H. R. 2194—33 
or administrative action against any registered investment com-
pany, or any employee, officer, director, or investment adviser 
thereof, based solely upon the investment company divesting 
from, or avoiding investing in, securities issued by persons 
that the investment company determines, using credible 
information available to the public— 
‘‘(A) conduct or have direct investments in business 
operations in Sudan described in section 3(d) of the Sudan 
Accountability and Divestment Act of 2007 (50 U.S.C. 1701 
note); or 
‘‘(B) engage in investment activities in Iran described 
in section 202(c) of the Comprehensive Iran Sanctions, 
Accountability, and Divestment Act of 2010.’’. 
(b) SEC REGULATIONS.—Not later than 120 days after the date 
of the enactment of this Act, the Securities and Exchange Commis-
sion shall issue any revisions the Commission determines to be 
necessary to the regulations requiring disclosure by each registered 
investment company that divests itself of securities in accordance 
with section 13(c) of the Investment Company Act of 1940 to include 
divestments of securities in accordance with paragraph (1)(B) of 
such section, as added by subsection (a) of this section. 
SEC. 204. SENSE OF CONGRESS REGARDING CERTAIN ERISA PLAN 
INVESTMENTS. 
It is the sense of Congress that a fiduciary of an employee 
benefit plan, as defined in section 3(3) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1002(3)), may divest plan 
assets from, or avoid investing plan assets in, any person the 
fiduciary determines engages in investment activities in Iran 
described in section 202(c) of this Act, without breaching the respon-
sibilities, obligations, or duties imposed upon the fiduciary by 
subparagraph (A) or (B) of section 404(a)(1) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1104(a)(1)), if— 
(1) the fiduciary makes such determination using credible 
information that is available to the public; and 
(2) the fiduciary prudently determines that the result of 
such divestment or avoidance of investment would not be 
expected to provide the employee benefit plan with— 
(A) a lower rate of return than alternative investments 
with commensurate degrees of risk; or 
(B) a higher degree of risk than alternative investments 
with commensurate rates of return. 
SEC. 205. TECHNICAL CORRECTIONS TO SUDAN ACCOUNTABILITY AND 
DIVESTMENT ACT OF 2007. 
(a) ERISA PLAN
INVESTMENTS.—Section 5 of the Sudan 
Accountability and Divestment Act of 2007 (Public Law 110–174; 
50 U.S.C. 1701 note) is amended— 
(1) by striking ‘‘section 404 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1104)’’ and inserting 
‘‘subparagraph (A) or (B) of section 404(a)(1) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1104(a)(1))’’; 
and 
(2) by striking paragraph (2) and inserting the following: 
‘‘(2) the fiduciary prudently determines that the result of 
such divestment or avoidance of investment would not be 
expected to provide the employee benefit plan with—
H. R. 2194—34 
‘‘(A) a lower rate of return than alternative investments 
with commensurate degrees of risk; or 
‘‘(B) a higher degree of risk than alternative invest-
ments with commensurate rates of return.’’. 
(b) SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY 
ASSET MANAGERS.— 
(1) IN
GENERAL.—Section 13(c)(2)(A) of the Investment 
Company Act of 1940 (15 U.S.C. 80a–13(c)(2)(A)) is amended 
to read as follows: 
‘‘(A) RULE OF CONSTRUCTION.—Nothing in paragraph 
(1) shall be construed to create, imply, diminish, change, 
or affect in any way whether or not a private right of 
action exists under subsection (a) or any other provision 
of this Act.’’. 
(2) APPLICABILITY.—The amendment made by paragraph 
(1) shall apply as if included in the Sudan Accountability and 
Divestment Act of 2007 (Public Law 110–174; 50 U.S.C. 1701 
note). 
TITLE III—PREVENTION OF DIVERSION 
OF CERTAIN GOODS, SERVICES, AND 
TECHNOLOGIES TO IRAN 
SEC. 301. DEFINITIONS. 
In this title: 
(1) ALLOW.—The term ‘‘allow’’, with respect to the diversion 
through a country of goods, services, or technologies, means 
the government of the country knows or has reason to know 
that the territory of the country is being used for such diversion. 
(2) APPROPRIATE CONGRESSIONAL COMMITTEES.—The term 
‘‘appropriate congressional committees’’ means— 
(A) the Committee on Banking, Housing, and Urban 
Affairs, the Committee on Foreign Relations, and the Select 
Committee on Intelligence of the Senate; and 
(B) the Committee on Foreign Affairs and the Perma-
nent Select Committee on Intelligence of the House of 
Representatives. 
(3) COMMERCE CONTROL LIST.—The term ‘‘Commerce Con-
trol List’’ means the list maintained pursuant to part 774 
of the Export Administration Regulations (or any corresponding 
similar regulation or ruling). 
(4) DIVERT; DIVERSION.—The terms ‘‘divert’’ and ‘‘diversion’’ 
refer to the transfer or release, directly or indirectly, of a 
good, service, or technology to an end-user or an intermediary 
that is not an authorized recipient of the good, service, or 
technology. 
(5) END-USER.—The term ‘‘end-user’’, with respect to a good, 
service, or technology, means the person that receives and 
ultimately uses the good, service, or technology. 
(6) EXPORT
ADMINISTRATION
REGULATIONS.—The term 
‘‘Export Administration Regulations’’ means subchapter C of 
chapter VII of title 15, Code of Federal Regulations (or any 
corresponding similar regulation or ruling). 
(7) GOVERNMENT.—The term ‘‘government’’ includes any 
agency or instrumentality of a government.
H. R. 2194—35 
(8) INTERMEDIARY.—The term ‘‘intermediary’’ means a per-
son that receives a good, service, or technology while the good, 
service, or technology is in transit to the end-user of the good, 
service, or technology. 
(9) INTERNATIONAL TRAFFIC IN ARMS REGULATIONS.—The 
term ‘‘International Traffic in Arms Regulations’’ means sub-
chapter M of chapter I of title 22, Code of Federal Regulations 
(or any corresponding similar regulation or ruling). 
(10) IRAN.—The term ‘‘Iran’’ includes the Government of 
Iran and any agency or instrumentality of Iran. 
(11) IRANIAN
END-USER.—The term ‘‘Iranian end-user’’ 
means an end-user that is the Government of Iran or a person 
in, or an agency or instrumentality of, Iran. 
(12) IRANIAN
INTERMEDIARY.—The term ‘‘Iranian inter-
mediary’’ means an intermediary that is the Government of 
Iran or a person in, or an agency or instrumentality of, Iran. 
(13) STATE
SPONSOR
OF
TERRORISM.—The term ‘‘state 
sponsor of terrorism’’ means any country the government of 
which the Secretary of State has determined has repeatedly 
provided support for acts of international terrorism pursuant 
to— 
(A) section 6(j)(1)(A) of the Export Administration Act 
of 1979 (50 U.S.C. App. 2405(j)(1)(A)) (or any successor 
thereto); 
(B) section 40(d) of the Arms Export Control Act (22 
U.S.C. 2780(d)); or 
(C) section 620A(a) of the Foreign Assistance Act of 
1961 (22 U.S.C. 2371(a)). 
(14) UNITED STATES MUNITIONS LIST.—The term ‘‘United 
States Munitions List’’ means the list maintained pursuant 
to part 121 of the International Traffic in Arms Regulations 
(or any corresponding similar regulation or ruling). 
SEC. 302. IDENTIFICATION OF COUNTRIES OF CONCERN WITH 
RESPECT TO THE DIVERSION OF CERTAIN GOODS, SERV-
ICES, AND TECHNOLOGIES TO OR THROUGH IRAN. 
(a) IN GENERAL.—Not later than 180 days after the date of 
the enactment of this Act, the Director of National Intelligence 
shall submit to the President, the Secretary of Defense, the Sec-
retary of Commerce, the Secretary of State, the Secretary of the 
Treasury, and the appropriate congressional committees a report 
that identifies each country the government of which the Director 
believes, based on all information available to the Director, is 
allowing the diversion through the country of goods, services, or 
technologies described in subsection (b) to Iranian end-users or 
Iranian intermediaries. 
(b) GOODS, SERVICES, AND TECHNOLOGIES DESCRIBED.—Goods, 
services, or technologies described in this subsection are goods, 
services, or technologies— 
(1) that— 
(A) originated in the United States; 
(B) would make a material contribution to Iran’s— 
(i) development of nuclear, chemical, or biological 
weapons; 
(ii) ballistic missile or advanced conventional 
weapons capabilities; or 
(iii) support for international terrorism; and
H. R. 2194—36 
(C) are— 
(i) items on the Commerce Control List or services 
related to those items; or 
(ii) defense articles or defense services on the 
United States Munitions List; or 
(2) that are prohibited for export to Iran under a resolution 
of the United Nations Security Council. 
(c) UPDATES.—The Director of National Intelligence shall 
update the report required by subsection (a)— 
(1) as new information becomes available; and 
(2) not less frequently than annually. 
(d) FORM.—The report required by subsection (a) and the 
updates required by subsection (c) may be submitted in classified 
form. 
SEC. 303. DESTINATIONS OF DIVERSION CONCERN. 
(a) DESIGNATION.— 
(1) IN GENERAL.—The President shall designate a country 
as a Destination of Diversion Concern if the President deter-
mines that the government of the country allows substantial 
diversion of goods, services, or technologies described in section 
302(b) through the country to Iranian end-users or Iranian 
intermediaries. 
(2) DETERMINATION OF SUBSTANTIAL.—For purposes of para-
graph (1), the President shall determine whether the govern-
ment of a country allows substantial diversion of goods, serv-
ices, or technologies described in section 302(b) through the 
country to Iranian end-users or Iranian intermediaries based 
on criteria that include— 
(A) the volume of such goods, services, and technologies 
that are diverted through the country to such end-users 
or intermediaries; 
(B) the inadequacy of the export controls of the country; 
(C) the unwillingness or demonstrated inability of the 
government of the country to control the diversion of such 
goods, services, and technologies to such end-users or inter-
mediaries; and 
(D) the unwillingness or inability of the government 
of the country to cooperate with the United States in efforts 
to interdict the diversion of such goods, services, or tech-
nologies to such end-users or intermediaries. 
(b) REPORT ON DESIGNATION.—Upon designating a country as 
a Destination of Diversion Concern under subsection (a), the Presi-
dent shall submit to the appropriate congressional committees a 
report— 
(1) notifying those committees of the designation of the 
country; and 
(2) containing a list of the goods, services, and technologies 
described in section 302(b) that the President determines are 
diverted through the country to Iranian end-users or Iranian 
intermediaries. 
(c) LICENSING REQUIREMENT.—Not later than 45 days after 
submitting a report required by subsection (b) with respect to 
a country designated as a Destination of Diversion Concern under 
subsection (a), the President shall require a license under the 
Export Administration Regulations or the International Traffic in 
Arms Regulations (whichever is applicable) to export to that country
H. R. 2194—37 
a good, service, or technology on the list required under subsection 
(b)(2), with the presumption that any application for such a license 
will be denied. 
(d) DELAY OF IMPOSITION OF LICENSING REQUIREMENT.— 
(1) IN GENERAL.—The President may delay the imposition 
of the licensing requirement under subsection (c) with respect 
to a country designated as a Destination of Diversion Concern 
under subsection (a) for a 12-month period if the President— 
(A) determines that the government of the country 
is taking steps— 
(i) to institute an export control system or 
strengthen the export control system of the country; 
(ii) to interdict the diversion of goods, services, 
or technologies described in section 302(b) through the 
country to Iranian end-users or Iranian intermediaries; 
and 
(iii) to comply with and enforce United Nations 
Security Council Resolutions 1696 (2006), 1737 (2006), 
1747 (2007), 1803 (2008), and 1929 (2010), and any 
other resolution that is agreed to by the Security 
Council and imposes sanctions with respect to Iran; 
(B) determines that it is appropriate to carry out 
government-to-government activities to strengthen the 
export control system of the country; and 
(C) submits to the appropriate congressional commit-
tees a report describing the steps specified in subparagraph 
(A) being taken by the government of the country. 
(2) ADDITIONAL
12-MONTH
PERIODS.—The President may 
delay the imposition of the licensing requirement under sub-
section (c) with respect to a country designated as a Destination 
of Diversion Concern under subsection (a) for additional 12- 
month periods after the 12-month period referred to in para-
graph (1) if the President, for each such 12-month period— 
(A) makes the determinations described in subpara-
graphs (A) and (B) of paragraph (1) with respect to the 
country; and 
(B) submits to the appropriate congressional commit-
tees an updated version of the report required by subpara-
graph (C) of paragraph (1). 
(3) STRENGTHENING
EXPORT
CONTROL
SYSTEMS.—If the 
President determines under paragraph (1)(B) that is it appro-
priate to carry out government-to-government activities to 
strengthen the export control system of a country designated 
as a Destination of Diversion Concern under subsection (a), 
the United States shall initiate government-to-government 
activities that may include— 
(A) cooperation by agencies and departments of the 
United States with counterpart agencies and departments 
in the country— 
(i) to develop or strengthen the export control 
system of the country; 
(ii) to strengthen cooperation among agencies of 
the country and with the United States and facilitate 
enforcement of the export control system of the country; 
and
H. R. 2194—38 
(iii) to promote information and data exchanges 
among agencies of the country and with the United 
States; 
(B) training officials of the country to strengthen the 
export control systems of the country— 
(i) to facilitate legitimate trade in goods, services, 
and technologies; and 
(ii) to prevent terrorists and state sponsors of ter-
rorism, 
including 
Iran, 
from 
obtaining 
nuclear, 
biological, and chemical weapons, defense technologies, 
components for improvised explosive devices, and other 
defense articles; and 
(C) encouraging the government of the country to 
participate in the Proliferation Security Initiative, such 
as by entering into a ship boarding agreement pursuant 
to the Initiative. 
(e) TERMINATION
OF
DESIGNATION.—The designation of a 
country as a Destination of Diversion Concern under subsection 
(a) shall terminate on the date on which the President determines, 
and certifies to the appropriate congressional committees, that the 
country has adequately strengthened the export control system 
of the country to prevent the diversion of goods, services, and 
technologies described in section 302(b) to Iranian end-users or 
Iranian intermediaries. 
(f) FORM OF REPORTS.—A report required by subsection (b) 
or (d) may be submitted in classified form. 
SEC. 304. REPORT ON EXPANDING DIVERSION CONCERN SYSTEM TO 
ADDRESS THE DIVERSION OF UNITED STATES ORIGIN 
GOODS, SERVICES, AND TECHNOLOGIES TO CERTAIN 
COUNTRIES OTHER THAN IRAN. 
(a) IN GENERAL.—Not later than 1 year after the date of the 
enactment of this Act, the President shall submit to the appropriate 
congressional committees a report that— 
(1) identifies any country that the President determines 
is allowing the diversion, in violation of United States law, 
of items on the Commerce Control List or services related 
to those items, or defense articles or defense services on the 
United States Munitions List, that originated in the United 
States to another country if such other country— 
(A) is seeking to obtain nuclear, biological, or chemical 
weapons, or ballistic missiles; or 
(B) provides support for acts of international terrorism; 
and 
(2) assesses the feasability and advisability of expanding 
the system established under section 303 for designating coun-
tries as Destinations of Diversion Concern to include countries 
identified under paragraph (1). 
(b) FORM.—The report required by subsection (a) may be sub-
mitted in classified form. 
SEC. 305. ENFORCEMENT AUTHORITY. 
The Secretary of Commerce may designate any employee of 
the Office of Export Enforcement of the Department of Commerce 
to conduct activities specified in clauses (i), (ii), and (iii) of section 
12(a)(3)(B) of the Export Administration Act of 1979 (50 U.S.C. 
App. 2411(a)(3)(B)) when the employee is carrying out activities 
to enforce—
H. R. 2194—39 
(1) the provisions of the Export Administration Act of 1979 
(50 U.S.C. App. 2401 et seq.) (as in effect pursuant to the 
International Emergency Economic Powers Act (50 U.S.C. 1701 
et seq.)); 
(2) the provisions of this title, or any other provision of 
law relating to export controls, with respect to which the Sec-
retary of Commerce has enforcement responsibility; or 
(3) any license, order, or regulation issued under— 
(A) the Export Administration Act of 1979 (50 U.S.C. 
App. 2401 et seq.) (as in effect pursuant to the International 
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)); 
or 
(B) a provision of law referred to in paragraph (2). 
TITLE IV—GENERAL PROVISIONS 
SEC. 401. GENERAL PROVISIONS. 
(a) SUNSET.—The provisions of this Act (other than sections 
105 and 305 and the amendments made by sections 102, 107, 
109, and 205) shall terminate, and section 13(c)(1)(B) of the Invest-
ment Company Act of 1940, as added by section 203(a), shall 
cease to be effective, on the date that is 30 days after the date 
on which the President certifies to Congress that— 
(1) the Government of Iran has ceased providing support 
for acts of international terrorism and no longer satisfies the 
requirements for designation as a state sponsor of terrorism 
(as defined in section 301) under— 
(A) section 6(j)(1)(A) of the Export Administration Act 
of 1979 (50 U.S.C. App. 2405(j)(1)(A)) (or any successor 
thereto); 
(B) section 40(d) of the Arms Export Control Act (22 
U.S.C. 2780(d)); or 
(C) section 620A(a) of the Foreign Assistance Act of 
1961 (22 U.S.C. 2371(a)); and 
(2) Iran has ceased the pursuit, acquisition, and develop-
ment of nuclear, biological, and chemical weapons and ballistic 
missiles and ballistic missile launch technology. 
(b) PRESIDENTIAL WAIVERS.— 
(1) IN GENERAL.—The President may waive the application 
of sanctions under section 103(b), the requirement to impose 
or maintain sanctions with respect to a person under section 
105(a), the requirement to include a person on the list required 
by section 105(b), the application of the prohibition under sec-
tion 106(a), or the imposition of the licensing requirement under 
section 303(c) with respect to a country designated as a Destina-
tion of Diversion Concern under section 303(a), if the President 
determines that such a waiver is in the national interest of 
the United States. 
(2) REPORTS.— 
(A) IN GENERAL.—If the President waives the applica-
tion of a provision pursuant to paragraph (1), the President 
shall submit to the appropriate congressional committees 
a report describing the reasons for the waiver. 
(B) SPECIAL RULE FOR REPORT ON WAIVING IMPOSITION 
OF LICENSING REQUIREMENT UNDER SECTION 303(c).—In any 
case in which the President waives, pursuant to paragraph
H. R. 2194—40 
(1), the imposition of the licensing requirement under sec-
tion 303(c) with respect to a country designated as a Des-
tination of Diversion Concern under section 303(a), the 
President shall include in the report required by subpara-
graph (A) of this paragraph an assessment of whether 
the government of the country is taking the steps described 
in subparagraph (A) of section 303(d)(1). 
(c) AUTHORIZATIONS OF APPROPRIATIONS.— 
(1) AUTHORIZATION OF APPROPRIATIONS FOR THE DEPART-
MENT
OF
STATE
AND
THE
DEPARTMENT
OF
THE
TREASURY.— 
There are authorized to be appropriated to the Secretary of 
State and to the Secretary of the Treasury such sums as may 
be necessary to implement the provisions of, and amendments 
made by, titles I and III of this Act. 
(2) AUTHORIZATION OF APPROPRIATIONS FOR THE DEPART-
MENT OF COMMERCE.—There are authorized to be appropriated 
to the Secretary of Commerce such sums as may be necessary 
to carry out title III. 
SEC. 402. DETERMINATION OF BUDGETARY EFFECTS. 
The budgetary effects of this Act, for the purpose of complying 
with the Statutory Pay-As-You-Go-Act of 2010, shall be determined 
by reference to the latest statement titled ‘‘Budgetary Effects of 
PAYGO Legislation’’ for this Act, jointly submitted for printing 
in the Congressional Record by the Chairmen of the House and 
Senate Budget Committees, provided that such statement has been 
submitted prior to the vote on passage in the House acting first 
on this conference report or amendment between the Houses. 
Speaker of the House of Representatives. 
Vice President of the United States and
President of the Senate.