State or local 

18 government from, or prohibit investment of the assets of 

19 the State or local government in, any person that the 

20 State or local government determines, using credible infor21 mation available to the public, engages in investment ac22 tivities in Iran described in subsection (c). 

23 (c) INVESTMENT ACTIVITIES DESCRIBED.—A person 

24 engages in investment activities in Iran described in this 

25 subsection if the person— 


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1 (1) has an investment of $20,000,000 or 

2 more— 

3 (A) in the energy sector of Iran; or 

4 (B) in a person that provides oil or 

5 liquified natural gas tankers, or products used 

6 to construct or maintain pipelines used to 

7 transport oil or liquified natural gas, for the en8 ergy sector in Iran; or 

9 (2) is a financial institution that extends 

10 $20,000,000 or more in credit to another person, for 

11 45 days or more, if that person will use the credit 

12 to invest in the energy sector in Iran. 

13 (d) REQUIREMENTS.—Any measure taken by a State 

14 or local government under subsection (b) shall meet the 

15 following requirements: 

16 (1) NOTICE.—The State or local government 

17 shall provide written notice to each person to which 

18 a measure is to be applied. 

19 (2) TIMING.—The measure shall apply to a per20 son not earlier than the date that is 90 days after 

21 the date on which written notice is provided to the 

22 person under paragraph (1). 

23 (3) OPPORTUNITY FOR HEARING.—The State 

24 or local government shall provide an opportunity to 

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1 ure is to be applied. If the person demonstrates to 

2 the State or local government that the person does 

3 not engage in investment activities in Iran described 

4 in subsection (c), the measure shall not apply to the 

5 person. 

6 (4) SENSE OF CONGRESS ON AVOIDING ERRO7 NEOUS TARGETING.—It is the sense of Congress 

8 that a State or local government should not adopt 

9 a measure under subsection (b) with respect to a 

10 person unless the State or local government has 

11 made every effort to avoid erroneously targeting the 

12 person and has verified that the person engages in 

13 investment activities in Iran described in subsection 

14 (c). 

15 (e) NOTICE TO DEPARTMENT OF JUSTICE.—Not 

16 later than 30 days after adopting a measure pursuant to 

17 subsection (b), a State or local government shall submit 

18 written notice to the Attorney General describing the 

19 measure. 

20 (f) NONPREEMPTION.—A measure of a State or local 

21 government authorized under subsection (b) is not pre22 empted by any Federal law or regulation. 

23 (g) DEFINITIONS.—In this section: 


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1 (1) INVESTMENT.—The ‘‘investment’’ of assets, 

2 with respect to a State or local government, in3 cludes— 

4 (A) a commitment or contribution of as5 sets; 

6 (B) a loan or other extension of credit; and 

7 (C) the entry into or renewal of a contract 

8 for goods or services. 

9 (2) ASSETS.— 

10 (A) IN GENERAL.—Except as provided in 

11 subparagraph (B), the term ‘‘assets’’ refers to 

12 public monies and includes any pension, retire13 ment, annuity, or endowment fund, or similar 

14 instrument, that is controlled by a State or 

15 local government. 

16 (B) EXCEPTION.—The term ‘‘assets’’ does 

17 not include employee benefit plans covered by 

18 title I of the Employee Retirement Income Se19 curity Act of 1974 (29 U.S.C. 1001 et seq.). 

20 (h) EFFECTIVE DATE.— 

21 (1) IN GENERAL.—Except as provided in para22 graph (2), this section applies to measures adopted 

23 by a State or local government before, on, or after 

24 the date of the enactment of this Act. 


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1 (2) NOTICE REQUIREMENTS.—Subsections (d) 

2 and (e) apply to measures adopted by a State or 

3 local government on or after the date of the enact4 ment of this Act. 

5 SEC. 203. SAFE HARBOR FOR CHANGES OF INVESTMENT 

6 POLICIES BY ASSET MANAGERS. 

7 (a) IN GENERAL.—Section 13(c)(1) of the Invest8 ment Company Act of 1940 (15 U.S.C. 80a–13(c)(1)) is 

9 amended to read as follows: 

10 ‘‘(1) IN GENERAL.—Notwithstanding any other 

11 provision of Federal or State law, no person may 

12 bring any civil, criminal, or administrative action 

13 against any registered investment company, or any 

14 employee, officer, director, or investment adviser 

15 thereof, based solely upon the investment company 

16 divesting from, or avoiding investing in, securities 

17 issued by persons that the investment company de18 termines, using credible information available to the 

19 public— 

20 ‘‘(A) conduct or have direct investments in 

21 business operations in Sudan described in sec22 tion 3(d) of the Sudan Accountability and Di23 vestment Act of 2007 (50 U.S.C. 1701 note); or 

24 ‘‘(B) engage in investment activities in 

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1 prehensive Iran Sanctions, Accountability, and 

2 Divestment Act of 2008.’’. 

3 (b) SEC REGULATIONS.—Not later than 120 days 

4 after the date of the enactment of this Act, the Securities 

5 and Exchange Commission shall issue any revisions the 

6 Commission determines to be necessary to the regulations 

7 requiring disclosure by each registered investment com8 pany that divests itself of securities in accordance with 

9 section 13(c) of the Investment Company Act of 1940 to 

10 include divestments of securities in accordance with para11 graph (1)(B) of such section, as added by subsection (a). 

12 SEC. 204. SENSE OF CONGRESS REGARDING CERTAIN 

13 ERISA PLAN INVESTMENTS. 

14 It is the sense of Congress that a fiduciary of an em15 ployee benefit plan, as defined in section 3(3) of the Em16 ployee Retirement Income Security Act of 1974 (29 

17 U.S.C. 1002(3)), may divest plan assets from, or avoid 

18 investing plan assets in, any person the fiduciary deter19 mines engages in investment activities in Iran described 

20 in section 202(c) of this Act, without breaching the re21 sponsibilities, obligations, or duties imposed upon the fidu22 ciary by section 404 of the Employee Retirement Income 

23 Security Act of 1974 (29 U.S.C. 1104), if— 


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1 (1) the fiduciary makes such determination 

2 using credible information that is available to the 

3 public; and 

4 (2) such divestment or avoidance of investment 

5 is conducted in accordance with section 2509.94–1 

6 of title 29, Code of Federal Regulations (as in effect 

7 on the day before the date of the enactment of this 

8 Act). 

9 TITLE III—PREVENTION OF 

10 TRANSSHIPMENT, REEXPOR11 TATION, OR DIVERSION OF 

12 SENSITIVE ITEMS TO IRAN 

13 SEC. 301. DEFINITIONS. 

14 In this title: 

15 (1) APPROPRIATE CONGRESSIONAL COMMIT16 TEES.—The term ‘‘appropriate congressional com17 mittees’’ means— 

18 (A) the Committee on Banking, Housing, 

19 and Urban Affairs, the Committee on Foreign 

20 Relations, and the Select Committee on Intel21 ligence of the Senate; and 

22 (B) the Committee on Financial Services, 

23 the Committee on Foreign Affairs, and the Per24 manent Select Committee on Intelligence of the 

25 House of Representatives. 


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1 (2) END-USER.—The term ‘‘end-user’’ means 

2 an end-user as that term is used in the Export Ad3 ministration Regulations. 

4 (3) ENTITY OWNED OR CONTROLLED BY THE

5 GOVERNMENT OF IRAN.—The term ‘‘entity owned or 

6 controlled by the Government of Iran’’ includes— 

7 (A) any corporation, partnership, associa8 tion, or other entity in which the Government 

9 of Iran owns a majority or controlling interest; 

10 and 

11 (B) any entity that is otherwise controlled 

12 by the Government of Iran. 

13 (4) EXPORT ADMINISTRATION REGULATIONS.— 

14 The term ‘‘Export Administration Regulations’’ 

15 means subchapter C of chapter VII of title 15, Code 

16 of Federal Regulations. 

17 (5) GOVERNMENT.—The term ‘‘government’’ 

18 includes any agency or instrumentality of a govern19 ment. 

20 (6) IRAN.—The term ‘‘Iran’’ includes any agen21 cy or instrumentality of Iran. 

22 (7) STATE SPONSOR OF TERRORISM.—The term 

23 ‘‘state sponsor of terrorism’’ means any country the 

24 government of which the Secretary of State has deVerDate Aug 31 2005 23:39 Aug 01, 2008 Jkt 069002 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\S3445.PCS S3445

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1 termined has repeatedly provided support for acts of 

2 international terrorism pursuant to— 

3 (A) section 6(j)(1)(A) of the Export Ad4 ministration Act of 1979 (50 U.S.C. App. 

5 2405(j)(1)(A)) (or any successor thereto); 

6 (B) section 40(d) of the Arms Export Con7 trol Act (22 U.S.C. 2780(d)); or 

8 (C) section 620A(a) of the Foreign Assist9 ance Act of 1961 (22 U.S.C. 2371(a)). 

10 (8) TRANSSHIPMENT, REEXPORTATION, OR DI11 VERSION.—The term ‘‘transshipment, reexportation, 

12 or diversion’’ means the exportation, directly or indi13 rectly, of items that originated in the United States 

14 to an end-user whose identity cannot be verified or 

15 to an entity owned or controlled by the Government 

16 of Iran in violation of the laws or regulations of the 

17 United States by any means, including by— 

18 (A) shipping such items through 1 or more 

19 foreign countries; or 

20 (B) by using false information regarding 

21 the country of origin of such items. 


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1 SEC. 302. IDENTIFICATION OF LOCATIONS OF CONCERN 

2 WITH RESPECT TO TRANSSHIPMENT, RE3 EXPORTATION, OR DIVERSION OF CERTAIN 

4 ITEMS TO IRAN. 

5 Not later than 180 days after the date of the enact6 ment of this Act, and annually thereafter, the Director 

7 of National Intelligence shall submit to the Secretary of 

8 Commerce, the Secretary of State, the Secretary of the 

9 Treasury, and the appropriate congressional committees 

10 a report that identifies all countries that the Director de11 termines are of concern with respect to transshipment, re12 exportation, or diversion of items subject to the provisions 

13 of the Export Administration Regulations to an entity 

14 owned or controlled by the Government of Iran. 

15 SEC. 303. DESTINATIONS OF POSSIBLE DIVERSION CON16 CERN AND DESTINATIONS OF DIVERSION 

17 CONCERN. 

18 (a) DESTINATIONS OF POSSIBLE DIVERSION CON19 CERN.— 

20 (1) DESIGNATION.—The Secretary of Com21 merce shall designate a country as a Destination of 

22 Possible Diversion Concern if the Secretary, in con23 sultation with the Secretary of State and the Sec24 retary of the Treasury, determines that such des25 ignation is appropriate to carry out activities to 


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1 strengthen the export control systems of that coun2 try based on criteria that include— 

3 (A) the volume of items that originated in 

4 the United States that are transported through 

5 the country to end-users whose identities cannot 

6 be verified; 

7 (B) the inadequacy of the export and reex8 port controls of the country; 

9 (C) the unwillingness or demonstrated in10 ability of the government of the country to con11 trol diversion activities; and 

12 (D) the unwillingness or inability of the 

13 government of the country to cooperate with the 

14 United States in interdiction efforts. 

15 (2) STRENGTHENING EXPORT CONTROL SYS16 TEMS OF DESTINATIONS OF POSSIBLE DIVERSION

17 CONCERN.—If the Secretary of Commerce designates 

18 a country as a Destination of Possible Diversion 

19 Concern under paragraph (1), the United States 

20 shall initiate government-to-government activities de21 scribed in paragraph (3) to strengthen the export 

22 control systems of the country. 

23 (3) GOVERNMENT-TO-GOVERNMENT ACTIVITIES

24 DESCRIBED.—The government-to-government activi25 ties described in this paragraph include— 


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1 (A) cooperation by agencies and depart2 ments of the United States with counterpart 

3 agencies and departments in a country des4 ignated as a Destination of Possible Diversion 

5 Concern under paragraph (1) to— 

6 (i) develop or strengthen export con7 trol systems in the country; 

8 (ii) strengthen cooperation and facili9 tate enforcement of export control systems 

10 in the country; and 

11 (iii) promote information and data ex12 changes among agencies of the country 

13 and with the United States; and 

14 (B) efforts by the Office of International 

15 Programs of the Department of Commerce to 

16 strengthen the export control systems of the 

17 country to— 

18 (i) facilitate legitimate trade in high19 technology goods; and 

20 (ii) prevent terrorists and state spon21 sors of terrorism, including Iran, from ob22 taining nuclear, biological, and chemical 

23 weapons, defense technologies, components 

24 for improvised explosive devices, and other 

25 defense items. 


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1 (b) DESTINATIONS OF DIVERSION CONCERN.— 

2 (1) DESIGNATION.—The Secretary of Com3 merce shall designate a country as a Destination of 

4 Diversion Concern if the Secretary, in consultation 

5 with the Secretary of State and the Secretary of the 

6 Treasury, determines— 

7 (A) that the government of the country is 

8 directly involved in transshipment, reexpor9 tation, or diversion of items that originated in 

10 the United States to end-users whose identities 

11 cannot be verified or to entities owned or con12 trolled by the Government of Iran; or 

13 (B) 12 months after the Secretary of Com14 merce designates the country as a Destination 

15 of Possible Diversion Concern under subsection 

16 (a)(1), that the country has failed— 

17 (i) to cooperate with the government18 to-government activities initiated by the 

19 United States under subsection (a)(2); or 

20 (ii) based on the criteria described in 

21 subsection (a)(1), to adequately strengthen 

22 the export control systems of the country. 

23 (2) LICENSING CONTROLS WITH RESPECT TO

24 DESTINATIONS OF DIVERSION CONCERN.— 

25 (A) REPORT ON SUSPECT ITEMS.— 


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1 (i) IN GENERAL.—Not later than 45 

2 days after the date of the enactment of 

3 this Act, the Secretary of Commerce, in 

4 consultation with the Director of National 

5 Intelligence, the Secretary of State, and 

6 the Secretary of the Treasury, shall submit 

7 to the appropriate congressional commit8 tees a report containing a list of items 

9 that, if the items were transshipped, reex10 ported, or diverted to Iran, could con11 tribute to— 

12 (I) Iran obtaining nuclear, bio13 logical, or chemical weapons, defense 

14 technologies, components for impro15 vised explosive devices, or other de16 fense items; or 

17 (II) support by Iran for acts of 

18 international terrorism. 

19 (ii) CONSIDERATIONS FOR LIST.—In 

20 developing the list required under clause 

21 (i), the Secretary of Commerce shall con22 sider— 

23 (I) the items subject to licensing 

24 requirements under section 742.8 of 

25 title 15, Code of Federal Regulations 


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1 (or any corresponding similar regula2 tion or ruling) and other existing li3 censing requirements; and 

4 (II) the items added to the list of 

5 items for which a license is required 

6 for exportation to North Korea by the 

7 final rule of the Bureau of Export Ad8 ministration of the Department of 

9 Commerce issued on June 19, 2000 

10 (65 Fed. Reg. 38148; relating to ex11 port restrictions on North Korea). 

12 (B) LICENSING REQUIREMENT.—Not later 

13 than 180 days after the date of the enactment 

14 of this Act, the Secretary of Commerce shall re15 quire a license to export an item on the list re16 quired under subparagraph (A)(i) to a country 

17 designated as a Destination of Diversion Con18 cern. 

19 (3) WAIVER.—The President may waive the im20 position of the licensing requirement under para21 graph (2)(B) with respect to a country designated as 

22 a Destination of Diversion Concern if the Presi23 dent— 

24 (A) determines that such a waiver is in the 

25 national interest of the United States; and 


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1 (B) submits to the appropriate congres2 sional committees a report describing the rea3 sons for the determination. 

4 (c) TERMINATION OF DESIGNATION.—The designa5 tion of a country as a Destination of Possible Diversion 

6 Concern or a Destination of Diversion Concern shall ter7 minate on the date on which the Secretary of Commerce 

8 determines, based on the criteria described in subpara9 graphs (A) through (D) of subsection (a)(1), and certifies 

10 to Congress and the President that the country has ade11 quately strengthened the export control systems of the 

12 country to prevent transshipment, reexportation, and di13 version of items through the country to end-users whose 

14 identities cannot be verified or to entities owned or con15 trolled by the Government of Iran. 

16 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

17 are authorized to be appropriated such sums as may be 

18 necessary to carry out this section. 

19 SEC. 304. REPORT ON EXPANDING DIVERSION CONCERN 

20 SYSTEM TO COUNTRIES OTHER THAN IRAN. 

21 Not later than 180 days after the date of the enact22 ment of this Act, the Director of National Intelligence, in 

23 consultation with the Secretary of Commerce, the Sec24 retary of State, and the Secretary of the Treasury, shall 


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1 submit to the appropriate congressional committees a re2 port that— 

3 (1) identifies any country that the Director de4 termines may be transshipping, reexporting, or di5 verting items subject to the provisions of the Export 

6 Administration Regulations to another country if 

7 such other country— 

8 (A) is seeking to obtain nuclear, biological, 

9 or chemical weapons, defense technologies, com10 ponents for improvised explosive devices, or 

11 other defense items; or 

12 (B) provides support for acts of inter13 national terrorism; and 

14 (2) assesses the feasability and advisability of 

15 expanding the system established under section 303 

16 for designating countries as Destinations of Possible 

17 Diversion Concern and Destinations of Diversion 

18 Concern to include countries identified under para19 graph (1). 

20 TITLE IV—EFFECTIVE DATE; 

21 SUNSET 

22 SEC. 401. EFFECTIVE DATE; SUNSET. 

23 (a) EFFECTIVE DATE.—Except as provided in sec24 tions 202 and 303(b)(2)(A), the provisions of, and amendVerDate Aug 31 2005 23:39 Aug 01, 2008 Jkt 069002 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S3445.PCS S3445

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1 ments made by, this Act shall take effect on the date that 

2 is 120 days after the date of the enactment of this Act. 

3 (b) SUNSET.—The provisions of this Act shall termi4 nate on the date that is 30 days after the date on which 

5 the President certifies to Congress that— 

6 (1) the Government of Iran has ceased pro7 viding support for acts of international terrorism 

8 and no longer satisfies the requirements for designa9 tion as a state sponsor of terrorism under— 

10 (A) section 6(j)(1)(A) of the Export Ad11 ministration Act of 1979 (50 U.S.C. App. 

12 2405(j)(1)(A)) (or any successor thereto); 

13 (B) section 40(d) of the Arms Export Con14 trol Act (22 U.S.C. 2780(d)); or 

15 (C) section 620A(a) of the Foreign Assist16 ance Act of 1961 (22 U.S.C. 2371(a)); and 

17 (2) Iran has ceased the pursuit, acquisition, 

18 and development of nuclear, biological, and chemical 

19 weapons and ballistic missiles and ballistic missile 

20 launch technology. 


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Calendar No. 939 

110TH CONGRESS 

2D SESSION S. 3445 

[Report No. 110

–443] 

A BILL 

To impose sanctions with respect to Iran, to prosensitive items to Iran, and for other purposes. shipment, reexportation, or diversion of certain tify locations of concern with respect to trans- and local governments and other entities, to iden- vide for the divestment of assets in Iran by State 

AUGUST 1, 2008 

Read twice and placed on the calendar 


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