I 

113TH CONGRESS 

2D SESSION H. R. 5431 

To impose sanctions on foreign financial institutions that engage in certain 

transactions with the Islamic State of Iraq and Syria, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 10, 2014 

Mr. FITZPATRICK introduced the following bill; which was referred to the 

Committee on Foreign Affairs, and in addition to the Committees on 

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 impose sanctions on foreign financial institutions that 

engage in certain transactions with the Islamic State 

of Iraq 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. 

4 This Act may be cited as the ‘‘Isolating ISIS Act’’. 


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1 SEC. 2. SANCTIONS WITH RESPECT TO FOREIGN FINANCIAL 

2 INSTITUTIONS THAT ENGAGE IN CERTAIN 

3 TRANSACTIONS. 

4 (a) PROHIBITIONS AND CONDITIONS WITH RESPECT

5 TO CERTAIN ACCOUNTS HELD BY FOREIGN FINANCIAL

6 INSTITUTIONS.— 

7 (1) IN GENERAL.—Not later than 120 days 

8 after the date of the enactment of this Act, the Sec9 retary of the Treasury, in consultation with the Sec10 retary of State and the heads of other applicable 

11 Federal departments and agencies, shall prohibit, or 

12 impose strict conditions on, the opening or maintain13 ing in the United States of a correspondent account 

14 or a payable-through account by a foreign financial 

15 institution that the Secretary of the Treasury deter16 mines, on or after the date of the enactment of this 

17 Act, engages in an activity described in paragraph 

18 (2). 

19 (2) ACTIVITIES DESCRIBED.—A foreign finan20 cial institution engages in an activity described in 

21 this paragraph if the foreign financial institution— 

22 (A) knowingly facilitates a transaction or 

23 transactions for the Islamic State of Iraq and 

24 Syria; 

25 (B) knowingly facilitates a transaction or 

26 transactions of a person designated for acting 


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1 on behalf of or at the direction of, or owned or 

2 controlled by, the Islamic State of Iraq and 

3 Syria; 

4 (C) knowingly engages in money laun5 dering to carry out an activity described in sub6 paragraph (A) or (B); 

7 (D) knowingly facilitates a transaction or 

8 transactions or provides financial services to 

9 carry out an activity described in subparagraph 

10 (A), (B), or (C), including— 

11 (i) facilitating a transaction or trans12 actions; or 

13 (ii) providing financial services that 

14 involve a transaction of any goods; or 

15 (E)(i) knowingly facilitates, or participates 

16 or assists in, an activity described in subpara17 graph (A), (B), (C), or (D), including by acting 

18 on behalf of, at the direction of, or as an inter19 mediary for, or otherwise assisting, another per20 son with respect to the activity described in any 

21 such subparagraph; 

22 (ii) knowingly attempts or conspires to fa23 cilitate or participate in an activity described in 

24 subparagraph (A), (B), (C), or (D); or 


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1 (iii) is owned or controlled by a foreign fi2 nancial institution that the Secretary finds 

3 knowingly engages in an activity described in 

4 subparagraph (A), (B), (C), or (D). 

5 (3) PENALTIES.—The penalties provided for in 

6 subsections (b) and (c) of section 206 of the Inter7 national Emergency Economic Powers Act (50 

8 U.S.C. 1705) shall apply to a person that violates, 

9 attempts to violate, conspires to violate, or causes a 

10 violation of the prohibition or strict conditions re11 ferred to in paragraph (1) of this subsection to the 

12 same extent that such penalties apply to a person 

13 that commits an unlawful act described in subsection 

14 (a) of such section 206. 

15 (4) REGULATIONS.—The Secretary of the 

16 Treasury shall prescribe and implement regulations 

17 to carry out this subsection. 

18 (b) WAIVER.— 

19 (1) IN GENERAL.—The Secretary of the Treas20 ury, in consultation with the Secretary of State and 

21 the heads of other applicable Federal departments 

22 and agencies, may waive, on a case-by-case basis, 

23 the application of a prohibition or condition imposed 

24 with respect to a foreign financial institution pursu25 ant to subsection (a) for a period of not more than 


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1 180 days, and may renew that waiver for additional 

2 periods of not more than 180 days, on and after the 

3 date that the Secretary of the Treasury, in consulta4 tion with the Secretary of State— 

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

6 national security interests of the United States; 

7 and 

8 (B) submits to the appropriate congres9 sional committees a report describing the rea10 sons for the determination. 

11 (2) FORM.—The report required by subpara12 graph (1) shall be submitted in unclassified form, 

13 but may contain a classified annex. 

14 (c) PROVISIONS RELATING TO FOREIGN FINANCIAL

15 INSTITUTIONS.— 

16 (1) REPORT.—Not later than 45 days after the 

17 date of the enactment of this Act and every 180 

18 days thereafter, the Secretary of the Treasury shall 

19 submit to the appropriate congressional committees 

20 a report that— 

21 (A) identifies each foreign central bank 

22 that the Secretary determines engages in one or 

23 more activities described in subsection 

24 (a)(2)(D); and 


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1 (B) provides a detailed description of each 

2 such activity. 

3 (2) SPECIAL RULE TO ALLOW FOR TERMI4 NATION OF SANCTIONABLE ACTIVITY.—The Sec5 retary of the Treasury shall not be required to apply 

6 sanctions to a foreign financial institution described 

7 in subsection (a) if the Secretary of the Treasury, in 

8 consultation with the Secretary of State and the 

9 heads of other applicable Federal departments and 

10 agencies, certifies in writing to the appropriate con11 gressional committees that— 

12 (A) the foreign financial institution— 

13 (i) is no longer engaging in an activity 

14 described in subsection (a)(2); or 

15 (ii) has taken and is continuing to 

16 take significant verifiable steps toward ter17 minating the activity described in sub18 section (a)(2); and 

19 (B) the Secretary has received reliable as20 surances from the government with primary ju21 risdiction over the foreign financial institution 

22 that the foreign financial institution will not en23 gage in any activity described in subsection 

24 (a)(2) in the future. 

25 (d) DEFINITIONS.— 


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1 (1) IN GENERAL.—In this section: 

2 (A) ACCOUNT; CORRESPONDENT ACCOUNT; 

3 PAYABLE-THROUGH ACCOUNT.—The terms ‘‘ac4 count’’, ‘‘correspondent account’’, and ‘‘payable5 through account’’ have the meanings given 

6 those terms in section 5318A of title 31, United 

7 States Code. 

8 (B) FINANCIAL INSTITUTION.—The term 

9 ‘‘financial institution’’ means a financial insti10 tution specified in subparagraph (A), (B), (C), 

11 (D), (E), (F), (G), (H), (I), (J), (K), (M), (N), 

12 (P), (R), (T), (Y), or (Z) of section 5312(a)(2) 

13 of title 31, United States Code. 

14 (C) FOREIGN FINANCIAL INSTITUTION.— 

15 The term ‘‘foreign financial institution’’ has the 

16 meaning of such term in section 1010.605 of 

17 title 31, Code of Federal Regulations, and in18 cludes a foreign central bank. 

19 (D) MONEY LAUNDERING.—The term 

20 ‘‘money laundering’’ means any of the activities 

21 described in paragraph (1), (2), or (3) of sec22 tion 1956(a) of title 18, United States Code, 

23 with respect to which penalties may be imposed 

24 pursuant to such section. 


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1 (2) OTHER DEFINITIONS.—The Secretary of 

2 the Treasury may further define the terms used in 

3 this section in the regulations prescribed under this 

4 section. 

5 SEC. 3. IMPOSITION OF SANCTIONS WITH RESPECT TO 

6 UNITED STATES PERSONS THAT ENGAGE IN 

7 TRANSACTIONS WITH CERTAIN FOREIGN 

8 PERSONS. 

9 (a) IN GENERAL.—The President shall impose sanc10 tions in accordance with subsection (c) with respect to 

11 each person on the list required by subsection (b). 

12 (b) LIST.— 

13 (1) IN GENERAL.—Not later than 90 days after 

14 the date of the enactment of this Act, the President 

15 shall submit to the appropriate congressional com16 mittees a list of United States persons that the 

17 President determines have knowingly engaged in an 

18 activity described in paragraph (2) on or after such 

19 date of enactment. 

20 (2) ACTIVITY DESCRIBED.— 

21 (A) IN GENERAL.—A person engages in an 

22 activity described in this paragraph if the per23 son knowingly engages in a transaction or 

24 transactions with a foreign person that trans25 fers or receives, or facilitates the transfer or reVerDate Mar 15 2010 22:01 Sep 11, 2014 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5431.IH H5431

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1 ceipt of, any goods or services to or from the 

2 Islamic State of Iraq and Syria. 

3 (B) APPLICABILITY TO CONTRACTS AND

4 OTHER AGREEMENTS.—A person engages in an 

5 activity described in subparagraph (A) without 

6 regard to whether the activity is carried out 

7 pursuant to a contract or other agreement en8 tered into before, on, or after the date of the 

9 enactment of this Act. 

10 (3) SPECIAL RULE TO ALLOW FOR TERMI11 NATION OF SANCTIONABLE ACTIVITY.—The Presi12 dent shall not be required to include a person on the 

13 list required by paragraph (1) if the President cer14 tifies in writing to the appropriate congressional 

15 committees that— 

16 (A) the person is no longer engaging in, or 

17 has taken significant verifiable steps toward 

18 stopping, the activity described in paragraph 

19 (2) for which the President would otherwise 

20 have included the person on the list; and 

21 (B) the President has received reliable as22 surances that the person will not knowingly en23 gage in any activity described in paragraph (2) 

24 in the future. 


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1 (4) UPDATES OF LIST.—The President shall 

2 submit to the appropriate congressional committees 

3 an updated list under paragraph (1) as new infor4 mation becomes available. 

5 (5) FORM OF REPORT; PUBLIC AVAILABILITY.— 

6 (A) FORM.—The list required by para7 graph (1) shall be submitted in unclassified 

8 form but may contain a classified annex. 

9 (B) PUBLIC AVAILABILITY.—The unclassi10 fied portion of the list required by paragraph 

11 (1) shall be made available to the public and 

12 posted on the websites of the Department of the 

13 Treasury and the Department of State. 

14 (c) APPLICATION OF SANCTIONS.— 

15 (1) IN GENERAL.—The President shall impose 

16 sanctions described in paragraph (2) with respect to 

17 a person on the list required by subsection (b). 

18 (2) SANCTIONS.—The sanctions described in 

19 this paragraph are the following: 

20 (A) No assistance may be provided to the 

21 person under the Foreign Assistance Act of 

22 1961 (22 U.S.C. 2151 et seq.) or the Arms Ex23 port Control Act (22 U.S.C. 2751 et seq.). 

24 (B) The United States Government may 

25 not procure, or enter into any contract for the 


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1 procurement of, any goods or services from the 

2 person. 

3 (C) The President may impose additional 

4 sanctions, as appropriate, with respect to the 

5 person in accordance with the International 

6 Emergency Economic Powers Act (50 U.S.C. 

7 1701 et seq.). 

8 (d) DEFINITIONS.—In this section: 

9 (1) FOREIGN PERSON.—The term ‘‘foreign per10 son’’ means— 

11 (A) an individual who is not a United 

12 States person or an alien lawfully admitted for 

13 permanent residence into the United States; or 

14 (B) a corporation, partnership, or other 

15 nongovernmental entity which is not a United 

16 States person. 

17 (2) PERSON.— 

18 (A) IN GENERAL.—The term ‘‘person’’ 

19 means— 

20 (i) a natural person; 

21 (ii) a corporation, business associa22 tion, partnership, society, trust, financial 

23 institution, insurer, underwriter, guar24 antor, and any other business organization, 

25 any other nongovernmental entity, organiVerDate Mar 15 2010 22:01 Sep 11, 2014 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5431.IH H5431

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1 zation, or group, and any governmental en2 tity operating as a business enterprise; and 

3 (iii) any successor to any entity de4 scribed in clause (ii). 

5 (B) APPLICATION TO GOVERNMENTAL EN6 TITIES.—The term ‘‘person’’ does not include a 

7 government or governmental entity that is not 

8 operating as a business enterprise. 

9 (3) UNITED STATES PERSON.—The term 

10 ‘‘United States person’’ means— 

11 (A) a natural person who is a citizen of the 

12 United States or who owes permanent alle13 giance to the United States; and 

14 (B) a corporation or other legal entity 

15 which is organized under the laws of the United 

16 States, any State or territory thereof, or the 

17 District of Columbia, if natural persons de18 scribed in subparagraph (A) own, directly or in19 directly, more than 50 percent of the out20 standing capital stock or other beneficial inter21 est in such legal entity. 

22 SEC. 4. REGULATORY AUTHORITY. 

23 (a) IN GENERAL.—Not later than 90 days after the 

24 date of the enactment of this Act, the President shall proVerDate Mar 15 2010 22:01 Sep 11, 2014 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H5431.IH H5431

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1 mulgate regulations as necessary for the implementation 

2 of this Act. 

3 (b) NOTIFICATION TO CONGRESS.—Not later than 10 

4 days before the promulgation of regulations under sub5 section (a), the President shall notify the appropriate con6 gressional committees of such proposed regulations. 

7 SEC. 5. TERMINATION. 

8 This Act shall cease to be in effect beginning 30 days 

9 after the date on which the President certifies to Congress 

10 that the Islamic State of Iraq and Syria— 

11 (1) is no longer designated as a foreign ter12 rorist organization pursuant to section 219 of the 

13 Immigration and Nationality Act (8 U.S.C. 1189); 

14 (2) is no longer listed in the Annex to Executive 

15 Order No. 13224 (September 23, 2001; relating to 

16 blocking property and prohibiting transactions with 

17 persons who commit, threaten to commit, or support 

18 terrorism); and 

19 (3) poses no significant threat to United States 

20 national security, interests, or allies. 

21 SEC. 6. RULE OF CONSTRUCTION. 

22 Nothing in this Act shall apply to the authorized in23 telligence activities of the United States. 

24 SEC. 7. DEFINITIONS. 

25 In this Act: 


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

4 (A) the Committee on Foreign Affairs and 

5 the Committee on Financial Services of the 

6 House of Representatives; and 

7 (B) the Committee on Foreign Relations 

8 and the Committee on Banking, Housing, and 

9 Urban Affairs of the Senate. 

10 (2) ISLAMIC STATE OF IRAQ AND SYRIA.—The 

11 term ‘‘Islamic State of Iraq and Syria’’ includes— 

12 (A) any person— 

13 (i) the property of or interests in 

14 property of which are blocked pursuant to 

15 the International Emergency Economic 

16 Powers Act (50 U.S.C. 1701 et seq.); and 

17 (ii) who is identified on the list of spe18 cially designated nationals and blocked 

19 persons maintained by the Office of For20 eign Asset Control of the Department of 

21 the Treasury as an agent, instrumentality, 

22 or affiliate of the Islamic State of Iraq and 

23 Syria; and 

24 (B) the entity designated by the Secretary 

25 of State as a foreign terrorist organization purVerDate Mar 15 2010 22:01 Sep 11, 2014 Jkt 039200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H5431.IH H5431

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1 suant to section 219 of the Immigration and 

2 Nationality Act (8 U.S.C. 1189). 

Æ 


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