[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
NUCLEAR IRAN PREVENTION ACT OF 2013
=======================================================================
MARKUP
BEFORE THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
ON
H.R. 850
__________
MAY 22, 2013
__________
Serial No. 113-27
__________
Printed for the use of the Committee on Foreign Affairs
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COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida ENI F.H. FALEOMAVAEGA, American
DANA ROHRABACHER, California Samoa
STEVE CHABOT, Ohio BRAD SHERMAN, California
JOE WILSON, South Carolina GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas ALBIO SIRES, New Jersey
TED POE, Texas GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina KAREN BASS, California
ADAM KINZINGER, Illinois WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas ALAN GRAYSON, Florida
PAUL COOK, California JUAN VARGAS, California
GEORGE HOLDING, North Carolina BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas JOSEPH P. KENNEDY III,
SCOTT PERRY, Pennsylvania Massachusetts
STEVE STOCKMAN, Texas AMI BERA, California
RON DeSANTIS, Florida ALAN S. LOWENTHAL, California
TREY RADEL, Florida GRACE MENG, New York
DOUG COLLINS, Georgia LOIS FRANKEL, Florida
MARK MEADOWS, North Carolina TULSI GABBARD, Hawaii
TED S. YOHO, Florida JOAQUIN CASTRO, Texas
LUKE MESSER, Indiana
Amy Porter, Chief of Staff Thomas Sheehy, Staff Director
Jason Steinbaum, Democratic Staff Director
C O N T E N T S
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Page
MARKUP OF
H.R. 850, To impose additional human rights and economic and
financial sanctions with respect to Iran, and for other
purposes....................................................... 2
Amendment in the nature of a substitute to H.R. 850 offered by
the Honorable Edward R. Royce, a Representative in Congress
from the State of California, and chairman, Committee on
Foreign Affairs.............................................. 29
En block amendments to H.R. 850 offered by various members..... 84
Amendment to the amendment in the nature of a substitute to
H.R. 850 offered by the Honorable Edward R. Royce............ 144
Amendment to the Royce amendment to the amendment in the nature
of a substitute to H.R. 850 offered by the Honorable Alan
Grayson, a Representative in Congress from the State of
Florida...................................................... 148
Amendments to the amendment in the nature of a substitute to
H.R. 850 offered by:.........................................
The Honorable Alan Grayson................................. 151
The Honorable Alan Grayson................................. 155
The Honorable Tom Cotton, a Representative in Congress from
the State of Arkansas.................................... 156
The Honorable Alan Grayson................................. 157
The Honorable Tom Cotton................................... 158
The Honorable Alan Grayson................................. 164
The Honorable Alan Grayson................................. 167
The Honorable Alan Grayson................................. 169
The Honorable Edward R. Royce; the Honorable Eliot L.
Engel, a Representative in Congress from the State of New
York; the Honorable Tom Cotton; the Honorable Brad
Sherman, a Representative in Congress from the State of
California............................................... 172
APPENDIX
Markup notice.................................................... 176
Markup minutes................................................... 177
Markup summary................................................... 179
The Honorable Edward R. Royce: Material submitted for the record. 181
The Honorable Christopher H. Smith, a Representative in Congress
from the State of New Jersey: Prepared statement............... 182
The Honorable George Holding, a Representative in Congress from
the State of North Carolina: Prepared statement................ 183
NUCLEAR IRAN PREVENTION ACT OF 2013
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WEDNESDAY, MAY 22, 2013
House of Representatives,
Committee on Foreign Affairs,
Washington, DC.
The committee met, pursuant to notice, at 10:15 a.m., in
room 2172 Rayburn House Office Building, Hon. Edward Royce
(chairman of the committee) presiding.
Chairman Royce. The hearing will come to order pursuant to
notice. We meet today to mark up H.R. 850, the Nuclear Iran
Prevention Act of 2013.
The Chair calls up the bill. And without objection, the
bipartisan amendment in the nature of a substitute that was
sent to your offices on Monday is considered base text, and is
considered read and open for amendment at any point.
[H.R. 850 and the amendment in the nature of a substitute
referred to follow:]
Chairman Royce. After recognizing myself and the ranking
member to explain the bill, I will call up a package of
bipartisan amendments to be considered en bloc, at which point
I would be glad to recognize any members seeking recognition to
speak. Without objection, all members may have 5 days to submit
statements for the record on the bill or statements on the
amendments.
I now recognize myself to describe the base text.
Last week the committee heard testimony from senior
administration officials on the threat of a nuclear Iran. As I
said then, there is no higher priority for this committee than
stopping Iran's nuclear weapons drive.
Thanks to the tools provided by Congress, sanctions have
been stepped up over the past year and a half. Consequently,
Iran's oil revenue has been dropped now by 40 percent.
Inflation in Iran has climbed to 30 percent. Those are the
official numbers. The unofficial numbers are twice that.
But as impressive as this is, it is not enough. A loophole
in existing sanctions has allowed, for example, the transfer of
$6 billion of gold into Iran to buttress their reserves. And
Iran is advancing its nuclear program with great determination.
The number of installed centrifuges has doubled since the fall
of 2011. These centrifuges are getting more advanced. Iran's
nuclear activities are falling farther out of view of
international inspectors who are being stonewalled.
Without question, we have to play every card, and we have
to pull every lever that we have. This legislation, developed
with Ranking Member Engel, aims to do just that. In short, we
attack Iran's oil exports, we hit its brutal leaders, and we
crimp its access to overseas cash.
Since key oil sanctions were passed--and, by the way, that
was over administration objections at the time--but since those
key oil sanctions were passed in December 2011, 1 million
barrels of Iranian crude per day have been taken off the
market, yet countries still buying Iran's oil continue to
receive a ``significant reduction exemption'' from the
administration.
This bill would compel that another 1 million barrels per
day be taken off of the market. Now is the time to snap
Tehran's Achilles heel. Simply put, without oil revenue, there
is no cash for atomic weapons. And without oil revenue,
hopefully, we also crimp the funding for Hezbollah.
With this bill, we will work to limit Iran's access to
overseas foreign currency reserves, blacklist more sectors of
the economy, and begin to target significant commercial trade
with Iran. Shipping is targeted in this legislation as well. We
squeeze, and then we squeeze some more.
Importantly, this bill seeks to ensure that when the
administration imposes sanctions on any entity that provides
precious metals to Iran, like gold, that they have every
sanction available to them. And we extend sanctions aimed at
curbing terrorism and proliferation to human rights violators,
standing by the Iranian people who are suffering abuse and
yearning for freedom. The Iranian regime also systematically
denies the Iranian people humanitarian supplies, as we heard
from the administration last week in their testimony.
I should recognize that Chairman Emeritus Ros-Lehtinen and
former chairman Howard Berman helped put in place many of the
sanctions we are building on today. This committee has
historically led the way on Iran sanctions, and always in a
bipartisan way.
Today, we continue moving ahead with a bill that now has
over 330 co-sponsors. It is critical that the administration
aggressively impose all Iran sanctions. This is a very tough
bill, as it should be. The threat is grave. And at the end of
the day, I know the committee wants to see Iran's nuclear
weapons effort ended by peaceful means. That can only happen
with crippling sanctions.
I now recognize the ranking member, the co-author of this
bill, Eliot Engel from the Bronx in New York City, for his
opening remarks.
Mr. Engel. Thank you very much, Mr. Chairman. Thank you for
calling today's markup on H.R. 850, the Nuclear Iran Prevention
Act of 2013.
You and I have worked closely together on this bill in a
bipartisan way, which is one of the reasons this committee
works so well. I think we have more bipartisanship on this
committee than virtually any other committee. Perhaps we can
lead the way for the rest of the Congress.
It has been a pleasure working with you and your staff,
again, in a bipartisan manner to craft this important
legislation, which now, as you have pointed out, has more than
330 co-sponsors from both sides of the aisle. I am very glad
that our freshmen on both sides of the aisle are here so early
in their congressional career having a markup, which is of
course so important to the well-being of our nation.
Mr. Chairman, we share the goal of preventing a nuclear-
capable Iran, which would pose a grave threat to the United
States and our allies, and I could not ask for a better partner
than you in this effort.
Last week the State Department's lead negotiator in the
P5+1 negotiations with Iran, Ambassador Wendy Sherman, appeared
before this committee. Her testimony confirmed that Iran
continues to reject diplomatic efforts to resolve this crisis
and is not prepared to abandon its dangerous and illegal
nuclear weapons program.
As I mentioned at the hearing, I don't think Iran will ever
negotiate in good faith unless we ratchet up the pressure, and
that is the purpose of the legislation before us today.
Previous sanctions legislation reduced Iran's oil exports by 1
million barrels a day, from roughly 2.5 million barrels a day
to less than 1.5 million barrels.
We have written this bill to cut Iran's oil exports by yet
another million barrels a day, a reduction of two-thirds from
Iran's current exports. Shrinking Iran's oil exports to less
than 0.5 million barrels a day will be the strongest step we
have taken thus far to pressure Iran to stop its nuclear
weapons program and end its support for terrorism.
The legislation also strengthens existing sanctions by
authorizing the President to restrict significant commercial
trade with Iran. It uses the same model, sanctioning
transactions through the central bank of Iran or a designated
Iranian bank, that has successfully targeted Iran's oil trade
over the past year.
In addition, the bill seeks to deny the Iranian regime hard
currency by enhancing our ability to work with our European
allies in cutting off Iran's access to euro-dominated
transactions. And, finally, our bill imposes new sanctions
against Iranian shipping imports and expands existing sanctions
against Iranian human rights violators and those who aid and
abet human rights abuses by transferring certain technologies
to Iran.
Today, members will have the opportunity to offer
amendments to improve this legislation, and hopefully make our
sanctions regime even more effective. I look forward to
supporting those amendments.
With Iran moving full speed ahead on its nuclear weapons
program, time is of the essence. It is clear that Iran is
playing for time. They want to keep making excuses until their
having a bomb becomes a fait accompli. We will not allow that
to happen, and this legislation is a very important piece of
that puzzle.
I hope we can bring this bill to the floor as soon as
possible, work out differences with our partners in the Senate,
and get it to the President's desk without delay.
Mr. Chairman, again, I am proud to be part of this
bipartisan effort to address the most critical national
security challenge facing our nation today, and I look forward
to working with you to ensure that the strongest possible
sanctions are enacted into law.
Thank you, Mr. Chairman.
Chairman Royce. I thank my friend for his remarks, and I
also thank him for the contributions that he has made to this
legislation. And as your offices were previously notified, I
will now call up the bipartisan en bloc, and then we will
recognize any members wishing to speak on the bill or wishing
to speak on those en bloc amendments after we have done that.
So without objection----
Mr. Grayson. Point of order.
Chairman Royce [continuing]. The following amendments
provided----
Mr. Grayson. Sorry, Mr. Chairman. This is a point of order.
I think that we should have at least a voice vote on the
amendment in the nature of a substitute. We have a bill. We
have an amendment in the nature of a substitute. We have not
had a vote yet on the amendment in the nature of a substitute.
I think under Rule 5 we should have such a vote.
It can be very brief; I want to move along here. But I
think we do need such a vote under Rule 5.
Chairman Royce. Well, if I could, Mr. Grayson, my intention
was to go to a vote on that after the amendments. What you are
suggesting is that rather than recognizing the en bloc
amendment first, you would prefer to have that vote prior to
accepting the en bloc amendments?
Mr. Grayson. Yes, Mr. Chairman. Exactly. The amendment in
the nature of a substitute should have a vote before we have
the en bloc amendments, because my understanding is that the en
bloc amendments are based upon the amendment in the nature of a
substitute, or, as you put it, the base language.
Chairman Royce. Well, we are in the process of amending the
base text, so that we have base language. Then, if you wished
to call up a vote on that, we could be recorded, because at
this point these amendments--the base text is pending these
amendments. That's the circumstance we are now in.
Mr. Grayson. So if I understand the chairman correctly, the
chairman does contemplate a vote on the amendment in the nature
of a substitute, but only after all other amendments to that
amendment have been resolved.
Chairman Royce. Well, after the amendments that we have
already resolved en bloc. All right? So that is the suggestion
I am making.
Mr. Grayson. I understand. I withdraw my objection.
Chairman Royce. And I think that might be acceptable to
you.
Mr. Grayson. Yes, it is, Mr. Chairman. Thank you.
Chairman Royce. I thank the gentleman from Florida.
Okay. Without objection, the following amendments provided
to all members yesterday, and which you have in front of you,
will be considered en bloc, Royce Amendment 22; Connolly
Amendment 39; Cotton Amendments 4 and 20; Deutch Amendments 22,
23, and 25; Duncan Amendment 16; Frankel Amendment 3; Grayson
Amendments 101, 103, 108, and 110; Marino Amendment 19; Poe
Amendment 38; Ros-Lehtinen Amendment 18; Schneider Amendment 2;
and Sherman Amendments 74, 75, 76, and 79.
[The en bloc amendments offered follow:]
Chairman Royce. And I think at this time it would be
appropriate to ask if any members want to speak either on the
en bloc amendments or on the underlying bill, and we will go to
Mr. Sherman.
Mr. Sherman. Thank you, Mr. Chairman. I want to thank you
and the ranking member for your work on this important
legislation. It builds upon the key work, particularly the
Menendez-Kirk Amendment, that has had such an effect of making
it difficult for Iran to sell its oil.
As you point out, Iran is now down to 1.2-1.5 million
barrels, and those who want to do business with the central
bank of Iran without obtaining U.S. sanctions have to get
waivers from the United States. And for those waivers to
continue, we need to see dramatic reductions in oil purchases
from Iran.
As to the en bloc amendment, I should explain some of the
provisions in it that stem from the four amendments that I had
pending individually. First, and perhaps most important, it
imposes sanctions on those who sell mining and milling
equipment to Iran that can be used by Iran to exploit its own
uranium ore.
Second, it strengthens the sanctions on those who would
provide WMD technology to Iran, and also strengthens the
sanctions on those who would give the Iranian Government the
technology to suppress the communications of its own citizens
and the social media that was so important in the,
unfortunately, unsuccessful Green Revolution or insurrection.
Perhaps most importantly, we have a situation where we have
to make sure that the sanctions are enforced. One thing that is
already in our law that is self-enforcing is that those getting
Federal Government contracts have to certify that that
contracting entity is not violating U.S. sanctions law.
So even if an administration were to do nothing unless
corporate executives are willing to risk imprisonment, they are
going to have to choose between doing business with the Federal
Government and doing business with Iran in a manner that is
sanctioned under our laws.
Unfortunately, current statute applies that certification
only to the entity contracting with the Federal Government and
its subsidiaries. This en bloc amendment would broaden that to
apply to the entire corporate group, so that the certification
would be on behalf of the parent corporation and all of the
brother-sister corporations, all of the corporations under
joint control.
So I think that the bill is a major step forward. The en
bloc amendment deserves support.
One thing that we need to work out with other committees is
the issue of whether some in the administration would say,
``Well, there is this or that part of the Iran sanctions bill
that we would like to enforce, but our lawyers say that we
can't because of some treaty or trade treaty, or whatever.''
You can always find a lawyer in this town that can tell you
that you can't do this or that, especially if you don't want to
do it.
The fact is that we have--that none of our sanctions
against Iran have been adjudicated by any competent
international jurists or domestic tribunal to be in violation
of any of our trade agreements. And I am certain that the
members of the Ways and Means Committee are as dedicated as all
Americans to preventing Iran from developing a nuclear weapon,
and that ultimately they will want to see in this bill
provisions that say that all American sanctions need to be
enforced, notwithstanding some argument about some treaty,
trade treaty or otherwise, unless and until there is an
adjudication from a competent tribunal, which I am sure would
not happen. And even if it did, it would happen many, many
years down the road.
Finally, I want to mention that an interesting bill was
introduced in the Senate yesterday, the Iran Export Embargo
Act, that would sanction those who buy non-energy exports from
the Government of Iran. And as this bill goes forward, we may
find provisions of that bill ought to be added to this bill.
So this may be the most important legislation the committee
deals with all year. It is something that I would like to
commend the chair and the ranking member for preparing, and I
yield back.
Chairman Royce. I thank the gentleman from California.
We go now to Mr. Smith from New Jersey.
Mr. Smith. Thank you very much, Mr. Chairman. And I want to
thank you for authoring a truly important bipartisan piece of
legislation. I think the Royce-Engel bill will make a serious
difference in the fight to combat Iran's efforts to acquire a
nuclear weapons of mass destruction capability.
Oil revenues remain, as we all know, Tehran's economic
lifeline, and I do believe we are at a tipping point. It may
now be a matter of when, and not if, that Iran procures these
weapons of mass destruction. But we have got to make this last
economic effort to try to say not now, not ever, while this
dictatorship continues to pose threats to its neighbors, to
Europe, to the United States, and, really, to the world.
I think it is very important that the legislation targets
oil. As I pointed out, as so many of us pointed out again and
again, especially when Wendy Sherman testified, when you can
sell oil to China and a whole host of other nations and derive
huge amounts of hard currency and the ability to sustain the
European and American sanctions, we have not done all that can
be done economically to try to mitigate this threat. So I do
think this legislation takes us in a very significant way in
the direction of finally saying, ``We are not kidding. This has
got to stop.'' We are a tipping point, like I said.
Again, I want to thank you--I would ask unanimous consent
that my full statement be made a part of the record. But I do
want to thank you, Chairman Royce. You know, Ileana Ros-
Lehtinen championed the legislation in the last Congress. And
as you pointed out, it was bipartisan. Howard Berman was
certainly a key factor in that legislation.
And we know the administration is not favorable to this. We
know it. Last Congress, over and over again, they tried to
throw hurdles, speed bumps, and moguls in front of the
legislation, and now it is a matter of more effective
implementation of all current sanctions, but also the new, and
I think significant, sanctions that you include in this
legislation.
So thank you, Mr. Chairman, and I yield back the balance of
my time.
Chairman Royce. Thank you. We will go now to Mr. Sires of
New Jersey.
Mr. Sires. Thank you, Mr. Chairman. Let me first compliment
you and Mr. Engel for working together on this.
Iran continues to ignore international law, and it is
moving forward with its nuclear program. While our current
sanctions are having an impact on Iran, more can be done and we
must act now.
I am a strong supporter of H.R. 850 and the amendments to
the Nuclear Iran Prevention Act, and I thank the chairman and
the ranking member for bringing this bill before the committee
today. This legislation would allow the United States to employ
more tools to combat Iran's nuclear program. H.R. 850
strengthens sanctions against human rights violators and the
corrupt Iran actors that steal humanitarian aid for their own
benefits.
H.R. 850 also tightens sanctions against companies who
invest in Iran's energy sector and work with Iran's central
bank. This bill also takes strong steps in having the Iran
Revolutionary Guard Corps designated as a foreign terrorist
organization by the U.S. State Department. H.R. 850 targets
Iran's leadership to help end the threat of nuclear Iran and to
stop the oppression of the Iranian people. Combating the threat
of Iran is critical for the future safety and stability of the
region, and the United States must continue to lead the fight
in sanctioning this dangerous regime.
I am proud to co-sponsor H.R. 850, and I urge my colleagues
to support this bill.
I yield back.
Chairman Royce. I thank the gentleman.
We go now to Mr. Chabot of Ohio.
Mr. Chabot. Thank you, Mr. Chairman. I will be brief. I do
support this legislation. I commend you and the ranking member
for offering it, and I intend to vote for it. I have to say,
however, I am not optimistic that ultimately sanctions against
Iran will work.
I believe Iran is bound and determined to obtain nuclear
weapons, and I think only if Iran is absolutely convinced that
military action will be taken against them, if they don't back
down from the program that they will actually back down. I
don't think they are convinced of that.
I think this administration, for years now, has basically
sent a mixed message to Iran saying one thing, but at the same
time saying something entirely different, sending mixed
signals. So, again, I commend you for doing this, I think it is
the right thing to do, and I do intend to support it. I don't
think Iran is convinced that military action will be taken
against them, therefore, I think they are going full speed
ahead with their nuclear weapons program
Thank you. I yield back.
Chairman Royce. I thank the gentleman.
We go to Mr. Connolly from Virginia.
Mr. Connolly. Thank you, Mr. Chairman. And I also want to
express my appreciation to you and the ranking member for your
leadership on this issue and for the bipartisan comity that has
characterized the progress of this legislation.
I support the amendment in the form of a substitute for
H.R. 850, and I also am supportive of the en bloc amendment
package. I particularly appreciate you and your staff and that
of Mr. Engel, willing to accept the Connolly-Ros-Lehtinen
Amendment that further clarifies internet access for
democratization within Iran. We believe that the social media
can really play a big role, despite the actions of the
government in Iran. And I, again, thank you and Mr. Engel for
working with us to accept that language.
I would just say, Mr. Chairman, I hear some discord in
notes on the otherwise bipartisan cooperation and tone today. I
have to say, I respectfully disagree with my friend from Ohio.
I think this administration most certainly does take sanctions
against Iran very seriously, has enforced them. They are some
of the toughest sanctions ever adopted against any country, and
I don't think the administration has sent mixed signals to
Tehran.
I think Tehran sometimes hears what it wants to hear, but I
am very gratified that both the United States and Israeli
Governments have worked closely together in a policy to try to
prevent nuclear development in Iran. And I think we will
continue to do so, and I think this legislation will be welcome
and will strengthen the administration's hands.
And with that, I yield back.
Chairman Royce. We will go now to Mr. McCaul of Texas.
Mr. McCaul. I want to thank the chairman and ranking member
for this legislation, and also for adopting my language to
designate the Quds Force as a foreign terrorist organization.
They have been behind some of the deadliest attacks of the past
three decades, including the killing of American troops in Iraq
and Afghanistan, the '96 Khobar Tower bombing in Saudi Arabia,
the '94 attack on the Jewish Community Center in Buenos Aires,
which I visited, the 1983/'84 bombings on the U.S. Embassy in
Beirut, the '83 bombing of the Marine barracks in Beirut
killing 299 Americans.
They fit squarely within the definition of a foreign
terrorist organization. I believe the designation is long
overdue. And I just want to thank the chairman and the ranking
member for including this language in this bill, which I
strongly support.
With that, I yield back.
Chairman Royce. Well, thank you, Mr. McCaul.
We now go to Mr. Vargas of California.
Mr. Vargas. Thank you very much, Mr. Chair, for the
opportunity to speak. I also want to thank you and the ranking
member for this bill.
I strongly support it, and I believe that we need to
tighten economic sanctions against Iran as tight as possible.
And the reason I think is quite simple, and that is because
these sanctions are really in lieu of military action, because
I don't think that the message has been clear enough, and I
don't think that the Iranians have taken us seriously that we
will use any means necessary to prevent them from gaining a
nuclear weapon.
We had testimony before, and I was able to ask the question
to the experts that were here, if they believed that the
Iranian regime was attempting to gain a nuclear weapon. All of
them agreed. They disagreed on many things, but they didn't
disagree on that point. They all agreed that Iran was
continuing that process to gain a nuclear weapon.
So I think that these sanctions are very necessary. I think
that we should tighten the noose as tight as possible. They are
a terrorist nation. There is no doubt about that. And, again, I
thank you for bringing this forward. And any way that we can
tighten these even further, I would be in favor of. So thank
you.
Chairman Royce. Thank you.
Mr. Duncan of South Carolina is recognized.
Mr. Duncan. Yes. Thank you, Mr. Chairman. And I want to
thank you and the other members for the bipartisan effort on
H.R. 850, and for including my amendment as part of the en bloc
amendment.
Just a few talking points that I would like to cover about
Iran's nuclear program which threatens the safety and security
of the U.S. and many of our allies and partners around the
world. And although the U.S. has had sanctions on Iran since
1979, with sharpening sanctions in more recent years, and while
the U.N. and the EU have passed sanctions on Iran, we continue
to see countries purchasing oil or natural gas from Iran with
gold.
Although the President has had the authority to impose
sanctions on gold exports to the Iranian Government since July
2012, to date the administration has not penalized any entity
on these grounds. In the meantime, lack of U.S. action has real
and tangible ramifications.
A recent report by the Foundation for Defense of
Democracies and the Roubini Global Economics found that between
July 2012 and March 2013 Iran received $6 billion in payment in
the form of gold for energy exports. My amendment to H.R. 850
seeks to close this gold for gas loophole by requiring greater
transparency and accountability from the President to ensure
that the President implements sanctions on gold exports to the
Government of Iran.
I appreciate the support of this, and I yield back.
Chairman Royce. Thank you.
We go to Mr. Deutch of Florida.
Mr. Deutch. Thank you. Chairman Royce, Ranking Member
Engel, thank you for your commitment to advancing this
legislation today. You acted swiftly to bring the bill up
before this committee, and I hope that it continues to the
floor as soon as possible because, as we all know, time is of
the essence.
We have seen how sanctions can cripple the Iranian regime's
financial lifeline with strict implementation and enforcement.
But we have also seen the regime become adept at finding
mechanisms to skirt sanctions. This legislation will close
those existing loopholes and make it more and more difficult
for Iran to avoid the economic pain of sanctions.
Today I offer three amendments, two of them addressing
critical issues that dominate today's headlines, and a third
continuing my work on divestment.
As we saw yesterday, tensions in Iran are rising as
Presidential elections draw near. The disqualification of
former President Rafsanjani, a supporter of the 2009
Reformists, is further proof that the Ayatollah is willing to
violate any and all international election standards that might
threaten his hold on power.
According to reports from Rafsanjani's daughter, a reason
for his disqualification is yet to be provided, but we knew
that the unelected, unchecked Guardian Council would disqualify
anyone seen as a threat to the regime, as well as any religious
minority or women candidates.
As Iran expert Karim Sadjadpour said recently,
``Increasingly looking like Iran's Presidential election will
be one man, one vote. That one man's name is Ayatollah
Khamenei.'' In fact, this morning there are reports that
members of Rafsanjani's campaign staff had been arrested.
To prevent any chance of a post-2009 uprising, we are
already seeing the regime's efforts to crack down on
communication, with reports of drastically slowed internet
speed and people unable to access technology necessary to help
circumvent the regime's ban on international Web sites.
News out of Iran reports that Reformist candidate and
opposition Web sites have been filtered. Mr. Chairman, that is
why the passage of my amendment today is so critical. With this
amendment, Congress will send a clear message to the Iranian
people that we stand with them in their quest for democracy,
and we unequivocally support their right to free and fair
elections.
For years the Iranian regime has been engaged in a
systematic campaign to deny the Iranian people access to
unbiased information and to prevent them from exercising basic
human freedoms of expression and assembly. And as we saw
yesterday, as this election draws closer, the regime will try
to cement its firm grip over the Iranian people. With elections
just weeks away, it is vital that we do not let Iran achieve
its goal of dropping an electronic curtain on its people.
In response to what we have already seen happening in Iran,
I am also pleased to offer an amendment that will expose those
that continue to import to Iran technologies that are used for
repression, tracking movements, monitoring of email and texts,
and jamming of access to the internet, as more sanctions to
those companies.
As more and more citizens of Iran use the internet and new
media as an alternative source for news and political debate,
the regime has responded by monitoring and filtering internet
content, limiting or suspending access to the internet,
satellite jamming, outlawing foreign information. The amendment
will also expedite licenses for those who seek to provide
technologies that promote the free flow of information.
Finally, Mr. Chairman, I would like to offer an amendment
that furthers an issue that I have worked on for many years. In
2007, the State of Florida passed the nation's first Iran
divestment legislation requiring state pensions to withdraw
funds from any company doing business in Iran's energy sector.
My third amendment today will broaden the ability of states
to divest their funds from companies who continue to support
the Iranian regime. This amendment will also allow states to
deny business licenses to companies engaged in business with
Iran. Twenty-eight states now have divestment policy, and, as a
result, billions of dollars of investment in Iran has been
lost.
Mr. Chairman, I want to thank you and the ranking member
for working with us in such an inclusive bipartisan manner on
this bill. The Nuclear Iran Prevention Act will continue to
advance what has become the most rigorous U.S. sanctions policy
to date, aimed at bringing maximum pressure on this regime and
ultimately halting Iran's drive for a nuclear weapon once and
for all.
And I yield back the balance of my time.
Chairman Royce. Well, thank you, Mr. Deutch. I do think
your amendment sent a strong message, and I think it is
interesting that this markup comes a day after, as you
eloquently expressed, another example of this rigged sham of an
election, one more case of evidence in terms of the way in
which the will of the people in Iran has been overturned by
this decision.
We now go to Mr. Cotton. We recognize Mr. Cotton of
Arkansas.
Mr. Cotton. Thank you, Mr. Chairman. I want to express my
thanks to you and the ranking member for your efforts on this
very important bipartisan legislation. I agree with my
colleague from Ohio that this legislation may be the last best
chance to stop Iran's nuclear weapons program before an act of
war, whether a passive act like a blockade, or an active act of
war like an attack, may be necessary. I hope it will be
successful. We don't know for sure, but it is certainly worth
the effort.
I have offered two en bloc amendments and will offer
standalone amendments as well. All of these amendments have one
underpinning. They are designed to accelerate and improve the
reporting of this legislation. I think the timeline on which we
are operating is very short. We are not operating on a 3- to 5-
year timeline. We are operating on a 1-year timeline, give or
take a few months.
I do believe this is necessary, because Western
intelligence services, including our own, have a history of
underestimating the timelines that covert weapons programs take
to reach full development, for example, Saddam Hussein's
program that was destroyed by Israel in 1981, thankfully.
In my en bloc amendments, the first is an amendment to
Section 102. It would require reporting about the net worth of
certain Iranian officials. Iran suffers from double digit
unemployment and staggering inflation, yet the elites of the
regime continue to profit at the expense of common Iranian
people, because of the regime's tight control over information.
Many Iranian people don't know this. To put this on the
internet I think would help ferment some of the civil unrest in
the country.
The second amendment to Section 301 would, again, help
strengthen reporting requirements. It would eliminate the
nuclear clock and the economic clock that Iran currently has.
It would do things like require more reporting on weapons grade
uranium production, plutonium production, Iran's capital
accounts, foreign exchange reserves, and an estimated timeline
with respect to its macroeconomic viability. I think this will
provide sorely needed accountability and transparency.
I am happy and honored to be offering this bipartisan
amendment with my colleagues from Massachusetts and Illinois,
and I will yield 2 minutes to the gentleman from Massachusetts
at this point.
Mr. Kennedy. Thank you, Mr. Cotton. It is a privilege to be
able to--and it has been a privilege to be able to work with
you on these amendments as well, and I want to thank and
recognize the chair and the ranking member of the committee for
putting forth such a strong bill that has received such strong
bipartisan support throughout this committee and in the House.
I just wanted to speak briefly and echo a bit of what Mr.
Cotton had said. This amendment essentially speeds up the
reporting timeline, so that Congress is able to get this
critical information as quickly as possible. It requires a more
detailed analysis of Iran's nuclear timeline, the procurement
network, and the capital accounts, all necessary details to
fully understand how effective our sanctions are and whether
there are areas that need to be improved.
Our amendment ensures that we are going to be able to move
forward with tougher sanctions and that there is a thorough and
consistent communication between the State Department and
Congress regarding any new threats and developments. The United
States has to continue to lead the way with these crippling
sanctions and must continue to stay active and engaged in their
implementation and oversight.
And for a couple more comments, I will yield to Mr.
Schneider.
Chairman Royce. We recognize the gentleman from Illinois.
Mr. Schneider. Thank you--and, again, I want to thank
Congressman Cotton and Congressman Kennedy--for your help, Mr.
Chairman. I am pleased to support the bipartisan effort of this
bill and support the en bloc amendment.
The provisions included in the legislation before us are
some of the most important policy necessities we will consider
before this committee. Sanctioning Iran and its affiliates is
crucial to our national security strategy and those of our
allies in the Middle East.
With this in mind, I was quite happy to work with my
colleagues on both sides of the aisle to improve upon the basic
text of this bill, particularly in this amendment with
Representative Cotton and Representative Kennedy in crafting
compromise language that strengthens our oversight of the
sanctions process and places a new emphasis on the speed and
frequency in which we impose economic hardship on the Iranian
regime.
The amendment clarifies the distinct process and deliberate
pace we must take to successfully degrade the Iranian regime's
ability to develop a nuclear weapon and isolate them in the
international community. The amendment would set in motion a
process in which the administration will make an initial
assessment of the current state of Iran's isolation, develop a
strategic framework for how to address those challenges, and
further report back to Congress on a regular interval on new
emerging trends, challenges, and potential threats that are
being continually observed and addressed throughout
implementation.
The renewed emphasis on reporting will allow us to better
evaluate how and when sanctions are being effective and what
tools are presenting us with the greatest opportunity to
successfully deter Iran's aggression.
We know that we are reaching a point of breakout in terms
of Iran's capabilities. It is essential that we develop a
sanctions and reporting process that is frequent, aggressive,
and offers us the greatest mobility at addressing Iran's
attempts to diversify its economy and circumvent U.S. and
European efforts at isolation.
Language included in this will not only provide an
operational and strategic approach to sanctions, but will also
require periodic reporting on what new emerging threats,
challenges, and opportunities are being identified, so swift
action can be taken to take full advantage of the points of
exploitation as they emerge.
I am also proud to offer an amendment seeking to report on
Iran's efforts to diversify its economy and that will
specifically evaluate the ability of Iran to diversify in such
a way that will lessen the impact of sanctions on their
economic and financial sections and their energy sectors.
As we continue to go through this process of amendment and
deliberation, I look forward to working with the chairman and
the ranking member and my colleagues to further clarify our
period reviews of how sanctions are being developed.
Thank you for working in such a bipartisan way. And with
that, I yield back my time.
Chairman Royce. Well, we thank the gentleman from
Massachusetts, as well as Illinois, and the gentleman from
Arkansas, for their amendment.
We now go to Ms. Meng of New York City. Ms. Meng is not
present at the moment, so let us go to Ms. Frankel of Florida.
Ms. Frankel. Thank you, Mr. Chairman. You know, I think
most Americans are wondering whether this Congress can ever get
along, so I just want to reiterate and thank the chairman and
the ranking member for a very bipartisan approach to a very
critical issue. And I join with my colleagues, first of all, to
say I support the bill and the amendment and the amendments en
bloc.
And I will go on record again saying that this extreme
regime is the largest state sponsor of terror. It cannot be
allowed to acquire the world's most dangerous weapon, and, as
we heard Under Secretary Sherman say, that a nuclear Iran would
trigger a nuclear arms race throughout the region that would
destabilize the world order. So thank you for strengthening the
sanctions with this Act.
I also want to thank Mr. Royce and Mr. Engel for advancing
human rights. There is always this delicate balance. These
sanctions are, rightfully, aimed at causing economic unrest in
Iran. And we want these strategies to work in a way that the
Iranian people, the unrest, that they turn against their
government, not have sanctions that further support of a
government. And so thank you for adding the advancement of
human rights.
I just wanted to give folks an example of what it is like
for women in Iran. For example, women convicted of adultery,
they are buried in the sand up to their shoulders and small
stones are thrown at them until they die. That is just one
example of the cruelty of the Iranian regime.
And with this en bloc amendment is a provision that asks
the Secretary of State to designate a position in the Bureau of
Near Eastern Affairs to facilitate cooperation across
departments for the purpose of advancing human rights and
political participation for women in Iran, as well as to
prepare evidence and information on women's rights violations
to be used in identifying Iranian officials for designation as
human rights violators.
We need both men and women's voices to be heard to alter
the actions of a very, very cruel, extreme Iranian regime.
Thank you, Mr. Chair.
Chairman Royce. Well, we thank the gentlelady for her
contribution to this measure.
And we go now to Mr. Poe of Texas.
Mr. Poe. Move to strike the last word, Mr. Chairman. Thank
you for the diligence on this bill. As the gentleman from the
Bronx mentioned, 330 co-sponsors on a piece of legislation in
Congress, I don't know that we have ever had that many agree on
anything, and that should be a sign not only to the American
people, and the Iranian people, but the rogue government in
Iran, that we mean business about sanctions, and we are united
on the issue of making sure that the little tyrant from the
desert, Ahmadinejad, is not able to have nuclear capability,
nuclear weapons.
The supreme leader took a heavy hand against his own people
after the 2009 massive protest and the illegal government of
Ahmadinejad took control. The Iran Revolutionary Guard was let
loose on the people, tramping down, stomping, and killing all
because of the right of free speech.
According to numerous accounts, one of those protesters was
a young lady. Her name was Taraneh Mousavi. One of her friends
described her as beautiful and very kind, and she had a warm
voice and played the piano with great skill. Taraneh
disappeared during the protests of 2009. She was arrested by
security forces. Weeks later her mother received an anonymous
call--the call in the night--from the government, a government
agent, saying her daughter had been hospitalized listing
injuries that could only come from an assault, a rape.
When her family went to the hospital, Taraneh was not
there. According to one account, the family was told by
government thugs not to tell people when she disappeared nor
any information about the kind of injuries she suffered. So
when her charred body was discovered a month after her arrest,
her family was again told not to hold a funeral ceremony for
her and not to tell anyone about the way she had been killed.
The report of Taraneh's rape and murder is not the only
example of torture and abuse in Iran's prisons by the Iranian
Government against its people. According to the U.N. Special
Rapporteur's September 13 report, human rights defenders
reported being arrested and held in secret for periods ranging
from several weeks to 3 years without charge or access to legal
counsel.
They reported being subject to severe torture, beatings
with batons, mock hangings, electrocution, rape, sleep
deprivation, and denial of food or water. The State
Department's Iran Human Rights Report of 2012 confirms exactly
the same thing.
The amendment that I have offered that is en bloc expands
the list of those Iranian Government officials that this
administration must report on. The new list includes those
responsible for human rights violations, and there are a lot of
those in Iran, human rights violations like the one that
happened to Taraneh, such as those who work in the prisons and
the Ministry of the Interior.
Now, unless it would justify in a report why it believes
they would not be subject to sanctions, the bill will force the
administration to sanction these officials personally. It is
important that we make it clear that our quarrel is not with
the Iranian people. Our quarrel is with the government of
Ahmadinejad and his being controlled by the supreme leader, who
denies the people of Iran basic human rights.
Many of those individuals are in different countries. Some
are held, I think, hostage in Camp Liberty in Iraq. Many of
their family members are in the United States. It is imperative
that we make the little fellow from the desert, Ahmadinejad,
understand that human rights violations are not tolerated, and
that we support those who hope for a peaceful regime change in
Iran.
I thank the chairman for the time, and I yield back my
time.
Chairman Royce. We go now to Mr. Cicilline of Rhode Island.
Mr. Cicilline. Thank you, Chairman Royce and Ranking Member
Engel, for your leadership and for holding this markup on this
important legislation, a legislation which becomes even more
important every single day. I support the en bloc amendments
and the underlying bill, and I particularly want to thank my
friend, the gentlelady from Florida, for her excellent words
and her amendment relating to human rights.
The continuing threat that Iran poses to international
stability is of paramount concern to the United States and to
the world. Addressing this threat must be a top priority of
U.S. foreign policy as Iran continues to defy the international
community with its pursuit of nuclear weapons. In addition, the
specter of violence and the suppression of basic human rights
loom over the upcoming elections in Iran, just as they did in
2009.
The threat of an Iran with nuclear weapons capability is
serious and must be prevented. According to a report from the
International Atomic Energy Agency, Iran is steadily increasing
its nuclear capability by installing new, more advanced
centrifuges. If Iran is allowed to bring these centrifuges
online, they will significantly reduce the time that is needed
to produce enough weapons grade uranium to construct a nuclear
weapon.
In addition, Iran continues its construction of heavy water
reactor, in defiance of U.N. Security Council regulations. The
spent fuel from such a reactor could be reprocessed to produce
plutonium. These conditions are unacceptable to the United
States and to the international community.
In June, Iran will hold its first Presidential election
since 2009's fraudulent vote, which sparked widespread protest
and worldwide condemnation. Thousands of demonstrators were
jailed, injured, or killed at the hands of the Iranian
Government, particularly by the Iranian Revolutionary Guard.
This year, the prospects of a fair and democratic election
in Iran remain remote. Of an estimated 700 candidates who have
registered, the Iranian Government has restricted those who are
able to run by excluding a vast majority of those it deems to
be disloyal to the regime.
Regardless of the outcome of this year's election, it will
do little to slow the expansion of Iran's nuclear program.
Decisions over the program's future will remain in the hands of
the supreme leader who continues to stifle all attempts at a
diplomatic solution. It is critical, therefore, that efforts to
curb Iran's nuclear ambitions and its abuses of human rights be
enhanced to exert increased pressure upon the regime.
The Nuclear Iran Prevention Act of 2013 will impose harsher
penalties for violations of human rights of the Iranian people.
It will broaden the scope of these sanctions to make the
Iranian Government more accountable for human rights violations
and impose harsh penalties on financial institutions that
provide aid to those who commit these violations.
This bill will strengthen existing sanctions by requiring
other nations to reduce their imports of Iranian crude oil by 1
million barrels within 1 year's time, and authorizes the
President to penalize foreign nationals who engage in
significant trade with Iran. It also calls for an expansion of
the blacklisting of industries that are strategically important
to the Iranian regime.
This bill also recognizes that we cannot accomplish our
goals by acting alone. It calls on the administration to work
closely with our European allies to curb Iranians' financial
capabilities and to provide a comprehensive U.S. strategy to
weaken Iran's economy and to prevent Iran from further
developing a nuclear capability.
The message that we send must be clear and unequivocal. A
nuclear armed Iran will not be tolerated, and the United States
will stand on the side of democracy and freedom. A clearly
defined national strategy that further pressures Iran to end
her nuclear ambition and strengthen economic sanctions is
absolutely necessary.
I thank, again, the chairman for his leadership. I thank my
colleagues for their excellent amendments, and the ranking
member, and I yield back the balance of my time.
Chairman Royce. We go now to Mr. Rohrabacher of California.
Mr. Rohrabacher. Thank you very much, Mr. Chairman, and
congratulations to you and to Ranking Member Engel for working
together and coming up with a very good package for us. This
legislation focuses on exercising economic power to provide
incentive for Iran's mullah regime to back away from the
development of a nuclear weapon.
This legislation is a good step in the right direction, but
it is not going to make us safer. At best, we will get the
status quo--no nukes. To make the world safer, we must
understand that the world will not be safer until the mullah
dictatorship is replaced by a government that is not dedicated
to destroying Israel or supporting terrorists throughout the
Western world. That will require us to support those brave
souls who live in Iran, who seek to change the regime in that
country.
This administration has not been aggressive in supporting
those who are opposing the mullah regime in Iran, and we have
heard several descriptions about the last elections and how the
students were pleading for help.
And they did plead for help, and America's weak response to
the suppression and the brutal putdown of those students who
were requesting an honest election--our actually weak response
was embarrassing to us, and certainly did not in any way
encourage those people who really seek democracy in that part
of the world to have any faith that we would back them up in
their efforts.
There are repressed--not only are there just regular
Iranians and the push for democracy, but we also have to
realize within Iran there is other leverage to try to come to a
more peaceful regime, and that is we can support those minority
groups in Iran that also would like some independence and seek
their own freedom.
There are more Kurds in Iran, for example, than there are
in Iraq. There are millions upon millions of Azaris. There are
Baluch in the southern part of the country and other various
groups that deserve our support in their struggle against the
repression of the mullah regime.
We aren't even broadcasting to Iran in their languages. We
need to convince the people of Iran and of every ethnic makeup
that we are on their side in their struggle for freedom. It is
this struggle for freedom and its success that will make the
world a safer place by replacing brutal dictators who are
willing to murder their own people with people who are trying
to make their country better and will live in peace and respect
the freedom of other peoples in the world.
So, Mr. Chairman, this is a great step in the right
direction. But if we are going to really tackle this problem,
it is going to require more than just a step in the right
direction. It is going to require--and a prevention of a
nuclear armed Iran, but it is to require us to support those
people who struggle for freedom in that country as well.
Thank you very much. I yield back the balance of my time.
Chairman Royce. Thank you, Mr. Rohrabacher.
We now go to Ms. Gabbard of Hawaii.
Ms. Gabbard. Thank you very much, Mr. Chairman and Ranking
Member Engel, for introducing and bringing this very important
bill before the committee. As a new member of the committee, I
have been impressed and very encouraged by the level of
bipartisanship that has been displayed in the quick progress of
this important bill. And I am also proud to be a co-sponsor of
the underlying measure and will be supporting it as we move it
forward today.
As we have seen other attempts being made in the past to
prevent Iran from acquiring a nuclear weapon, seeing the lack
of progress that has been made, I am encouraged to see this
bill move forward because it will add and tighten the sanctions
greatly on Iran. It is absolutely vital that the United States
take steps to curb Iran's progress in this direction and
believe that the bill's provisions to broaden economic
sanctions and target human rights violators will help to
increase this pressure.
Additionally, we know that Iran and North Korea have
developed a close working relationship in many of its ballistic
missile programs. For constituents in my district in Hawaii, as
well as places like Guam, CNMI, and Alaska, as well as our
allies in the region, this is an issue of great importance.
And just as we have seen great progress and support on
moving this measure forward, Mr. Chairman and Ranking Member, I
hope we can also work together to move forward your bill, H.R.
1771, the North Korea Sanctions Enforcement Act, through the
committee and to the floor.
The work done on this measure absolutely shows that we can
come together to make progress on such important issues that we
are united on and that we see our challenges facing our
country, and I look forward to being able to continue to work
with you as we take a similar path on dealing with North Korea.
Thank you, Mr. Chairman.
Mr. Smith [presiding]. The Chair recognizes Mr. Castro from
Texas.
[No response.]
Mr. Smith Mr. Keating from Massachusetts.
Mr. Keating. Thank you, Mr. Chair. I would like to
congratulate the committee on the timeliness of this important
legislation, and I would also like to express my gratitude for
the inclusion of a provision that Mr. McCaul and myself worked
on together in a bipartisan manner.
Under our amendment, the Secretary of State is required to
make a determination as to whether Iran's Revolutionary Guard
Corps is a foreign terrorist organization, and, if so, to
implement sanctions. However, if the Secretary should determine
that the Iranian Revolutionary Guard Corps is not a foreign
terrorist organization, our amendment requires that not only
must the Secretary provide a report that details how he came to
that conclusion, but also that sanctions currently in place
against FTOs be applied to Iran's Revolutionary Guard Corps'
Quds Force.
The IRGC's covert Quds Force presents a direct and
immediate threat to the United States and our allies. They are
responsible for some of the deadliest attacks in recent
decades. Moreover, these attacks and assassinations take place
outside of Iran's borders. Today they continue to support and
oversee weapons deliveries to pro-Iranian factions, more
recently to the Assad regime in Syria, and Hezbollah in
Lebanon. In the course of just a year, the Quds Force influence
has been witnessed in attempted and successful terror plots in
Turkey, Pakistan, Thailand, Azerbaijan, India, Georgia, Kenya,
and Bulgaria.
Subjecting the Quds Force to further sanctions can only aid
our attempts to limit their resources and, in turn, the danger
that they present.
So I applaud today's markup, and I applaud the important
legislation that we have, and I thank the chairman and ranking
member for their inclusion of this important amendment.
With that, I yield back my time.
Mr. Smith. Mr. Lowenthal.
Mr. Lowenthal. Thank you, Mr. Chair. I, too, join with
voices of all of my other colleagues in commending the chair,
Mr. Royce, and the ranking member, Mr. Engel, for bringing
forth this bipartisan measure. I think it is really important
that the American public hear that under their leadership we
have come together to support this legislation.
I not only believe that we have come together to support
this legislation but that the administration supports this
legislation and that all Americans support this legislation.
Not only is it really important to Israel that we not have an
Iran with nuclear weapons, but this legislation sends a message
to all of the other countries of the Middle East who are also
terribly threatened by an Iranian nuclear power that this shall
not be tolerated, and that the United States will play a
leadership role in protecting and supporting all nations of the
world in moving Iran away from nuclear weapons.
I, again, want to commend the leadership for bringing us
together, and I also want to support all of the amendments en
bloc.
And I yield back my time and thank you.
Mr. Smith. Do any other members seek recognition?
[No response.]
Chairman Royce [presiding]. Do any other members, again,
wish to speak on either the en bloc amendments or the
underlying bill?
[No response.]
Chairman Royce If not, the question occurs on agreeing to
the amendments being considered en bloc. All those in favor say
aye.
All those opposed, no.
In the opinion of the Chair, the ayes have it, and the
amendments considered en bloc are agreed to.
Before taking up other amendments, the Chair has an
amendment at the desk, and the clerk will report the amendment.
And I would hope, if the clerk's office could distribute the
amendment as well at this time.
Ms. Marter. Amendment to the amendment in the nature of a
substitute to H.R. 850 offered by Mr. Royce of California. On
page 29, line 19, strike ``the date that is 90 days after such
date of enactment'' and insert ``May 22, 2013.''
[The information referred to follows:]
----------
Chairman Royce. I recognize myself to explain the
amendment. Section 205 of the bill imposes sanctions on certain
transactions in foreign currencies. This section seeks to
prohibit the conversion and repatriation of Iran's overseas
foreign currency reserves back into Iran.
The bill authorizes the President to impose sanctions on
any foreign bank involved in facilitating transactions in
foreign currencies over which it does not have primary
jurisdiction, on behalf of the central bank of Iran, or another
designed Iranian bank.
The objective is to further enable the administration to
render Iran's foreign exchange reserves inaccessible, make it
impossible for those reserves to come back into Iran. This is a
key provision in the bill. There are concerns that waiting for
enactment would allow Iran to engage in this activity in the
interim.
Therefore, this amendment changes the enactment date of the
provision to today's date. This will bolster our ability to
target this activity, and, most importantly, put banks on
notice that as of today they will be sanctioned for helping
Iran access their overseas hard currency. And I would ask my
colleagues' support on this measure.
Do any other members wish to be recognized on this
amendment, on the date change?
Mr. Grayson. Yes. I would like to recognized, Mr. Chairman.
Chairman Royce. Mr. Engel.
Mr. Engel. Yes. Thank you, Mr. Chairman. I agree with
everything you've said about this amendment. I think it is very
important that we enact it. I know that our colleague, Mr.
Sherman, was working on this legislation as well, on this very
important issue as well. And, again, I think this is something
that is bipartisan and very, very important to be added to this
bill.
I think it closes a loophole, and I urge its--I urge a yes
vote for this amendment, and I yield back.
Chairman Royce. I thank the gentleman from New York.
We will go to Mr. Poe of Texas.
Mr. Poe. Thank you, Mr. Chairman. I want to show the
committee the reality of living as a political prisoner in
Iran. Here we have two young men that were hung publicly for
just being political prisoners opposing the Iranian Government,
the little fellow from the desert, and his oppression of human
rights to people of Iran. And, unfortunately, these are not the
only two that were hung in Tehran in recent years for being
opposed to the regime.
And I yield back. Thank you, Mr. Chairman.
Chairman Royce. I thank the gentleman.
We go now to the gentleman from Florida, Mr. Grayson.
Mr. Grayson. Mr. Chairman, I understand and agree with the
principle involved here, in other words, what it is that I
think that the chair is trying to accomplish through this
amendment. However, this is a bill that, among other things,
can be enforced by a penalty of 20 years in prison. I believe
that this amendment would represent a violation of the ex post
facto provision in the Constitution.
What you are contemplating here is to say that activities
that take place before the enactment of this bill will become
illegal upon the enactment of this bill dating back to May 22,
2013. I don't see any way to reconcile that, unfortunately,
with the ex post facto prohibition in the constitution. I would
point out that this provision appears not to be severable from
the Act, and, arguably, puts the entire Act at risk for
including it.
I was not aware of this amendment before it was offered
today. I would have been happier to be able to have addressed
this before today. I regret the fact that I have to raise this
point at this now late date. But given the fact that I didn't
see this amendment until literally 10 minutes ago, there was no
earlier opportunity.
If there is some way to make this work, I would love to see
this in an amendment before this bill goes to the floor. But I
think putting this in the bill at this point risks torpedoing
the entire bill.
Chairman Royce. Let me respond to the gentleman, if I
could. I have no reason to expect that this bill would be
implemented in a way that would be unconstitutional. However, I
would be happy to work with the gentleman on this issue going
forward.
In the meantime, let me recognize some of the other members
that are here. Mr. Cicilline.
Mr. Cicilline. Mr. Chairman, I would offer a friendly
amendment that I think might accomplish that. If the amendment
were to insert instead, ``The date of enactment shall be the
date upon which the legislation is passed,'' I think we would
avoid what my friend from Florida has raised and would not give
an additional 90 days, but it would happen on the day of
enactment.
Mr. Grayson. Would the gentleman yield to me? Would the
gentleman from Rhode Island yield to me?
Mr. Cicilline. Sure. Certainly.
Mr. Grayson. I agree that if the penalties under this Act
do not apply to any action before enactment, then the ex post
facto provision has not been violated.
I yield back.
Chairman Royce. Again, so that the members of the committee
understand the consequences, the provision in the bill, by
changing this date of enactment, would enable the
administration, which I believe could still utilize this tool
and do it in a constitutional way, to prevent Iran during this
interim period, before the legislation is finally enacted, from
repatriating its overseas earnings.
And the difficulty of the situation is that in advancing
this bill out of committee today there is going to be an
enormous pressure inside the regime to find ways to circumvent
this law. And the most effective way to do so would be to
immediately begin a process through third parties of trying to
figure out the repatriation scheme.
So if we stick with the amendment that I am suggesting,
which would make the date--it is effective the date it is
passed out of committee--we do a lot to offset the ability of
the Iranian central bank to circumvent the sanctions.
But let me go to Mr. Cotton of Arkansas to recognize him
for 5 minutes.
Mr. Cotton. Thank you, Mr. Chairman. I would like to speak
in support of this amendment, which I had originally planned to
introduce with Mr. Sherman. I am not the distinguished lawyer
that the gentleman from Florida is. I only practiced for a
couple of years before my skills required me to leave and join
the Army as an infantry officer.
I understand concerns about the ex post facto clause as
well. I do think, though, that the case law is somewhat
complicated on that, and this is not final passage of the bill
into law. We have several quarters left to go in this game. We
have the Rules Committee, we have the floor, we have a Senate
version, we will have a conference committee to address, in
light of Supreme Court case law in the ex post facto clause.
I would encourage all of my colleagues to vote yes. As the
chairman said, this helps indicate the intent of this
committee, this Congress, to hold the Iranian regime to the
strictest standards possible, and then work with committee
counsel, as well as legislative counsel, to address any
concerns that may or may not arise.
When I left the law and went to the infantry in Iraq, I was
a platoon leader in the 101st Airborne where, as Mr. McCaul
said earlier, the Iranian regime, the Quds Force in particular,
were shipping in a particularly lethal kind of improvised
explosive device, explosively foreign projectiles, that would
kill any soldier that they hit. Our armor simply could not
resist them.
I had to tell soldiers of mine that came in, when they
asked about roadside bombs, to trust your armor and trust your
leadership. And they asked me, ``What about EFPs from Iran?''
and I said, ``Just hope today is not your today.'' That is the
kind of enemy against which we are fighting this multi-front
campaign. And the only thing they understand is iron will, and
I think this amendment shows the iron will of the committee to
stop or take all measures necessary to stop the Iranian regime
from obtaining nuclear weapons.
I urge a yes vote.
Mr. Grayson. Will the gentleman yield?
Mr. Cotton. I will yield.
Mr. Grayson. Thank you. Listen, I indicated earlier that I
think that this is a good idea if it were constitutional. I
think it is a very dangerous precedent to set that we pass a
provision that is on its face unconstitutional for the sake of
showing an iron will, whatever that may mean.
On the contrary, our strength in this country comes from
the fact that we are a nation of laws, and we need to respect
the highest law of all. That is the Constitution.
Mr. Cicilline has suggested one potential fix for this
provision. I would like to suggest another. If the chairman
would consider this, I think that if we had a severance
provision in this amendment, then that might potentially remedy
the problem.
We would still have to deal with the possibility that the
courts might rule that our severance provision is itself not
severable, but, in any event, perhaps the chairman would
consider this amendment to your amendment that would read as
follows: ``Should this provision be found unconstitutional, it
is severed from the remainder of the bill.''
That means that at least we have allowed for that
possibility and done so in such a way so that a finding that
this amendment is unconstitutional, which, frankly, I think is
more likely than not, that that would not end up destroying all
of the effort this committee has put into this bill.
I yield back.
Chairman Royce. If I could ask the gentleman from Arkansas
to yield.
Mr. Cotton. Yes, I will yield.
Chairman Royce. Might I suggest to Mr. Cicilline, if in
substitute to your amendment, if Mr. Grayson's amendment was
offered, I would accept Mr. Grayson's amendment, if that--if
you consider that appropriate, if you withdraw your amendment?
Mr. Cicilline. Yes, Mr. Chairman, I will withdraw my
amendment, and I will second Mr. Grayson's amendment.
Chairman Royce. I thank the gentleman. Let me comment that
it is not without precedent, Mr. Grayson. I understand your
point, but it is not without precedent in that our legislation
on CISADA, and the first legislation we passed on Iran
sanctions, did have this provision. But, Mr. Grayson, as you
point out, later in the process that was adjusted.
Let us accept your amendment, Mr. Grayson, or why don't we
go for a vote on Mr. Grayson's amendment at this time. Do you
have an amendment at the desk, Mr. Grayson?
Mr. Grayson. I will hand it to the chair, because I am not
familiar with exactly where it needs to end up.
Chairman Royce. We are going to ask the clerk to read the
amendment. Madam Clerk. Now, what I am going to suggest, Madam
Clerk, is that you read the amendment, and then the clerk's
office make copies of the amendment for the members, and then
we will----
Mr. Grayson. That is language to be added.
Chairman Royce. And I am going to ask that leg counsel, if
you hand it to leg counsel after you read it.
Ms. Marter. Grayson amendment to the Royce amendment to the
amendment in the nature of a substitute to H.R. 850. Should
this provision be found unconstitutional, it is severed from
the remainder of the bill.
[The information referred to follows:]
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Chairman Royce. And I would ask, then, that the clerk's
office make copies after review by leg counsel. I think the
terminology is straightforward enough there, but we will have
them review it. And we could do technical corrections later
anyway, so let us make those copies.
And now I recognize for 5 minutes the gentleman from
Arkansas, Mr. Cotton, on this amendment.
Mr. Cotton. Appreciate the amendment offered by the
gentleman from Florida. I think a severability clause is the
best way at the moment to address his concerns. One question I
have, though, is, should that provision be held
unconstitutional, and, therefore, severed, would we revert back
to a date of enactment, or would we have no date to go into
effect and, therefore, make the provision ineffective?
And I would yield to the gentleman from Florida.
Chairman Royce. Mr. Cotton, we would have the date of
enactment as the controlling date in that case, and we will
work with legislative counsel to so designate.
Mr. Cotton. I yield back the balance of my time.
Chairman Royce. Any other commentary on this amendment? The
gentleman from California.
Mr. Sherman. I think this due date provision is
constitutional. It does not relate to a criminal sanction so
much as civil sanctions. I think that we ought to explore
adding just a general boilerplate severability provision for
the whole bill. That would be a standard part of many major
pieces of legislation.
I don't think there is anything in the bill that is
unconstitutional. I don't think any of the amendments will
cause it to be unconstitutional. But I would sure hate to lose
the whole bill because there was some legal argument I hadn't
thought of.
Chairman Royce. Let me recognize Mr. Grayson from Florida
for any thoughts on that resolution.
Mr. Grayson. Well, with regard to what the gentleman from
California said, the penalties provision in the bill that we
are voting on specifically refers to another Act, incorporates
it by reference, and that other Act provides for a 20-year
criminal penalty. So I have to respectfully disagree with the
gentleman from California.
Chairman Royce. And if I could----
Mr. Sherman. I believe I was recognized for----
Chairman Royce. I will allow the gentleman from California
to proceed.
Mr. Sherman. I thank the gentleman from Florida for his
comments, and I think it illustrates why we should have his
severability provision on this particular provision. Mr. Cotton
is right that we should indicate that if for some reason the
particular effective date provision is found to be
unconstitutional, the date of enactment should be the
replacement effective date, and that a general severability
clause be added to the end of the bill.
And I thank the chairman for seeing the importance that we
make sure that banks aren't rushing to ``beat the deadline.''
Mr. Cotton and I were going to introduce an amendment very
similar to the chairman's amendment, which shows that we are
all thinking along the same lines.
So I think Mr. Grayson is right, Mr. Cotton is right, the
chairman is right, and we can put together a bill that will
both deter those banks that might try to act between now and
date of enactment, and at the same time protect everything in
the bill from any claim of constitutional violation.
Chairman Royce. If the gentleman will yield.
Mr. Sherman. I would yield.
Chairman Royce. I believe that is correct. But I am going
to raise with Mr. Grayson the issue of a general severability
clause, because I believe it will accomplish what he wishes to
accomplish with his amendment, and, as you have suggested, Mr.
Sherman, will also clarify in the case of any other provisions
in the measure that might subsequently be found to be
unconstitutional, that it would satisfy that concern as well.
Let me go, again, to the gentleman from Florida and ask Mr.
Grayson for his thoughts on simply working with leg counsel for
a vote later today on an amendment which we will have before
us, Mr. Grayson, which you could be involved in helping to
draft, which would be a more general provision of clarification
on the severability clause.
Mr. Grayson. Mr. Chairman, I agree with you and the
gentleman from California that a general severability clause
is, in some respects, preferable to the narrow severability
clause that I just drafted. I also agree with the gentleman
from California and the gentleman from Rhode Island that we
should try to specify what would happen in the event that a
retroactive application of this provision was found
unconstitutional, what the effective date would be.
So I agree with that suggestion as well. I am very
agreeable today.
Chairman Royce. I assume that you would concur that it
would be date of enactment. Very good.
Will the gentleman, then, withdraw his amendment at this
time, with the understanding that we will work with leg counsel
on that language as we just discussed?
Mr. Grayson. Well, respectfully, Mr. Chairman, I think that
it is the amendment that was initially offered that should be
withdrawn, with the understanding that it will be voted on as
we discussed just now in some slightly altered form later
today.
Chairman Royce. I am going to withdraw my amendment, then,
also at this moment. We will consider it in a new form, which I
think will be mutually agreeable to the members of the
committee.
Mr. Grayson. Yes, Mr. Chairman.
Chairman Royce. All right. Let us continue. Are there any
further amendments?
[No response.]
Chairman Royce Mr. Grayson, I think you have an additional
amendment at the desk.
All right. I am going to ask the clerk to report your
amendment.
Ms. Marter. Which amendment, Mr. Grayson?
Mr. Grayson. I believe we are going to start with Grayson
Number 109. Is that all right, Mr. Chairman?
Chairman Royce. 109. Clerk, if you would read that
amendment?
Ms. Marter. Amendment to the amendment in the nature of a
substitute to H.R. 850 offered by Mr. Grayson of Florida. Page
16, line 5, insert ``or a foreign central bank'' after
``foreign financial institution.''
[The information referred to follows:]
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Chairman Royce. The Chair recognizes the author for 5
minutes to explain the amendment. And let us have the amendment
distributed to the members.
Mr. Grayson. Thank you very much. The general purpose of
this amendment is to make sure that the term ``foreign
financial institution,'' as described in this legislation, and
the particular provision that we discussed, which is Section
202, includes foreign central banks. I believe that the intent
was to have it include foreign central banks, but it does not
actually do so. Regulations that were promulgated by the
administration leave the question at best cloudy.
The amendment at the desk is a simple one. It would ensure
that foreign central banks are sanctioned for facilitating
significant financial transactions on behalf of companies that
are owned or controlled by designated Iranian nationals.
Section 202 of this bill is short and sweet. It says that
if you are a foreign financial institution and helps out
companies owned by the bad guys, you will be sanctioned. You,
as a foreign financial institution, will not be permitted to
open or maintain correspondent or payable accounts in the
United States. You won't be able to receive deposits from or
make payments on behalf of a foreign financial institution, and
your customers will be effectively shut out of banking
activities within the United States. That is exactly what we
hope to accomplish in this bill.
Unfortunately, we, in drafting this initial bill, missed an
extremely important group of foreign financial institutions
when we defined this term. We took a shortcut. In 22 USC
Section 8801(a)(5), the governing definition for the statute,
we said that foreign financial institution says, what the
Secretary of the Treasury says it says and means pursuant to 22
USC Section 8513. In other words, we delegated the definition
to the Secretary of the Treasury.
Well, what that says is that ``foreign financial
institution'' means whatever the Secretary of the Treasury says
it means. And Secretary Geithner, when he got around to making
a list of what a foreign financial institution constitutes late
last year, and the Department finally published it on November
8, and published it at 31 CFR 561.308, created a long list. And
it says it is not limited solely to the items on the list, but
it does get so specific that it spells out things like employee
benefit plans and dealers in precious metals, stones, or
jewels.
Clearly, the Treasury Department put some thought into the
list. There are 17 specific entities that are singled out, but
foreign central banks are conspicuously absent. And, therefore,
by the delegation and law that is already in existence, it is
by implication excluded from the definition of a foreign
financial institution.
It is interesting that Congress, when drafting the Fiscal
Year 2012 NDAA, decided to include an entire section covering
foreign central banks' financial transactions for the sale or
purchase of petroleum or petroleum products with Iran. In fact,
other than financial institutions located in Iran, foreign
central banks were the only other entities explicitly mentioned
and addressed within the section to all 45 sanctions that deal
with imposition of sanctions with respect to the financial
sector of Iran.
The Treasury, in its own wisdom, decided to choose to gloss
over those banks most directly tied to a nation in its
definition of foreign financial institutions. The problem here
is easy to solve. By not including foreign central banks in
this section, and by not explicitly mentioning them in the
Treasury CFR definition, the President, unfortunately, unless
we act, will not be required by the legislation we pass today
to punish nations whose foreign central banks facilitate
transactions on behalf of companies owned by designated
Iranians.
If President Obama or the State Department wished to ignore
such actions that would otherwise lead to sanctions with regard
to another financial institution, they may. They would be free
to be given a free pass to any country they wish for whatever
reason they wish on account of exclusion of foreign central
banks from this important provision.
I would urge my fellow committee members to join me in
clarifying for the President, and for his Treasury Department,
and for his State Department, exactly what a foreign financial
institution looks like; specifically, the fact that it includes
a foreign central bank.
I urge you to join me in supporting this amendment.
Thank you. I yield back.
Chairman Royce. Thank you. I will attempt to articulate
Treasury's position, and then I will ask Mr. Grayson if he
finds these arguments compelling.
But your amendment would amend Section 202 of the bill and
would have the sanctions apply to foreign financial
institutions and a foreign central bank. Now, from the
perspective of Treasury, central banks, as they have
articulated this, already are included in the definition of
foreign financial institution. Okay?
Central banks are already included in the definition of
foreign financial institutions. So then you go to the
definition of foreign financial institution, 561.308. The term
means any foreign entity that is engaged in the business of
accepting deposits; making, granting, transferring, holding, or
brokering loans or credits; or purchasing or selling foreign
exchange securities, commodity futures, or options; or
procuring purchasers and sellers of as a principal or agent.
It includes, but is not limited to, depository
institutions, banks, savings banks, money service businesses,
trust companies, securities brokerages, dealers, commodity
futures options brokers and dealers, forward contract and
foreign exchange merchants, securities and commodities
exchanges, clearing corporations, investment companies,
employee benefit plans, as you pointed out, dealers in precious
metals, stones, jewels, holding companies, affiliates, or
subsidiaries.
Now, those that implement these laws every day tell us that
a foreign central bank fits under this definition, and they
point out that the term foreign financial institution, the
Treasury already says includes central banks, appears very
often in U.S. law.
And now here is the problem, from their perspective, on
this. If you spell it out here, some say you may create
confusion in the law. Lawyers will ask, why is foreign central
bank noted here, but not elsewhere? So from their vantage point
on this, it, in their minds, fixes a problem that doesn't
exist, but may actually create a problem for them given that
perspective.
I would ask the gentleman from Florida his thoughts on
that.
Mr. Grayson. Well, I thank the chairman for spelling out an
interesting and perhaps valid perspective on the amendment that
has been offered. I would point out to the chairman that, with
regard to the provision that we have been discussing, Section
561.308 of Title 31 of the Code of Federal Regulations, it
would have been extremely simple--extremely simple--for the
Secretary of the Treasury to actually include in this long,
long list of institutions the foreign central banks themselves.
The Treasury Secretary chose not to do that. One could
argue that at this point in saying that foreign central banks
are included, when not having included it in a promulgated
regulation by the Secretary himself, arguably the Secretary is
speaking out of both sides of his mouth.
However, with regard to the specific language that is being
discussed, I understand and I take the chairman's point that
having foreign financial institutions be appended by ``or a
foreign central bank'' could arguably imply that a foreign
central bank is in fact something different from a foreign
financial institution.
We are trying to make it clear that a foreign central bank
is included in the definition of foreign financial institution,
rather than excluded or not enumerated in the way that the
Treasury has done.
So what I would suggest, if the chairman would entertain
this at this point, would be instead of saying ``foreign
financial institution or a foreign central bank,'' we say
``foreign financial institution, including, but not limited to,
a foreign central bank.''
Chairman Royce. I think the gentleman has devised a
framework here that works. And in an abundance of caution, I
think the committee is happy to accept your amendment with
those changes.
Mr. Collins. Mr. Chair?
Chairman Royce. Let me recognize the gentleman from
Georgia.
Mr. Collins. I do have a concern that just came up in
listening to the gentleman from Florida. I appreciate his
concern, but I am concerned even with this language you could
be setting up a duality in the system here in which, one, you
are setting it up as something different than a financial
service, a foreign financial institution here.
I appreciate the concern that the gentleman is raising.
However, at this point in time, I think by amending it to add
that you are adding more confusion to this, and I would, at
this point, be cautious at best of approving this moving
forward, especially in light of what the chairman has spoken of
as Treasury's definition of this.
I appreciate his intent and his amendment here. I am just
afraid we are----
Chairman Royce. I appreciate the comment from the gentleman
from Georgia, because he has raised an issue that perhaps the
Treasury Department would like to opine on in terms of the
changes in the wording. What I am going to suggest is we accept
the amendment with this change, and then work with Treasury,
and I will work with Mr. Grayson's office, and work with your
office as well, Mr. Collins, to make certain that we end up
with the intent that Mr. Grayson is laying out here in the
final legislation.
Is that acceptable to you, Mr. Collins?
Mr. Collins. I would assume, Mr. Chairman, you are speaking
of maybe before Rules? Is that when we are looking at actually
adding or changing language if we are amending this bill now?
Otherwise, I would state at this point, if there becomes a
need to change--I would rather err, personally, on the side of,
if there is a need to change it from this, change it later,
since he has raised a good point, we will ask; instead of
changing it now and then going back to the process.
Chairman Royce. Well, Mr. Collins, I believe we are going
to have multiple opportunities to change this bill, including
before Rules, of course. And I think at this point we would
probably be best served by accepting this amendment, working
with Treasury, because, Mr. Collins, if Treasury indicates that
they don't have a problem with this, then I think we have
solved the problem.
Mr. Collins. Mr. Chairman, I will defer to your wisdom.
Mr. Smith. Mr. Chairman?
Chairman Royce. Yes. Appreciate that.
We will go now to Mr. Smith of New Jersey.
Mr. Smith. And I do think if we factor in all of this, if
we were to construe this to be a restatement, which Treasury
seems to indicate it is, it would avoid, I think, some of the
unwitting consequences you alluded to, so a restatement of what
is already current law.
Chairman Royce. Without objection, the committee will now
consider the amendment to the amendment in the nature of a
substitute to H.R. 850 offered by Mr. Grayson of Florida, as
modified by Mr. Grayson.
[The information referred to follows:]
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Chairman Royce. All those in favor please signify by saying
aye. All those opposed? Without objection, in the opinion of
the Chair, the ayes have it and we will proceed to the next
amendment. Are there other amendments to be offered?
Mr. Cotton. Mr. Chairman.
Chairman Royce. Mr. Cotton for an amendment.
Mr. Cotton. I would like to call up Cotton-2.
Chairman Royce. Chair reserves a point of order and
recognizes the author for 5 minutes to explain the amendment.
Well, Clerk, would you read the amendment?
Ms. Marter. Amendment to the amendment in the nature of a
substitute to H.R. 850 offered by Mr. Cotton of Arkansas. Page
13, line 4, strike ``180 days'' and insert ``60 days''. Page
14, line 15, strike ``180-day'' and insert ``60-day''. Page 14,
line 18, strike ``180-day'' and insert ``60-day''.
[The information referred to follows:]
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Chairman Royce. Mr. Cotton.
Mr. Cotton. Thank you, Mr. Chairman.
This is a relatively straightforward amendment. Section 201
of the underlying text provides for sanctions against persons
engaged in certain significant non-oil international trade with
Iran, unless that trade falls significantly in 180 days.
My amendment would simply change that period from 180 days
to 60 days. I believe that this information is largely known.
The fact that this Congress is pursuing more sanctions against
Iran is largely known. The opportunities to reduce trade are
significant and straightforward, and simply put, if you don't
want to be sanctioned by the United States don't engage in
trade with a theocratic tyranny.
I yield back the balance of my time.
Chairman Royce. Do any other members seek recognition on
Mr. Cotton's amendment?
Okay. The Chair withdraws the point of order. Hearing no
further requests for recognition, the question occurs on the
amendment. All those in favor say aye.
Mr. Grayson. Mr. Chairman, I'd like clarification of what
we're voting on right now, if you don't mind.
Chairman Royce. Absolutely. Cotton-2 is the amendment
before us, and I think we have that amendment--I think that
amendment has been distributed.
Mr. Grayson. Yes. Thank you, Mr. Chairman.
Chairman Royce. All those in favor please signify by saying
aye. Opposed? In the opinion of the Chair, the ayes have it,
and the amendment is agreed to.
Are there any other amendments? Mr. Grayson, I think you
have another amendment at the desk, and in the interim I'm
working on the amendment that I've offered with your suggested
change.
Mr. Grayson. Thank you, Mr. Chairman.
Chairman Royce. So, if we could go to your amendment, that
would be appropriate.
Mr. Grayson. Yes, I have other amendments. My understanding
is that the chair is calling the amendments in an order decided
by the chair, so I will go ahead with one of these amendments
at this point.
Mr. Chairman, I'm calling Grayson-102.
Chairman Royce. Madam Clerk, could you report the
amendment?
Ms. Marter. Amendment to the amendment in the nature of a
substitute to H.R. 850 offered by Mr. Grayson of Florida.
Chairman Royce. Let's distribute the amendment.
Ms. Marter. Page 14, beginning on line 11, strike ``of
goods'' and all that follows through line 13 and insert the
following: ``of both--(A) goods and services between such
country and Iran; and (B) petroleum and petroleum products
between such country and Iran.''
[The information referred to follows:]
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Chairman Royce. Mr. Grayson is recognized for 5 minutes.
Mr. Grayson. Thank you, Mr. Chairman.
There's a provision in this bill that I was uncomfortable
with for a specific reason, and this amendment was intended to
address that.
The basic problem here is that we are through this bill
trying to implement a 1-million-barrel-per-day reduction in
Iranian oil exports that would be divided among the five
remaining countries that import Iranian oil.
There is no guidance in the bill itself about how that is
to be allocated among those five except for the fact that each
one has to make a significant reduction. And if one makes a
significant reduction, then arguably the President can allow
those imports to continue even if the 1-million-barrel-a-day
reduction is not reached.
We drafted this amendment, Grayson-102 in order to try to
address that with the idea that we would try to put some teeth
into this reduction by making it pro rata. There were very
extensive, and I think productive discussions between my staff
and the committee staff which, unfortunately, did not reach a
conclusion that I'm comfortable with.
I think the problem with the bill remains; however, I think
that the best course right now is to ask the chairman's
indulgence to withdraw this amendment and to see whether we can
continue this conversation so that we reach some productive
conclusion with the hope that the chairman will entertain some
inclusion of this type of amendment in the manager's bill if
this bill--the manager's amendment if this bill reaches the
floor.
Chairman Royce. If the member is willing to withdraw the
proposed amendment then I'm prepared to work in good faith to
see that we can try to incorporate, perhaps, some of these--
this provision in our committee report or through the other
committees of referral to address the member's stated concerns.
Mr. Grayson. Then, Mr. Chairman, I withdraw the amendment.
Chairman Royce. I thank the gentleman for withdrawing the
amendment.
Are there any other amendments? Mr. Cotton.
Mr. Cotton. Mr. Chairman, I'd like to call for Cotton
Amendment 7.
Chairman Royce. Madam Clerk.
Ms. Marter. Amendment to the amendment in the nature of a
substitute to H.R. 850 offered by Mr. Cotton of Arkansas. Page
7, line 16, after ``paragraph (1)'' insert ``and any family
member of such official (to include a spouse and any relative
to the third degree of consanguinity)''. Page 9, line 5, after
``official'' insert ``and any family member of such official
(to include a spouse and any relative to the third degree of
consanguinity)''. Page 9, line 12, after ``official'' insert
``and any family member of such official (to include a spouse
and any relative to the third degree of consanguinity)''.
[The information referred to follows:]
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Chairman Royce. Mr. Cotton is recognized for 5 minutes.
Mr. Cotton. Thank you, Mr. Chairman.
I did not introduce this amendment to tongue tie the clerk
of the committee, but to fix what I think is a potential gap in
our sanctions regime.
Section 102 imposes sanctions for persons responsible for
Human Rights violations, for engaging in censorship or
otherwise diverting goods designated for common Iranian people
to their own purposes. I think that's very important.
The whole point of the section is to impose financial pain
and hardship on those malefactors, people listed in the section
like the Supreme Leader of Iran, and the President, and so on
and so forth. However, I think it is pointless if we let them
simply divert assets and income to relatives, so this amendment
would also add to the list of sanctions anyone married to those
persons or to the third degree of consanguinity which in plain
English are parents, children, aunts, uncles, nephews, nieces,
grandparents, great-grandparents, grandkids, great-grandkids.
We've seen tyrants around the world use family members to
evade sanctions regime. You only need mention the name Suha
Arafat to understand what I am talking about, and I urge the
committee to support the amendment.
Chairman Royce. Any other members wish to speak on this
amendment? Mr. Castro.
Mr. Castro. I have a question for Congressman Cotton, if
you would allow me.
Mr. Cotton. Yes.
Mr. Castro. Congressman, under your amendment, if they're
trying to funnel resources to family members, how would we
investigate and come to that conclusion?
Chairman Royce. Mr. Cotton, you're recognized.
Mr. Cotton. There would be no investigation. If the prime
malefactor of the family is identified as on the list for
sanctions, then everyone within their family would
automatically come within the sanctions regime, as well. It
would be very hard to investigate and demonstrate through
conclusive proof, and I think that we would leave a gaping
loophole if we didn't adopt this amendment.
Mr. Castro. Thanks.
Chairman Royce. Mr. Grayson.
Mr. Grayson. Mr. Chairman, again, we all understand the
underlying purpose of this bill, and we all, I think, will be
found to be in favor when the final vote comes, but in this
case an amendment is being offered literally to allow the sins
of the uncles to descend on the nephews.
Again, this is a bill that provides for a prison term of 20
years potentially for people who violate this bill. The
amendment that's being offered doesn't even indicate a
requirement of knowing violation.
Again, my conception of the due process provision in the
Fifth Amendment to the Constitution does not comport with this
amendment. I will vote against it if it comes to a vote. And,
also, I hope that we do now have a provision in the bill that
indicates that there's severability at every provision in this
bill if this provision is incorporated in the bill because I
really question the constitutionality of a provision that
punishes nephews on account of the actions of uncles.
I yield back.
Mr. Cotton. Iranian citizens do not have constitutional
rights under the United States Constitution. I sympathize with
their plight if they are harmless, innocent civilians in Iran.
I doubt that that is often the case, and the stakes of this
bill in our confrontation with Iran could not be any higher.
Chairman Royce. Here's the suggestion I'm going to make, if
the gentleman would yield.
Mr. Cotton. Yes.
Chairman Royce. We are familiar with past activities of
sanctions on Human Rights abusers who then utilized family
members in order to circumvent the sanction either by carrying
cash out of the country, or similar examples.
With the gentleman's acquiescence, what we'd like to do is
work with you on this amendment in concept but refine the
language going forward since we will have the opportunity to do
that, and we have one of two options here; to have you withdraw
the amendment, or if it's acceptable to Mr. Grayson, I will
take the amendment as worded and work going forward with the
gentleman from Florida and the gentleman from Arkansas to
address the concept but do it in a way which is a little more
refined.
Let me ask, if I could; Mr. Cotton, your amendments are
pending. Would you yield time to the gentleman from Florida for
a minute so he might respond to the suggestion that I've just
suggested?
Mr. Cotton. Yes, sir, I will yield.
Mr. Grayson. Thank you. I agree that relatives who are
knowingly involved in a way that intentionally subverts the
sanctions that are being discussed here are people who should
be punished to the extent the Constitution permits that. And I
would be happy to see such a provision that comports with the
Constitutional limitations in this bill when one is drafted.
I respectfully submit that this provision does not comport
with those limitations.
Chairman Royce. Let me suggest then, if you withdraw at
this time, Mr. Cotton, that we work with legislative counsel in
the interim and see if we cannot at this time develop language
which will address this issue and maybe refine the definition.
I am suggesting that we have the vote on the markup today,
but I'm suggesting that the amendment before us might be
rewritten in a way in short here with leg counsel's assistance
that would allow it to move forward without objection.
Mr. Cotton. Is the----
Chairman Royce. Let me----
Mr. Cotton [continuing]. Is the procedure you're proposing
that we work on the amendment in the coming hours and we have a
vote later?
Chairman Royce. Yes, sir. That was my suggestion. I would
sooner get this done now rather than later in terms of trying
to refine the amendment. That was my suggestion. And if you'll
indulge me for a moment, I'd like to recognize Mr. Vargas for 5
minutes for his observations.
Mr. Vargas. Thank you very much, Mr. Chair.
I think what Congressman Cotton's attempting to do is very
important. I think what he's attempting to do is to make sure
that it's not circumvented through a family member. I think
that's the point, and I think the point is well made.
How to get there, I think, is the issue that we're
discussing, and I think maybe some more time in drawing it up
in a way that is Constitutional, but I think he has a very
valid point. It would be easily circumventable if it just
simply was money being transferred to a son. It's not the sin
of the father being transferred to the son, it's the common sin
of all, you know, the circumventing of the law.
I think that's what you're attempting to do, and I think
that's a very important aspect of this, and I would support
that. How you achieve that, I think, is something that we could
discuss, but I think the point is well made.
Chairman Royce. Mr. Cotton.
Mr. Cotton. I'm happy to follow the procedure you just
proposed that we work on language of the amendment in the
coming minutes and hours, and then have a final vote on a
revised version later, but there is substantive matters here
when we're working on the language, and I am still somewhat
confused about the gentleman from Florida's Constitutional
concerns given that we're not talking about American citizens.
Second, I am worried that if we include any kind of mens
rea provision like knowing then how is the United States
Government going to prove what was and was not a knowing
transfer inside the Iranian regime that has an ironclad grip on
information. The money may not ever have to be transferred, it
may be provided directly from vendors or other people who are
offering bribes to senior officials, to children, or spouses,
or parents and so forth. But I am certainly willing to work on
the language.
Mr. Kinzinger. Will the gentleman yield for a second?
Mr. Cotton. Yes, I will yield.
Mr. Kinzinger. I just want to add to that. I really like
what you're doing. I'm confused, frankly, at why we're talking
about Constitutional rights in this process when it comes to,
frankly, enemies of the United States.
From my understanding, Constitutional rights are earned by
and granted to U.S. citizens, so I would hope, Mr. Chairman, as
we do go forward in this, if this is something we can rectify,
if this is a big difference between us in terms of saying to
Iranian citizens or foreign citizens have the same
Constitutional rights as Americans, that's something that we
probably ought to have a substantive debate about. So, I yield
back.
Mr. Grayson. Will the gentleman yield? Will the gentleman
yield?
Mr. Cotton. Yes, I will yield.
Mr. Grayson. Thank you. The law is perfectly clear on this
subject.
This is a bill that is enforced through sanctions that are
enforced and instituted by the U.S. Government regardless of
whom they're directed against, whether it's Iranian citizens,
U.S. citizens, or anyone else.
When the government enforces this provision it either
institutes a civil fine, or it institutes a criminal penalty.
Every criminal defendant in our system is entitled to the
Constitutional rights including, among others, the right under
the Fifth Amendment to due process of law.
Honestly, this matter has been resolved through Supreme
Court decisions that go back literally decades. I understand
that certain members on the other side of the aisle wish to
make some kind of point that citizenship conveys Constitutional
rights that non-citizens don't have, but I assure them that
it's a matter that's been resolved many, many years ago by the
U.S. Supreme Court that every criminal defendant, regardless of
citizenship, is covered by the Fifth Amendment to the
Constitution.
I yield back.
Mr. Cotton. And I assure the gentleman that anyone who is
targeted for sanctions has those due process rights. You are
conflating that person, though, and the Iranian citizens that
are supposedly not receiving knowledge of these transfers.
Iranian citizens do not have due process rights under our
Constitution; certainly, the spouses, or the children, or the
siblings of the worst most evil members of that regime. If we
specify someone who has--is on a sanctions list that does not
violate the due process rights of any company or any person
outside of Iran who is an American citizen, who is entitled to
due process rights, of those due process rights.
Mr. Grayson. Will the gentleman yield?
Mr. Cotton. I would be happy to.
Mr. Grayson. If the gentleman is seriously suggesting that
a grandchild of a high Iranian public official is subject to
sanctions, including 20 years of imprisonment under our laws
and our Constitutions, all I can say is that the gentleman is
completely mistaken, completely and utterly mistaken. And,
frankly, the fact that you would even entertain the possibility
that we would put such people in jail in the United States,
that we would imprison them in the United States shows that the
gentleman may not well understand the Fifth Amendment to the
Constitution and underscores my concern.
Chairman Royce. Mr. Cicilline.
Mr. Cicilline. Thank you, Mr. Chairman.
I think there's something very fundamental that's being
misinterpreted here. I think the legislation already covers
anyone who conspires, or assists, or participates in any
prohibited activity. It's already covered.
What your amendment would do, ultimately, is say if
someone--and this is the persons who are designated to be on a
list of individuals subject to sanctions. So, what it says is
if you have, in fact, been identified as a high-level Iranian
official or engaged in prohibited activities you could be
subject to sanctions. And your amendment says, and so can your
children and great-grandchildren.
It's not a question of unconstitutional, it's a question of
do we want to use the appropriately severe sanctions to impose
upon someone who, in fact, has not engaged in prohibited
activity. And I think the answer is no, that we actually do
want to make sure that these sanctions work, that they severely
impose penalties on people engaged in prohibited activity. If
there are children, or grandchildren, or nephews who in any way
participate in that and conspire to participate, facilitate
they're already covered by the Act. To simply say because you
are related that you are subject to criminal penalties, it
seems to me that we--no one would want to do that.
I don't think that's your intention, so I would just urge
you in drafting the language to maybe reaffirm that, you know,
what I think is already in here, that if, in fact, they have
engaged or assisted in the facilitation of a prohibited
activity, they will have violated the Sanctions Act themselves,
so they're already covered. But simply to say you're subject to
these criminal and civil penalties simply because you're
related to someone who is engaged in that behavior would not be
something that we would want to do.
Mr. Grayson. Will the gentleman yield?
Mr. Cicilline. Yes.
Mr. Grayson. Thank you. I agree with the gentleman
wholeheartedly, the existing provisions in the bill cover
conspiracy to violate the bill. Clearly, the scenario that's
been provided or suggested by the offeror of this amendment is
covered when, in fact, there's a conspiracy to violate the bill
already without any amendment being required.
I'd also mention that apart from the due process
limitations in the Constitution, the Constitution specifically
provides that people are not subject to punishment because they
are related to other people. Thank you.
I yield back.
Mr. Cotton. Will the gentleman yield?
Chairman Royce. Let me recognize the gentleman from
Arkansas, but I would ask that you yield to me for a minute to
make an observation.
Mr. Cotton. I will yield to the chair.
Chairman Royce. We know, Mr. Cotton, from past experience
that we do indeed have a problem with family members trying to
circumvent sanctions. And I can think of two examples in
particular in which a spouse was able to transfer money out of
the country, despite the fact that in one case, there was
subsequently conviction for crimes against humanity in the
International Criminal Court. So this is, in fact, a challenge
in terms of trying to figure out how we have those who are
subject to sanctions not circumventing those sanctions.
I suspect there is a way to draft this amendment, to refine
this amendment so as to address that issue but also to do it in
a way that meets some of the concerns of Mr. Cicilline as well
as Mr. Grayson. And so if we could ask you to withdraw and work
with leg counsel, it is possible that we would be able to get
that refinement of this legislation.
One way or the other, I would like to proceed with an
amendment that would address this issue, but I think you could
probably do it in a way which garners greater support.
Mr. Cotton. Thank you, Mr. Chair.
As I indicated, I am happy to do that. I am glad that the
gentleman from Rhode Island agrees this is not a matter of
constitutional law but a matter of taking prudential preventive
measures.
I think Mr. Grayson has raised at least one hypothetical in
which my amendment could be over-broad if someone in the third
degree of consanguinity has naturalized and become an American
citizen. And that is one example of how we could welcome this
amendment.
With that, I am happy to yield back the balance of my time
and withdraw the amendment and begin that work.
Chairman Royce. I appreciate the gentleman's work. And if
we could designate leg counsel to work with you today, then
before the final vote, we will probably have that amendment in
order.
If I could go now to Mr. Grayson? I think you have a couple
of additional amendments at the desk.
Mr. Grayson. Yes. Mr. Chairman, I call for amendment number
104. And I have that amendment at the desk.
Chairman Royce. Clerk, would you report the amendment and
distribute as well? Thank you.
Ms. Marter. Amendment to the amendment in the nature of a
substitute to H.R. 850 offered by Mr. Grayson of Florida. Page
17, after line 16, insert the following: (1) by inserting
``value and'' before ``volume''; page 17, lines 17 and 19,
redesignate paragraphs (1) and (2) as paragraphs (2) and (3),
respectively.
[The information referred to follows:]
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Chairman Royce. Mr. Grayson, you are recognized for 5
minutes to explain your amendment.
Mr. Grayson. Thank you.
Mr. Chairman, this is a result of what were highly
productive conversations between our staff and your staff that
did not quite reach the conclusion that we were looking for.
And at this point, we are looking for a very minor modest
modification to the language that has to do with the fact that
the price of oil fluctuates. This is something that I think
everybody on the committee and everybody who fills a tank of
gas in his car, it is a fact that they are familiar with.
In this situation, what we have is a commitment to the
reduction of the volume in Iranian oil that is imported by five
remaining countries who import Iranian oil but not a reduction
in the value. So, for instance, let's say that it,
unfortunately, happens that the price of oil triples in the
next 12 months while we are trying to impose these sanctions.
If we simply allow a continuation of the existing volume, then
the income to Iran from these oil exports will triple. In that
situation, the purpose of these sanctions would be utterly
defeated because Iran would have more money, more oil money, to
use in order to continue its nuclear program.
Our solution to addressing that problem is simple. We would
say that the sanctions require a reduction not only in the
volume of oil but also in the value of oil. And so we propose
simply to add the words ``value and'' to the word ``volume'' in
order to prevent that scenario.
Now, you will note, Mr. Chairman, that the opposite is not
true. If the value of oil were to decline, let's say, the price
of oil were to decline, by two-thirds during this 1-year period
that we are imposing these sanctions, it, nevertheless, would
remain true that the volume limitation would continue to bite.
So here by this amendment, we end up with the best of both
worlds. If the value of oil, the price of oil, goes up, then by
adding this language, we prevent the Iranians from benefitting
from that. If the price of oil goes down, then the existing
language protects us and makes sure that these sanctions
continue to have bite. That is the purpose of this simple
amendment. It is only two words.
I yield back.
Mr. Chabot [presiding]. The gentleman yields back. Do any
other members seek time to speak on the amendment?
[No response.]
Mr. Chabot. If not, speaking on behalf of the chair, I
think we are in a position to accept the gentleman's amendment.
Hearing no further requests for recognition, the question
occurs on the amendment.
Excuse me. The gentleman from Florida seeks recognition.
The gentleman is recognized for 5 minutes.
Mr. Deutch. Thank you.
I just have a question for my friend from Florida. I just
want to understand. If the price of oil goes up, does that mean
that the reduction in the volume can be less than it would have
been before in order to--how do you prioritize? If you could
just walk through what would happen if the price goes up?
Mr. Grayson. The reduction in the oil would be more, not
less, under that scenario because what this does is it limits
Iran to a reduction in total income. So, for instance, in the
scenario that I believe that the gentleman from Florida is
describing, let's say hypothetically the price of oil doubled.
In that case, the target for reduction in Iranian oil
exports would actually be increased. And the oil exports
themselves would be decreased as a result. So by adding this
language, what we are ensuring is that fluctuations in the
price of oil do not accrue to the benefit of Iran and
implicitly weaken the sanctions that we are trying to impose
here.
Does that answer the gentleman's question?
Mr. Deutch. I thank my friend. If oil spiked to $150 a
barrel, if the gentleman from Florida could just walk through
what would happen without having ``greater of'' language or
something that requires that we take the biggest bite possible,
my concern is that if the price of oil spikes, that you can use
the value piece, satisfy the value piece, but ultimately not
impact the volume as significantly.
I am struggling my way through this. I have not seen it
before.
Mr. Grayson. Well, will the gentleman yield?
Mr. Deutch. Of course.
Mr. Grayson. All right. Thank you. I will try to explain
this further. Under section 203(a), we are dealing with
exceptions to the applicability of sanctions. So we are dealing
with the scenario under what conditions can the President say
that an exception can be made and that oil imports by a foreign
country can continue without sanctions under this act?
So what we are doing is we are applying an alternative
test. The President has to determine that both, both the value
and the volume, have decreased before he can issue if he wants
to issue an exception to the applicability of the sanctions. If
the volume has decreased but the price of oil goes up, then the
value has increased. And that would defeat the purpose of these
sanctions.
So what we are saying is for the President to make an
exception, both the value and the volume have to decrease. That
is why we use the word ``and.''
Mr. Duncan. Will the gentleman from Florida yield?
Mr. Deutch. Yes.
Mr. Duncan. I think by using the word ``and,'' you are
putting two values, so to speak, in place that both have to
happen in order for the sanction to kick in. I am troubled by
the word and the use of ``and,'' ``volume and value.'' I would
be more comfortable with an amendment that used the word ``or''
so we would have an either/or situation. The word ``and''
troubles me, and I would oppose this amendment because of that.
Mr. Grayson. Will the gentleman yield?
Mr. Duncan. I will.
Mr. Grayson. Okay. Again, what we are doing here is we are
looking at an amendment to page 17 of the current draft, the
amendment and the alternative that substitutes for the entire
bill. And, again, we are not judging under what circumstances
the sanctions are imposed. Quite the opposite, we are judging
under what circumstances the sanctions are excepted. They are
relaxed. We are judging under what circumstances the President
has the authority to say that oil imports by a foreign country
can continue.
And, therefore, I think the gentleman actually would be
right if we were talking about under what circumstances the
sanctions apply. Actually, we are talking about under what
circumstances the sanctions are accepted. And, therefore, it
makes eminent sense, I think, to have both a value test and a
volume test. Otherwise, if the price of oil increases, as I
indicated before, the President will have the authority to
exempt a foreign country as long as they decrease their volume
but don't decrease their value.
Mr. Deutch. I am reclaiming my time. I thank my friend from
Florida. I thank my friend for explaining that. I think ``and''
actually, the use of the word ``and'' actually, makes it
tougher. I appreciate him walking through that, and I will----
Mr. Duncan. Will the gentleman yield back? I agree with
you. It has been clarified now. So I will retract my earlier
statement.
I yield back.
Mr. Deutch. Okay. So I yield back my time.
Mr. Chabot. All right. The gentleman's time has expired. Do
any other members seek recognition?
[No response.]
Mr. Chabot. If not, the question occurs on the amendment.
All those in favor say aye.
[Chorus of ayes.]
Mr. Chabot. All those opposed say nay.
[No response.]
Mr. Chabot. It appears the ayes have it, and the amendment
is agreed to.
Do any other members seek recognition for the purpose of
offering an amendment? The gentleman from Florida is
recognized.
Mr. Grayson. Thank you. Mr. Chairman, I have an amendment
at the desk. It is amendment Grayson 111.
Mr. Chabot. The clerk will read the amendment.
Ms. Marter. Amendment to the amendment in the nature of a
substitute to H.R. 850 offered by Mr. Grayson of Florida.
Redesignate section 305 as section 306. Insert after section
304 the following new section: Section 305. Amendment to
Definitions of ``Significant Reduction'' under Section 1245 of
the National Defense Authorization Act for Fiscal Year 2012.
Section 1245(h)(3) of the National Defense Authorization Act
for Fiscal Year 2012 (22 U.S.C.----
[The information referred to follows:]
----------
Mr. Chabot. Without objection, the amendment will be
considered as read. The gentleman from Florida is recognized.
Mr. Grayson. Mr. Chairman, this amendment simply applies
the same principle as the amendment that we just passed to a
different section of the bill.
I yield back.
Mr. Chabot. The gentleman yields back. Are there any other
members who seek recognition?
[No response.]
Mr. Chabot. As the chair had previously indicated, he would
support this amendment as well. If no one else seeks
recognition, the question occurs on the amendment. All of those
in favor will say aye.
[Chorus of ayes.]
Mr. Chabot. All those opposed say nay.
[No response.]
Mr. Chabot. It appears the ayes have it. The ayes have it,
and the amendment is agreed to.
Do any other members seek recognition for the purpose of
offering an amendment? The gentleman from Florida, Mr. Grayson,
is recognized for the purpose of offering an amendment.
Mr. Grayson. Mr. Chairman, this is the last amendment that
I will offer before the committee today. And the crowd cheered.
[Laughter.]
Do I hear any amens?
[Chorus of amens.]
Mr. Grayson. Amen. Amen. I am sure that pleases everybody
as much as it pleases me.
[The information referred to follows:]
----------
Mr. Grayson. With this amendment, again, I find myself
drawn to the definition of a significant reduction under the
previous sanctions passed, Fiscal Year 2012, NDAA. And I think
it is really important to get this right because it is the
underpinning of the mechanism by which the remaining five
countries that purchase oil from Iran receive exemptions from
losing their access to the American banking system.
How we define what it means to significantly reduce in
section 1245 of the Fiscal Year 2012 NDAA, how we define the
term ``significantly reduce'' directly impacts the measurements
used when determining compliance for the sake of granting
exemptions.
It is important to note that under the current soft
standard in place, every importer of Iranian oil has received
an exemption from the sanctions that are available to be levied
pursuant to section 1245. If we really expect these sanctions
to bite, I think we have to change that. It is time. The time
has come to review these standards and make them firm.
Currently the definition of significant reduction in the
statute is as follows: ``The terms `reduce significantly,'
`significant reduction,' and `significantly reduced' with
respect to purchases from Iran of petroleum and petroleum
products includes a reduction in such purchases in terms of
price or volume toward a complete cessation of such
purchases.''
So, just to be clear about this, the statute does not
provide for any amount any percentage any standard other than
to say it is a reduction toward a complete cessation. One could
say that you can go from 100 percent down to 99.99 percent and
that is a reduction toward complete cessation that allows the
administration to exclude these countries. Basically what it
says is just reduce your purchases downward without any
specific requirement.
Frankly, that is not good enough. Mr. Chairman, I commend
you and your staff for the work that you put into this bill and
for what I view to be the first real attempt at benchmarking
what a significant reduction looks like in terms of the number
of barrels of crude oil that must be reduced.
On pages 19 and 20 of this bill, you have taken the bold
step of setting a hard mark of a reduction of at least an
average of 1 million barrels of crude oil per day by the end of
a 1-year period. Seeing that this was a figure that this
committee could support, my search for finding a benchmark for
what significant reductions look like in the real world was
over. You have provided it in this amendment in the nature of a
substitute.
My amendment does nothing more than to tie the rest of
section 1245 to the new benchmark that you drafted by adding
the 1 million barrel of crude oil figure to the definition of
significant reduction.
Section 1245, again, governs the imposition of sanctions
with respect to the financial sector of Iran and the governance
of petroleum transactions with Iran. It is so crucial that
there be an explicit mention of it in the rule of construction
located on page 13 of this bill.
I think it is only appropriate to merge the new law that we
will be creating here today with the existing law. And I feel
that we should leave no doubt as to what a significant
reduction will look like going forward. It looks like a
reduction on the average of 1 million barrels of crude oil per
day that applies for all five of these countries individually.
And that is exactly what this amendment attempts to do.
With that, Mr. Speaker, I thank you for the time and for
your important work on this important bill.
Chairman Royce [presiding]. Well, I want to thank the
gentleman from Florida. And if I could recognize myself for 5
minutes? I just want to express my appreciation for your
contribution to this measure. I think I certainly support this
amendment.
Are there any other members who would like to speak on this
amendment before the body?
[No response.]
Chairman Royce. If not, the question is before the
committee. All those in favor signify by saying aye.
[Chorus of ayes.]
Chairman Royce. All those opposed, no.
[No response.]
Chairman Royce. In the opinion of the Chair, the ayes have
it, and the amendment is agreed to.
We are in the process of having received back from leg
counsel the language, the severability language, of making
copies for the members and distributing that to the members, as
Mr. Grayson and others have an opportunity to review that
language. We will recess for 10 minutes.
[Brief recess.]
Chairman Royce. We are going to reconvene the committee,
the markup, at this time. I am going to ask the members to
please take your seats. And the Chair recognizes himself to
offer a new effective date and severability amendment offered
by me, Mr. Engel, Mr. Cotton, and Mr. Sherman, which all the
members have at their desks. The clerk will report the
amendment.
Ms. Marter. Amendment to the amendment in the nature of a
substitute to H.R. 850 offered by Mr. Royce of California, Mr.
Engel of New York, Mr. Cotton of Arkansas, and Mr. Sherman of
California. Page 29, beginning on line 19, strike ``the date
that is 90 days after such date of enactment'' and insert ``May
22, 2013.''
At the end of title III add the following: Section 306.
Severability. (a) In general--if any provision of this act, or
the application of such provision to any person or
circumstance, is found to be unconstitutional, the remainder of
this act, or the application of that provision to other persons
or circumstances, shall not be affected. (b) Effective date----
[The information referred to follows:]
----------
Chairman Royce. Without objection, the amendment will be
considered as read. And let me yield myself some time to just
share with the members that we were pleased to work with Mr.
Grayson and with other colleagues to work out the language,
which I think was mutually acceptable. And I would ask if any
members wish to speak now on the amendment.
[No response.]
Chairman Royce. Mr. Grayson, I will acknowledge your time.
Five minutes.
Mr. Grayson. Thank you very much, Mr. Chairman. I think
that this shows the process worked extremely well. I appreciate
the chairman's consideration. I am very happy with the result.
Thank you again. I yield back.
Chairman Royce. Thank you, Mr. Grayson. Hearing no further
requests for recognition----
Mr. Collins. Mr. Chairman?
Chairman Royce. Mr. Radel?
Mr. Collins. No. Collins.
Chairman Royce. Mr. Collins?
Mr. Collins. Just a clarification. And I know--because
there was a lot of amendments going on while this was written.
And I know this--you are adding section 306. And a couple of
Mr. Grayson's amendments redesignated 305, added a 306 in this
process. So----
Chairman Royce. Well, this particular amendment addresses
the severability issue.
Mr. Collins. I understand that, sir. I get the--I am just
designating the proper section. You already have----
Chairman Royce. Oh. I understand your point now, Mr.
Collins.
Mr. Collins. You already have a 306.
Chairman Royce. You are concerned. As a technical matter,
we will make certain that the numbers correspond correctly
after the markup.
Mr. Collins. I just wanted--because I know it was in
process, but it was just designated wrong.
Chairman Royce. Yes. Good point, Mr. Collins. All right.
Any other members seek to speak on the amendment?
[No response.]
Chairman Royce. In that case, I will ask all of those in
favor to say aye.
[Chorus of ayes.]
Chairman Royce. All opposed, no.
[No response.]
Chairman Royce. In the opinion of the Chair, the ayes have
it, and the amendment is agreed to.
Are there any further amendments?
[No response.]
Chairman Royce. Might I suggest, Mr. Cotton, if we were to
pledge to work with you going forward on your amendment--the
leg counsel has not worked their magic yet and produced or
rewritten that amendment. Would that be amenable to you or
would you sooner have us go into recess until we have that
amendment before us?
We would prefer to move forward, obviously.
Mr. Cotton. I understand. I am amenable to that.
Chairman Royce. Okay. All right. Then in that case, hearing
no further amendments to this measure, the question occurs on
agreeing to the base amendment in the nature of a substitute,
as amended. All those in favor indicating by saying aye.
[Chorus of ayes.]
Chairman Royce. All those opposed, no.
[No response.]
Chairman Royce. In the opinion of the Chair, the ayes have
it, and the amendment in the nature of a substitute, as
amended, is agreed to. Without objection, the underlying bill,
H.R. 850, as amended, is agreed to, is ordered favorably
reported, and will be reported as a single amendment in the
nature of a substitute.
Also, without objection, staff is directed to make
technical and conforming changes. And the Chairman is
authorized to seek House consideration of H.R. 850 under
suspension of the rules.
I want to thank Ranking Member Engel. And I want to thank
all of our committee members for their contributions to this
critically important legislation and their assistance with
today's markup. And the committee now stands adjourned.
[Whereupon, at 12:53 p.m., the committee was adjourned.]
A P P E N D I X
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