H.R. 6178House110th Congress (2007-2009)In Committee

STOP Act of 2008

Legislative Activity

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2 earlier actions

HouseCommittee Latest Action

Referred to the Subcommittee on Trade.

Trade Subcommittee

June 9, 2008

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HouseIntro Referral

Introduced in House

June 4, 2008

HouseIntro Referral

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.

Foreign Affairs Committee

June 4, 2008

HouseCommittee

Referred to the Subcommittee on Trade.

Trade Subcommittee

June 9, 2008

Floor Debate

7 members

What members said about H.R. 6178 on the floor

1 Republican6 Democrats

Rep. Ileana Ros-LehtinenR-FL-18 · Sep 26, 2008

Mr. Speaker, I would like to yield myself such time as I might consume. Mr. Speaker, I rise in support of this measure, but with great reservations that this weak legislation will send a message to…

Mr. Speaker, I would like to yield myself such time as I might consume.

Mr. Speaker, I rise in support of this measure, but with great reservations that this weak legislation will send a message to our enemies of a weakened U.S. position on the issue of Iran.

The Iranian threat to the United States, to our allies and to our interests could not be more apparent. Only last week the head of the International Atomic Energy Agency warned that Iran is probably carrying out secret nuclear activities. Then last Saturday the lead inspector for the Middle East shared with member nations of the IAEA extensive documentation of an Iranian effort to reconfigure the Shahab- 3 long-range missile to carry a nuclear warhead. The range of these missiles reach Israel and most of the Middle East.

And this is a regime whose current leader, Ahmadinejad, has consistently called for the destruction of the Jewish State of Israel.

On October 26, 2005, at the World Without Zionism Conference in Tehran, the Iranian leader called for Israel to be ``wiped off the map,'' described Israel as ``a disgraceful blot on the face of the Islamic world'' and declared that ``anybody who recognizes Israel will burn in the fire of the Islamic nation's fury.'' Then on December 12, 2006, he addressed a conference in Tehran questioning the historical veracity of the Holocaust and said that Israel, again, would ``soon be wiped out.''

On Israel's 60th birthday, Ahmadinejad gave a speech in which, according to the official Iranian news agency, he stated that Israel was ``on its way to total destruction.''

In a public address which aired on the Iranian news channel on June 2 of this year, Ahmadinejad again called this ``worm of corruption'' in reference to Israel, to be wiped off. He further stated that while ``some say the ideal of Greater Israel has expired, I say the idea of lesser Israel has expired too.'' And earlier this week at the United Nations, he continued to invoke anti-Israel and anti-Semitic canards when he stated ``the dignity, integrity and rights of the European and American people are being played with by a small but deceitful number of people call Zionists. These nations are spending their dignity and resources on the crimes and the occupations and the threats of the Zionist network against their will.''

But the threat is not just to our friend Israel. Iran is currently working on even longer-range missiles directly threatening critical U.S. interests. The importance and the urgency of strengthened sanctions was underlined just a few days ago, Mr. Speaker, when the European Union warned that Iran was approaching a nuclear weapons capability. The significance stems from the fact that the European Union has long insisted that the West and other countries focus their efforts on diplomacy to persuade Iran to suspend its nuclear program.

This is an acknowledgment that a strategy based on holding out an olive branch and engaging directly with the Iranian regime, while promising trade agreements and other benefits, has not worked and that more concrete economic pressure is needed to compel a change in regimes' behavior. Thus the evidence before us makes it clear that we must act quickly to impose the greatest pressure possible on the regime and its enablers.

Unfortunately, this bill does not do quite that, Mr. Speaker. My colleagues, you all know where I stand on Iran. Last Congress I authored the Iran Freedom Support Act which contained very tough and quite focused sanctions on the regime in Tehran. Our beloved late former chairman of the Foreign Affairs Committee, Tom Lantos, was the lead Democrat cosponsor, and the bill enjoyed the support of our current chairman, Howard Berman, my good friend, and 360 Members of the House.

The Iran Freedom Support Act was enacted into law 2 years ago almost to the day on September 30. Then when Chairman Lantos approached me last year and asked that I serve as the lead Republican cosponsor of H.R. 1400, the Iran Counter-Proliferation Act of 2007, I immediately agreed because H.R. 1400 truly does strengthen U.S. law and does tighten the economic noose around the regime's elites in Iran.

H.R. 1400 passed the House a year ago yesterday, September 25, 2007, by a vote of 397 in favor and only 16 against. Yet it has been stalled in the Senate all this time. Then we have Senate bill 970 which currently has the support of 73 Senators. However, action on these stronger bills was not to be. Instead, we have a bill which refers to certain sanctions already in place, and they call them ``new'' sanctions, and then refers to a handful of other important ones while providing a meager ``national interest waiver.''

What does this mean in practice, Mr. Speaker? The next President doesn't have to worry about actually implementing or applying these sanctions, as a ``national interest waiver'' has been easily justified by consecutive administrations to avoid implementing U.S. laws concerning state sponsors of terrorism, like Iran.

So rather than strengthening the sanctions structure, rather than limiting the President's flexibility, as we did 2 years ago in the Iran Freedom Support Act on proliferation-related sanctions by removing the waiver and on the Iran Sanctions Act by raising the threshold to ``vital to the national security interests of the United States,'' the bill before us provides the weakest possible threshold.

I do not fault my good friend, Chairman Berman. I commend the chairman for his efforts. He is in a difficult situation, and this is as strong a bill as some of his colleagues will allow the House or the Senate to act on.

This bill is like one of the weak Iran resolutions that the United Nations Security Council keeps passing that allows Russia and China and others to go along with because they do nothing. In fact, just today, the U.N. Security Council moved a measure that contained no new sanctions but said that other Security Council resolutions on Iran are legally binding and must be carried out. That is almost exactly what the bill before us is going to do on the issue of sanctions.

Again, I do not understand why, at a time when the Iranian regime is crystal clear in accelerating its efforts to acquire a nuclear weapon, that we are not considering the Lantos Iran Counter-Proliferation Act or Senate bill 970.

Notably, this body has not even considered the Ackerman-Pence resolution, which has 275 cosponsors and is a strong, unequivocal message to the regime.

Yet, Mr. Speaker, despite the many deficiencies of this bill, I want to thank my friend, Chairman Berman, for adding a Rule of Construction to his version of the Dodd bill which states, ``nothing in this Act shall be construed as affecting in any way any provision of the Iran Freedom Support Act of 2006, Public Law 109-293.''

Since the legislation retains a ``notwithstanding'' clause for section 103, I hope that the Rule of Construction will be sufficient to prevent the unraveling

of sanctions codified 2 years ago. Additionally, Mr. Speaker, portions of section 104 are essentially a repetition of current law as section 2(f) of the Executive Order 13059 codified.

In this respect, Chairman Berman, I would appreciate or his substitute, Mr. Ackerman, clarification that the waiver in section 104 would not apply to sanctions already in place, even if these have been restated in the legislation.

Finally, Mr. Speaker, I appreciate that the reporting requirements have been strengthened with respect to investments in Iran's energy sector since January 1 of this year. However, I ask to add language to the bill before us that would amend current law and force a determination on whether foreign investments in Iran's energy sector violate the Iran Sanctions Act and whether sanctions should be implemented. My proposal was not limited to the last 9 months of activity or to simply reporting requirements. But this modification was not incorporated in the text that we are considering today.

Looking to other sections of this House version of the Dodd bill, there are provisions seeking to prevent the export or trans-shipment of U.S.-origin goods to Iran. Except for the language calling for the designation of a country as a Destination of Possible Diversion Concern, this bill duplicates most existing laws and regulations on these issues, as well as current U.S. Government programs. It does provide for the application of licensing controls to the countries designated, but immediately affords yet another mere ``national interest waiver.''

There are also stronger bills pending on the issue of trans-shipment, such as H.R. 6178, the Security Through Termination of Proliferation Act, or the STOP Act. And I hope that we can work together to move that legislation in the next Congress.

My good friend, Howard Berman, shares with me concerns about trans- shipment and diversion of sensitive materials and technology to Iran. We articulated them in our letter of February 5, 2008, a letter to Admiral McConnell, the Director of National Intelligence, raising these and many other vital issues.

Mr. Speaker, also on this issue I recently wrote to my chairman, Howard Berman, asking for greater scrutiny of foreign military financing, foreign military sales and direct commercial sales to countries that are a trans-shipment concern for U.S.-origin goods to Iran.

In closing, Mr. Speaker, despite my grave, serious and repeated reservations about this weak bill, I will vote for it, and I hope that the Iranian regime and its enablers do not see this as a sign of weakness on our part.

House of Representatives,

Committee on Foreign Affairs,

Washington, DC, February 5, 2008.

Hon. J. Michael McConnell,

Director of National Intelligence, Office of the Director of

National Intelligence, Washington, DC.

Dear Admiral McConnell: We are writing to request an

assessment of the export control regime in the United Arab

Emirates (UAE), especially its effectiveness in preventing

the export or transshipment of U.S.-origin goods to Iran. We

are also interested in receiving information regarding

broader efforts to implement U.S. sanctions against Iran.

As you are aware, Iran is the one of the UAE's largest

trade partners. The UAE is also a world leader in the

transshipments of goods from other countries, including the

United States. We are concerned by reports that the

international sanctions against Iran are being undermined by

inadequate end-use controls in the UAE. Obviously, an

effective export, re-export, and transshipment control regime

in the UAE is a prerequisite to that country's ability to

control transshipment of sensitive goods through its ports.

To enable the House Foreign Affairs Committee to better

understand this issue, we request that you provide an

assessment of the effectiveness of the UAE's existing export

control regime and a translated copy of the DAE's new export

control legislation. Among other subjects, the assessment

should address overall effectiveness, obstacles to

implementation, the extent to which the UAE has complied with

U.S. requests to interdict and prevent shipments of concern,

and the attitudes and records of specific UAE officials

toward preventing exports or transshipments of items of

proliferation concern to Iran or Iranian-controlled entities.

Additionally, we request that you provide the following

information pertaining to broader U.S. efforts: the amount of

goods seized, penalties imposed, and convictions obtained by

U.S. authorities under the trade ban; the type and amount of

U.S. sensitive items diverted to Iran through all

transshipment points; the extent to which all repeat

violators of U.S. Iran-specific sanctions laws have ended

their sales of sensitive items to Iran; the total amount of

assets frozen due to financial sanctions implemented by both

the United States and other nations; and the total impact of

U.S. bilateral sanctions on foreign investment in Iran's

energy sector.

This assessment may be in classified form.

Thank you for your attention to our request.

Sincerely,

Ileana Ros-Lehtinen,

Ranking Member, House Foreign Affairs Committee.

Edward R. Royce,

Ranking Member, Subcommittee on Terrorism, Nonproliferation

and Trade.

Mike Pence,

Ranking Member, Subcommittee on the Middle East and South

Asia.

Tom Lantos,

Chairman, House Foreign Affairs Committee.

Howard L. Berman,

Senior Member, House Foreign Affairs Committee.

I continue to reserve, Mr. Speaker.

I reserve my time.

Mr. Speaker, I would like to yield myself such time as I may consume.

I would like to point out that the reports that we are getting about the threat of a nuclear-powered Iran are coming from all corners of the world, and I would like to read just segments of the online edition of The Jerusalem Post posted by Herb Keinon. It says, ``Military Intelligence: Iran Halfway to First Nuclear Bomb.'' It reads, ``Iran is halfway to a nuclear bomb, and Hezbollah, Hamas and Syria are using this period of relative calm to significantly rearm.''

This is according to the Head of Research from the Israeli Military Intelligence, and that is the information that he gave and he shared with members of the Israeli Cabinet and the Israeli Parliament on September 21st, in the Knesset. He said there was a growing gap between Iran's progress on the nuclear front and the determination of the West to stop it. A growing gap. Iran gets closer, our determination is stopped. Iran is concentrating on uranium enrichment and is making progress.

He noted that they have improved the function of their 4,000 centrifuges. According to this military intelligence head of research, Iranian centrifuges have so far produced between one-third to one-half of the enriched material that is needed to build a nuclear bomb. The time that they will have crossed the nuclear point of no return is fast approaching.

Although he stopped short of giving a firm deadline, last week in the Knesset's Foreign Affairs and Defense Committee, he put the date at 2011. Tick tock, the clock is ticking. He said that their confidence is growing with the thought that the international community is not strong enough to stop them. He said that the Iranians were playing for time and that time was working in their favor because the longer the process dragged on, the wider the riffs appearing among the countries in the west, then Iran is in control of the technology and continues to move forward with determination toward a nuclear bomb.

In addition to their nuclear efforts, Iranians were also deepening their influence throughout the region, because they are cooperating with Syria. They are cooperating with the Palestinian terrorist organization, as well as being the main arms supplier to another terrorist group, Hezbollah.

While I appreciate the intentions of my good friend, Chairman Berman, this bill does fall far short of the type of comprehensive sanctions that would truly cripple the Iranian economy, which is dependent on investments in its energy sector. Setting aside the weakness of the bill regarding the U.S. direct sanctions on the regime, it does nothing tangible to force the executive branch's hand to fully implement the Iran Sanctions Act.

It could have, but language to include an automatic trigger for a determination of sanctions was not in place in this bill, and it was not to be. This bill had great promise. It does deliver on some of those promises. I wish that it could have gone further, but I hope that my colleagues will adopt this important bill tonight.

Mr. Speaker, I yield back the balance of our time.

Rep. Howard L. BermanD-CA-28 · Sep 26, 2008

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 7112) to impose sanctions with respect to Iran, to provide for the divestment of assets in Iran by State and local governments and…

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 7112) to impose sanctions with respect to Iran, to provide for the divestment of assets in Iran by State and local governments and other entities, and to identify locations of concern with respect to transshipment, reexportation, or diversion of certain sensitive items to Iran.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks and include extraneous material on the resolution under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, preventing Iran from becoming a nuclear power, to me, is one of the great national security challenges of our age. A nuclear- armed, fundamentalist Iran would become the dominant power in its region. The global nonproliferation regime would crumble. Already today we know that many of Iran's neighbors are contemplating their own nuclear programs. And can anyone be sure that Iran, with a leader who speaks like he speaks now, would not resort to either the use of nuclear weapons or to the handoff of those weapons to terrorist organizations?

The sanctions that the United States and the international community have thus far placed on Iran have squeezed Iran's economy somewhat, but clearly not enough to slow down its nuclear program. The present strategy is not working. I'm disappointed--and I believe the Iranian regime is surely heartened--by the failure of the administration's program to produce the kinds of results we need regarding Iran's nuclear program.

We need to make our foreign policy priorities clear. And Iran must be at the very top of the agenda in all our dealings with other countries. Sanctions will never work unless we have buy-in and support from other key countries. And if the process of achieving that buy-in requires us to engage directly with Iran, that is certainly something we should do.

Two months ago, the Permanent Members of the U.N. Security Council and Germany offered Iran all kinds of generous incentives to persuade it to suspend its uranium enrichment program. Just for the sake of initiating further talks on this package, they offered what they called a ``freeze-for-freeze,'' meaning we will agree not to pursue further sanctions for 6 weeks and Iran agrees not to increase the number of its centrifuges. But these offers weren't good enough for Iran, which responded only with a noncommittal letter.

If Iran won't change its behavior as a result of the sanctions the international community has already imposed, and if it won't change its behavior as a result of the generous incentives package offered in Geneva, then we should be pursuing tougher and more meaningful sanctions.

The legislation before us won't put an end to Iran's nuclear program, but it may help to slow it down. It will send a strong signal to Tehran that the U.S. Congress views this matter with urgency. And it will send a message to companies and countries that invest or consider investing in Iran's energy sector.

This bill before us contains a somewhat diluted version of two measures put together in the other body that had previously been passed by the House by votes of 397-16 and 408-6.

This legislation would codify and expand export and import bans on goods to and from Iran. It would freeze assets in the U.S. held by Iranians closely tied to the regime. It would render sanctionable a U.S. parent company if that parent company uses a foreign subsidiary to circumvent sanctions. It expands the Iran Sanctions Act to

cover not only oil and all natural gas but related industries. It authorizes State and local governments in the United States to divest from any company that invests $20 million or more in Iran's energy sector. It increases U.S. export controls on countries that are directly involved in trans-shipment or illegal diversion of sensitive technologies to Iran. And it requires the administration to report all foreign investments of $20 million or more made in Iran's energy sector, an action which they have not done notwithstanding the existing law, and determining whether each such investment qualifies as sanctionable.

Since 1996, the executive branch has never implemented the sanctions in the Iran Sanctions Act, even though well over a dozen sanctionable investment deals have been concluded with Iran by international companies. The administration hasn't even made a determination as to whether any of those investors are sanctionable. This bill will close that loophole.

This legislation before us also reaffirms our Nation's commitment to multilateral diplomacy to increase pressure on Iran to give up its nuclear weapons program, and it exclusively states that nothing in this act authorizes the use of force.

Based on previous votes, this body is committed to ending Iran's illicit nuclear program by taking measures that are peaceful but meaningful. I believe this legislation is a useful step forward toward that end.

I reserve the balance of my time.

Mr. Speaker, two issues: first, the gentlelady has mentioned several times that this bill is not as strong as we wanted, and she is right. But it does many good things, many important things.

If we went on and fully extrapolated her comments, we would know the reason it isn't quite as strong as we wanted. It is because the White House, working with the other body, has worked very hard to not make it as strong as we would like.

Even this good, but not good as we wanted bill, would have been much stronger. I would love to see a letter of support from the administration for this measure.

On the issue she asked me to clarify, she got a very important piece of legislation through a couple of years ago that codified our sanctions and did not contain waiver authority. We don't believe this bill did, but we have made clear, by the language in section 108, that this waiver does not affect the provisions of the executive order codified by the Iran Freedom Support Act, that the waiver in this legislation has no impact whatsoever on her legislation, which passed in 2006, I am glad of that, and the specific provisions of section 108.

Mr. Speaker, I would like to place two exchanges of letters with the Committee on Financial Services and the Committee on Ways and Means in the Record.

House of Representatives,

Committee on Ways and Means,

Washington, DC, September 26, 2008.

Hon. Howard L. Berman,

Chairman, Committee on Foreign Affairs, Washington, DC.

Dear Mr. Chairman: I am writing regarding H.R. 7112--to

amend the Iran Sanctions Act of 1996, to expand and clarify

the entities against which sanctions may be imposed--is

expected to be on the suspension calendar today.

As you know, the Committee on Ways and Means has

jurisdiction over import matters, such as the import ban and

restrictions on imports imposed by the Iran Sanctions Act and

the International Emergency Powers Act. Accordingly, the

certain provisions of H.R. 7112 fall under the Committee's

jurisdiction.

There have been some very productive conversations between

the staffs of our committees, during which we have proposed

some changes to H.R. 7112 that I believe help clarify the

intent and scope of the measure. My understanding is that

there is an agreement with regard to these changes.

In order to expedite this legislation for floor

consideration, the Committee will forgo action on this bill

and will not oppose its consideration on the suspension

calendar. This is done with the understanding that it does

not in any way prejudice the Committee or its jurisdictional

prerogatives on this, or similar legislation in the future.

I would appreciate your response to this letter, confirming

our understanding with

respect to H.R. 7112, and would ask that a copy of our

exchange of letters on this matter be included in the Record.

I look forward to the bill's consideration on the floor and

hope that it will command the broadest possible support.

Sincerely,

Charles B. Rangel,

Chairman.

Rep. Gary L. AckermanD-NY-5 · Sep 26, 2008

Mr. Speaker, at this time I yield 4 minutes to the distinguished gentleman from Ohio, Dennis Kucinich. Mr. Speaker, I yield myself 3\1/2\ minutes. Mr. Speaker, in considering this bill, this package…

Mr. Speaker, at this time I yield 4 minutes to the distinguished gentleman from Ohio, Dennis Kucinich.

Mr. Speaker, I yield myself 3\1/2\ minutes.

Mr. Speaker, in considering this bill, this package of sanctions and divestment authorities for states and localities, we should keep foremost in our minds we are in a race. I am not referring to our upcoming elections, but rather the race between the civilized world and the nuclear ambitions of Iran.

One of us will win, and one will lose. If the world wins, Iran will not become a nuclear weapons state, there will not be a nuclear arms race in the Middle East and the nuclear Nonproliferation Treaty will not collapse. If Iran wins, the chief sponsor of terrorism in the Middle East, the patron of Hamas and Hezbollah, a hegemonic nation led by fanatical religious zealots will be able to threaten the global economy and the security of the United States and the civilized world from behind a nuclear shield.

And we are just about to lose this race. Iran is not only ahead, it is sprinting to the finish. Its proliferation potential is now a simple math problem. Iran is now producing 2.5 kilograms of low-enriched uranium per day, and has produced an estimated 200 to 250 kilograms of LEU just since this past May.

For a crash bomb program, Iran could use the LEU as feedstock, dramatically shortening the time to produce nuclear weapons grade uranium. With 700 to 800 kilograms of LEU set into centrifuges, Iran could produce the 20 to 25 kilograms of weapons-grade uranium required for a crude atomic bomb. Other estimates suggest that 1,000 to 1,700 kilograms of LEU would be necessary. Regardless of whether it is 700 or 1,700 kilograms, Iranian proliferation is no longer a question of if, but when.

The President has known about this threat since day one. He has known, and done next to nothing. The Bush administration has adamantly refused to use existing U.S. sanction laws against foreign companies investing in Iran's oil sector. But far worse, the Bush administration has actively worked to stop Congress from adopting the tough and necessary legislation that we have before us today.

Why? Do they believe that the past 5 years of slow motion, U.S.-in- the-back-seat diplomacy is about to make a huge breakthrough? In the light of Russia's recent announcement that they have no intention of supporting additional UN Security Council sanctions in Iran, I would like someone to explain how this huge breakthrough is supposed to happen.

With our administration tied up in an ideological knot, opposed to U.S. sanctions and unwilling to engage effectively itself, the question for Congress is what can we do to stop Iran. With so little time, our thinking on this problem needs to change. Options that years ago may have seemed reckless, like sanctioning firms in allied countries and applying unilateral economic levers, now have been become essential if we are going to be successful in peacefully getting Iran to back down.

Likewise, continuing doggedly with the current take-no-chances, small-carrots-and-no-sticks diplomacy which the Bush administration has insisted on, today looks like a roadmap to disaster.

Iranian proliferation is mere months away. That fact makes what is feckless, by definition, reckless. I am not calling for another war. I do not want air strikes or a blockade. I want to avoid all that. But if we don't want war, and we really don't want a nuclear Iran, then we have an obligation to use every peaceful, diplomatic, political and economic weapon at our disposal. If you don't want bombs, then you have to have an alternative, and that is sanctions. Abjuring sanctions is a de facto call to those who want arms.

I am very grateful to Chairman Berman and Ranking Member Ros-Lehtinen for their efforts in bringing this critical package of sanctions of legislation to the floor today. It deserves the enthusiastic support of every Member of the House, and there isn't a moment to lose.

Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from California (Mr. Sherman) from the Subcommittee on Terrorism, Nonproliferation, and Trade.

I yield the gentleman 1 additional minute.

Mr. Speaker, it is my pleasure to yield now to the gentleman from New York, the distinguished gentleman from the Subcommittee on the Western Hemisphere, Mr. Engel, 1 minute.

Mr. Speaker, it is now my pleasure to yield to the gentleman from California, the distinguished chairman of the full committee, Mr. Howard Berman.

Rep. Dennis J. KucinichD-OH-10 · Sep 26, 2008

I thank the gentleman. I rise in opposition. What we see here at work is the Bush administration's flawed national security doctrine. They are staging an attack on Iran. Their Navy is in the gulf.…

I thank the gentleman.

I rise in opposition. What we see here at work is the Bush administration's flawed national security doctrine. They are staging an attack on Iran. Their Navy is in the gulf. There have been overflights. There are covert operations and assassinations. The administration recently sent weapons to Israel which can be used for an attack on Iran: 1,000 so-called smart bombs, the GBU 39s, which could be used to attack the nuclear power sites that would produce a catastrophe, according to the Physicians for Social Responsibility report.

I believe it is adverse to the security of Israel to continue to follow the United States' current national security doctrine. And it's also adverse to continue to insist that nuclear power is to be equated with nuclear weapons.

Now, if we want diplomacy, and we should, we should be listening to five former Secretaries of State who have said that diplomacy is what we should pursue.

I would like to enter their names into the Record.

Sanctions are not to be confused with diplomacy, any more than war is to be confused with diplomacy. Nuclear power, I want to repeat, does not equate with a nuclear weapons program.

I want to cite our own CRS report which was given to the Congress on August 11, 2008, just a little more than a month ago, which cites the 2007 National Intelligence Estimate, that says according to the 2007 National Intelligence Estimate, and that is from December of 2007, ``Iranian military entities were working under government direction to develop nuclear weapons'' until fall 2003, but then halted its nuclear weapons program ``primarily in response to international pressure.''

I would like to enter the CRS report into the Record.

Furthermore, the International Atomic Energy Agency has recently released a report which states very clearly, and this report is 4 days ago, September 22, 2008, by the Director General, Mohamed ElBaradei, with respect to the implementation of safeguards in the Islamic Republic of Iran, ``The Agency has been able to continue to verify the non-diversion of nuclear material in Iran.'' It goes on to say, ``I note that the agency has not detected the usual use of nuclear material in connection with the alleged studies, nor does it have information apart from uranium metal document on the actual design or manufacture by Iran of nuclear material components of a nuclear weapon.''

I would like to include this in the Record.

I would also like to include in the Record a quote from a piece by historian William Polk, who has said, ``Ironically the U.S. has three times actually helped Iran move towards nuclear weapons. Under the Shah, the Nixon administration gave Iran a big push in that direction. Then 6 years ago in Operation Merlin, the CIA provided Iran with plans for the central explosive charge for a nuclear weapon. The idea was to mislead the Persians into working on an unworkable model for the bomb, but the ploy was so crude that Iran probably profited from it. Finally, it turns out the U.S. Department of Energy has been subsidizing Russian organizations that have been helping Iran's nuclear program.''

Now, one of my many concerns with this legislation is it sanctions the Central Bank of Iran. In doing that, I raise a question with regard to our current liquidity problems on Wall Street, whether or not the sanctioning of Iran's Central Bank will be a problem for our own economy, as well as the sanctions here on oil transactions, which could affect the price of energy.

I want to submit this for the Record as well.

Precis of Understanding Iran

(By William Polk, Historian)

Ironically, the U.S. has three times actually helped Iran

move toward nuclear weapons: Under the Shah the Nixon

administration gave Iran a big push in that direction; then

six years ago in ``Operation Merlin,'' the CIA provided Iran

with plans for the central explosive charge for a nuclear

weapon. The idea was to mislead the Persians into working on

an unworkable approach to the bomb but the ploy was so crude

that Iran probably profited from it. Finally, it turns out

that the U.S. Department of Energy has been subsidizing

Russian organizations that have been helping Iran's nuclear

program.

Rep. Brad ShermanD-CA-27 · Sep 26, 2008

Let me quickly respond to the comments of the gentleman from Ohio. He can attack this bill as he will, except he cannot say that it is related to George Bush. Bush stalled and weakened this…

Let me quickly respond to the comments of the gentleman from Ohio. He can attack this bill as he will, except he cannot say that it is related to George Bush. Bush stalled and weakened this legislation throughout the 110th Congress. It would be law today without the opposition of the Bush administration.

He also tells us, he quotes from the NIE, that Iran seems to have suspended its weaponization program. Weaponization is the small, easy and delayable part of developing a nuclear weapon. The tough part is getting enough highly enriched uranium, and Iran is working full bore and proudly unveiled 3,000 and more centrifuges to do that. They can wait a couple of years, and then work on the engineering of how to take that enriched uranium and turn it into an atomic weapon, without delaying for a day the day they have become a nuclear power state.

I also want to agree with the ranking member when she states that this bill does not waive or make waivable any sanction in existing law. The sole purpose of this law is to increase and apply new sanctions to Iran, not to waive or make waivable any sanction under existing law.

The goal of this bill is to drive home to the people and elites of Iran that they face economic isolation if they do not abandon their nuclear program. But let's not exaggerate its impact. It is long overdue, modest steps in that direction.

The bill includes concepts from two important Iran sanctions bills that passed the House overwhelmingly in 2007. Within 6 months of our taking office, with the strong support of Speaker Pelosi and Majority Leader Hoyer, under the leadership of Chairman Lantos and Chairman Frank, the House passed the two Iran sanctions bills that have become the centerpiece legislation of efforts on Iran in the 110th Congress: H.R. 1400, the Iran Counter-Proliferation Act, authored by the late Tom Lantos; and H.R. 2347, the Iran Sanctions Enabling Act, authored by Chairman Frank and introduced in the Senate by Senator Obama.

We have worked over the opposition of the Bush administration to pass these bills through the House. Then they got bogged down in the Senate. Now the Senate, with Senators Dodd and Shelby, have reached consensus on an Iran package that encompasses the concepts in the House bills, though weakens them. This bill would already be in the Senate DOD authorization bill had a bipartisan consensus not broken down.

So now we have this imperfect bill which we need to enact, and hopefully the Senate will act on it in the next few days.

The bill takes important steps like reinforcing the embargo on Iranian goods. We don't import oil

from Iran. We only import the stuff that we don't need and they couldn't sell elsewhere. Unfortunately, this provision is waivable.

If it clarifies that a U.S. company, and I take some pride in authoring this provision, may not use its overseas subsidiaries to do business with Iran that it could not do on its own. Unfortunately, this provision is also waivable.

I would hope that people would understand, you get overwhelming rhetoric from the administration about how much they hate Ahmadinejad. The little secret is they have a love for the total independence of multinational oil corporations that exceeds their hatred of Ahmadinejad, and that is something the country does not understand. That is why the Bush administration has bottled up this legislation. We need to pass it now.

Show 2 more

Rep. Eliot L. EngelD-NY-17 · Sep 26, 2008

I thank my colleague and good friend from New York. I rise to support this very important bill. Iran continues to defy Security Council resolutions by continuing to develop its nuclear program. The…

Rep. Edward J. MarkeyD-MA-7 · Sep 26, 2008

Mr. Speaker, I rise in support of this legislation to increase some sanctions against Iran in response to it's ongoing nuclear program. One important provision, which I have fought for in my state of…

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Introduced in HouseIssued June 4, 2008

110th CONGRESS

2d Session

H. R. 6178

IN THE HOUSE OF REPRESENTATIVES

June 4, 2008

Ms. Ros-Lehtinen (for herself, Mr. Cantor, Mr. Pence, and Mr. McCotter) introduced the following bill; which was referred to the Committee on Foreign Affairs, and in addition to the Committees on Ways and Means, 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.

Short title; Table of contents

(a)

Short title

This Act may be cited as the or Security through Termination Of Proliferation Act of 2008 or the STOP Act of 2008.

(b)

Table of contents

The table of contents for 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.

Codification of sanctions against Iran, North Korea, and Syria

101.

Codification of sanctions against Iran

United States sanctions, controls, and regulations with respect to Iran imposed pursuant to Executive Order No. 12957, sections 1(b) through (1)(g) and sections (2) through (6) of Executive Order No. 12959, and sections 2 and 3 of Executive Order No. 13059 (relating to exports and certain other transactions with Iran) as in effect on January 1, 2008, shall remain in effect until the President certifies to the appropriate congressional committees that the Government of Iran has verifiably dismantled its weapons of mass destruction programs.

102.

Codification of sanctions against North Korea

United States sanctions, controls, and regulations with respect to North Korea imposed by reason of a determination of the Secretary of State that the Government of North Korea, for purposes of section 6(j) of the Export Administration Act of 1979 (as continued in effect pursuant to the International Emergency Economic Powers Act), section 40 of the Arms Export Control Act, section 620A of the Foreign Assistance Act of 1961, or other provision of law, is a government that has repeatedly provided support for acts of international terrorism, shall remain in effect and may not be lifted pursuant to such provisions of law until the President certifies to appropriate congressional committees that the Government of North Korea has verifiably dismantled its weapons of mass destruction programs.

103.

Codification of sanctions against Syria

Restrictions against the Government of Syria, and on persons by reason of their direction of, or contribution to, activities of the Government of Syria, that were imposed pursuant to the International Emergency Economic Powers Act, the Syria Accountability and Lebanese Sovereignty Act of 2003, the Iran, North Korea, and Syria Nonproliferation Act, or any similar provision of law, as in effect on the date of the enactment of this Act, including the restrictions imposed under Executive Order 12938 (as amended by Executive Order 13094), Executive Order 13338, Executive Order 13399, Executive Order 13460, and any similar Executive Order, shall remain in effect and may not be lifted pursuant to such provisions of law until the President certifies to the appropriate congressional committees that the Government of Syria has verifiably dismantled its weapons of mass destruction programs.

Amendments to the Iran, North Korea, and Syria Nonproliferation Act

201.

Transshipment of certain goods, services, or technology

The Iran, North Korea, and Syria Nonproliferation Act (Public Law 106–178; 50 U.S.C. 1701 note) is amended—

(1)

in section 2—

(A)

in subsection (a), in the matter preceding paragraph (1)—

(i)

by striking or after Syria; and

(ii)

by inserting after North Korea the following: , on or after January 1, 1999, permitted, hosted or otherwise facilitated a transshipment (as such term is defined in section 5) that may have enabled a foreign person to transfer (as such term is defined in section 7) to or acquire from Iran, on or after January 1, 2005, permitted, hosted or otherwise facilitated a transshipment that may have enabled a foreign person to transfer to or acquire from Syria, or on or after January 1, 2006, permitted, hosted or otherwise facilitated a transshipment that may have enabled a person to transfer to or acquire from North Korea; and

(B)

in subsection (e), by inserting , or whose transfer via transshipment was permitted, hosted or facilitated, after transferred; and

(2)

in section 5—

(A)

in subsection (a)—

(i)

in paragraph (1), by inserting , or did not permit, host, or otherwise facilitate transshipment (as such term is defined in section 5) that may have enabled a foreign person to transfer to or acquire from, before Iran;

(ii)

in paragraph (3), by striking or at the end;

(iii)

in paragraph (4), by striking the period at the end and inserting ; or; and

(iv)

by adding at the end the following new paragraph:

(5)

in the case of a foreign person who permitted, hosted or otherwise facilitated transshipment that may have enabled a foreign person to transfer to or acquire from, Iran, North Korea, or Syria, as the case may be, the goods, services, or technology the apparent transfer of which caused that person to be identified in a report submitted pursuant to section 2(a), the government with primary jurisdiction over the foreign person has made and continues to make clear, specific efforts to stop and deter the permitting, hosting, or other facilitating of transshipments that may enable such transfers or acquisitions.

; and

(B)

by adding at the end the following new subsection:

(g)

Definitions

In this section:

(1)

Goods, services, or technology

The term goods, services, or technology includes—

(A)

any defense articles or defense services on the United States Munitions List under section 38 of the Arms Export Control Act (22 U.S.C. 2778) for which special export controls are warranted under such Act (22 U.S.C. 2751 3 et seq.);

(B)

any item identified on the Commerce Control List maintained under part 774 of title 15, Code of Federal Regulations; and

(C)

other sensitive United States goods, including intellectual property and services that would contribute to the abilities of Iran, North Korea, and Syria to further their conventional and unconventional military capabilities.

(2)

Transshipment

In this section, the term transshipment means the export from one country to another that passes through a third country, in which cargo is off-loaded and there is some change to conveyance.

202.

Restrictions on nuclear cooperation

The Iran, North Korea, and Syria Nonproliferation Act is further amended—

(1)

by redesignating section 7 as section 9; and

(2)

by inserting after section 6 the following new section:

Restrictions on nuclear cooperation with countries aiding proliferation by Iran, North Korea, or Syria

(a)

In general

(1)

Restrictions

Notwithstanding any other provision of law—

(A)

no agreement for cooperation between the United States and the government of any country that is assisting the nuclear program of Iran, North Korea, or Syria or transferring advanced conventional weapons or missiles to Iran, North Korea, or Syria may be submitted to the President or to Congress pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153);

(B)

no such agreement may enter into force with such country;

(C)

no license may be issued for export directly or indirectly to such country of any nuclear material, facilities, components, or other goods, services, or technology that would be subject to such agreement; and

(D)

no approval may be given for the transfer or retransfer directly or indirectly to such country of any nuclear material, facilities, components, or other goods, services, or technology that would be subject to such agreement, until the President makes the determination and report under paragraph (2).

(2)

Determination and report

The determination and report referred to in paragraph (1)(D) are a determination and report by the President, submitted to the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate, that—

(A)

Iran, North Korea, or Syria have ceased their efforts to design, develop, or acquire a nuclear explosive device or related materials or technology; or

(B)

the government of the country that is assisting the nuclear programs of Iran, North Korea, or Syria or transferring advanced conventional weapons or missiles to Iran, North Korea, or Syria—

(i)

has suspended all nuclear assistance to Iran, North Korea, or Syria and all transfers of advanced conventional weapons and missiles to Iran, North Korea, or Syria; and

(ii)

is committed to maintaining that suspension until Iran, North Korea, or Syria have implemented measures that would permit the President to make the determination described in subparagraph (A).

(b)

Rules of construction

The restrictions described in subsection (a)(1)—

(1)

shall apply in addition to all other applicable procedures, requirements, and restrictions described in the Atomic Energy Act of 1954 and other applicable Acts; and

(2)

shall not be construed as affecting the validity of an agreement for cooperation between the United States and the government of a country that is in effect on the date of the enactment of this Act.

(c)

Definitions

In this section:

(1)

Agreement for cooperation

The term agreement for cooperation has the meaning given that term in section 11 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2014(b)).

(2)

Assisting the nuclear program of Iran, North Korea, or Syria

The term assisting the nuclear program of Iran, North Korea, or Syria means the intentional transfer to Iran, North Korea, or Syria by a government, or by a person subject to the jurisdiction of a government with the knowledge and acquiescence of that government, of goods, services, or technology listed on the Nuclear Suppliers Group Guidelines for the Export of Nuclear Material, Equipment and Technology (published by the International Atomic Energy Agency as Information Circular INFCIRC/254/Rev. 3/Part 1, and subsequent revisions), or the Nuclear Suppliers Group Guidelines for Transfers of Nuclear-Related Dual-Use Equipment, Material, and Related Technology (published by the International Atomic Energy Agency as Information Circular INFCIR/254/Rev. 3/Part 2, and subsequent revisions).

(3)

Country that is assisting the nuclear programs of Iran, North Korea, or Syria, or transferring advanced conventional weapons or missiles to Iran, North Korea, or Syria

The term country that is assisting the nuclear program of Iran, North Korea, or Syria, or transferring advanced conventional weapons or missiles to Iran, North Korea, or Syria means—

(A)

the Russian Federation; and

(B)

any other country determined by the President to be assisting the nuclear program of Iran, North Korea, or Syria, or transferring advanced conventional weapons or missiles to Iran, North Korea, or Syria.

(4)

Transfer

The term transfer means the conveyance of technological or intellectual property, or the conversion of intellectual or technological advances into marketable goods, services, or articles of value, developed and generated in one place, to another through illegal or illicit means to a country, the government of which the Secretary of State has determined, for purposes of section 6(j)(1)(A) of the Export Administration Act of 1979 (as in effect pursuant to the International Emergency Economic Powers Act; 50 U.S.C. 1701 et seq.), section 40(d) of the Arms Export Control Act (22 U.S.C. 2780(d)), and section 620A of the Foreign Assistance Act of 1961 (22 U.S.C. 2371), is a government that has repeatedly provided support for acts of international terrorism.

(5)

Transferring advanced conventional weapons or missiles to Iran, North Korea, or Syria

The term transferring advanced conventional weapons or missiles to Iran, North Korea, or Syria means the intentional transfer to Iran, North Korea, or Syria by a government, or by a person subject to the jurisdiction of a government with the knowledge and acquiescence of that government, of goods, services, or technology listed on—

(A)

the Wassenaar Arrangement list of Dual Use Goods and Technologies and Munitions list of July 12, 1996, and subsequent revisions; or

(B)

the Missile Technology Control Regime Equipment and Technology Annex of June 11, 1996, and subsequent revisions.

(d)

Effective date

The amendment made by subsection (a) shall apply to expense paid or incurred on or after January 1, 2008.

203.

Exclusion of senior officials

The Iran, North Korea, and Syria Nonproliferation Act is further amended by inserting after section (7), as added by section 202 of this Act, the following new section:

Exclusion from the United States of senior officials of foreign persons who have aided proliferation relating to Iran, North Korea, or Syria

(a)

Grounds for exclusion

Except as provided in subsection (b), the Secretary of State shall deny a visa to, and the Secretary of Homeland Security shall exclude from the United States, any alien whom the Secretary of State determines is an alien who, on or after the date of the enactment of this Act is a—

(1)

corporate officer, principal, or shareholder with a controlling interest of a foreign person identified in a report submitted pursuant to section 2(a);

(2)

corporate officer, principal, or shareholder with a controlling interest of a successor entity to, or a parent or subsidiary of, a foreign person identified in such a report;

(3)

corporate officer, principal, or shareholder with a controlling interest of an affiliate of a foreign person identified in such a report, if such affiliate engaged in the activities referred to in such report, and if such affiliate is controlled in fact by the foreign person identified in such report;

(4)

spouse, minor child, or agent of a person excludable under paragraph (1), (2), or (3);

(5)

senior official of a foreign government identified in such a report;

(6)

senior official of a foreign government with primary jurisdiction over a foreign person identified in such a report; or

(7)

spouse, minor child, or agent of a person excludable under paragraph (5) or (6).

(b)

Exception

The President may waive the sanctions described in subsection (a) with respect to a person specified in paragraph (5), (6), or (7) if the President determines and certifies in writing to the Committee on Foreign Affairs and the Committee on Appropriations of the House of Representatives and the Committee on Foreign Relations and the Committee on Appropriations of the Senate, on a case by case basis, that the foreign government with primary jurisdiction over such person has made and continues to make clear, specific efforts to stop and deter the transfer (as such term is defined in section 7) or retransfer of, or the permitting, hosting, or other facilitating of transshipments (as such term is defined in section 5) that may enable the transfer or retransfer of, goods or technology that contribute to the efforts by Iran, North Korea, or Syria, as the case may be, to acquire or develop advanced conventional weapons, or to acquire, develop, produce, or stockpile biological, chemical, radiological, or nuclear weapons or long-range ballistic missiles.

(c)

Advanced conventional weapons defined

In this section, the term advanced conventional weapons means goods, services, or technology listed on—

(1)

the Wassenaar Arrangement list of Dual Use Goods and Technologies and Munitions list of July 12, 1996, and subsequent revisions; or

(2)

the Missile Technology Control Regime Equipment and Technology Annex of June 11, 1996, and subsequent revisions.

III

Amendments to the Iran Sanctions Act of 1996 and related provisions

301.

Exclusion from the United States of senior officials of foreign persons who have aided proliferation relating to Iran

The Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note) is amended—

(1)

in section 5(b), in the matter preceding paragraph (1), by inserting , or permitted, hosted, or otherwise facilitated transshipment that may have enabled a person to export, transfer, or otherwise provide to Iran, after or otherwise provided to Iran;

(2)

by redesignating sections (7) through (14) as sections (8) through (15), respectively; and

(3)

by inserting after section (6) the following new section:

Exclusion from the United States of senior officials of foreign persons who have aided proliferation relating to Iran

(a)

Grounds for exclusion

Except as provided in subsection (b), the Secretary of State shall deny a visa to, and the Secretary of State shall exclude from the United States, any alien whom the Secretary of State determines is an alien who, on or after the date of the enactment of this Act is a—

(1)

corporate officer, principal, or shareholder with a controlling interest of a person against whom sanctions have been imposed pursuant to section 5;

(2)

corporate officer, principal, or shareholder with a controlling interest of a successor entity to or a parent or subsidiary of such a person;

(3)

corporate officer, principal, or shareholder with a controlling interest of an affiliate of such a sanctioned person, if such affiliate engaged in a sanctionable activity described in subsection (a) or (b) of section 5, and if such affiliate is controlled in fact by such a person;

(4)

spouse, minor child, or agent of a person excludable under paragraph (1), (2), or (3);

(5)

senior official of a foreign government that is identified as a person against whom sanctions have been imposed pursuant to section 5;

(6)

senior official of a foreign government with primary jurisdiction over such a person; or

(7)

spouse, minor child, or agent of a person excludable under paragraph (5) or (6).

(b)

Exception

The President may waive the sanctions described in subsection (a) with respect to a person specified in paragraph (5), (6), or (7) if the President determines and certifies in writing to the appropriate congressional committees, on a case by case basis, that the foreign government with primary jurisdiction over such a person against whom sanctions have been imposed pursuant to section 5 has made and continues to make clear, specific efforts to stop and deter a sanctionable activity described in subsection (a) or (b) of section 5.

; and

(4)

in section 15, as redesignated pursuant to paragraph (2) of this section—

(A)

by redesignating paragraphs (15) and (16) as paragraphs (17) and (18), respectively; and

(B)

by inserting after paragraph (14) the following new paragraphs:

(14)

Transfer

(15)

Transshipment

The term transshipment means the export from one country to another that passes through a third country, in which cargo is off-loaded and there is some change to conveyance.

302.

Denial of tax benefits for taxpayers engaged in business activity with Iran prohibited by United States law

(a)

In general

Section 901 of the Internal Revenue Code of 1986 (relating to taxes of foreign countries and of possessions of United States) is amended by redesignating subsection (m) as subsection (n) and by inserting after subsection (l) the following new subsection:

(m)

Taxpayers engaged in business activity with Iran prohibited by United States law

(1)

In general

Notwithstanding any other provision of this part, in the case of a taxpayer which is a member of an expanded affiliated group any member of which, on any day during the taxable year, engaged in business activity with Iran which is prohibited by United States law, no credit shall be allowed under subsection (a) to the taxpayer for any income, war profits, or excess profits taxes paid or accrued (or deemed paid under section 902 or 960) to any country if such taxes are with respect to income attributable to a period any part of which occurs during such taxable year.

(2)

Business activity

For purposes of paragraph (1)—

(A)

In general

The term business activity means any of the following:

(i)

An entity described in subparagraph (D) that—

(I)

has in effect a contract that includes the responsibility for the development of petroleum resources, petroleum refining capacity, or liquefied natural gas located in Iran or (as the case may be), or

(II)

has in effect a contract providing for the general supervision and guarantee of another person’s performance of a contract described in subclause (I).

(ii)

The purchase of a share of ownership, including an equity interest, in the development described in clause (i).

(iii)

Having in effect a contract providing for the participation in royalties, earnings, or profits in the development described in clause (i), without regard to the form of the participation.

(B)

Goods, services, and technology

The term business activity includes the entry into, performance, or financing of a contract to sell or purchase goods, services, or technology.

(C)

Special rule

For purposes of this paragraph, an amendment or other modification that is made, on or the date of the enactment of this subsection to an agreement or contract shall be treated as the entry of an agreement or contract.

(D)

Entities described

For purposes of subparagraph (A), an entity described in this subparagraph is—

(i)

a natural person,

(ii)

a corporation, business association, partnership, society, trust, financial institution, insurer, underwriter, guarantor, and any other business organization,

(iii)

any foreign subsidiary of any entity described in clause (ii),

(iv)

any governmental entity operating as a business enterprise, such as an export credit agency, and

(v)

any successor to any entity described in clause (ii), (iii), or (iv).

(3)

Taxes allowed as a deduction, etc

Sections 275 and 78 shall not apply to any tax which is not allowable as a credit under subsection (a) by reason of this subsection.

(4)

Expanded affiliated group

For purposes of paragraph (1), the term expanded affiliated group means an affiliated group (as defined in subsection (a) of section 1504 (without regard to subsections (b)(2), (b)(4), and (c) thereof)); except that section 1504(a) shall be applied by substituting more than 50 percent for at least 80 percent each place it appears.

(5)

Regulations

The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection, including regulations which impose appropriate reporting requirements.

(b)

Income included as subpart F income

Subsection (a) of section 952 is amended by striking and at the end of paragraph (4), by striking the period at the end of paragraph (5) and inserting , and, and by inserting after paragraph (5) the following new paragraph:

(6)

all income of such corporation derived from all foreign countries during any period during which section 901(m) applies to such corporation.

(c)

Reporting

(1)

In general

Part II of subchapter B of chapter 68 of the Internal Revenue Code of 1986 (relating to failure to comply with certain information reporting requirements) is amended by adding at the end the following new section:

6726.

Failure to report information under section 901(m)

(a)

In general

In the case of each failure described in subsection (c) by any person, such person shall pay a penalty of $100,000 for each day in the noncompliance period with respect to which the failure relates.

(b)

Noncompliance period

For purposes of this section, the term noncompliance period means, with respect to any failure, the period—

(1)

beginning on the date such failure first occurs; and

(2)

ending on the date such failure is corrected.

(c)

Failures subject to penalty

For purposes of subsection (a), the failure described in this subsection is a failure to comply with any requirement contained in the regulations prescribed under section 901(m).

(2)

Clerical amendment

The table of sections for part II of subchapter B of chapter 68 of such Code is amended by adding at the end the following new item:

Sec. 6726. Failure to report information under section 901

(m).

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

303.

Income tax of foreign corporations engaged in business activity with Iran prohibited by United States law

(a)

In general

Subpart B of part II of subchapter N of chapter 1 of the Internal Revenue Code of 1986 (relating to foreign corporations) is amended by inserting after section 884 the following new section:

884A.

Income tax of foreign corporations engaged in business activity with Iran prohibited by United States law

In the case of a foreign corporation which is engaged in business activity with Iran prohibited by United States law—

(1)

in respect of tax on income—

(A)

section 881(a) shall be applied by substituting 45 percent for 30 percent;

(B)

subsections (b), (c), (d) and (e) of section 881 shall not apply;

(C)

tax imposed pursuant to section 882 shall be imposed at a rate of 45 percent;

(D)

section 883 shall not apply; and

(E)

section 884(a) shall be applied by substituting 45 percent for 30 percent; and

(2)

in respect of withholding—

(A)

section 1442(a) shall be applied by substituting 45 percent for 30 percent; and

(B)

section 1442(c) shall not apply.

(b)

Clerical amendment

The table of sections for subpart B of part II of subchapter N of chapter 1 of such Code is amended by inserting after the item relating 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.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

304.

Compensation for Former United States Hostages in Iran Fund

(a)

Creation of Fund

There is established a fund to be known as the Compensation for Former United States Hostages in Iran Fund (in this section referred to as the Fund), consisting of such amounts as may be appropriated to the Fund as provided by this section.

(b)

Transfers to Fund

There are hereby appropriated to the Fund amounts equivalent to the taxes received in the Treasury by reason of the amendments made by sections 302 and 303 of this Act.

(c)

Expenditures from Fund

Amounts in the Fund shall be available, as provided by appropriation Acts, for making expenditures to pay claims to the United States citizens held hostage in Iran, and to members of the families of such United States citizens, who are identified as plaintiffs or class members in Case Number 1:00CV03110 (EGS) or Case Number 1:00CV00716 (HHK) in the United States District Court for the District of Columbia.

Definitions

401.

Definitions

In this Act:

(1)

Appropriate congressional committees

The term appropriate congressional committees means—

(A)

the Committee on Foreign Affairs and the Committee on Appropriations of the House of Representatives; and

(B)

the Committee on Foreign Relations and the Committee on Appropriations of the Senate.

(2)

Government of Syria

The term Government of Syria includes any agency or instrumentality of the Government of Syria, including any entity that is controlled by the Government of Syria.

(3)

Government of Iran

The term Government of Iran includes any agency or instrumentality of the Government of Iran, including any entity that is controlled by the Government of Iran.

(4)

Government of North Korea

The term Government of North Korea includes any agency or instrumentality of the Government of North Korea, including any entity that is controlled by the Government of North Korea.

(5)

Weapons of mass destruction programs

The term weapons of mass destruction programs means—

(A)

and chemical weapons, biological weapons, radiological or nuclear procurement and development programs and efforts;

(B)

ballistic missile procurement and development programs and efforts; and

(C)

other actions in violation of the Waasenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, the Missile Technology Control Regime, the Australia Group, the Nuclear Suppliers’ Group, the Zangger Committee, and any other international agreement or arrangement to which the United States is a party that restricts the export of chemical, biological, nuclear, and other weapons and their delivery systems, and effectively restricts the export of dual use components of such weapons and their delivery systems.