[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4992 Introduced in House (IH)]
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114th CONGRESS
2d Session
H. R. 4992
To codify regulations relating to transfers of funds involving Iran,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 19, 2016
Mr. Royce introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To codify regulations relating to transfers of funds involving Iran,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``United States Financial System
Protection Act of 2016''.
SEC. 2. FINDINGS, SENSE OF CONGRESS, AND STATEMENT OF POLICY.
(a) Findings.--Congress finds the following:
(1) On November 8, 2011, the Department of the Treasury
identified the Islamic Republic of Iran as a jurisdiction of
primary money laundering concern pursuant to section 5318A of
title 31, United States Code, including Iran's Central Bank,
private Iranian banks, branches, and subsidiaries of Iranian
banks operating outside of Iran as posing illicit finance risks
for the global financial system.
(2) On November 6, 2008, the Department of the Treasury
announced that it was revoking the ``U-turn'' license for Iran,
stating that ``as a member of the Financial Action Task Force
(FATF), the United States today fulfilled its obligation to
strengthen measures to protect the financial sector from the
risks posed to the international financial system by Iran''.
(3) On February 19, 2016, the Financial Action Task Force
(FATF), the global standard setting body for anti-money
laundering and combating the financing of terrorism which has
determined that Iran is a ``non-cooperating country or
territory'' in the fight against money laundering and terror
financing since 2008, stated that, ``the FATF remains
particularly and exceptionally concerned about Iran's failure
to address the risk of terrorist financing and the serious
threat this poses to the integrity of the international
financial system''.
(4) United States and foreign businesses operating or
seeking to operate in Iran run significant risks, as corruption
in Iran is endemic, with Transparency International ranking
Iran 130 out of 168 countries.
(b) Sense of Congress.--It is the sense of Congress that the entire
financial sector of Iran, including Iran's Central Bank, private
Iranian banks and branches, and subsidiaries of Iranian banks operating
outside of Iran, poses illicit finance risks for the global financial
system due to its proliferation, support for terrorism, and other
illicit conduct.
(c) Statement of Policy.--It shall be the policy of the United
States to--
(1) deny Iran access to funds denominated in United States
dollars, including through any offshore United States dollar
clearing system for transactions involving the Government of
Iran or an Iranian person; and
(2) deny Iran access to United States dollars through any
offshore United States dollar clearing system conducted or
overseen by a foreign government or a foreign financial
institution for transactions involving the Government of Iran
or an Iranian person.
SEC. 3. CODIFICATION OF REGULATIONS RELATING TO TRANSFERS OF FUNDS
INVOLVING IRAN; CLARIFICATION OF APPLICATION OF
REGULATIONS TO FOREIGN DEPOSITORY INSTITUTIONS AND
FOREIGN REGISTERED BROKERS AND DEALERS.
(a) Codification of Regulations.--Section 560.516 of title 31, Code
of Federal Regulations, as in effect on January 1, 2016, shall apply
with respect to transfers of funds to or from Iran, or for the direct
or indirect benefit of an Iranian person or the Government of Iran, for
the period beginning on or after January 1, 2016, and ending on the
date on which the President makes the certification to the appropriate
congressional committees under section 401(a) of the Comprehensive Iran
Sanctions, Accountability, and Divestment Act of 2010 (22 U.S.C.
8551(a)).
(b) Clarification of Application of Regulations to Foreign
Financial Institutions and Foreign Registered Brokers and Dealers.--
(1) Foreign financial institutions.--Subsection (a) of
section 560.516 of title 31, Code of Federal Regulations, as in
effect on January 1, 2016, shall apply with respect to foreign
financial institutions to the same extent and in the same
manner as such subsection applies with respect to United States
depository institutions if the funds that are to be transferred
as described in such subsection are funds that are denominated
in United States dollars.
(2) Foreign registered brokers and dealers.--Subsection (b)
of section 560.516 of title 31, Code of Federal Regulations, as
in effect on January 1, 2016, shall apply with respect to
foreign registered brokers or dealers in securities to the same
extent and in the same manner as such subsection applies with
respect to United States registered brokers or dealers in
securities if the funds that are to be transferred as described
in such subsection are funds that are denominated in United
States dollars.
(3) Suspension.--The President may suspend the application
of paragraph (1) with respect to a foreign financial
institution or the application of paragraph (2) with respect to
a foreign registered broker or dealer in securities for a
period not to exceed 60 days, and the President may renew the
suspension of the application of paragraph (1) or paragraph
(2), respectively, for additional periods of not more than 60
days, on and after the date on which the President certifies to
the appropriate congressional committees that during the
preceding 60-day period the Government of Iran is in compliance
with the criteria described in section 401(a)(1) of the
Comprehensive Iran Sanctions, Accountability, and Divestment
Act of 2010 (22 U.S.C. 8551(a)(1)).
(c) Licensing Restrictions.--
(1) In general.--Except as provided in paragraph (2), the
President may not issue any license under the International
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) or
provide other guidance, including executive actions, rules,
regulations, frequently asked questions, written
communications, or any other commitments, that permits--
(A) a United States depository institution or
United States registered broker or dealer in
securities--
(i) to conduct an offshore United States
dollar clearing system for transactions
involving or for the benefit of the Government
of Iran or an Iranian person, including to
process transfers of funds to or from Iran
under section 560.516 of title 31, Code of
Federal Regulations, as in effect on January 1,
2016; or
(ii) to provide United States dollars for
any offshore United States dollar clearing
system conducted or overseen by a foreign
government or a foreign financial institution
for transactions involving or for the benefit
of the Government of Iran or an Iranian person,
including to process transfers of funds to or
from Iran under section 560.516 of title 31,
Code of Federal Regulations, as in effect on
January 1, 2016; or
(B) a foreign financial institution or foreign
registered broker or dealer in securities--
(i) to conduct an offshore United States
dollar clearing system for transactions
involving or for the benefit of the Government
of Iran or an Iranian person, including to
process transfers of funds to or from Iran
under section 560.516 of title 31, Code of
Federal Regulations, as in effect on January 1,
2016, and as applied under subsection (b); or
(ii) to provide United States dollars for
any offshore United States dollar clearing
system conducted or overseen by a foreign
government or a foreign financial institution
for transactions involving or for the benefit
of the Government of Iran or an Iranian person,
including to process transfers of funds to or
from Iran under section 560.516 of title 31,
Code of Federal Regulations, as in effect on
January 1, 2016, and as applied under
subsection (b).
(2) Exception for humanitarian purposes.--The President
may, on a case-by-case basis, issue a license described in
paragraph (1) to authorize the activities described in clause
(i) or (ii) of paragraph (1)(A) or the activities described in
clause (i) or (ii) of paragraph (1)(B) if--
(A) such activities relate solely to--
(i) the provision of agricultural
commodities, food, medicine, or medical devices
to Iran; or
(ii) the provision of humanitarian
assistance to the people of Iran; and
(B) the President submits to the appropriate
congressional committees a copy of the license.
(d) Definitions.--In this section:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Affairs and the
Committee on Financial Services of the House of
Representatives; and
(B) the Committee on Foreign Relations and the
Committee on Banking, Housing, and Urban Affairs of the
Senate.
(2) Foreign financial institution.--The term ``foreign
financial institution'' has the meaning given such term in
section 1010.605 of title 31, Code of Federal Regulations, as
in effect on January 1, 2016.
(3) Iran.--The term ``Iran'' has the meaning given the term
in section 561.329 of title 31, Code of Federal Regulations, as
in effect on January 1, 2016.
(4) Iranian person.--The term ``Iranian person'' means a
person or entity (as such terms are defined in section 560.305
of title 31, Code of Federal Regulations, as in effect on
January 1, 2016) that--
(A) is organized under the laws of Iran or any
jurisdiction within Iran (including foreign branches);
or
(B) is a person in Iran.
(5) Transfer of funds.--The term ``transfer of funds''--
(A) has the meaning given the term ``funds
transfer'' in section 1010.100 of title 31, Code of
Federal Regulations, as in effect on January 1, 2016;
and
(B) includes a transfer of funds or other property
for the benefit of an Iranian financial institution
that is made between accounts of the same financial
institution even if that Iranian financial institution
is not the direct recipient of the transfer.
(6) United states depository institution.--The term
``United States depository institution'' has the meaning given
such term in section 560.319 of title 31, Code of Federal
Regulations, as in effect on January 1, 2016.
(7) United states registered broker or dealer in
securities.--The term ``United States registered broker or
dealers in securities'' has the meaning given such term in
section 560.321 of title 31, Code of Federal Regulations, as in
effect on January 1, 2016.
SEC. 4. CERTIFICATION REQUIREMENT FOR REMOVAL OF DESIGNATION OF IRAN AS
A JURISDICTION OF PRIMARY MONEY LAUNDERING CONCERN.
(a) In General.--The President may not rescind a preliminary draft
rule or final rule (as in effect on the day before the date of the
enactment of this Act) that provides for the designation of Iran as a
jurisdiction of primary money laundering concern pursuant to section
5318A of title 31, United States Code, unless the President submits to
the appropriate congressional committees a certification described in
subsection (b) with respect to Iran.
(b) Certification.--The President may rescind a preliminary draft
rule or final rule described in subsection (a) if the President submits
to the appropriate congressional committees a certification that the
Government of Iran is no longer engaged in support for terrorism,
pursuit of weapons of mass destruction, and any illicit and deceptive
financial activities.
(c) Form.--The certification described in subsection (b) shall be
submitted in unclassified form, but may contain a classified annex.
(d) Definition.--In this section, the term ``appropriate
congressional committees'' means--
(1) the Committee on Foreign Affairs and the Committee on
Financial Services of the House of Representatives; and
(2) the Committee on Banking, Housing, and Urban Affairs of
the Senate.
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