101 
spect to an activity described in subparagraph 
(A)(ii) or (E)(ii)(II) of subsection (c)(2).’’. 
SEC. 306. DISCLOSURE TO THE SECURITIES AND EX-
CHANGE COMMISSION OF ACTIVITIES WITH 
CERTAIN SECTORS OF IRAN THAT SUPPORT 
THE BALLISTIC MISSILE PROGRAM OF IRAN. 
(a) IN GENERAL.—Section 13(r)(1) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78m(r)(1)) is amend-
ed— 
(1) in subparagraph (C), by striking ‘‘; or’’ and 
inserting a semicolon; 
(2) by redesignating subparagraph (D) as sub-
paragraph (E); and 
(3) by inserting after subparagraph (C) the fol-
lowing: 
‘‘(D) knowingly engaged in any activity for 
which sanctions may be imposed under section 
235 of the Iran Threat Reduction and Syria 
Human Rights Act of 2012;’’. 
(b) INVESTIGATIONS.—Section 13(r)(5)(A) of the Se-
curities Exchange Act of 1934 is amended by striking ‘‘an 
Executive order specified in clause (i) or (ii) of paragraph 
(1)(D)’’ and inserting ‘‘section 235 of the Iran Threat Re-
duction and Syria Human Rights Act of 2012, an Execu-
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102 
tive order specified in clause (i) or (ii) of paragraph 
(1)(E)’’. 
(c) CONFORMING AMENDMENT.—Section 13(r)(5) of 
the Securities Exchange Act of 1934 is amended, in the 
matter preceding subparagraph (A), by striking ‘‘subpara-
graph (D)(iii)’’ and inserting ‘‘subparagraph (E)(iii)’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect with respect to reports re-
quired to be filed with the Securities and Exchange Com-
mission after the date that is 180 days after the date of 
the enactment of this Act. 
SEC. 307. REGULATIONS. 
Not later than 90 days after the date of the enact-
ment of this Act, the President shall prescribe regulations 
to carry out this title and the amendments made by this 
title. 
TITLE IV—SANCTIONS WITH RE-
SPECT TO CERTAIN IRANIAN 
TRANSACTIONS 
Subtitle A—Sanctions Relating to 
Iran’s Support of Terrorism 
SEC. 401. FINDINGS. 
Congress makes the following findings: 
(1) The Financial Action Task Force, an inter-
governmental body the purpose of which is to de-
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103 
velop and promote national and international policies 
to combat money laundering and terrorist financ-
ing— 
(A) has noted it is concerned about Iran’s 
failure to address the risk of terrorist financing 
and serious threat that failure poses to the in-
tegrity of the international financial system; 
(B) since February 25, 2009, has called on 
its members and urged all jurisdictions to apply 
countermeasures against Iran to protect finan-
cial sectors from money laundering and financ-
ing of terrorism risks emanating from Iran; and 
(C) states that it ‘‘urges jurisdictions to 
protect 
against 
correspondent 
relationships 
being used to bypass or evade countermeasures 
and risk mitigation practices and to take into 
account [money laundering and terrorist financ-
ing (ML/FT)] risks when considering requests 
by Iranian financial institutions to open 
branches and subsidiaries in their jurisdiction. 
Due to the continuing terrorist financing threat 
emanating from Iran, jurisdictions should con-
sider the steps already taken and possible addi-
tional safeguards or strengthen existing ones.’’. 
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104 
(2) The Financial Action Task Force renewed 
its call for countermeasures on February 19, 2016, 
and called on Iran to address its deficiencies with re-
spect to measures countering money laundering and 
terrorist financing. 
(3) The Financial Crimes Enforcement Net-
work of the Department of the Treasury on Novem-
ber 25, 2011, issued a notice of finding that Iran is 
a jurisdiction of primary money laundering concern 
pursuant to section 5318A of title 31, United States 
Code. 
(4) The Financial Crimes Enforcement Net-
work on November 28, 2011, issued a notice of pro-
posed rulemaking that stated the intent to impose 
special measures against Iran under that section. 
(5) Section 1245 of the National Defense Au-
thorization Act for Fiscal Year 2012 (22 U.S.C. 
8513a) designated the financial sector of Iran as a 
primary money laundering concern, but did not im-
pose special measures pursuant to that designation. 
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105 
SEC. 402. SPECIAL MEASURES WITH RESPECT TO IRAN RE-
LATING TO ITS DESIGNATION AS A JURISDIC-
TION OF PRIMARY MONEY LAUNDERING CON-
CERN. 
(a) PROHIBITION
ON
DIRECT
USE
OF
COR-
RESPONDENT ACCOUNTS.—A covered financial institution 
shall terminate any correspondent account that— 
(1) is established, maintained, administered, or 
managed in the United States for, or on behalf of, 
an Iranian banking institution; and 
(2) is not blocked under any Executive order 
issued pursuant to the International Emergency 
Economic Powers Act (50 U.S.C. 1701 et seq.). 
(b) SPECIAL DUE DILIGENCE MEASURES FOR COR-
RESPONDENT ACCOUNTS.— 
(1) IN GENERAL.—A covered financial institu-
tion shall apply special due diligence measures to 
correspondent accounts of the financial institution 
that are reasonably designed to guard against the 
improper indirect use of such accounts by Iranian 
banking institutions. 
(2) REQUIREMENTS.—The special due diligence 
measures a covered financial institution is required 
to apply to correspondent accounts under paragraph 
(1) shall include, at a minimum— 
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106 
(A) notifying the holders of such accounts 
that the covered financial institution knows or 
has reason to know provide services to Iranian 
banking institutions, that such holders generally 
may not provide Iranian banking institutions 
with access to such accounts; and 
(B) taking reasonable steps to identify any 
indirect use of such accounts by Iranian bank-
ing institutions, to the extent that such indirect 
use can be determined from transactional 
records maintained by the covered financial in-
stitution in the normal course of business. 
(3) RISK-BASED APPROACH.—A covered finan-
cial institution shall take a risk-based approach 
when deciding what, if any, other due diligence 
measures the financial institution should adopt to 
guard against the improper indirect use of its cor-
respondent accounts by Iranian banking institutions. 
(4) RESPONSE TO INDIRECT ACCESS BY IRA-
NIAN BANKING INSTITUTIONS.—A covered financial 
institution that obtains credible information that a 
correspondent account is being used by a foreign 
bank to provide indirect access to an Iranian bank-
ing institution, shall— 
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107 
(A) take all appropriate steps to prevent 
such indirect access, including notifying the 
holder of the account under paragraph (2)(A); 
and 
(B) if necessary, terminate the account. 
(c) RECORDKEEPING AND REPORTING.— 
(1) IN GENERAL.—A covered financial institu-
tion shall document its compliance with the notice 
requirement set forth in subsection (b)(2)(A). 
(2) RULE OF CONSTRUCTION.—Nothing in this 
section shall require a covered financial institution 
to report any information not otherwise required to 
be reported by law or regulation. 
(d) TERMINATION.—This section shall terminate on 
the date that is 30 days after the date on which the Presi-
dent submits to Congress— 
(1) the certification described in section 401(a) 
of the Comprehensive Iran Sanctions, Account-
ability, and Divestment Act of 2010 (22 U.S.C. 
8551(a)); and 
(2) a certification that the Financial Action 
Task Force has lifted its call for countermeasures 
against Iran and Iran has become a member of a re-
gional body of the Financial Action Task Force. 
(e) DEFINITIONS.—In this section: 
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108 
(1) CORRESPONDENT
ACCOUNT.—The term 
‘‘correspondent account’’ has the meaning given that 
term in section 1010.605 of title 31, Code of Fed-
eral Regulations (as in effect on the day before the 
date of the enactment of this Act). 
(2) COVERED
FINANCIAL
INSTITUTION.—The 
term ‘‘covered financial institution’’ has the meaning 
given that term under paragraphs (1) and (2) of 
section 1010.605(e) of title 31, Code of Federal 
Regulations (as in effect on the day before the date 
of the enactment of this Act). 
(3) FOREIGN BANK.—The term ‘‘foreign bank’’ 
has the meaning given that term in section 
1010.100(u) of title 31, Code of Federal Regulations 
(as in effect on the day before the date of the enact-
ment of this Act). 
(4) IRANIAN BANKING INSTITUTION.—The term 
‘‘Iranian banking institution’’ means— 
(A) any foreign bank chartered by Iran, in-
cluding— 
(i) any branches, offices, or subsidi-
aries of such a bank operating in any juris-
diction; and 
(ii) any branch or office within Iran of 
any foreign bank licensed by Iran; 
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109 
(B) the Central Bank of Iran; and 
(C) any foreign bank of which more than 
50 percent of the voting stock or analogous in-
terest is owned by two or more foreign banks 
chartered by Iran. 
Subtitle 
B—Prohibition 
on 
and 
Other 
Sanctions 
Relating 
to 
Transactions With Iran 
SEC. 411. PROHIBITION ON FACILITATION OF CERTAIN 
TRANSACTIONS INVOLVING THE GOVERN-
MENT OF IRAN OR IRANIAN PERSONS. 
(a) IN GENERAL.—The President shall not issue any 
license under the International Emergency Economic Pow-
ers Act (50 U.S.C. 1701 et seq.) that permits a person— 
(1) to conduct an offshore United States dollar 
clearing system for transactions involving the Gov-
ernment of Iran or an Iranian person; or 
(2) to provide United States dollars for any off-
shore United States dollar clearing system conducted 
or overseen by a foreign government or a foreign fi-
nancial institution for transactions involving the 
Government of Iran or an Iranian person. 
(b) FOREIGN FINANCIAL INSTITUTION DEFINED.— 
In this section, the term ‘‘foreign financial institution’’ has 
the meaning of that term as determined by the Secretary 
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110 
of the Treasury pursuant to section 104(i) of the Com-
prehensive Iran Sanctions, Accountability, and Divestment 
Act of 2010 (22 U.S.C. 8513(i)). 
SEC. 412. REPORTS ON, AND AUTHORIZATION OF IMPOSI-
TION OF SANCTIONS WITH RESPECT TO, OFF-
SHORE UNITED STATES DOLLAR CLEARING 
FOR TRANSACTIONS INVOLVING THE GOV-
ERNMENT OF IRAN OR IRANIAN PERSONS. 
(a) REPORTS REQUIRED.— 
(1) IN GENERAL.—Not later than 60 days after 
the date of the enactment of this Act, and not less 
frequently than once every 90 days thereafter, the 
Secretary of the Treasury shall submit to the appro-
priate congressional committees and publish in the 
Federal Register a report that contains— 
(A) a list of any financial institutions that 
the Secretary has identified as— 
(i) operating an offshore United 
States dollar clearing system that conducts 
transactions involving the Government of 
Iran or an Iranian person; or 
(ii) participating in a transaction de-
scribed in clause (i) through a system de-
scribed in that clause; and 
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111 
(B) a detailed assessment of the status of 
efforts by the Secretary to prevent the conduct 
of transactions described in subparagraph 
(A)(i) through systems described in that sub-
paragraph. 
(2) FORM OF REPORT.—Each report submitted 
under paragraph (1) shall be submitted in unclassi-
fied form but may contain a classified annex. 
(b) IMPOSITION OF SANCTIONS.— 
(1) IN GENERAL.—The President shall, in ac-
cordance with the International Emergency Eco-
nomic Powers Act (50 U.S.C. 1701 et seq.), block 
and prohibit all transactions in all property and in-
terests in property of any financial institution speci-
fied in the most recent list submitted under sub-
section (a)(1)(A) if such property and interests in 
property are in the United States, come within the 
United States, or are or come within the possession 
or control of a United States person. 
(2) ADDITIONAL
SANCTIONS.—The President 
may impose additional sanctions under the Inter-
national Emergency Economic Powers Act (50 
U.S.C. 1701 et seq.) with respect to a financial in-
stitution that is subject to sanctions under para-
graph (1). 
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112 
(c) APPROPRIATE CONGRESSIONAL COMMITTEES DE-
FINED.—In this section, the term ‘‘appropriate congres-
sional committees’’ has the meaning given that term in 
section 14 of the Iran Sanctions Act of 1996 (Public Law 
104–172; 50 U.S.C. 1701 note). 
SEC. 413. CLARIFICATION THAT FREEZING OF ASSETS OF 
IRANIAN 
FINANCIAL 
INSTITUTIONS 
IN-
CLUDES ASSETS IN POSSESSION OR CON-
TROL OF A UNITED STATES PERSON PURSU-
ANT TO A U-TURN TRANSACTION. 
Section 1245(c) of the National Defense Authoriza-
tion Act for Fiscal Year 2012 (22 U.S.C. 8513a(c)) is 
amended— 
(1) by striking ‘‘The President’’ and inserting 
‘‘(1) IN GENERAL.—The President’’; and 
(2) by adding at the end the following: 
‘‘(2) 
TREATMENT
OF
CERTAIN
TRANS-
ACTIONS.— 
‘‘(A) U-TURN
TRANSACTIONS.—Property 
that comes within the possession or control of 
a United States person pursuant to a transfer 
of funds that arises from, and is ordinarily inci-
dent and necessary to give effect to, an under-
lying transaction shall be considered to come 
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113 
within the possession or control of that person 
for purposes of paragraph (1). 
‘‘(B) BOOK
TRANSFERS.—A transfer of 
funds or other property for the benefit of an 
Iranian financial institution that is made be-
tween accounts of the same financial institution 
shall be considered property or interests in 
property of that Iranian financial institution for 
purposes of paragraph (1) even if that Iranian 
financial institution is not the direct recipient 
of the transfer.’’. 
TITLE V—MISCELLANEOUS 
SEC. 501. MODIFICATION OF REQUIREMENTS RELATING TO 
STATE SPONSORS OF TERRORISM. 
(a) REQUIREMENT TO COMPLY WITH ALL PROVI-
SIONS OF LAW RELATING TO STATE SPONSORS OF TER-
RORISM.—In making a determination to rescind the des-
ignation of a country as a state sponsor of terrorism, the 
President shall comply with all requirements under this 
Act, section 620A of the Foreign Assistance Act of 1961 
(22 U.S.C. 2371), section 40 of the Arms Export Control 
Act (22 U.S.C. 2780), section 6(j) of the Export Adminis-
tration Act of 1979 (50 U.S.C. 4605(j)) (as in effect pur-
suant to the International Emergency Economic Powers 
Act (50 U.S.C. 1701 et seq.)), and any other provision 
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114 
of law relating to countries the governments of which pro-
vide support for acts of international terrorism, with re-
spect to the rescission. 
(b) ADDITIONAL REQUIREMENTS FOR REMOVAL.— 
(1) IN GENERAL.—Not later than 15 days be-
fore the President submits to Congress a report 
under section 620A(c) of the Foreign Assistance Act 
of 1961 (22 U.S.C. 2371(c)), section 40(f) of the 
Arms Export Control Act (22 U.S.C. 2780(f)), or 
section 6(j) of the Export Administration Act of 
1979 (50 U.S.C. 4605(j)) (as in effect pursuant to 
the International Emergency Economic Powers Act 
(50 U.S.C. 1701 et seq.)) relating to the rescission 
of the designation of a country as a state sponsor 
of terrorism, the President shall submit to the 
Speaker of the House of Representatives, the minor-
ity leader of the House, the majority leader of the 
Senate, the minority leader of the Senate, and the 
appropriate congressional committees a report certi-
fying that— 
(A) the government of the country does 
not provide safe haven or assistance of any kind 
to terrorists or other violent fugitives from 
other countries; 
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115 
(B) the Secretary of State and the Direc-
tor of National Intelligence agree that the gov-
ernment of the country has ceased all support, 
directly or indirectly, to any terrorist or ter-
rorist organization, including public statements 
of support for any such terrorist or terrorist or-
ganization during the 36-month period imme-
diately preceding the submission of the report; 
(C) the government of the country has not 
provided direct or indirect support to another 
country on the state sponsor of terrorism list 
during that 36-month period; 
(D) the government of the country has not 
unjustly detained during that 36-month period, 
and is not unjustly detaining on the date of the 
report, United States citizens, including dual 
citizens; and 
(E) there has been a fundamental change 
in the leadership and policies of the government 
of the country. 
(2) FORM OF REPORT.—Each report described 
in paragraph (1) shall be submitted in unclassified 
form, but may include a classified annex if nec-
essary. 
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116 
(c) EXTENDED PERIOD BEFORE REMOVAL FROM 
LIST TAKES EFFECT.— 
(1) FOREIGN ASSISTANCE ACT OF 1961.—Sec-
tion 620A(c)(2) of the Foreign Assistance Act of 
1961 (22 U.S.C. 2371(c)(2)) is amended in the mat-
ter preceding subparagraph (A) by striking ‘‘45 
days’’ and inserting ‘‘180 days’’. 
(2) ARMS
EXPORT
CONTROL
ACT.—Section 
40(f)(1)(B) of the Arms Export Control Act (22 
U.S.C. 2780(f)(1)(B)) is amended in the matter pre-
ceding clause (i) by striking ‘‘45 days’’ and inserting 
‘‘180 days’’. 
(3) EXPORT ADMINISTRATION ACT OF 1979.— 
Section 6(j)(4)(B) of the Export Administration Act 
of 1979 (50 U.S.C. 4605(j)(4)(B)) (as in effect pur-
suant to the International Emergency Economic 
Powers Act (50 U.S.C. 1701 et seq.)) shall be ap-
plied and administered by substituting ‘‘180 days’’ 
for ‘‘45 days’’. 
(d) RESOLUTION OF DISAPPROVAL.— 
(1) IN GENERAL.—The rescission of the des-
ignation of a country as a state sponsor of terrorism 
shall not become effective if, during the 180-day pe-
riod following the submission of a report under sec-
tion 620A(c) of the Foreign Assistance Act of 1961 
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117 
(22 U.S.C. 2371(c)), section 40(f) of the Arms Ex-
port Control Act (22 U.S.C. 2780(f)), or section 6(j) 
of the Export Administration Act of 1979 (50 
U.S.C. 4605(j)) (as in effect pursuant to the Inter-
national Emergency Economic Powers Act (50 
U.S.C. 1701 et seq.)) relating to the rescission, Con-
gress enacts a joint resolution stating in substance 
that the Congress disapproves the rescission. 
(2) PROCEDURES IN THE SENATE.—Any joint 
resolution described paragraph (1) shall be consid-
ered in the Senate under the procedures set forth in 
section 601 of the International Security Assistance 
and Arms Export Control Act of 1976 (Public Law 
94–329; 90 Stat. 765) for consideration of joint res-
olutions. 
(3) RULES OF SENATE.—Paragraph (2) is en-
acted by Congress— 
(A) as an exercise of the rulemaking power 
of the Senate and as such is deemed a part of 
the rules of the Senate, but applicable only with 
the respect to the procedure to be followed in 
the Senate in the case of a joint resolution de-
scribed in paragraph (1), and supersedes other 
rules only to the extent that it is inconsistent 
with such rules; and 
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118 
(B) with full recognition of the constitu-
tional right of the Senate to change the rules 
at any time, in the same manner and to the 
same extent as in the case of any other rule of 
the Senate. 
(e) REDESIGNATION
OF COUNTRIES PREVIOUSLY 
DESIGNATED
AS STATE SPONSORS
OF TERRORISM.— 
During the 5-year period beginning on the date on which 
the designation of the country as a state sponsor of ter-
rorism is rescinded, the President shall redesignate the 
country as a state sponsor of terrorism upon the assess-
ment of the Director of National Intelligence that the gov-
ernment of the country has— 
(1) directly or indirectly supported acts of inter-
national terrorism; 
(2) given direct or indirect support to a ter-
rorist or terrorist organization, including providing 
safe haven or assistance to a terrorist or terrorist 
organization; 
(3) given direct or indirect support to another 
country designated as a state sponsor of terrorism; 
or 
(4) provided direct or indirect support, training, 
materials, or advice on nuclear, biological, or chem-
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