[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7112 Received in Senate (RDS)]
2d Session
H. R. 7112
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 27 (legislative day, September 17), 2008
Received
_______________________________________________________________________
AN ACT
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Comprehensive Iran
Sanctions, Accountability, and Divestment Act of 2008''.
(a) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Support for diplomatic efforts relating to preventing Iran from
acquiring nuclear weapons.
TITLE I--SANCTIONS
Sec. 101. Definitions.
Sec. 102. Clarification and expansion of definitions.
Sec. 103. Economic sanctions relating to Iran.
Sec. 104. Liability of parent companies for violations of sanctions by
foreign subsidiaries.
Sec. 105. Increased capacity for efforts to combat unlawful or
terrorist financing.
Sec. 106. Reporting requirements.
Sec. 107. Sense of Congress regarding the imposition of sanctions on
the Central Bank of Iran.
Sec. 108. Rule of construction.
Sec. 109. Temporary increase in fee for certain consular services.
TITLE II--DIVESTMENT FROM CERTAIN COMPANIES THAT INVEST IN IRAN
Sec. 201. Definitions.
Sec. 202. Authority of State and local governments to divest from
certain companies that invest in Iran.
Sec. 203. Safe harbor for changes of investment policies by asset
managers.
Sec. 204. Sense of Congress regarding certain ERISA plan investments.
TITLE III--PREVENTION OF TRANSSHIPMENT, REEXPORTATION, OR DIVERSION OF
SENSITIVE ITEMS TO IRAN
Sec. 301. Definitions.
Sec. 302. Identification of locations of concern with respect to
transshipment, reexportation, or diversion
of certain items to Iran.
Sec. 303. Destinations of Possible Diversion Concern and Destinations
of Diversion Concern.
Sec. 304. Report on expanding diversion concern system to countries
other than Iran.
TITLE IV--EFFECTIVE DATE; SUNSET
Sec. 401. Effective date; sunset.
SEC. 2. SUPPORT FOR DIPLOMATIC EFFORTS RELATING TO PREVENTING IRAN FROM
ACQUIRING NUCLEAR WEAPONS.
(a) Support for International Diplomatic Efforts.--It is the sense
of the Congress that--
(1) the United States should use diplomatic and economic
means to resolve the Iranian nuclear problem;
(2) the United States should continue to support efforts in
the International Atomic Energy Agency and the United Nations
Security Council to bring about an end to Iran's uranium
enrichment program and its nuclear weapons program; and
(3)(A) United Nations Security Council Resolution 1737 was
a useful first step toward pressing Iran to end its nuclear
weapons program; and
(B) in light of Iran's continued defiance of the
international community, the United Nations Security Council
should adopt additional measures against Iran, including
measures to prohibit investments in Iran's energy sector.
(b) Peaceful Efforts by the United States.--Nothing in this Act
shall be construed as authorizing the use of force or the use of the
United States Armed Forces against Iran.
TITLE I--SANCTIONS
SEC. 101. DEFINITIONS.
In this title:
(1) Agricultural commodity.--The term ``agricultural
commodity'' has the meaning given that term in section 102 of
the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' has the meaning given
that term in section 14(2) of the Iran Sanctions Act of 1996
(Public Law 104-172; 50 U.S.C. 1701 note).
(3) Executive agency.--The term ``executive agency'' has
the meaning given that term in section 4 of the Office of
Federal Procurement Policy Act (41 U.S.C. 403).
(4) Family member.--The term ``family member'' means, with
respect to an individual, the spouse, children, grandchildren,
or parents of the individual.
(5) Information and informational materials.--The term
``information and informational materials''--
(A) means information and informational materials
described in section 203(b)(3) of the International
Emergency Economic Powers Act (50 U.S.C. 1702(b)(3));
and
(B) does not include information or informational
materials--
(i) the exportation of which is otherwise
controlled--
(I) under section 5 of the Export
Administration Act of 1979 (50 U.S.C.
App. 2404) (as in effect pursuant to
the International Emergency Economic
Powers Act (50 U.S.C. 1701 et seq.));
or
(II) under section 6 of that Act
(50 U.S.C. App. 2405), to the extent
that such controls promote the
nonproliferation or antiterrorism
policies of the United States; or
(ii) with respect to which acts are
prohibited by chapter 37 of title 18, United
States Code.
(6) Investment.--The term ``investment'' has the meaning
given that term in section 14(9) of the Iran Sanctions Act of
1996 (Public Law 104-172; 50 U.S.C. 1701 note).
(7) Iranian diplomats and representatives of other
government and military or quasi-governmental institutions of
iran.--The term ``Iranian diplomats and representatives of
other government and military or quasi-governmental
institutions of Iran'' has the meaning given that term in
section 14(11) of the Iran Sanctions Act of 1996 (50 U.S.C.
1701 note).
(8) Medical device.--The term ``medical device'' has the
meaning given the term ``device'' in section 201 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321).
(9) Medicine.--The term ``medicine'' has the meaning given
the term ``drug'' in section 201 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321).
SEC. 102. CLARIFICATION AND EXPANSION OF DEFINITIONS.
(a) Person.--Section 14(13)(B) of the Iran Sanctions Act of 1996
(50 U.S.C. 1701 note) is amended--
(1) by inserting ``financial institution, insurer,
underwriter, guarantor, and any other business organization,
including any foreign subsidiary, parent, or affiliate of the
foregoing,'' after ``trust,''; and
(2) by inserting ``, such as an export credit agency''
before the semicolon.
(b) Petroleum Resources.--Section 14(14) of the Iran Sanctions Act
of 1996 (50 U.S.C. 1701 note) is amended to read as follows:
``(14) Petroleum resources.--
``(A) Petroleum resources.--The term `petroleum
resources' includes petroleum, petroleum by-products,
oil or liquefied natural gas, oil or liquefied natural
gas tankers, and products used to construct or maintain
pipelines used to transport oil or compressed or
liquefied natural gas.
``(B) Petroleum by-products.--The term `petroleum
by-products' means gasoline, kerosene, distillates,
propane or butane gas, diesel fuel, residual fuel oil,
and other goods classified in headings 2709 and 2710 of
the Harmonized Tariff Schedule of the United States.''.
(c) Effective Date.--The amendments made by this section shall take
effect 120 days after the date of the enactment of this Act.
SEC. 103. ECONOMIC SANCTIONS RELATING TO IRAN.
(a) In General.--Notwithstanding any other provision of law, and in
addition to any other sanction in effect, beginning on the date that is
120 days after the date of the enactment of this Act, the economic
sanctions described in subsection (b) shall apply with respect to Iran.
(b) Sanctions.--The sanctions described in this subsection are the
following:
(1) Prohibition on imports.--
(A) In general.--Except as provided in subparagraph
(B), no article of Iranian origin may be imported
directly or indirectly into the United States.
(B) Exception.--The prohibition in subparagraph (A)
does not apply to imports from Iran of information and
informational materials.
(2) Prohibition on exports.--
(A) In general.--Except as provided in subparagraph
(B), no article of United States origin may be exported
directly or indirectly to Iran.
(B) Exceptions.--The prohibition in subparagraph
(A) does not apply to exports to Iran of--
(i) agricultural commodities, food,
medicine, or medical devices;
(ii) articles exported to Iran to provide
humanitarian assistance to the people of Iran;
(iii) information or informational
materials; or
(iv) goods, services, or technologies
necessary to ensure the safe operation of
commercial passenger aircraft produced in the
United States if the exportation of such goods,
services, or technologies is approved by the
Secretary of the Treasury, in consultation with
the Secretary of Commerce, pursuant to
regulations for licensing the exportation of
such goods, services, or technologies, if
appropriate.
(3) Freezing assets.--
(A) In general.--At such time as the United States
has access to the names of persons in Iran, including
Iranian diplomats and representatives of other
government and military or quasi-governmental
institutions of Iran, that are determined to be subject
to sanctions imposed under the authority of the
International Emergency Economic Powers Act (50 U.S.C.
1701 et seq.) or any other provision of law relating to
the imposition of sanctions with respect to Iran, the
President shall take such action as may be necessary to
freeze immediately the funds and other assets belonging
to any person so named, and any family members or
associates of those persons so named to whom assets or
property of those persons so named were transferred on
or after January 1, 2008. The action described in the
preceding sentence includes requiring any United States
financial institution that holds funds and assets of a
person so named to report promptly to the Office of
Foreign Assets Control information regarding such funds
and assets.
(B) Asset reporting requirement.--Not later than 14
days after a decision is made to freeze the property or
assets of any person under this paragraph, the
President shall report the name of such person to the
appropriate congressional committees.
(4) United states government contracts.--The head of an
executive agency may not procure, or enter into a contract for
the procurement of, any goods or services from a person that
meets the criteria for the imposition of sanctions under
section 5(a) of the Iran Sanctions Act of 1996 (Public Law 104-
172; 50 U.S.C. 1701 note).
(c) Waiver.--The President may waive the application of the
sanctions described in subsection (b) if the President--
(1) determines that such a waiver is in the national
interest of the United States; and
(2) submits to the appropriate congressional committees a
report describing the reasons for the determination.
SEC. 104. LIABILITY OF PARENT COMPANIES FOR VIOLATIONS OF SANCTIONS BY
FOREIGN SUBSIDIARIES.
(a) Definitions.--In this section:
(1) Entity.--The term ``entity'' means a partnership,
association, trust, joint venture, corporation, or other
organization.
(2) Own or control.--The term ``own or control'' means,
with respect to an entity--
(A) to hold more than 50 percent of the equity
interest by vote or value in the entity;
(B) to hold a majority of seats on the board of
directors of the entity; or
(C) to otherwise control the actions, policies, or
personnel decisions of the entity.
(3) Subsidiary.--The term ``subsidiary'' means an entity
that is owned or controlled, directly or indirectly, by a
United States person.
(4) United states person.--The term ``United States
person'' means--
(A) a natural person who is a citizen, resident, or
national of the United States; and
(B) an entity that is organized under the laws of
the United States, any State or territory thereof, or
the District of Columbia, if natural persons described
in subparagraph (A) own or control the entity.
(b) In General.--A United States person shall be subject to a
penalty for a violation of the provisions of Executive Order 12959 (50
U.S.C. 1701 note) or Executive Order 13059 (50 U.S.C. 1701 note), or
any other prohibition on transactions with respect to Iran imposed
under the authority of the International Emergency Economic Powers Act
(50 U.S.C. 1701 et seq.), if--
(1) the President determines that the United States person
establishes or maintains a subsidiary outside of the United
States for the purpose of circumventing such provisions; and
(2) that subsidiary engages in an act that, if committed in
the United States or by a United States person, would violate
such provisions.
(c) Waiver.--The President may waive the application of subsection
(b) if the President--
(1) determines that such a waiver is in the national
interest of the United States; and
(2) submits to the appropriate congressional committees a
report describing the reasons for the determination.
(d) Effective Date.--
(1) In general.--Subsection (b) shall take effect on the
date of the enactment of this Act and apply with respect to
acts described in subsection (b)(2) that are--
(A) commenced on or after the date of the enactment
of this Act; or
(B) except as provided in paragraph (2), commenced
before such date of enactment, if such acts continue on
or after such date of enactment.
(2) Exception.--Subsection (b) shall not apply with respect
to an act described in paragraph (1)(B) by a subsidiary owned
or controlled by a United States person if the United States
person divests or terminates its business with the subsidiary
not later than 90 days after such date of enactment.
SEC. 105. INCREASED CAPACITY FOR EFFORTS TO COMBAT UNLAWFUL OR
TERRORIST FINANCING.
(a) Finding.--Congress finds that the work of the Office of
Terrorism and Financial Intelligence of the Department of the Treasury,
which includes the Office of Foreign Assets Control and the Financial
Crimes Enforcement Network, is critical to ensuring that the
international financial system is not used for purposes of supporting
terrorism and developing weapons of mass destruction.
(b) Authorization of Appropriations for Office of Terrorism and
Financial Intelligence.--There is authorized to be appropriated to the
Secretary of the Treasury for the Office of Terrorism and Financial
Intelligence--
(1) $61,712,000 for fiscal year 2009; and
(2) such sums as may be necessary for each of fiscal years
2010 and 2011.
(c) Authorization of Appropriations for the Financial Crimes
Enforcement Network.--Section 310(d)(1) of title 31, United States
Code, is amended by striking ``such sums as may be necessary for fiscal
years 2002, 2003, 2004, and 2005'' and inserting ``$91,335,000 for
fiscal year 2009 and such sums as may be necessary for each of fiscal
years 2010 and 2011''.
SEC. 106. REPORTING REQUIREMENTS.
(a) Foreign Investment in Iran.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, the President shall submit to the
appropriate congressional committees a report on--
(A) any foreign investments of $20,000,000 or more
made in Iran's energy sector on or after January 1,
2008, and before the date on which the President
submits the report; and
(B) the determination of the President on whether
each such investment qualifies as a sanctionable
offense under section 5(a) of the Iran Sanctions Act of
1996 (Public Law 104-172; 50 U.S.C. 1701 note).
(2) Subsequent reports.--Not later than 1 year after the
date of the enactment of this Act, and every 180 days
thereafter, the President shall submit to the appropriate
congressional committees a report on--
(A) any foreign investments of $20,000,000 or more
made in Iran's energy sector during the 180-day period
preceding the submission of the report; and
(B) the determination of the President on whether
each such investment qualifies as a sanctionable
offense under section 5(a) of the Iran Sanctions Act of
1996 (Public Law 104-172; 50 U.S.C. 1701 note).
(b) Form of Reports.--The reports required under subsection (a)
shall be submitted in unclassified form, but may contain a classified
annex.
SEC. 107. SENSE OF CONGRESS REGARDING THE IMPOSITION OF SANCTIONS ON
THE CENTRAL BANK OF IRAN.
Congress urges the President, in the strongest terms, to consider
immediately using the authority of the President to impose sanctions on
the Central Bank of Iran and any other Iranian bank engaged in
proliferation activities or support of terrorist groups.
SEC. 108. RULE OF CONSTRUCTION.
Nothing in this title shall be construed to affect any provision of
title I of the Iran Freedom Support Act (Public Law 109-293; 50 U.S.C.
1701 note).
SEC. 109. TEMPORARY INCREASE IN FEE FOR CERTAIN CONSULAR SERVICES.
(a) Increase in Fee.--Notwithstanding any other provision of law,
not later than 120 days after the date of the enactment of this Act,
the Secretary of State shall increase by $1.00 the fee or surcharge
assessed under section 140(a) of the Foreign Relations Authorization
Act, Fiscal Years 1994 and 1995 (Public Law 103-236; 8 U.S.C. 1351
note) over the amount of such fee or surcharge as of such date for
processing machine readable nonimmigrant visas and machine readable
combined border crossing identification cards and nonimmigrant visas.
(b) Deposit of Amounts.--Notwithstanding section 140(a)(2) of the
Foreign Relations Authorization Act, Fiscal Years 1994 and 1995, fees
collected under the authority of subsection (a) shall be deposited in
the Treasury of the United States.
(c) Duration of Increase.--The fee increase authorized under
subsection (a) shall terminate on the date that is nine months after
the date on which such fee is first collected.
TITLE II--DIVESTMENT FROM CERTAIN COMPANIES THAT INVEST IN IRAN
SEC. 201. DEFINITIONS.
In this title:
(1) Energy sector.--The term ``energy sector'' refers to
activities to develop petroleum or natural gas resources or
nuclear power.
(2) Financial institution.--The term ``financial
institution'' has the meaning given that term in section 14(5)
of the Iran Sanctions Act of 1996 (Public Law 104-172; 50
U.S.C. 1701 note).
(3) Iran.--The term ``Iran'' includes any agency or
instrumentality of Iran.
(4) Person.--The term ``person'' means--
(A) a natural person, corporation, company,
business association, partnership, society, trust, or
any other nongovernmental entity, organization, or
group;
(B) any governmental entity or instrumentality of a
government, including a multilateral development
institution (as defined in section 1701(c)(3) of the
International Financial Institutions Act (22 U.S.C.
262r(c)(3))); and
(C) any successor, subunit, parent company, or
subsidiary of any entity described in subparagraph (A)
or (B).
(5) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the United States Virgin Islands, Guam, American Samoa,
and the Commonwealth of the Northern Mariana Islands.
(6) State or local government.--The term ``State or local
government'' includes--
(A) any State and any agency or instrumentality
thereof;
(B) any local government within a State, and any
agency or instrumentality thereof;
(C) any other governmental instrumentality; and
(D) any public institution of higher education
within the meaning of the Higher Education Act of 1965
(20 U.S.C. 1001 et seq.).
SEC. 202. AUTHORITY OF STATE AND LOCAL GOVERNMENTS TO DIVEST FROM
CERTAIN COMPANIES THAT INVEST IN IRAN.
(a) Sense of Congress.--It is the sense of Congress that the United
States Government should support the decision of any State or local
government to divest from, or to prohibit the investment of assets of
the State or local government in, a person that the State or local
government determines poses a financial or reputational risk.
(b) Authority to Divest.--Notwithstanding any other provision of
law, a State or local government may adopt and enforce measures that
meet the requirements of subsection (d) to divest the assets of the
State or local government from, or prohibit investment of the assets of
the State or local government in, any person that the State or local
government determines, using credible information available to the
public, engages in investment activities in Iran described in
subsection (c).
(c) Investment Activities Described.--A person engages in
investment activities in Iran described in this subsection if the
person--
(1) has an investment of $20,000,000 or more--
(A) in the energy sector of Iran; or
(B) in a person that provides oil or liquified
natural gas tankers, or products used to construct or
maintain pipelines used to transport oil or liquified
natural gas, for the energy sector in Iran; or
(2) is a financial institution that extends $20,000,000 or
more in credit to another person, for 45 days or more, if that
person will use the credit to invest in the energy sector in
Iran.
(d) Requirements.--The requirements referred to in subsection (b)
that a measure taken by a State or local government must meet are the
following:
(1) Notice.--The State or local government shall provide
written notice to each person to which a measure is to be
applied.
(2) Timing.--The measure shall apply to a person not
earlier than the date that is 90 days after the date on which
written notice is provided to the person under paragraph (1).
(3) Opportunity for hearing.--The State or local government
shall provide an opportunity to comment in writing to each
person to which a measure is to be applied. If the person
demonstrates to the State or local government that the person
does not engage in investment activities in Iran described in
subsection (c), the measure shall not apply to the person.
(4) Sense of congress on avoiding erroneous targeting.--It
is the sense of Congress that a State or local government
should not adopt a measure under subsection (b) with respect to
a person unless the State or local government has made every
effort to avoid erroneously targeting the person and has
verified that the person engages in investment activities in
Iran described in subsection (c).
(e) Notice to Department of Justice.--Not later than 30 days after
adopting a measure pursuant to subsection (b), a State or local
government shall submit written notice to the Attorney General
describing the measure.
(f) Nonpreemption.--A measure of a State or local government
authorized under subsection (b) is not preempted by any Federal law or
regulation.
(g) Definitions.--In this section:
(1) Investment.--The ``investment'' of assets, with respect
to a State or local government, includes--
(A) a commitment or contribution of assets;
(B) a loan or other extension of credit; and
(C) the entry into or renewal of a contract for
goods or services.
(2) Assets.--
(A) In general.--Except as provided in subparagraph
(B), the term ``assets'' refers to public monies and
includes any pension, retirement, annuity, or endowment
fund, or similar instrument, that is controlled by a
State or local government.
(B) Exception.--The term ``assets'' does not
include employee benefit plans covered by title I of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1001 et seq.).
(h) Effective Date.--
(1) In general.--Except as provided in paragraph (2), this
section applies to measures adopted by a State or local
government before, on, or after the date of the enactment of
this Act.
(2) Notice requirements.--Subsections (d) and (e) apply to
measures adopted by a State or local government on or after the
date of the enactment of this Act.
SEC. 203. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY ASSET
MANAGERS.
(a) In General.--Section 13(c)(1) of the Investment Company Act of
1940 (15 U.S.C. 80a-13(c)(1)) is amended to read as follows:
``(1) In general.--Notwithstanding any other provision of
Federal or State law, no person may bring any civil, criminal,
or administrative action against any registered investment
company, 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
2008.''.
(b) SEC Regulations.--Not later than 120 days after the date of the
enactment of this Act, the Securities and Exchange Commission 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).
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 title, without breaching the responsibilities, obligations, or
duties imposed upon the fiduciary by section 404 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1104), if--
(1) the fiduciary makes such determination using credible
information that is available to the public; and
(2) such divestment or avoidance of investment is conducted
in accordance with section 2509.94-1 of title 29, Code of
Federal Regulations (as in effect on the day before the date of
the enactment of this Act).
TITLE III--PREVENTION OF TRANSSHIPMENT, REEXPORTATION, OR DIVERSION OF
SENSITIVE ITEMS TO IRAN
SEC. 301. DEFINITIONS.
In this title:
(1) 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 Financial Services, the
Committee on Foreign Affairs, and the Permanent Select
Committee on Intelligence of the House of
Representatives.
(2) End-user.--The term ``end-user'' means an end-user as
that term is used in the Export Administration Regulations.
(3) Entity owned or controlled by the government of iran.--
The term ``entity owned or controlled by the Government of
Iran'' includes--
(A) any corporation, partnership, association, or
other entity in which the Government of Iran owns a
majority or controlling interest; and
(B) any entity that is otherwise controlled by the
Government of Iran.
(4) Export administration regulations.--The term ``Export
Administration Regulations'' means subchapter C of chapter VII
of title 15, Code of Federal Regulations.
(5) Government.--The term ``government'' includes any
agency or instrumentality of a government.
(6) Iran.--The term ``Iran'' includes any agency or
instrumentality of Iran.
(7) State sponsor of terrorism.--The term ``state sponsor
of terrorism'' means any country the government of which the
Secretary of State has determined, 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)),
is a government that has repeatedly provided support for acts
of international terrorism.
(8) Transshipment, reexportation, or diversion.--The term
``transshipment, reexportation, or diversion'' means the
exportation, directly or indirectly, by any means, of items
that originated in the United States to an end-user whose
identity cannot be verified or to an entity owned or controlled
by the Government of Iran in violation of the laws or
regulations of the United States, including by--
(A) shipping such items through 1 or more foreign
countries; or
(B) by using false information regarding the
country of origin of such items.
SEC. 302. IDENTIFICATION OF LOCATIONS OF CONCERN WITH RESPECT TO
TRANSSHIPMENT, REEXPORTATION, OR DIVERSION OF CERTAIN
ITEMS TO IRAN.
Not later than 180 days after the date of the enactment of this
Act, and annually thereafter, the Director of National Intelligence
shall submit to the Secretary of Commerce, the Secretary of State, the
Secretary of the Treasury, and the appropriate congressional committees
a report that identifies all countries that the Director determines are
of concern with respect to transshipment, reexportation, or diversion
of items subject to the provisions of the Export Administration
Regulations to an entity owned or controlled by the Government of Iran.
SEC. 303. DESTINATIONS OF POSSIBLE DIVERSION CONCERN AND DESTINATIONS
OF DIVERSION CONCERN.
(a) Destinations of Possible Diversion Concern.--
(1) Designation.--The Secretary of Commerce shall designate
a country as a Destination of Possible Diversion Concern if the
Secretary, in consultation with the Secretary of State and the
Secretary of the Treasury, determines that such designation is
appropriate to carry out activities to strengthen the export
control systems of that country based on criteria that
include--
(A) the volume of items that originated in the
United States that are transported through the country
to end-users whose identities cannot be verified;
(B) the inadequacy of the export and reexport
controls of the country;
(C) the unwillingness or demonstrated inability of
the government of the country to control diversion
activities; and
(D) the unwillingness or inability of the
government of the country to cooperate with the United
States in interdiction efforts.
(2) Strengthening export control systems of destinations of
possible diversion concern.--If the Secretary of Commerce
designates a country as a Destination of Possible Diversion
Concern under paragraph (1), the United States shall initiate
government-to-government activities described in paragraph (3)
to strengthen the export control systems of the country.
(3) Government-to-government activities described.--The
government-to-government activities described in this paragraph
include--
(A) cooperation by agencies and departments of the
United States with counterpart agencies and departments
in a country designated as a Destination of Possible
Diversion Concern under paragraph (1) to--
(i) develop or strengthen export control
systems in the country;
(ii) strengthen cooperation and facilitate
enforcement of export control systems in the
country; and
(iii) promote information and data
exchanges among agencies of the country and
with the United States; and
(B) efforts by the Office of International Programs
of the Department of Commerce to strengthen the export
control systems of the country to--
(i) facilitate legitimate trade in high-
technology goods; and
(ii) prevent terrorists and state sponsors
of terrorism, including Iran, from obtaining
nuclear, biological, and chemical weapons,
defense technologies, components for improvised
explosive devices, and other defense items.
(b) Destinations of Diversion Concern.--
(1) Designation.--The Secretary of Commerce shall designate
a country as a Destination of Diversion Concern if the
Secretary, in consultation with the Secretary of State and the
Secretary of the Treasury, determines--
(A) that the government of the country is directly
involved in transshipment, reexportation, or diversion
of items that originated in the United States to end-
users whose identities cannot be verified or to
entities owned or controlled by the Government of Iran;
or
(B) 12 months after the Secretary of Commerce
designates the country as a Destination of Possible
Diversion Concern under subsection (a)(1), that the
country has failed--
(i) to cooperate with the government-to-
government activities initiated by the United
States under subsection (a)(2); or
(ii) based on the criteria described in
subsection (a)(1), to adequately strengthen the
export control systems of the country.
(2) Licensing controls with respect to destinations of
diversion concern.--
(A) Report on suspect items.--
(i) In general.--Not later than 45 days
after the date of the enactment of this Act,
the Secretary of Commerce, in consultation with
the Director of National Intelligence, the
Secretary of State, and the Secretary of the
Treasury, shall submit to the appropriate
congressional committees a report containing a
list of items that, if the items were
transshipped, reexported, or diverted to Iran,
could contribute to--
(I) Iran obtaining nuclear,
biological, or chemical weapons,
defense technologies, components for
improvised explosive devices, or other
defense items; or
(II) support by Iran for acts of
international terrorism.
(ii) Considerations for list.--In
developing the list required under clause (i),
the Secretary of Commerce shall consider--
(I) the items subject to licensing
requirements under section 742.8 of
title 15, Code of Federal Regulations
(or any corresponding similar
regulation or ruling) and other
existing licensing requirements; and
(II) the items added to the list of
items for which a license is required
for exportation to North Korea by the
final rule of the Bureau of Export
Administration of the Department of
Commerce issued on June 19, 2000 (65
Fed. Reg. 38148; relating to export
restrictions on North Korea).
(B) Licensing requirement.--Not later than 180 days
after the date of the enactment of this Act, the
Secretary of Commerce shall require a license to export
an item on the list required under subparagraph (A)(i)
to a country designated as a Destination of Diversion
Concern.
(3) Waiver.--The President may waive the imposition of the
licensing requirement under paragraph (2)(B) with respect to a
country designated as a Destination of Diversion Concern if the
President--
(A) determines that such a waiver is in the
national interest of the United States; and
(B) submits to the appropriate congressional
committees a report describing the reasons for the
determination.
(c) Termination of Designation.--The designation of a country as a
Destination of Possible Diversion Concern or a Destination of Diversion
Concern shall terminate on the date on which the Secretary of Commerce
determines, based on the criteria described in subparagraphs (A)
through (D) of subsection (a)(1), and certifies to Congress and the
President that the country has adequately strengthened the export
control systems of the country to prevent transshipment, reexportation,
and diversion of items through the country to end-users whose
identities cannot be verified or to entities owned or controlled by the
Government of Iran.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this section.
SEC. 304. REPORT ON EXPANDING DIVERSION CONCERN SYSTEM TO COUNTRIES
OTHER THAN IRAN.
Not later than 180 days after the date of the enactment of this
Act, the Director of National Intelligence, in consultation with the
Secretary of Commerce, the Secretary of State, and the Secretary of the
Treasury, shall submit to the appropriate congressional committees a
report that--
(1) identifies any country that the Director determines may
be transshipping, reexporting, or diverting items subject to
the provisions of the Export Administration Regulations to
another country if such other country--
(A) is seeking to obtain nuclear, biological, or
chemical weapons, defense technologies, components for
improvised explosive devices, or other defense items;
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
countries as Destinations of Possible Diversion Concern and
Destinations of Diversion Concern to include countries
identified under paragraph (1).
TITLE IV--EFFECTIVE DATE; SUNSET
SEC. 401. EFFECTIVE DATE; SUNSET.
(a) Effective Date.--Except as provided in sections 102, 103, 104
and 202, this Act and the amendments made by this Act take effect on
the date of the enactment of this Act.
(b) Sunset.--The provisions of this Act shall terminate 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
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
development of nuclear, biological, and chemical weapons and
ballistic missiles and ballistic missile launch technology.
Passed the House of Representatives September 26, 2008.
Attest:
LORRAINE C. MILLER,
Clerk.