Rosoboronexport Embargo Act of 2016

To re-impose sanctions on Russian arms exporter Rosoboronexport, and for other purposes. 1. Short title This Act may be cited as Rosoboronexport Embargo Act of 2016 2. Prohibition on direct or indirect use of funds to enter into contracts or agreements with Rosoboronexport (a) Prohibition The head of an executive agency may not enter into a contract, memorandum of understanding, or cooperative agreement with, or make a grant to, or provide a loan or loan agreement to Ro­so­bor­on­ex­port or any subsidiary of Rosoboronexport related to the design, manufacture, or sale of military equipment. (b) Waiver The President may waive the applicability of subsection (a) if the President, in consultation with the Secretary of Defense, the Secretary of State, the Secretary of Commerce and the Director of National Intelligence, certifies in writing to the appropriate congressional committees that— (1) to the best of the President's knowledge— (A) Rosoboronexport has ceased the transfer of lethal military equipment to, and the maintenance of existing lethal military equipment for, the Government of the Syrian Arab Republic; (B) the armed forces of the Russian Federation have withdrawn from Crimea (other than military forces present on military bases subject to agreements in force between the Government of the Russian Federation and the Government of Ukraine); and (C) agents of the Russian Federation are not taking active measures to destabilize the control of the Government of Ukraine over eastern Ukraine (including through active support of efforts to unlawfully occupy facilities of the Government of Ukraine); or (2) the waiver is in the national security interests of the United States. (c) Reprogramming authority (1) In general The President may reprogram funds appropriated or otherwise made available for Economic Support Fund assistance or security assistance for the government of a country that, on or after the date of the enactment of this Act, enters into a contract, memorandum of understanding, or cooperative agreement with, or makes a grant to, or provides a loan or loan agreement to Ro­so­bor­on­ex­port, or any subsidiary of Ro­so­bor­on­ex­port, in an amount up to or equal to the total amount of each such contract, memorandum of understanding, cooperative agreement, loan, or loan agreement. (2) Notification The President shall notify Congress not later than 15 days before reprogramming funds under paragraph (1). (d) Definitions In this section: (1) Appropriate congressional committees The term appropriate congressional committees (A) the Committee on Armed Services, the Committee on Foreign Relations, and the Committee on Appropriations of the Senate; and (B) the Committee on Armed Services, the Committee on Foreign Affairs, and the Committee on Appropriations of the House of Representatives. (2) Executive agency The term executive agency 3. Prohibition on assisting Rosoboronexport through the provision of financing (a) Prohibited activity defined For purposes of this section, the term prohibited activity (b) Prohibition No United States person may engage in any prohibited activity to the extent that the United States has jurisdiction to prohibit such activity by such United States person. (c) Presidential determination and order with respect to united states and foreign persons If the President determines that a United States person has engaged in a prohibited activity (without regard to whether subsection (b) applies), the President shall, by order, impose the sanctions described in subsection (d) on such person. (d) Sanctions The following sanctions shall be imposed pursuant to any order issued under subsection (c) with respect to any United States person: (1) Ban on dealings in government finance (A) Designation as primary dealer Neither the Board of Governors of the Federal Reserve System nor the Federal Reserve Bank of New York may designate, or permit the continuation of any prior designation of, the person as a primary dealer in United States Government debt instruments. (B) Service as depositary The person may not serve as a depositary for United States Government funds. (2) Restrictions on operations The person may not, directly or indirectly— (A) commence any line of business in the United States in which the person was not engaged as of the date of the order; or (B) conduct business from any location in the United States at which the person did not conduct business as of the date of the order. (e) Termination of the sanctions Any sanction imposed on any person pursuant to an order issued under subsection (c) shall— (1) remain in effect for a period of not less than 12 months; and (2) cease to apply after the end of such 12-month period only if the President determines, and certifies in writing to the Congress, that— (A) the person has ceased to engage in any prohibited activity; and (B) the President has received reliable assurances from such person that the person will not, in the future, engage in any prohibited activity. (f) Waiver The President may waive the application of any sanction imposed on any person pursuant to an order issued under subsection (c) if the President determines, and certifies in writing to the Congress, that the continued imposition of the sanction would have a serious adverse effect on the safety and soundness of the domestic or international financial system or on domestic or international payments systems. (g) Enforcement action The Attorney General may bring an action in an appropriate district court of the United States for injunctive and other appropriate relief with respect to— (1) any violation of subsection (b); or (2) any order issued pursuant to subsection (c). (h) Knowingly defined (1) In general For purposes of this section, the term knowingly (A) such person is aware that such person is engaging in such conduct, that such circumstance exists, or that such result is substantially certain to occur; or (B) such person has a firm belief that such circumstance exists or that such result is substantially certain to occur. (2) Knowledge of the existence of a particular circumstance If knowledge of the existence of a particular circumstance is required for an offense, such knowledge is established if a person is aware of a high probability of the existence of such circumstance, unless the person actually believes that such circumstance does not exist. (i) Scope of application This section shall apply with respect to prohibited activities that occur on or after the date of the enactment of this Act. 4. Sanctions against United States persons that transfers or retransfers goods or technology, or enters into contracts, or engages in trade, with Rosoboronexport (a) In general If any United States person transfers or retransfers goods or technology, or enters into contracts, or engages in trade, with Rosoboronexport, or any subsidiary of Rosoboronexport, then the sanctions described in subsection (b) shall be imposed. (b) Mandatory sanctions The sanctions to be imposed pursuant to subsection (a) are as follows: (1) Procurement sanction For a period of two years, the United States Government shall not procure, or enter into any contract for the procurement of, any goods or services from the sanctioned person. (2) Export sanction For a period of two years, the United States Government shall not issue any license for any export by or to the sanctioned person. 5. Report on Rosoboronexport activities (a) Report required Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense, in consultation with the Secretary of State and the Director of National Intelligence, shall submit to the appropriate congressional committees a report setting forth the following: (1) A list of the known transfers of lethal military equipment by Rosoboronexport to the Donetsk People’s Republic (2) A list of the known transfers of lethal military equipment by Rosoboronexport to the Government of the Syrian Arab Republic since March 15, 2011. (3) A list of the known contracts, if any, that Rosoboronexport has signed with the Government of the Syrian Arab Republic since March 15, 2011. (4) A detailed list of all existing contracts, memorandums of understanding, cooperative agreements, grants, loans, and loan guarantees between the Department of Defense and Rosoboronexport, including a description of the transaction, signing dates, values, and quantities. (b) Form The report required by subsection (a) shall be submitted in unclassified form, but may include a classified annex. (c) Appropriate congressional committees In this section, the term appropriate congressional committees (1) the Committee on Armed Services, the Committee on Foreign Relations, and the Committee on Appropriations of the Senate; and (2) the Committee on Armed Services, the Committee on Foreign Affairs, and the Committee on Appropriations of the House of Representatives. 6. United States person defined In this Act, the term United States person (1) a natural person who is a citizen of the United States or who owes permanent allegiance to the United States; and (2) a corporation or other legal entity which is organized under the laws of the United States, any State or territory thereof, or the District of Columbia, if natural persons described in paragraph (1) own, directly or indirectly, more than 50 percent of the outstanding capital stock or other beneficial interest in such legal entity.

Summary: Rosoboronexport Embargo Act of 2016 This bill prohibits the head of an executive agency from entering into a contract, memorandum of understanding, or cooperative agreement with, or make a grant to, or provide a loan or loan agreement to Rosoboronexport (the state intermediary agency for Russia's exports/imports of defense-related and dual use products, technologies, and services). The President may: (1) waive such prohibition under specified circumstances, and (2) reprogram funds for a country that enters into any such arrangement with Rosoboronexport. No U.S. person (individual or corporation) may assist Rosoboronexport through the provision of financing. A ban is imposed on dealing in government finance and restrictions on U.S. business operations on a person that engages in such activity. The President may waive the application of sanctions under specified circumstances. The Department of Justice may bring an action in U.S. district court for injunctive and other relief with respect to such activities. Procurement and export sanctions are imposed on any U.S. person that transfers goods or technology, enters into contracts, or engages in trade with Rosoboronexport. The bill directs the Department of Defense (DOD) to report to Congress regarding: (1) transfers of lethal military equipment by Rosoboronexport to separatist groups in Ukraine and to the government of Syria; and (2) contracts, memorandums of understanding, cooperative agreements, grants, and loans and loan guarantees between DOD and Rosoboronexport.