I 

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. 

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; TABLE OF CONTENTS. 

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

5 ‘‘Security through Termination Of Proliferation Act of 

6 2009’’ or the ‘‘STOP Act of 2009’’. 


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

2 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. 

3 TITLE I—CODIFICATION OF 

4 SANCTIONS AGAINST IRAN, 

5 NORTH KOREA, AND SYRIA 

6 SEC. 101. CODIFICATION OF SANCTIONS AGAINST IRAN. 

7 United States sanctions, controls, and regulations 

8 with respect to Iran imposed pursuant to Executive Order 

9 No. 12957, sections 1(b) through (1)(g) and sections (2) 

10 through (6) of Executive Order No. 12959, and sections 

11 2 and 3 of Executive Order No. 13059 (relating to exports 

12 and certain other transactions with Iran) as in effect on 


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1 January 1, 2006, shall remain in effect until the President 

2 certifies to the appropriate congressional committees that 

3 the Government of Iran has verifiably dismantled its 

4 weapons of mass destruction programs. 

5 SEC. 102. CODIFICATION OF SANCTIONS AGAINST NORTH 

6 KOREA. 

7 United States sanctions, controls, and regulations 

8 with respect to North Korea imposed by reason of a deter9 mination of the Secretary of State that the Government 

10 of North Korea, for purposes of section 6(j) of the Export 

11 Administration Act of 1979 (as continued in effect pursu12 ant to the International Emergency Economic Powers 

13 Act), section 40 of the Arms Export Control Act, section 

14 620A of the Foreign Assistance Act of 1961, or other pro15 vision of law, is a government that has repeatedly provided 

16 support for acts of international terrorism, shall remain 

17 in effect and may not be lifted pursuant to such provisions 

18 of law until the President certifies to appropriate congres19 sional committees that the Government of North Korea 

20 has verifiably dismantled its weapons of mass destruction 

21 programs. 

22 SEC. 103. CODIFICATION OF SANCTIONS AGAINST SYRIA. 

23 Restrictions against the Government of Syria, and on 

24 persons by reason of their direction of, or contribution to, 

25 activities of the Government of Syria, that were imposed 


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1 pursuant to the International Emergency Economic Pow2 ers Act, the Syria Accountability and Lebanese Sov3 ereignty Act of 2003, the Iran, North Korea, and Syria 

4 Nonproliferation Act, or any similar provision of law, as 

5 in effect on the date of the enactment of this Act, includ6 ing the restrictions imposed under Executive Order 12938 

7 (as amended by Executive Order 13094), Executive Order 

8 13338, Executive Order 13399, Executive Order 13460, 

9 and any similar Executive Order, shall remain in effect 

10 and may not be lifted pursuant to such provisions of law 

11 until the President certifies to the appropriate congres12 sional committees that the Government of Syria has 

13 verifiably dismantled its weapons of mass destruction pro14 grams. 

15 TITLE II—AMENDMENTS TO THE 

16 IRAN, NORTH KOREA, AND 

17 SYRIA NONPROLIFERATION 

18 ACT 

19 SEC. 201. TRANSSHIPMENT OF CERTAIN GOODS, SERVICES, 

20 OR TECHNOLOGY. 

21 The Iran, North Korea, and Syria Nonproliferation 

22 Act (Public Law 106–178; 50 U.S.C. 1701 note) is 

23 amended— 

24 (1) in section 2— 


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1 (A) in subsection (a), in the matter pre2 ceding paragraph (1)— 

3 (i) by striking ‘‘or’’ after ‘‘Syria’’; and 

4 (ii) by inserting after ‘‘North Korea’’ 

5 the following: ‘‘, on or after January 1, 

6 1999, permitted, hosted or otherwise facili7 tated a transshipment (as such term is de8 fined in section 5) that may have enabled 

9 a foreign person to transfer (as such term 

10 is defined in section 7) to or acquire from 

11 Iran, on or after January 1, 2005, per12 mitted, hosted or otherwise facilitated a 

13 transshipment that may have enabled a 

14 foreign person to transfer to or acquire 

15 from Syria, or on or after January 1, 

16 2006, permitted, hosted or otherwise facili17 tated a transshipment that may have en18 abled a person to transfer to or acquire 

19 from North Korea’’; and 

20 (B) in subsection (e), by inserting ‘‘, or 

21 whose transfer via transshipment was per22 mitted, hosted or facilitated,’’ after ‘‘trans23 ferred’’; and 

24 (2) in section 5— 

25 (A) in subsection (a)— 


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1 (i) in paragraph (1), by inserting ‘‘, or 

2 did not permit, host, or otherwise facilitate 

3 transshipment (as such term is defined in 

4 section 5) that may have enabled a foreign 

5 person to transfer to or acquire from,’’ be6 fore ‘‘Iran’’; 

7 (ii) in paragraph (3), by striking ‘‘or’’ 

8 at the end; 

9 (iii) in paragraph (4), by striking the 

10 period at the end and inserting ‘‘; or’’; and 

11 (iv) by adding at the end the following 

12 new paragraph: 

13 ‘‘(5) in the case of a foreign person who per14 mitted, hosted or otherwise facilitated transshipment 

15 that may have enabled a foreign person to transfer 

16 to or acquire from, Iran, North Korea, or Syria, as 

17 the case may be, the goods, services, or technology 

18 the apparent transfer of which caused that person to 

19 be identified in a report submitted pursuant to sec20 tion 2(a), the government with primary jurisdiction 

21 over the foreign person has made and continues to 

22 make clear, specific efforts to stop and deter the 

23 permitting, hosting, or other facilitating of trans24 shipments that may enable such transfers or acquisi25 tions.’’; and 


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1 (B) by adding at the end the following new 

2 subsection: 

3 ‘‘(d) DEFINITIONS.—In this section: 

4 ‘‘(1) GOODS, SERVICES, OR TECHNOLOGY.—The 

5 term ‘goods, services, or technology’ includes— 

6 ‘‘(A) any defense articles or defense serv7 ices on the United States Munitions List under 

8 section 38 of the Arms Export Control Act (22 

9 U.S.C. 2778) for which special export controls 

10 are warranted under such Act (22 U.S.C. 2751 

11 et seq.); 

12 ‘‘(B) any item identified on the Commerce 

13 Control List maintained under part 774 of title 

14 15, Code of Federal Regulations; and 

15 ‘‘(C) other sensitive United States goods, 

16 including intellectual property and services that 

17 would contribute to the abilities of Iran, North 

18 Korea, and Syria to further their conventional 

19 and unconventional military capabilities. 

20 ‘‘(2) TRANSSHIPMENT.—In this section, the 

21 term ‘transshipment’ means the export from one 

22 country to another that passes through a third coun23 try, in which cargo is off-loaded and there is some 

24 change to conveyance.’’. 


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1 SEC. 202. RESTRICTIONS ON NUCLEAR COOPERATION. 

2 The Iran, North Korea, and Syria Nonproliferation 

3 Act is further amended— 

4 (1) by redesignating section 7 as section 9; and 

5 (2) by inserting after section 6 the following 

6 new section: 

7 ‘‘SEC. 7. RESTRICTIONS ON NUCLEAR COOPERATION WITH 

8 COUNTRIES AIDING PROLIFERATION BY 

9 IRAN, NORTH KOREA, OR SYRIA. 

10 ‘‘(a) IN GENERAL.— 

11 ‘‘(1) RESTRICTIONS.—Notwithstanding any 

12 other provision of law— 

13 ‘‘(A) no agreement for cooperation between 

14 the United States and the government of any 

15 country that is assisting the nuclear program of 

16 Iran, North Korea, or Syria, or transferring ad17 vanced conventional weapons or missiles to 

18 Iran, North Korea, or Syria may be submitted 

19 to the President or to Congress pursuant to 

20 section 123 of the Atomic Energy Act of 1954 

21 (42 U.S.C. 2153); 

22 ‘‘(B) no such agreement may enter into 

23 force with such country; 

24 ‘‘(C) no license may be issued for export 

25 directly or indirectly to such country of any nu26 clear material, facilities, components, or other 


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1 goods, services, or technology that would be 

2 subject to such agreement; and 

3 ‘‘(D) no approval may be given for the 

4 transfer or retransfer directly or indirectly to 

5 such country of any nuclear material, facilities, 

6 components, or other goods, services, or tech7 nology that would be subject to such agreement, 

8 until the President makes the determination 

9 and report under paragraph (2). 

10 ‘‘(2) DETERMINATION AND REPORT.—The de11 termination and report referred to in paragraph 

12 (1)(D) are a determination and report by the Presi13 dent, submitted to the Committee on Foreign Affairs 

14 of the House of Representatives and the Committee 

15 on Foreign Relations of the Senate, that— 

16 ‘‘(A) Iran, North Korea, or Syria, as the 

17 case may, has ceased its efforts to design, de18 velop, or acquire a nuclear explosive device or 

19 related materials or technology; or 

20 ‘‘(B) the government of the country that is 

21 assisting the nuclear programs of Iran, North 

22 Korea, or Syria, as the case may be, or trans23 ferring advanced conventional weapons or mis24 siles to Iran, North Korea, or Syria, as the case 

25 may be— 


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1 ‘‘(i) has suspended all nuclear assist2 ance to Iran, North Korea, or Syria, as the 

3 case may be, and all transfers of advanced 

4 conventional weapons and missiles to Iran, 

5 North Korea, or Syria, as the case may be; 

6 and 

7 ‘‘(ii) is committed to maintaining that 

8 suspension until Iran, North Korea, or 

9 Syria, as the case may be, has imple10 mented measures that would permit the 

11 President to make the determination de12 scribed in subparagraph (A). 

13 ‘‘(b) RULES OF CONSTRUCTION.—The restrictions 

14 described in subsection (a)(1)— 

15 ‘‘(1) shall apply in addition to all other applica16 ble procedures, requirements, and restrictions de17 scribed in the Atomic Energy Act of 1954 and other 

18 applicable Acts; and 

19 ‘‘(2) shall not be construed as affecting the va20 lidity of an agreement for cooperation between the 

21 United States and the government of a country that 

22 is in effect on the date of the enactment of this Act. 

23 ‘‘(c) DEFINITIONS.—In this section: 

24 ‘‘(1) AGREEMENT FOR COOPERATION.—The 

25 term ‘agreement for cooperation’ has the meaning 


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1 given that term in section 11 b. of the Atomic En2 ergy Act of 1954 (42 U.S.C. 2014 b.). 

3 ‘‘(2) ASSISTING THE NUCLEAR PROGRAM OF

4 IRAN, NORTH KOREA, OR SYRIA.—The term ‘assist5 ing the nuclear program of Iran, North Korea, or 

6 Syria’ means the intentional transfer to Iran, North 

7 Korea, or Syria by a government, or by a person 

8 subject to the jurisdiction of a government with the 

9 knowledge and acquiescence of that government, of 

10 goods, services, or technology listed on the Nuclear 

11 Suppliers Group Guidelines for the Export of Nu12 clear Material, Equipment and Technology (pub13 lished by the International Atomic Energy Agency as 

14 Information Circular INFCIRC/254/Rev. 3/Part 1, 

15 and subsequent revisions), or the Nuclear Suppliers 

16 Group Guidelines for Transfers of Nuclear-Related 

17 Dual-Use Equipment, Material, and Related Tech18 nology (published by the International Atomic En19 ergy Agency as Information Circular INFCIR/254/ 

20 Rev. 3/Part 2, and subsequent revisions). 

21 ‘‘(3) COUNTRY THAT IS ASSISTING THE NU22 CLEAR PROGRAMS OF IRAN, NORTH KOREA, OR

23 SYRIA OR TRANSFERRING ADVANCED CONVENTIONAL

24 WEAPONS OR MISSILES TO IRAN, NORTH KOREA, OR

25 SYRIA.—The term ‘country that is assisting the nuVerDate Nov 24 2008 21:50 Jan 29, 2009 Jkt 079200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H485.IH H485

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1 clear program of Iran, North Korea, or Syria or 

2 transferring advanced conventional weapons or mis3 siles to Iran, North Korea, or Syria’ means— 

4 ‘‘(A) the Russian Federation; and 

5 ‘‘(B) any other country determined by the 

6 President to be assisting the nuclear program 

7 of Iran, North Korea, or Syria or transferring 

8 advanced conventional weapons or missiles to 

9 Iran, North Korea, or Syria. 

10 ‘‘(4) TRANSFER.—The term ‘transfer’ means 

11 the conveyance of technological or intellectual prop12 erty, or the conversion of intellectual or technological 

13 advances into marketable goods, services, or articles 

14 of value, developed and generated in one place, to 

15 another through illegal or illicit means to a country, 

16 the government of which the Secretary of State has 

17 determined, for purposes of section 6(j)(1)(A) of the 

18 Export Administration Act of 1979 (as in effect pur19 suant to the International Emergency Economic 

20 Powers Act; 50 U.S.C. 1701 et seq.), section 40(d) 

21 of the Arms Export Control Act (22 U.S.C. 

22 2780(d)), and section 620A of the Foreign Assist23 ance Act of 1961 (22 U.S.C. 2371), is a government 

24 that has repeatedly provided support for acts of 

25 international terrorism. 


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1 ‘‘(5) TRANSFERRING ADVANCED CONVEN2 TIONAL WEAPONS OR MISSILES TO IRAN, NORTH

3 KOREA, OR SYRIA.—The term ‘transferring advanced 

4 conventional weapons or missiles to Iran, North 

5 Korea, or Syria’ means the intentional transfer to 

6 Iran, North Korea, or Syria by a government, or by 

7 a person subject to the jurisdiction of a government 

8 with the knowledge and acquiescence of that govern9 ment, of goods, services, or technology listed on— 

10 ‘‘(A) the Wassenaar Arrangement list of 

11 Dual Use Goods and Technologies and Muni12 tions list of July 12, 1996, and subsequent revi13 sions; or 

14 ‘‘(B) the Missile Technology Control Re15 gime Equipment and Technology Annex of 

16 June 11, 1996, and subsequent revisions. 

17 ‘‘(d) EFFECTIVE DATE.—The amendment made by 

18 subsection (a) shall apply to expenses paid or incurred on 

19 or after January 1, 2009.’’. 

20 SEC. 203. EXCLUSION OF SENIOR OFFICIALS. 

21 The Iran, North Korea, and Syria Nonproliferation 

22 Act is further amended by inserting after section 7, as 

23 added by section 202 of this Act, the following new sec24 tion: 


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1 ‘‘SEC. 8. EXCLUSION FROM THE UNITED STATES OF SENIOR 

2 OFFICIALS OF FOREIGN PERSONS WHO HAVE 

3 AIDED PROLIFERATION RELATING TO IRAN, 

4 NORTH KOREA, OR SYRIA. 

5 ‘‘(a) GROUNDS FOR EXCLUSION.—Except as pro6 vided in subsection (b), the Secretary of State shall deny 

7 a visa to, and the Secretary of Homeland Security shall 

8 exclude from the United States, any alien whom the Sec9 retary of State determines is an alien who, on or after 

10 the date of the enactment of this Act is a— 

11 ‘‘(1) corporate officer, principal, or shareholder 

12 with a controlling interest of a foreign person identi13 fied in a report submitted pursuant to section 2(a); 

14 ‘‘(2) corporate officer, principal, or shareholder 

15 with a controlling interest of a successor entity to, 

16 or a parent or subsidiary of, a foreign person identi17 fied in such a report; 

18 ‘‘(3) corporate officer, principal, or shareholder 

19 with a controlling interest of an affiliate of a foreign 

20 person identified in such a report, if such affiliate 

21 engaged in the activities referred to in such report, 

22 and if such affiliate is controlled in fact by the for23 eign person identified in such report; 

24 ‘‘(4) spouse, minor child, or agent of a person 

25 excludable under paragraph (1), (2), or (3); 


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1 ‘‘(5) senior official of a foreign government 

2 identified in such a report; 

3 ‘‘(6) senior official of a foreign government with 

4 primary jurisdiction over a foreign person identified 

5 in such a report; or 

6 ‘‘(7) spouse, minor child, or agent of a person 

7 excludable under paragraph (5) or (6). 

8 ‘‘(b) EXCEPTION.—The President may waive the 

9 sanctions described in subsection (a) with respect to a per10 son specified in paragraph (5), (6), or (7) if the President 

11 determines and certifies in writing to the Committee on 

12 Foreign Affairs and the Committee on Appropriations of 

13 the House of Representatives and the Committee on For14 eign Relations and the Committee on Appropriations of 

15 the Senate, on a case by case basis, that the foreign gov16 ernment with primary jurisdiction over such person has 

17 made and continues to make clear, specific efforts to stop 

18 and deter the transfer (as such term is defined in section 

19 7) or retransfer of, or the permitting, hosting, or other 

20 facilitating of transshipments (as such term is defined in 

21 section 5) that may enable the transfer or retransfer of, 

22 goods or technology that contribute to the efforts by Iran, 

23 North Korea, or Syria, as the case may be, to acquire or 

24 develop advanced conventional weapons, or to acquire, deVerDate Nov 24 2008 21:50 Jan 29, 2009 Jkt 079200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\H485.IH H485

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1 velop, produce, or stockpile biological, chemical, radio2 logical, or nuclear weapons or long-range ballistic missiles. 

3 ‘‘(c) ADVANCED CONVENTIONAL WEAPONS DE4 FINED.—In this section, the term ‘advanced conventional 

5 weapons’ means goods, services, or technology listed on— 

6 ‘‘(1) the Wassenaar Arrangement list of Dual 

7 Use Goods and Technologies and Munitions list of 

8 July 12, 1996, and subsequent revisions; or 

9 ‘‘(2) the Missile Technology Control Regime 

10 Equipment and Technology Annex of June 11, 

11 1996, and subsequent revisions.’’. 

12 TITLE III—AMENDMENTS TO 

13 THE IRAN SANCTIONS ACT OF 

14 1996 AND RELATED PROVI15 SIONS 

16 SEC. 301. EXCLUSION FROM THE UNITED STATES OF SEN17 IOR OFFICIALS OF FOREIGN PERSONS WHO 

18 HAVE AIDED PROLIFERATION RELATING TO 

19 IRAN. 

20 The Iran Sanctions Act of 1996 (Public Law 104– 

21 172; 50 U.S.C. 1701 note) is amended— 

22 (1) in section 5(b), in the matter preceding 

23 paragraph (1), by inserting ‘‘, or permitted, hosted, 

24 or otherwise facilitated transshipment that may have 

25 enabled a person to export, transfer, or otherwise 


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1 provide to Iran,’’ after ‘‘or otherwise provided to 

2 Iran’’; 

3 (2) by redesignating sections (7) through (14) 

4 as sections (8) through (15), respectively; and 

5 (3) by inserting after section (6) the following 

6 new section: 

7 ‘‘SEC. 7. EXCLUSION FROM THE UNITED STATES OF SENIOR 

8 OFFICIALS OF FOREIGN PERSONS WHO HAVE 

9 AIDED PROLIFERATION RELATING TO IRAN. 

10 ‘‘(a) GROUNDS FOR EXCLUSION.—Except as pro11 vided in subsection (b), the Secretary of State shall deny 

12 a visa to, and the Secretary of State shall exclude from 

13 the United States, any alien whom the Secretary of State 

14 determines is an alien who, on or after the date of the 

15 enactment of this Act is a— 

16 ‘‘(1) corporate officer, principal, or shareholder 

17 with a controlling interest of a person against whom 

18 sanctions have been imposed pursuant to section 5; 

19 ‘‘(2) corporate officer, principal, or shareholder 

20 with a controlling interest of a successor entity to or 

21 a parent or subsidiary of such a person; 

22 ‘‘(3) corporate officer, principal, or shareholder 

23 with a controlling interest of an affiliate of such a 

24 sanctioned person, if such affiliate engaged in a 

25 sanctionable activity described in subsection (a) or 


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1 (b) of section 5, and if such affiliate is controlled in 

2 fact by such a person; 

3 ‘‘(4) spouse, minor child, or agent of a person 

4 excludable under paragraph (1), (2), or (3); 

5 ‘‘(5) senior official of a foreign government that 

6 is identified as a person against whom sanctions 

7 have been imposed pursuant to section 5; 

8 ‘‘(6) senior official of a foreign government with 

9 primary jurisdiction over such a person; or 

10 ‘‘(7) spouse, minor child, or agent of a person 

11 excludable under paragraph (5) or (6). 

12 ‘‘(b) EXCEPTION.—The President may waive the 

13 sanctions described in subsection (a) with respect to a per14 son specified in paragraph (5), (6), or (7) if the President 

15 determines and certifies in writing to the appropriate con16 gressional committees, on a case by case basis, that the 

17 foreign government with primary jurisdiction over such a 

18 person against whom sanctions have been imposed pursu19 ant to section 5 has made and continues to make clear, 

20 specific efforts to stop and deter a sanctionable activity 

21 described in subsection (a) or (b) of section 5.’’; and 

22 (4) in section 15, as redesignated pursuant to 

23 paragraph (2) of this section— 


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1 (A) by redesignating paragraphs (15) and 

2 (16) as paragraphs (17) and (18), respectively; 

3 and 

4 (B) by inserting after paragraph (14) the 

5 following new paragraphs: 

6 ‘‘(15) TRANSFER.—The term ‘transfer’ means 

7 the conveyance of technological or intellectual prop8 erty, or the conversion of intellectual or technological 

9 advances into marketable goods, services, or articles 

10 of value, developed and generated in one place, to 

11 another through illegal or illicit means to a country, 

12 the government of which the Secretary of State has 

13 determined, for purposes of section 6(j)(1)(A) of the 

14 Export Administration Act of 1979 (as in effect pur15 suant to the International Emergency Economic 

16 Powers Act; 50 U.S.C. 1701 et seq.), section 40(d) 

17 of the Arms Export Control Act (22 U.S.C. 

18 2780(d)), and section 620A of the Foreign Assist19 ance Act of 1961 (22 U.S.C. 2371), is a government 

20 that has repeatedly provided support for acts of 

21 international terrorism. 

22 ‘‘(16) TRANSSHIPMENT.—The term ‘trans23 shipment’ means the export from one country to an24 other that passes through a third country, in which 


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1 cargo is off-loaded and there is some change to con2 veyance.’’. 

3 SEC. 302. DENIAL OF TAX BENEFITS FOR TAXPAYERS EN4 GAGED IN BUSINESS ACTIVITY WITH IRAN 

5 PROHIBITED BY UNITED STATES LAW. 

6 (a) IN GENERAL.—Section 901 of the Internal Rev7 enue Code of 1986 (relating to taxes of foreign countries 

8 and of possessions of United States) is amended by redes9 ignating subsection (m) as subsection (n) and by inserting 

10 after subsection (l) the following new subsection: 

11 ‘‘(m) TAXPAYERS ENGAGED IN BUSINESS ACTIVITY

12 WITH IRAN PROHIBITED BY UNITED STATES LAW.— 

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

14 provision of this part, in the case of a taxpayer 

15 which is a member of an expanded affiliated group 

16 any member of which, on any day during the taxable 

17 year, engaged in business activity with Iran which is 

18 prohibited by United States law, no credit shall be 

19 allowed under subsection (a) to the taxpayer for any 

20 income, war profits, or excess profits taxes paid or 

21 accrued (or deemed paid under section 902 or 960) 

22 to any country if such taxes are with respect to in23 come attributable to a period any part of which oc24 curs during such taxable year. 


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1 ‘‘(2) BUSINESS ACTIVITY.—For purposes of 

2 paragraph (1)— 

3 ‘‘(A) IN GENERAL.—The term ‘business 

4 activity’ means any of the following: 

5 ‘‘(i) An entity described in subpara6 graph (D) that— 

7 ‘‘(I) has in effect a contract that 

8 includes the responsibility for the de9 velopment of petroleum resources, pe10 troleum refining capacity, or liquefied 

11 natural gas located in Iran or (as the 

12 case may be), or 

13 ‘‘(II) has in effect a contract pro14 viding for the general supervision and 

15 guarantee of another person’s per16 formance of a contract described in 

17 subclause (I). 

18 ‘‘(ii) The purchase of a share of own19 ership, including an equity interest, in the 

20 development described in clause (i). 

21 ‘‘(iii) Having in effect a contract pro22 viding for the participation in royalties, 

23 earnings, or profits in the development de24 scribed in clause (i), without regard to the 

25 form of the participation. 


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1 ‘‘(B) GOODS, SERVICES, AND TECH2 NOLOGY.—The term ‘business activity’ includes 

3 the entry into, performance, or financing of a 

4 contract to sell or purchase goods, services, or 

5 technology. 

6 ‘‘(C) SPECIAL RULE.—For purposes of this 

7 paragraph, an amendment or other modification 

8 that is made, on or the date of the enactment 

9 of this subsection to an agreement or contract 

10 shall be treated as the entry of an agreement 

11 or contract. 

12 ‘‘(D) ENTITIES DESCRIBED.—For pur13 poses of subparagraph (A), an entity described 

14 in this subparagraph is— 

15 ‘‘(i) a natural person, 

16 ‘‘(ii) a corporation, business associa17 tion, partnership, society, trust, financial 

18 institution, insurer, underwriter, guar19 antor, and any other business organization, 

20 ‘‘(iii) any foreign subsidiary of any en21 tity described in clause (ii), 

22 ‘‘(iv) any governmental entity oper23 ating as a business enterprise, such as an 

24 export credit agency, and 


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1 ‘‘(v) any successor to any entity de2 scribed in clause (ii), (iii), or (iv). 

3 ‘‘(3) TAXES ALLOWED AS A DEDUCTION, ETC.— 

4 Sections 275 and 78 shall not apply to any tax 

5 which is not allowable as a credit under subsection 

6 (a) by reason of this subsection. 

7 ‘‘(4) EXPANDED AFFILIATED GROUP.—For pur8 poses of paragraph (1), the term ‘expanded affiliated 

9 group’ means an affiliated group (as defined in sub10 section (a) of section 1504 (without regard to sub11 sections (b)(2), (b)(4), and (c) thereof)); except that 

12 section 1504(a) shall be applied by substituting 

13 ‘more than 50 percent’ for ‘at least 80 percent’ each 

14 place it appears. 

15 ‘‘(5) REGULATIONS.—The Secretary shall pre16 scribe such regulations as may be necessary or ap17 propriate to carry out the purposes of this sub18 section, including regulations which impose appro19 priate reporting requirements.’’. 

20 (b) INCOME INCLUDED AS SUBPART F INCOME.— 

21 Subsection (a) of section 952 is amended by striking 

22 ‘‘and’’ at the end of paragraph (4), by striking the period 

23 at the end of paragraph (5) and inserting ‘‘, and’’, and 

24 by inserting after paragraph (5) the following new para25 graph: 


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1 ‘‘(6) all income of such corporation derived 

2 from all foreign countries during any period during 

3 which section 901(m) applies to such corporation.’’. 

4 (c) REPORTING.— 

5 (1) IN GENERAL.—Part II of subchapter B of 

6 chapter 68 of the Internal Revenue Code of 1986 

7 (relating to failure to comply with certain informa8 tion reporting requirements) is amended by adding 

9 at the end the following new section: 

10 ‘‘SEC. 6726. FAILURE TO REPORT INFORMATION UNDER 

11 SECTION 901(m). 

12 ‘‘(a) IN GENERAL.—In the case of each failure de13 scribed in subsection (c) by any person, such person shall 

14 pay a penalty of $100,000 for each day in the noncompli15 ance period with respect to which the failure relates. 

16 ‘‘(b) NONCOMPLIANCE PERIOD.—For purposes of 

17 this section, the term ‘noncompliance period’ means, with 

18 respect to any failure, the period— 

19 ‘‘(1) beginning on the date such failure first oc20 curs; and 

21 ‘‘(2) ending on the date such failure is cor22 rected. 

23 ‘‘(c) FAILURES SUBJECT TO PENALTY.—For pur24 poses of subsection (a), the failure described in this sub25 section is a failure to comply with any requirement conVerDate Nov 24 2008 21:50 Jan 29, 2009 Jkt 079200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H485.IH H485

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1 tained in the regulations prescribed under section 

2 901(m).’’. 

3 (2) CLERICAL AMENDMENT.—The table of sec4 tions for part II of subchapter B of chapter 68 of 

5 such Code is amended by adding at the end the fol6 lowing new item: 

‘‘Sec. 6726. Failure to report information under section 901(m).’’. 

7 (d) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to taxable years beginning after 

9 the date of the enactment of this Act. 

10 SEC. 303. INCOME TAX OF FOREIGN CORPORATIONS EN11 GAGED IN BUSINESS ACTIVITY WITH IRAN 

12 PROHIBITED BY UNITED STATES LAW. 

13 (a) IN GENERAL.—Subpart B of part II of sub14 chapter N of chapter 1 of the Internal Revenue Code of 

15 1986 (relating to foreign corporations) is amended by in16 serting after section 884 the following new section: 

17 ‘‘SEC. 884A. INCOME TAX OF FOREIGN CORPORATIONS EN18 GAGED IN BUSINESS ACTIVITY WITH IRAN 

19 PROHIBITED BY UNITED STATES LAW. 

20 ‘‘In the case of a foreign corporation which is en21 gaged in business activity with Iran prohibited by United 

22 States law— 

23 ‘‘(1) in respect of tax on income— 

24 ‘‘(A) section 881(a) shall be applied by 

25 substituting ‘45 percent’ for ‘30 percent’; 


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1 ‘‘(B) subsections (b), (c), (d), and (e) of 

2 section 881 shall not apply; 

3 ‘‘(C) tax imposed pursuant to section 882 

4 shall be imposed at a rate of 45 percent; 

5 ‘‘(D) section 883 shall not apply; and 

6 ‘‘(E) section 884(a) shall be applied by 

7 substituting ‘45 percent’ for ‘30 percent’; and 

8 ‘‘(2) in respect of withholding— 

9 ‘‘(A) section 1442(a) shall be applied by 

10 substituting ‘45 percent’ for ‘30 percent’; and 

11 ‘‘(B) section 1442(c) shall not apply.’’. 

12 (b) CLERICAL AMENDMENT.—The table of sections 

13 for subpart B of part II of subchapter N of chapter 1 

14 of such Code is amended by inserting after the item relat15 ing 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.’’. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to taxable years beginning after 

18 the date of the enactment of this Act. 

19 SEC. 304. COMPENSATION FOR FORMER UNITED STATES 

20 HOSTAGES IN IRAN FUND. 

21 (a) CREATION OF FUND.—There is established a 

22 fund to be known as the ‘‘Compensation for Former 

23 United States Hostages in Iran Fund’’ (in this section re24 ferred to as the ‘‘Fund’’), consisting of such amounts as 


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1 may be appropriated to the Fund as provided by this sec2 tion. 

3 (b) TRANSFERS TO FUND.—There are hereby appro4 priated to the Fund amounts equivalent to the taxes re5 ceived in the Treasury by reason of the amendments made 

6 by sections 302 and 303 of this Act. 

7 (c) EXPENDITURES FROM FUND.—Amounts in the 

8 Fund shall be available, as provided by appropriation Acts, 

9 for making expenditures to pay claims to the United 

10 States citizens held hostage in Iran, and to members of 

11 the families of such United States citizens, who are identi12 fied as plaintiffs or class members in Case Number 

13 1:00CV03110 (EGS) or Case Number 1:00CV00716 

14 (HHK) in the United States District Court for the Dis15 trict of Columbia. 

16 TITLE IV—DEFINITIONS 

17 SEC. 401. DEFINITIONS. 

18 In this Act: 

19 (1) APPROPRIATE CONGRESSIONAL COMMIT20 TEES.—The term ‘‘appropriate congressional com21 mittees’’ means— 

22 (A) the Committee on Foreign Affairs and 

23 the Committee on Appropriations of the House 

24 of Representatives; and 


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1 (B) the Committee on Foreign Relations 

2 and the Committee on Appropriations of the 

3 Senate. 

4 (2) GOVERNMENT OF SYRIA.—The term ‘‘Gov5 ernment of Syria’’ includes any agency or instru6 mentality of the Government of Syria, including any 

7 entity that is controlled by the Government of Syria. 

8 (3) GOVERNMENT OF IRAN.—The term ‘‘Gov9 ernment of Iran’’ includes any agency or instrumen10 tality of the Government of Iran, including any enti11 ty that is controlled by the Government of Iran. 

12 (4) GOVERNMENT OF NORTH KOREA.—The 

13 term ‘‘Government of North Korea’’ includes any 

14 agency or instrumentality of the Government of 

15 North Korea, including any entity that is controlled 

16 by the Government of North Korea. 

17 (5) WEAPONS OF MASS DESTRUCTION PRO18 GRAMS.—The term ‘‘weapons of mass destruction 

19 programs’’ means— 

20 (A) and chemical weapons, biological weap21 ons, radiological or nuclear procurement and 

22 development programs and efforts; 

23 (B) ballistic missile procurement and devel24 opment programs and efforts; and 


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1 (C) other actions in violation of the 

2 Waasenaar Arrangement on Export Controls 

3 for Conventional Arms and Dual-Use Goods 

4 and Technologies, the Missile Technology Con5 trol Regime, the Australia Group, the Nuclear 

6 Suppliers’ Group, the Zangger Committee, and 

7 any other international agreement or arrange8 ment to which the United States is a party that 

9 restricts the export of chemical, biological, nu10 clear, and other weapons and their delivery sys11 tems, and effectively restricts the export of dual 

12 use components of such weapons and their de13 livery systems. 

Æ 


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