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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 485 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 485

   To strengthen existing legislation sanctioning persons aiding and 
 facilitating nonproliferation activities by the Governments of Iran, 
            North Korea, and Syria, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 13, 2009

 Ms. Ros-Lehtinen introduced the following bill; which was referred to 
the Committee on Foreign Affairs, and in addition to the Committees on 
  Ways and Means, the Judiciary, Oversight and Government Reform, and 
 Financial Services, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
   To strengthen existing legislation sanctioning persons aiding and 
 facilitating nonproliferation activities by the Governments of Iran, 
            North Korea, and Syria, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Security through 
Termination Of Proliferation Act of 2009'' or the ``STOP Act of 2009''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; Table of contents.
TITLE I--CODIFICATION OF SANCTIONS AGAINST IRAN, NORTH KOREA, AND SYRIA

Sec. 101. Codification of sanctions against Iran.
Sec. 102. Codification of sanctions against North Korea.
Sec. 103. Codification of sanctions against Syria.
       TITLE II--AMENDMENTS TO THE IRAN, NORTH KOREA, AND SYRIA 
                          NONPROLIFERATION ACT

Sec. 201. Transshipment of certain goods, services, or technology.
Sec. 202. Restrictions on nuclear cooperation.
Sec. 203. Exclusion of senior officials.
  TITLE III--AMENDMENTS TO THE IRAN SANCTIONS ACT OF 1996 AND RELATED 
                               PROVISIONS

Sec. 301. Exclusion from the United States of senior officials of 
                            foreign persons who have aided 
                            proliferation relating to Iran.
Sec. 302. Denial of tax benefits for taxpayers engaged in business 
                            activity with Iran prohibited by United 
                            States law.
Sec. 303. Income tax of foreign corporations engaged in business 
                            activity with Iran prohibited by United 
                            States law.
Sec. 304. Compensation for Former United States Hostages in Iran Fund.
                         TITLE IV--DEFINITIONS

Sec. 401. Definitions.

TITLE I--CODIFICATION OF SANCTIONS AGAINST IRAN, NORTH KOREA, AND SYRIA

SEC. 101. CODIFICATION OF SANCTIONS AGAINST IRAN.

    United States sanctions, controls, and regulations with respect to 
Iran imposed pursuant to Executive Order No. 12957, sections 1(b) 
through (1)(g) and sections (2) through (6) of Executive Order No. 
12959, and sections 2 and 3 of Executive Order No. 13059 (relating to 
exports and certain other transactions with Iran) as in effect on 
January 1, 2006, shall remain in effect until the President certifies 
to the appropriate congressional committees that the Government of Iran 
has verifiably dismantled its weapons of mass destruction programs.

SEC. 102. CODIFICATION OF SANCTIONS AGAINST NORTH KOREA.

    United States sanctions, controls, and regulations with respect to 
North Korea imposed by reason of a determination of the Secretary of 
State that the Government of North Korea, for purposes of section 6(j) 
of the Export Administration Act of 1979 (as continued in effect 
pursuant to the International Emergency Economic Powers Act), section 
40 of the Arms Export Control Act, section 620A of the Foreign 
Assistance Act of 1961, or other provision of law, is a government that 
has repeatedly provided support for acts of international terrorism, 
shall remain in effect and may not be lifted pursuant to such 
provisions of law until the President certifies to appropriate 
congressional committees that the Government of North Korea has 
verifiably dismantled its weapons of mass destruction programs.

SEC. 103. CODIFICATION OF SANCTIONS AGAINST SYRIA.

    Restrictions against the Government of Syria, and on persons by 
reason of their direction of, or contribution to, activities of the 
Government of Syria, that were imposed pursuant to the International 
Emergency Economic Powers Act, the Syria Accountability and Lebanese 
Sovereignty Act of 2003, the Iran, North Korea, and Syria 
Nonproliferation Act, or any similar provision of law, as in effect on 
the date of the enactment of this Act, including the restrictions 
imposed under Executive Order 12938 (as amended by Executive Order 
13094), Executive Order 13338, Executive Order 13399, Executive Order 
13460, and any similar Executive Order, shall remain in effect and may 
not be lifted pursuant to such provisions of law until the President 
certifies to the appropriate congressional committees that the 
Government of Syria has verifiably dismantled its weapons of mass 
destruction programs.

       TITLE II--AMENDMENTS TO THE IRAN, NORTH KOREA, AND SYRIA 
                          NONPROLIFERATION ACT

SEC. 201. TRANSSHIPMENT OF CERTAIN GOODS, SERVICES, OR TECHNOLOGY.

    The Iran, North Korea, and Syria Nonproliferation Act (Public Law 
106-178; 50 U.S.C. 1701 note) is amended--
            (1) in section 2--
                    (A) in subsection (a), in the matter preceding 
                paragraph (1)--
                            (i) by striking ``or'' after ``Syria''; and
                            (ii) by inserting after ``North Korea'' the 
                        following: ``, on or after January 1, 1999, 
                        permitted, hosted or otherwise facilitated a 
                        transshipment (as such term is defined in 
                        section 5) that may have enabled a foreign 
                        person to transfer (as such term is defined in 
                        section 7) to or acquire from Iran, on or after 
                        January 1, 2005, permitted, hosted or otherwise 
                        facilitated a transshipment that may have 
                        enabled a foreign person to transfer to or 
                        acquire from Syria, or on or after January 1, 
                        2006, permitted, hosted or otherwise 
                        facilitated a transshipment that may have 
                        enabled a person to transfer to or acquire from 
                        North Korea''; and
                    (B) in subsection (e), by inserting ``, or whose 
                transfer via transshipment was permitted, hosted or 
                facilitated,'' after ``transferred''; and
            (2) in section 5--
                    (A) in subsection (a)--
                            (i) in paragraph (1), by inserting ``, or 
                        did not permit, host, or otherwise facilitate 
                        transshipment (as such term is defined in 
                        section 5) that may have enabled a foreign 
                        person to transfer to or acquire from,'' before 
                        ``Iran'';
                            (ii) in paragraph (3), by striking ``or'' 
                        at the end;
                            (iii) in paragraph (4), by striking the 
                        period at the end and inserting ``; or''; and
                            (iv) by adding at the end the following new 
                        paragraph:
            ``(5) in the case of a foreign person who permitted, hosted 
        or otherwise facilitated transshipment that may have enabled a 
        foreign person to transfer to or acquire from, Iran, North 
        Korea, or Syria, as the case may be, the goods, services, or 
        technology the apparent transfer of which caused that person to 
        be identified in a report submitted pursuant to section 2(a), 
        the government with primary jurisdiction over the foreign 
        person has made and continues to make clear, specific efforts 
        to stop and deter the permitting, hosting, or other 
        facilitating of transshipments that may enable such transfers 
        or acquisitions.''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(d) Definitions.--In this section:
            ``(1) Goods, services, or technology.--The term `goods, 
        services, or technology' includes--
                    ``(A) any defense articles or defense services on 
                the United States Munitions List under section 38 of 
                the Arms Export Control Act (22 U.S.C. 2778) for which 
                special export controls are warranted under such Act 
                (22 U.S.C. 2751 et seq.);
                    ``(B) any item identified on the Commerce Control 
                List maintained under part 774 of title 15, Code of 
                Federal Regulations; and
                    ``(C) other sensitive United States goods, 
                including intellectual property and services that would 
                contribute to the abilities of Iran, North Korea, and 
                Syria to further their conventional and unconventional 
                military capabilities.
            ``(2) Transshipment.--In this section, the term 
        `transshipment' means the export from one country to another 
        that passes through a third country, in which cargo is off-
        loaded and there is some change to conveyance.''.

SEC. 202. RESTRICTIONS ON NUCLEAR COOPERATION.

    The Iran, North Korea, and Syria Nonproliferation Act is further 
amended--
            (1) by redesignating section 7 as section 9; and
            (2) by inserting after section 6 the following new section:

``SEC. 7. RESTRICTIONS ON NUCLEAR COOPERATION WITH COUNTRIES AIDING 
              PROLIFERATION BY IRAN, NORTH KOREA, OR SYRIA.

    ``(a) In General.--
            ``(1) Restrictions.--Notwithstanding any other provision of 
        law--
                    ``(A) no agreement for cooperation between the 
                United States and the government of any country that is 
                assisting the nuclear program of Iran, North Korea, or 
                Syria, or transferring advanced conventional weapons or 
                missiles to Iran, North Korea, or Syria may be 
                submitted to the President or to Congress pursuant to 
                section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 
                2153);
                    ``(B) no such agreement may enter into force with 
                such country;
                    ``(C) no license may be issued for export directly 
                or indirectly to such country of any nuclear material, 
                facilities, components, or other goods, services, or 
                technology that would be subject to such agreement; and
                    ``(D) no approval may be given for the transfer or 
                retransfer directly or indirectly to such country of 
                any nuclear material, facilities, components, or other 
                goods, services, or technology that would be subject to 
                such agreement, until the President makes the 
                determination and report under paragraph (2).
            ``(2) Determination and report.--The determination and 
        report referred to in paragraph (1)(D) are a determination and 
        report by the President, submitted to the Committee on Foreign 
        Affairs of the House of Representatives and the Committee on 
        Foreign Relations of the Senate, that--
                    ``(A) Iran, North Korea, or Syria, as the case may, 
                has ceased its efforts to design, develop, or acquire a 
                nuclear explosive device or related materials or 
                technology; or
                    ``(B) the government of the country that is 
                assisting the nuclear programs of Iran, North Korea, or 
                Syria, as the case may be, or transferring advanced 
                conventional weapons or missiles to Iran, North Korea, 
                or Syria, as the case may be--
                            ``(i) has suspended all nuclear assistance 
                        to Iran, North Korea, or Syria, as the case may 
                        be, and all transfers of advanced conventional 
                        weapons and missiles to Iran, North Korea, or 
                        Syria, as the case may be; and
                            ``(ii) is committed to maintaining that 
                        suspension until Iran, North Korea, or Syria, 
                        as the case may be, has implemented measures 
                        that would permit the President to make the 
                        determination described in subparagraph (A).
    ``(b) Rules of Construction.--The restrictions described in 
subsection (a)(1)--
            ``(1) shall apply in addition to all other applicable 
        procedures, requirements, and restrictions described in the 
        Atomic Energy Act of 1954 and other applicable Acts; and
            ``(2) shall not be construed as affecting the validity of 
        an agreement for cooperation between the United States and the 
        government of a country that is in effect on the date of the 
        enactment of this Act.
    ``(c) Definitions.--In this section:
            ``(1) Agreement for cooperation.--The term `agreement for 
        cooperation' has the meaning given that term in section 11 b. 
        of the Atomic Energy Act of 1954 (42 U.S.C. 2014 b.).
            ``(2) Assisting the nuclear program of iran, north korea, 
        or syria.--The term `assisting the nuclear program of Iran, 
        North Korea, or Syria' means the intentional transfer to Iran, 
        North Korea, or Syria by a government, or by a person subject 
        to the jurisdiction of a government with the knowledge and 
        acquiescence of that government, of goods, services, or 
        technology listed on the Nuclear Suppliers Group Guidelines for 
        the Export of Nuclear Material, Equipment and Technology 
        (published by the International Atomic Energy Agency as 
        Information Circular INFCIRC/254/Rev. 3/Part 1, and subsequent 
        revisions), or the Nuclear Suppliers Group Guidelines for 
        Transfers of Nuclear-Related Dual-Use Equipment, Material, and 
        Related Technology (published by the International Atomic 
        Energy Agency as Information Circular INFCIR/254/Rev. 3/Part 2, 
        and subsequent revisions).
            ``(3) Country that is assisting the nuclear programs of 
        iran, north korea, or syria or transferring advanced 
        conventional weapons or missiles to iran, north korea, or 
        syria.--The term `country that is assisting the nuclear program 
        of Iran, North Korea, or Syria or transferring advanced 
        conventional weapons or missiles to Iran, North Korea, or 
        Syria' means--
                    ``(A) the Russian Federation; and
                    ``(B) any other country determined by the President 
                to be assisting the nuclear program of Iran, North 
                Korea, or Syria or transferring advanced conventional 
                weapons or missiles to Iran, North Korea, or Syria.
            ``(4) Transfer.--The term `transfer' means the conveyance 
        of technological or intellectual property, or the conversion of 
        intellectual or technological advances into marketable goods, 
        services, or articles of value, developed and generated in one 
        place, to another through illegal or illicit means to a 
        country, the government of which the Secretary of State has 
        determined, for purposes of section 6(j)(1)(A) of the Export 
        Administration Act of 1979 (as in effect pursuant to the 
        International Emergency Economic Powers Act; 50 U.S.C. 1701 et 
        seq.), section 40(d) of the Arms Export Control Act (22 U.S.C. 
        2780(d)), and section 620A of the Foreign Assistance Act of 
        1961 (22 U.S.C. 2371), is a government that has repeatedly 
        provided support for acts of international terrorism.
            ``(5) Transferring advanced conventional weapons or 
        missiles to iran, north korea, or syria.--The term 
        `transferring advanced conventional weapons or missiles to 
        Iran, North Korea, or Syria' means the intentional transfer to 
        Iran, North Korea, or Syria by a government, or by a person 
        subject to the jurisdiction of a government with the knowledge 
        and acquiescence of that government, of goods, services, or 
        technology listed on--
                    ``(A) the Wassenaar Arrangement list of Dual Use 
                Goods and Technologies and Munitions list of July 12, 
                1996, and subsequent revisions; or
                    ``(B) the Missile Technology Control Regime 
                Equipment and Technology Annex of June 11, 1996, and 
                subsequent revisions.
    ``(d) Effective Date.--The amendment made by subsection (a) shall 
apply to expenses paid or incurred on or after January 1, 2009.''.

SEC. 203. EXCLUSION OF SENIOR OFFICIALS.

    The Iran, North Korea, and Syria Nonproliferation Act is further 
amended by inserting after section 7, as added by section 202 of this 
Act, the following new section:

``SEC. 8. EXCLUSION FROM THE UNITED STATES OF SENIOR OFFICIALS OF 
              FOREIGN PERSONS WHO HAVE AIDED PROLIFERATION RELATING TO 
              IRAN, NORTH KOREA, OR SYRIA.

    ``(a) Grounds for Exclusion.--Except as provided in subsection (b), 
the Secretary of State shall deny a visa to, and the Secretary of 
Homeland Security shall exclude from the United States, any alien whom 
the Secretary of State determines is an alien who, on or after the date 
of the enactment of this Act is a--
            ``(1) corporate officer, principal, or shareholder with a 
        controlling interest of a foreign person identified in a report 
        submitted pursuant to section 2(a);
            ``(2) corporate officer, principal, or shareholder with a 
        controlling interest of a successor entity to, or a parent or 
        subsidiary of, a foreign person identified in such a report;
            ``(3) corporate officer, principal, or shareholder with a 
        controlling interest of an affiliate of a foreign person 
        identified in such a report, if such affiliate engaged in the 
        activities referred to in such report, and if such affiliate is 
        controlled in fact by the foreign person identified in such 
        report;
            ``(4) spouse, minor child, or agent of a person excludable 
        under paragraph (1), (2), or (3);
            ``(5) senior official of a foreign government identified in 
        such a report;
            ``(6) senior official of a foreign government with primary 
        jurisdiction over a foreign person identified in such a report; 
        or
            ``(7) spouse, minor child, or agent of a person excludable 
        under paragraph (5) or (6).
    ``(b) Exception.--The President may waive the sanctions described 
in subsection (a) with respect to a person specified in paragraph (5), 
(6), or (7) if the President determines and certifies in writing to the 
Committee on Foreign Affairs and the Committee on Appropriations of the 
House of Representatives and the Committee on Foreign Relations and the 
Committee on Appropriations of the Senate, on a case by case basis, 
that the foreign government with primary jurisdiction over such person 
has made and continues to make clear, specific efforts to stop and 
deter the transfer (as such term is defined in section 7) or retransfer 
of, or the permitting, hosting, or other facilitating of transshipments 
(as such term is defined in section 5) that may enable the transfer or 
retransfer of, goods or technology that contribute to the efforts by 
Iran, North Korea, or Syria, as the case may be, to acquire or develop 
advanced conventional weapons, or to acquire, develop, produce, or 
stockpile biological, chemical, radiological, or nuclear weapons or 
long-range ballistic missiles.
    ``(c) Advanced Conventional Weapons Defined.--In this section, the 
term `advanced conventional weapons' means goods, services, or 
technology listed on--
            ``(1) the Wassenaar Arrangement list of Dual Use Goods and 
        Technologies and Munitions list of July 12, 1996, and 
        subsequent revisions; or
            ``(2) the Missile Technology Control Regime Equipment and 
        Technology Annex of June 11, 1996, and subsequent revisions.''.

  TITLE III--AMENDMENTS TO THE IRAN SANCTIONS ACT OF 1996 AND RELATED 
                               PROVISIONS

SEC. 301. EXCLUSION FROM THE UNITED STATES OF SENIOR OFFICIALS OF 
              FOREIGN PERSONS WHO HAVE AIDED PROLIFERATION RELATING TO 
              IRAN.

    The Iran Sanctions Act of 1996 (Public Law 104-172; 50 U.S.C. 1701 
note) is amended--
            (1) in section 5(b), in the matter preceding paragraph (1), 
        by inserting ``, or permitted, hosted, or otherwise facilitated 
        transshipment that may have enabled a person to export, 
        transfer, or otherwise provide to Iran,'' after ``or otherwise 
        provided to Iran'';
            (2) by redesignating sections (7) through (14) as sections 
        (8) through (15), respectively; and
            (3) by inserting after section (6) the following new 
        section:

``SEC. 7. EXCLUSION FROM THE UNITED STATES OF SENIOR OFFICIALS OF 
              FOREIGN PERSONS WHO HAVE AIDED PROLIFERATION RELATING TO 
              IRAN.

    ``(a) Grounds for Exclusion.--Except as provided in subsection (b), 
the Secretary of State shall deny a visa to, and the Secretary of State 
shall exclude from the United States, any alien whom the Secretary of 
State determines is an alien who, on or after the date of the enactment 
of this Act is a--
            ``(1) corporate officer, principal, or shareholder with a 
        controlling interest of a person against whom sanctions have 
        been imposed pursuant to section 5;
            ``(2) corporate officer, principal, or shareholder with a 
        controlling interest of a successor entity to or a parent or 
        subsidiary of such a person;
            ``(3) corporate officer, principal, or shareholder with a 
        controlling interest of an affiliate of such a sanctioned 
        person, if such affiliate engaged in a sanctionable activity 
        described in subsection (a) or (b) of section 5, and if such 
        affiliate is controlled in fact by such a person;
            ``(4) spouse, minor child, or agent of a person excludable 
        under paragraph (1), (2), or (3);
            ``(5) senior official of a foreign government that is 
        identified as a person against whom sanctions have been imposed 
        pursuant to section 5;
            ``(6) senior official of a foreign government with primary 
        jurisdiction over such a person; or
            ``(7) spouse, minor child, or agent of a person excludable 
        under paragraph (5) or (6).
    ``(b) Exception.--The President may waive the sanctions described 
in subsection (a) with respect to a person specified in paragraph (5), 
(6), or (7) if the President determines and certifies in writing to the 
appropriate congressional committees, on a case by case basis, that the 
foreign government with primary jurisdiction over such a person against 
whom sanctions have been imposed pursuant to section 5 has made and 
continues to make clear, specific efforts to stop and deter a 
sanctionable activity described in subsection (a) or (b) of section 
5.''; and
            (4) in section 15, as redesignated pursuant to paragraph 
        (2) of this section--
                    (A) by redesignating paragraphs (15) and (16) as 
                paragraphs (17) and (18), respectively; and
                    (B) by inserting after paragraph (14) the following 
                new paragraphs:
            ``(15) Transfer.--The term `transfer' means the conveyance 
        of technological or intellectual property, or the conversion of 
        intellectual or technological advances into marketable goods, 
        services, or articles of value, developed and generated in one 
        place, to another through illegal or illicit means to a 
        country, the government of which the Secretary of State has 
        determined, for purposes of section 6(j)(1)(A) of the Export 
        Administration Act of 1979 (as in effect pursuant to the 
        International Emergency Economic Powers Act; 50 U.S.C. 1701 et 
        seq.), section 40(d) of the Arms Export Control Act (22 U.S.C. 
        2780(d)), and section 620A of the Foreign Assistance Act of 
        1961 (22 U.S.C. 2371), is a government that has repeatedly 
        provided support for acts of international terrorism.
            ``(16) Transshipment.--The term `transshipment' means the 
        export from one country to another that passes through a third 
        country, in which cargo is off-loaded and there is some change 
        to conveyance.''.

SEC. 302. DENIAL OF TAX BENEFITS FOR TAXPAYERS ENGAGED IN BUSINESS 
              ACTIVITY WITH IRAN PROHIBITED BY UNITED STATES LAW.

    (a) In General.--Section 901 of the Internal Revenue Code of 1986 
(relating to taxes of foreign countries and of possessions of United 
States) is amended by redesignating subsection (m) as subsection (n) 
and by inserting after subsection (l) the following new subsection:
    ``(m) Taxpayers Engaged in Business Activity With Iran Prohibited 
by United States Law.--
            ``(1) In general.--Notwithstanding any other provision of 
        this part, in the case of a taxpayer which is a member of an 
        expanded affiliated group any member of which, on any day 
        during the taxable year, engaged in business activity with Iran 
        which is prohibited by United States law, no credit shall be 
        allowed under subsection (a) to the taxpayer for any income, 
        war profits, or excess profits taxes paid or accrued (or deemed 
        paid under section 902 or 960) to any country if such taxes are 
        with respect to income attributable to a period any part of 
        which occurs during such taxable year.
            ``(2) Business activity.--For purposes of paragraph (1)--
                    ``(A) In general.--The term `business activity' 
                means any of the following:
                            ``(i) An entity described in subparagraph 
                        (D) that--
                                    ``(I) has in effect a contract that 
                                includes the responsibility for the 
                                development of petroleum resources, 
                                petroleum refining capacity, or 
                                liquefied natural gas located in Iran 
                                or (as the case may be), or
                                    ``(II) has in effect a contract 
                                providing for the general supervision 
                                and guarantee of another person's 
                                performance of a contract described in 
                                subclause (I).
                            ``(ii) The purchase of a share of 
                        ownership, including an equity interest, in the 
                        development described in clause (i).
                            ``(iii) Having in effect a contract 
                        providing for the participation in royalties, 
                        earnings, or profits in the development 
                        described in clause (i), without regard to the 
                        form of the participation.
                    ``(B) Goods, services, and technology.--The term 
                `business activity' includes the entry into, 
                performance, or financing of a contract to sell or 
                purchase goods, services, or technology.
                    ``(C) Special rule.--For purposes of this 
                paragraph, an amendment or other modification that is 
                made, on or the date of the enactment of this 
                subsection to an agreement or contract shall be treated 
                as the entry of an agreement or contract.
                    ``(D) Entities described.--For purposes of 
                subparagraph (A), an entity described in this 
                subparagraph is--
                            ``(i) a natural person,
                            ``(ii) a corporation, business association, 
                        partnership, society, trust, financial 
                        institution, insurer, underwriter, guarantor, 
                        and any other business organization,
                            ``(iii) any foreign subsidiary of any 
                        entity described in clause (ii),
                            ``(iv) any governmental entity operating as 
                        a business enterprise, such as an export credit 
                        agency, and
                            ``(v) any successor to any entity described 
                        in clause (ii), (iii), or (iv).
            ``(3) Taxes allowed as a deduction, etc.--Sections 275 and 
        78 shall not apply to any tax which is not allowable as a 
        credit under subsection (a) by reason of this subsection.
            ``(4) Expanded affiliated group.--For purposes of paragraph 
        (1), the term `expanded affiliated group' means an affiliated 
        group (as defined in subsection (a) of section 1504 (without 
        regard to subsections (b)(2), (b)(4), and (c) thereof)); except 
        that section 1504(a) shall be applied by substituting `more 
        than 50 percent' for `at least 80 percent' each place it 
        appears.
            ``(5) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary or appropriate to carry out the 
        purposes of this subsection, including regulations which impose 
        appropriate reporting requirements.''.
    (b) Income Included as Subpart F Income.--Subsection (a) of section 
952 is amended by striking ``and'' at the end of paragraph (4), by 
striking the period at the end of paragraph (5) and inserting ``, 
and'', and by inserting after paragraph (5) the following new 
paragraph:
            ``(6) all income of such corporation derived from all 
        foreign countries during any period during which section 901(m) 
        applies to such corporation.''.
    (c) Reporting.--
            (1) In general.--Part II of subchapter B of chapter 68 of 
        the Internal Revenue Code of 1986 (relating to failure to 
        comply with certain information reporting requirements) is 
        amended by adding at the end the following new section:

``SEC. 6726. FAILURE TO REPORT INFORMATION UNDER SECTION 901(M).

    ``(a) In General.--In the case of each failure described in 
subsection (c) by any person, such person shall pay a penalty of 
$100,000 for each day in the noncompliance period with respect to which 
the failure relates.
    ``(b) Noncompliance Period.--For purposes of this section, the term 
`noncompliance period' means, with respect to any failure, the period--
            ``(1) beginning on the date such failure first occurs; and
            ``(2) ending on the date such failure is corrected.
    ``(c) Failures Subject to Penalty.--For purposes of subsection (a), 
the failure described in this subsection is a failure to comply with 
any requirement contained in the regulations prescribed under section 
901(m).''.
            (2) Clerical amendment.--The table of sections for part II 
        of subchapter B of chapter 68 of such Code is amended by adding 
        at the end the following new item:

``Sec. 6726.  Failure to report information under section 901(m).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 303. INCOME TAX OF FOREIGN CORPORATIONS ENGAGED IN BUSINESS 
              ACTIVITY WITH IRAN PROHIBITED BY UNITED STATES LAW.

    (a) In General.--Subpart B of part II of subchapter N of chapter 1 
of the Internal Revenue Code of 1986 (relating to foreign corporations) 
is amended by inserting after section 884 the following new section:

``SEC. 884A. INCOME TAX OF FOREIGN CORPORATIONS ENGAGED IN BUSINESS 
              ACTIVITY WITH IRAN PROHIBITED BY UNITED STATES LAW.

    ``In the case of a foreign corporation which is engaged in business 
activity with Iran prohibited by United States law--
            ``(1) in respect of tax on income--
                    ``(A) section 881(a) shall be applied by 
                substituting `45 percent' for `30 percent';
                    ``(B) subsections (b), (c), (d), and (e) of section 
                881 shall not apply;
                    ``(C) tax imposed pursuant to section 882 shall be 
                imposed at a rate of 45 percent;
                    ``(D) section 883 shall not apply; and
                    ``(E) section 884(a) shall be applied by 
                substituting `45 percent' for `30 percent'; and
            ``(2) in respect of withholding--
                    ``(A) section 1442(a) shall be applied by 
                substituting `45 percent' for `30 percent'; and
                    ``(B) section 1442(c) shall not apply.''.
    (b) Clerical Amendment.--The table of sections for subpart B of 
part II of subchapter N of chapter 1 of such Code is amended by 
inserting after the item relating to section 884 the following new 
item:

``Sec. 884A. Income tax of foreign corporations engaged in business 
                            activity with Iran prohibited by United 
                            States law.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 304. COMPENSATION FOR FORMER UNITED STATES HOSTAGES IN IRAN FUND.

    (a) Creation of Fund.--There is established a fund to be known as 
the ``Compensation for Former United States Hostages in Iran Fund'' (in 
this section referred to as the ``Fund''), consisting of such amounts 
as may be appropriated to the Fund as provided by this section.
    (b) Transfers to Fund.--There are hereby appropriated to the Fund 
amounts equivalent to the taxes received in the Treasury by reason of 
the amendments made by sections 302 and 303 of this Act.
    (c) Expenditures From Fund.--Amounts in the Fund shall be 
available, as provided by appropriation Acts, for making expenditures 
to pay claims to the United States citizens held hostage in Iran, and 
to members of the families of such United States citizens, who are 
identified as plaintiffs or class members in Case Number 1:00CV03110 
(EGS) or Case Number 1:00CV00716 (HHK) in the United States District 
Court for the District of Columbia.

                         TITLE IV--DEFINITIONS

SEC. 401. DEFINITIONS.

    In this Act:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Foreign Affairs and the 
                Committee on Appropriations of the House of 
                Representatives; and
                    (B) the Committee on Foreign Relations and the 
                Committee on Appropriations of the Senate.
            (2) Government of syria.--The term ``Government of Syria'' 
        includes any agency or instrumentality of the Government of 
        Syria, including any entity that is controlled by the 
        Government of Syria.
            (3) Government of iran.--The term ``Government of Iran'' 
        includes any agency or instrumentality of the Government of 
        Iran, including any entity that is controlled by the Government 
        of Iran.
            (4) Government of north korea.--The term ``Government of 
        North Korea'' includes any agency or instrumentality of the 
        Government of North Korea, including any entity that is 
        controlled by the Government of North Korea.
            (5) Weapons of mass destruction programs.--The term 
        ``weapons of mass destruction programs'' means--
                    (A) and chemical weapons, biological weapons, 
                radiological or nuclear procurement and development 
                programs and efforts;
                    (B) ballistic missile procurement and development 
                programs and efforts; and
                    (C) other actions in violation of the Waasenaar 
                Arrangement on Export Controls for Conventional Arms 
                and Dual-Use Goods and Technologies, the Missile 
                Technology Control Regime, the Australia Group, the 
                Nuclear Suppliers' Group, the Zangger Committee, and 
                any other international agreement or arrangement to 
                which the United States is a party that restricts the 
                export of chemical, biological, nuclear, and other 
                weapons and their delivery systems, and effectively 
                restricts the export of dual use components of such 
                weapons and their delivery systems.
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