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115th Congress } { Rept. 115-366
HOUSE OF REPRESENTATIVES
1st Session } { Part 1
======================================================================
HIZBALLAH INTERNATIONAL FINANCING PREVENTION AMENDMENTS ACT OF 2017
_______
October 24, 2017.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Royce of California, from the Committee on Foreign Affairs,
submitted the following
R E P O R T
[To accompany H.R. 3329]
[Including cost estimate of the Congressional Budget Office]
The Committee on Foreign Affairs, to whom was referred the
bill (H.R. 3329) to amend the Hizballah International Financing
Prevention Act of 2015 to impose additional sanctions with
respect to Hizballah, and for other purposes, having considered
the same, report favorably thereon with an amendment and
recommend that the bill as amended do pass.
TABLE OF CONTENTS
Page
The Amendment.................................................... 1
Summary and Purpose.............................................. 12
Background and Need for Legislation.............................. 13
Hearings......................................................... 20
Committee Consideration.......................................... 21
Committee Oversight Findings..................................... 21
New Budget Authority, Tax Expenditures, and Federal Mandates..... 21
Congressional Budget Office Cost Estimate........................ 22
Directed Rule Making............................................. 23
Non-Duplication of Federal Programs.............................. 23
Performance Goals and Objectives................................. 23
Congressional Accountability Act................................. 24
New Advisory Committees.......................................... 24
Earmark Identification........................................... 24
Section-by-Section Analysis...................................... 24
Changes in Existing Law Made by the Bill, as Reported............ 26
The Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Hizballah
International Financing Prevention Amendments Act of 2017''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--PREVENTION OF ACCESS BY HIZBALLAH TO INTERNATIONAL FINANCIAL
AND OTHER INSTITUTIONS
Sec. 101. Mandatory sanctions with respect to fundraising and
recruitment activities for Hizballah.
Sec. 102. Modification of report with respect to financial institutions
that engage in certain transactions.
Sec. 103. Sanctions against foreign states that support Hizballah.
Sec. 104. Prohibitions and conditions with respect to certain accounts
held by foreign financial institutions.
Sec. 105. United States strategy to prevent hostile activities by Iran
and disrupt and degrade Hizballah's illicit networks in the Western
Hemisphere.
TITLE II--NARCOTICS TRAFFICKING AND SIGNIFICANT TRANSNATIONAL CRIMINAL
ACTIVITIES OF HIZBALLAH
Sec. 201. Blocking of property of affiliated networks of Hizballah.
Sec. 202. Report on racketeering activities engaged in by Hizballah.
Sec. 203. Modification of report on activities of foreign governments
to disrupt global logistics networks and fundraising, financing, and
money laundering activities of Hizballah.
Sec. 204. Report on combating the illicit tobacco trafficking networks
used by Hizballah and other foreign terrorist organizations.
TITLE III--GENERAL PROVISIONS
Sec. 301. Regulatory authority.
Sec. 302. Implementation; penalties; judicial review; exemptions.
TITLE I--PREVENTION OF ACCESS BY HIZBALLAH TO INTERNATIONAL FINANCIAL
AND OTHER INSTITUTIONS
SEC. 101. MANDATORY SANCTIONS WITH RESPECT TO FUNDRAISING AND
RECRUITMENT ACTIVITIES FOR HIZBALLAH.
(a) In General.--Section 101 of the Hizballah International Financing
Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 note) is
amended to read as follows:
``SEC. 101. MANDATORY SANCTIONS WITH RESPECT TO FUNDRAISING AND
RECRUITMENT ACTIVITIES FOR HIZBALLAH.
``(a) In General.--The President shall, on or after the date of the
enactment of this section, impose the sanctions described in subsection
(b) with respect to any foreign person that the President determines
knowingly assists, sponsors, or, provides significant financial,
material, or technological support for--
``(1) Bayt al-Mal, Jihad al-Bina, the Islamic Resistance
Support Association, the Foreign Relations Department of
Hizballah, the External Security Organization of Hizballah, or
any successor or affiliate thereof;
``(2) al-Manar TV, al Nour Radio, or the Lebanese Media
Group, or any successor or affiliate thereof;
``(3) a foreign person determined by the President to be
engaged in fundraising or recruitment activities for Hizballah;
or
``(4) a foreign person owned or controlled by a foreign
person described in paragraph (1), (2), or (3).
``(b) Sanctions Described.--
``(1) In general.--The sanctions described in this subsection
are the following:
``(A) Asset blocking.--The exercise of all powers
granted to the President by the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.) (except
that the requirements of section 202 of such Act (50
U.S.C. 1701) shall not apply) to the extent necessary
to block and prohibit all transactions in all property
and interests in property of a foreign person
determined by the President to be subject to subsection
(a) if such property and interests in property are in
the United States, come within the United States, or
are or come within the possession or control of a
United States person.
``(B) Aliens ineligible for visas, admission, or
parole.--
``(i) Visas, admission, or parole.--An alien
who the President determines is subject to
subsection (a) is--
``(I) inadmissible to the United
States;
``(II) ineligible to receive a visa
or other documentation to enter the
United States; and
``(III) otherwise ineligible to be
admitted or paroled into the United
States or to receive any other benefit
under the Immigration and Nationality
Act (8 U.S.C. 1101 et seq.).
``(ii) Current visas revoked.--
``(I) In general.--The issuing
consular officer, the Secretary of
State, or the Secretary of Homeland
Security shall revoke any visa or other
entry documentation issued to an alien
who the President determines is subject
to subsection (a), regardless of when
issued.
``(II) Effect of revocation.--A
revocation under subclause (I) shall
take effect immediately and shall
automatically cancel any other valid
visa or entry documentation that is in
the possession of the alien.
``(2) Penalties.--The penalties provided for in subsections
(b) and (c) of section 206 of the International Emergency
Economic Powers Act (50 U.S.C. 1705) shall apply to a person
that violates, attempts to violate, conspires to violate, or
causes a violation of regulations prescribed under paragraph
(1)(A) to the same extent that such penalties apply to a person
that commits an unlawful act described in subsection (a) of
such section 206.
``(c) Implementation.--The President may exercise all authorities
provided under sections 203 and 205 of the International Emergency
Economic Powers Act (50 U.S.C. 1702 and 1704) to carry out this
section.
``(d) Waiver.--
``(1) In general.--The President may, for periods not to
exceed 180 days, waive the imposition of sanctions under this
section with respect to a foreign person or foreign persons if
the President certifies to the appropriate congressional
committees that such waiver is in the national security
interests of the United States.
``(2) Consultation.--
``(A) Before waiver exercised.--Before a waiver under
paragraph (1) takes effect with respect to a foreign
person, the President shall notify and brief the
appropriate congressional committees on the status of
the involvement of the foreign person in activities
described in subsection (a).
``(B) After waiver exercised.--Not later than 90 days
after the issuance of a waiver under paragraph (1) with
respect to a foreign person, and every 120 days
thereafter while the waiver remains in effect, the
President shall brief the appropriate congressional
committees on the status of the involvement of the
foreign person in activities described in subsection
(a).
``(e) Report.--Not later than 90 days after the date of the enactment
of the Hizballah International Financing Prevention Amendments Act of
2017, and every 180 days thereafter, the President shall submit to the
appropriate congressional committees a report that lists the foreign
persons that the President has credible evidence knowingly assists,
sponsors, or provides significant financial, material, or technological
support for the foreign persons described in paragraph (1), (2), (3),
or (4) of subsection (a).
``(f) Definitions.--In this section:
``(1) Admitted; alien.--The terms `admitted' and `alien' have
meanings given those terms in section 101 of the Immigration
and Nationality Act (8 U.S.C. 1101).
``(2) Appropriate congressional committees.--The term
`appropriate congressional committees' means--
``(A) the Committee on Foreign Affairs, the Committee
on Ways and Means, the Committee on the Judiciary, and
the Committee on Financial Services of the House of
Representatives; and
``(B) the Committee on Foreign Relations, the
Committee on Banking, Housing, and Urban Affairs, and
the Committee on the Judiciary of the Senate.
``(3) Entity.--The term `entity'--
``(A) means a partnership, association, corporation,
or other organization, group, or subgroup; and
``(B) includes a governmental entity
``(4) Fundraising or recruitment activities.--The term
`fundraising or recruitment activities' includes online
fundraising and other online commercial activities, or other
means of such fundraising, recruitment, and retention, as
determined by the President.
``(5) Hizballah.--The term `Hizballah' has the meaning given
such term in section 102(f).
``(6) Person.--The term `person' means an individual or
entity.
``(7) United states person.--The term `United States person'
means a United States citizen, permanent resident alien, entity
organized under the laws of the United States (including
foreign branches), or a person in the United States.''.
(b) Clerical Amendment.--The table of contents for the Hizballah
International Financing Prevention Act of 2015 is amended by striking
the item relating to section 101 and inserting the following new item:
``Sec. 101. Mandatory sanctions with respect to fundraising and
recruitment activities for Hizballah.''.
SEC. 102. MODIFICATION OF REPORT WITH RESPECT TO FINANCIAL INSTITUTIONS
THAT ENGAGE IN CERTAIN TRANSACTIONS.
(a) In General.--Subsection (d) of section 102 of the Hizballah
International Financing Prevention Act of 2015 (Public Law 114-102; 50
U.S.C. 1701 note) is amended to read as follows:
``(d) Report on Financial Institutions Organized Under the Laws of
State Sponsors of Terrorism.--
``(1) In general.--Not later than 90 days after the date of
the enactment of the Hizballah International Financing
Prevention Amendments Act of 2017, and annually thereafter for
a period not to exceed three years, the President shall submit
to the appropriate congressional committees a report that--
``(A) identifies each foreign financial institution
described in paragraph (2) that the President
determines engages in one or more activities described
in subsection (a)(2);
``(B) provides a detailed description of each such
activity; and
``(C) contains a determination with respect to each
such foreign financial institution that is identified
under subparagraph (A) as engaging in one or more
activities described in subsection (a)(2) as to whether
or not such foreign financial institution is in
violation of Executive Order 13224 (50 U.S.C. 1701
note; relating to blocking property and prohibiting
transactions with persons who commit, threaten to
commit, or support terrorism) or section 2339B of title
18, United States Code, by reason of engaging in one or
more such activities.
``(2) Foreign financial institution described.--
``(A) In general.--A foreign financial institution
described in this paragraph is a foreign financial
institution--
``(i) that, wherever located, is--
``(I) organized under the laws of a
state sponsor of terrorism or any
jurisdiction within a state sponsor of
terrorism;
``(II) owned or controlled by the
government of a state sponsor of
terrorism;
``(III) located in the territory of a
state sponsor of terrorism; or
``(IV) owned or controlled by a
foreign financial institution described
in subclause (I), (II), or (III); and
``(ii) the capitalization of which exceeds
$10,000,000.
``(B) State sponsor of terrorism.--In this paragraph,
the term `state sponsor of terrorism' means a country
the government of which the Secretary of State has
determined is a government that has repeatedly provided
support for acts of international terrorism for
purposes of--
``(i) section 6(j) of the Export
Administration Act of 1979 (50 U.S.C. 4605(j))
(as continued in effect pursuant to the
International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.));
``(ii) section 620A of the Foreign Assistance
Act of 1961 (22 U.S.C. 2371);
``(iii) section 40 of the Arms Export Control
Act (22 U.S.C. 2780); or
``(iv) any other provision of law.''.
(b) Sense of Congress.--It is the sense of the Congress that--
(1) all countries should designate the entirety of Hizballah
as a terrorist organization; and
(2) the notion of separate Hizballah political and military
``wings'' is an artificial construct that attempts to
legitimize Hizballah members of parliament and Hizballah
cabinet officials who are complicit in Hizballah's use of
violence and coercion against its political opponents.
(c) Modification of Definition of Hizballah.--Clause (ii) of section
102(f)(1)(E) of the Hizballah International Financing Prevention Act of
2015 (Public Law 114-102; 50 U.S.C. 1701 note) is amended--
(1) by striking ``(I)'' and inserting ``(I)(aa)'';
(2) by striking ``(II)'' and inserting ``(bb)'';
(3) by striking ``of Hizballah.'' and inserting ``of
Hizballah; or''; and
(4) by adding at the end the following:
``(II) who the President determines
is an agent or affiliate of, or is
owned or controlled by Hizballah.''.
(d) Report.--
(1) In general.--Not later than 120 days after the date of
the enactment of this Act, the President shall transmit to the
appropriate congressional committee a report that contains a
description of any sanctions described in section 102 of the
Hizballah International Financing Prevention Act of 2015
(Public Law 114-102; 50 U.S.C. 1701 note) apply with respect to
a foreign financial institution by reason of engaging in an
activity described in subsection (a)(2) of such section with a
member of the Lebanese parliament or any cabinet official of
the Lebanese Republic who is a member of Hizballah or
identifies as such.
(2) Form.--The report required by this subsection shall be
transmitted in unclassified form but may include a classified
annex.
SEC. 103. SANCTIONS AGAINST FOREIGN STATES THAT SUPPORT HIZBALLAH.
(a) In General.--Title I of the Hizballah International Financing
Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 note) is
amended by adding at the end the following:
``SEC. 103. SANCTIONS AGAINST FOREIGN STATES THAT SUPPORT HIZBALLAH.
``(a) Sanctions Against Certain Agencies and Instrumentalities of
Foreign States.--
``(1) In general.--Not later than 90 days after the date of
the enactment of this section, and as appropriate thereafter,
the President shall impose the sanctions described in paragraph
(3) with respect to any agency or instrumentality of a foreign
state described in paragraph (2).
``(2) Agency or instrumentality described.--An agency or
instrumentality of a foreign state described in this paragraph
is an agency or instrumentality of a foreign state that the
President determines has, on or after the date of the enactment
of this section, knowingly--
``(A) directly or indirectly conducted combat
operations with, or supported combat operations of,
Hizballah or an entity owned or controlled by
Hizballah; or
``(B) directly or indirectly provided significant
financial or material support for, or significant arms
or related material to, Hizballah or an entity owned or
controlled by Hizballah.
``(3) Sanctions described.--The sanctions described in this
paragraph are the exercise of all powers granted to the
President by the International Emergency Economic Powers Act
(50 U.S.C. 1701 et seq.) (except that the requirements of
section 202 of such Act (50 U.S.C. 1701) shall not apply) to
the extent necessary to block and prohibit all transactions in
all property and interests in property of an agency or
instrumentality of a foreign state if such property and
interests in property are in the United States, come within the
United States, or are or come within the possession or control
of a United States person.
``(b) Sanctions Against State Sponsors of Terrorism.--
``(1) In general.--In the case of an agency or
instrumentality of a foreign state that engages in the
activities described in subsection (a) that is an agency or
instrumentality of a foreign state described in paragraph (2),
the President shall, pursuant to section 6 of the Export
Administration Act of 1979 (as continued in effect pursuant to
the International Emergency Economic Powers Act (50 U.S.C. 1701
et seq.)), require a license under the Export Administration
Regulations to export or re-export to that foreign state any
item designated by the Secretary of Commerce as `EAR 99', other
than food, medicine, medical devices, or similarly licensed
items.
``(2) Foreign state described.--A foreign state described in
this paragraph is a foreign state that--
``(A) the President determines has, on or after the
date of the enactment of this section, knowingly
provided significant financial or material support for,
or arms or related material to--
``(i) Hizballah; or
``(ii) an entity owned or controlled by
Hizballah; and
``(B) is a state sponsor of terrorism.
``(c) Waiver.--
``(1) In general.--The President may, for periods not to
exceed 180 days, waive the imposition of sanctions under this
section with respect to a foreign state or an agency or
instrumentality of a foreign state if the President certifies
to the appropriate congressional committees that such waiver is
vital to the national security interests of the United States.
``(2) Consultation.--
``(A) Before waiver exercised.--Before a waiver under
paragraph (1) takes effect with respect to a foreign
state or an agency or instrumentality of a foreign
state, the President shall notify and brief the
appropriate congressional committees on the status of
the involvement of the foreign state in activities
described in subsection (b)(2) or involvement of the
agency or instrumentality of a foreign state in
activities described in subsection (a)(2), as the case
may be.
``(B) After waiver exercised.--Not later than 90 days
after the issuance of a waiver under paragraph (1) with
respect to a foreign state or an agency or
instrumentality of a foreign state, and every 120 days
thereafter while the waiver remains in effect, the
President shall brief the appropriate congressional
committees on the status of the involvement of the
foreign state in activities described in subsection
(b)(2) or involvement of the agency or instrumentality
of a foreign state in activities described in
subsection (a)(2), as the case may be.
``(d) Report on Supply Chain of Hizballah's Missile Production
Facilities.--
``(1) In general.--Not later than 120 days after the date of
the enactment of this subsection, the President shall submit to
the appropriate congressional committees a report that contains
the following:
``(A) An analysis of the foreign and domestic supply
chain that significantly facilitates, supports, or
otherwise aids Hizballah's acquisition or development
of missile production facilities.
``(B) A description of the geographic distribution of
the foreign and domestic supply chain described in
subparagraph (A).
``(C) An assessment of the provision of goods,
services, or technology transferred to Hizballah by the
Government of Iran or its affiliates to indigenously
manufacture or otherwise produce missiles.
``(D) An identification of foreign persons that have,
on or after the date of the enactment of this
subsection, and based on credible evidence--
``(i) knowingly provided significant
financial or material support for, or
significant arms or related material to,
Hizballah or an entity owned or controlled by
Hizballah; or
``(ii) knowingly facilitated the transfer of
significant arms or related materiel to
Hizballah utilizing commercial aircraft or air
carriers.
``(E) A description of the steps that the President
is taking to disrupt the foreign and domestic supply
chain described in subparagraph (A).
``(2) Form.--The report required under paragraph (1) shall be
submitted in unclassified form, but may contain a classified
annex.
``(e) Definitions.--In this section:
``(1) Agency or instrumentality of a foreign state; foreign
state.--The terms `agency or instrumentality of a foreign
state' and `foreign state' have the meanings given those terms
in section 1603 of title 28, United States Code.
``(2) Appropriate congressional committees.--The term
`appropriate congressional committees' means--
``(A) the Committee on Foreign Affairs, the Committee
on Financial Services, the Committee on Ways and Means,
and the Committee on the Judiciary of the House of
Representatives; and
``(B) the Committee on Foreign Relations, the
Committee on Banking, Housing, and Urban Affairs, and
the Committee on the Judiciary of the Senate.
``(3) Arms or related material.--The term `arms or related
material' means--
``(A) nuclear, biological, chemical, or radiological
weapons or materials or components of such weapons;
``(B) ballistic or cruise missile weapons or
materials or components of such weapons;
``(C) destabilizing numbers and types of advanced
conventional weapons;
``(D) defense articles or defense services, as those
terms are defined in paragraphs (3) and (4),
respectively, of section 47 of the Arms Export Control
Act (22 U.S.C. 2794); or
``(E) defense information, as that term is defined in
section 644 of the Foreign Assistance Act of 1961 (22
U.S.C. 2403).
``(4) Export administration regulations.--The term `Export
Administration Regulations' means subchapter C of chapter VII
of title 15, Code of Federal Regulations (as in effect on the
date of the enactment of this Act).
``(5) Hizballah.--The term `Hizballah' has the meaning given
that term in section 102(f).
``(6) State sponsor of terrorism.--In this paragraph, the
term `state sponsor of terrorism' means a country the
government of which the Secretary of State has determined is a
government that has repeatedly provided support for acts of
international terrorism for purposes of--
``(A) section 6(j) of the Export Administration Act
of 1979 (50 U.S.C. 4605(j)) (as continued in effect
pursuant to the International Emergency Economic Powers
Act (50 U.S.C. 1701 et seq.));
``(B) section 620A of the Foreign Assistance Act of
1961 (22 U.S.C. 2371);
``(C) section 40 of the Arms Export Control Act (22
U.S.C. 2780); or
``(D) any other provision of law.''.
(b) Clerical Amendment.--The table of contents for the Hizballah
International Financing Prevention Act of 2015 is amended by inserting
after the item relating to section 102 the following new item:
``Sec. 103. Sanctions against foreign states that support Hizballah.''.
(c) Report on Significant Material Support and Arms or Related
Materiel Provided by the Russian Federation to Hizballah.--
(1) In general.--Not later than 120 days after the date of
the enactment of this Act, the President shall submit to the
appropriate congressional committees a report that contains the
following:
(A) A description of significant material support and
arms or related material that the Government of the
Russian Federation has, on or after the date of the
enactment of this Act, knowingly, directly or
indirectly, provided to Hizballah or an entity owned or
controlled by Hizballah.
(B) An analysis of the extent to which Russian
strategic weapons deployed in Syria, including air
defense systems, have provided protection for Hizballah
fighters in Syria.
(C) An assessment of whether Russian counter-
proliferation safeguards can ensure that any arms or
related materiel described in subparagraph (A) will not
be used against Israel in the future.
(2) Form.--The report required by paragraph (1) shall be
submitted in unclassified form but may include a classified
annex.
(3) Definitions.--In this subsection:
(A) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the
Committee on Foreign Affairs of the House of
Representatives and the Committee on Foreign Relations
of the Senate.
(B) Arms or related material.--The term ``arms or
related material'' has the meaning given such term in
section 103 of the Hizballah International Financing
Prevention Act of 2015, as added by this section.
SEC. 104. PROHIBITIONS AND CONDITIONS WITH RESPECT TO CERTAIN ACCOUNTS
HELD BY FOREIGN FINANCIAL INSTITUTIONS.
Section 104(c)(2)(A)(ii) of the Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010 (22 U.S.C.
8513(c)(2)(A)(ii)) is amended by inserting before ``or support for acts
of international terrorism'' the following ``, including Hizballah (as
defined in section 102(f)(1)(E) of the Hizballah International
Financing Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701
note)), and any affiliates or successors thereof,''.
SEC. 105. UNITED STATES STRATEGY TO PREVENT HOSTILE ACTIVITIES BY IRAN
AND DISRUPT AND DEGRADE HIZBALLAH'S ILLICIT
NETWORKS IN THE WESTERN HEMISPHERE.
(a) In General.--Not later than 180 days after the date of the
enactment of this Act, the Secretary of State shall submit to the
relevant congressional committees a strategy to prevent hostile
activities by Iran and disrupt and degrade Hizballah's illicit networks
in the Western Hemisphere that--
(1) identifies Department of State priorities, in
coordination with other executive branch agencies, for defining
United States policy to protect United States interests from
Iranian and Hizballah threats in the Western Hemisphere;
(2) coordinates with other executive branch agencies to
ensure that information-sharing, interdictions, arrests,
investigations, indictments, sanctions, and designations
related to Hizballah individuals or networks in the Western
Hemisphere are integrated, coordinated, and publicly
communicated by the United States in a manner that supports
United States interests;
(3) describes Iranian and Hizballah activities in the Western
Hemisphere, their relationships with transnational criminal
organizations in the region, their use of the region's
commodities trade to engage in illicit activities, and their
use of Latin American and Caribbean visas, including through
Citizenship by Investment Programs to seek admittance into the
United States, as well as a plan to address any security
vulnerabilities to the United States;
(4) includes a review of all relevant United States sanctions
that relate to Hizballah's activities in Latin America and the
Caribbean and an assessment of their use, effectiveness, and
any capability gaps;
(5) includes a review of the use of the Department of State's
rewards program under section 36 of the State Department Basic
Authorities Act (22 U.S.C. 2708) to obtain information related
to Latin America-based Hizballah operatives and illicit
networks and an assessment of the effectiveness of this program
for targeting Hizballah in the Western Hemisphere;
(6) includes a review of all relevant United States sanctions
on financial institutions in Latin America and the Caribbean
that engage in activities outlined by section 102 of Hizballah
International Financing Prevention Act of 2015 (Public Law 114-
102; 50 U.S.C. 1701 note) and an assessment of the use of the
authorities outlined, their effectiveness, and recommendations
for improvement;
(7) describes Hizballah criminal support networks, including
country facilitation, in the Western Hemisphere and outlines a
United States approach to partners in the region to address
those illicit networks and build country capacity to combat the
transnational criminal activities of Hizballah; and
(8) includes a review of the actions of governments in the
Western Hemisphere to identify, investigate, and prosecute
Latin America-based Hizballah operatives, and enforce sanctions
either personally or to their business interests of Latin
America-based Hizballah operatives as well as recommendations
for United States action towards governments who refuse to
impose sanctions or who willingly facilitate Latin America-
based Hizballah illicit activities.
(b) Form.--The strategy required by subsection (a) shall be submitted
in unclassified form to the greatest extent possible but may include a
classified annex.
(c) Diplomatic Engagement.--
(1) In general.--Title I of the Hizballah International
Financing Prevention Act of 2015 (Public Law 114-102; 129 Stat.
2206; 50 U.S.C. 1701 note), as amended by section 103 of this
Act, is further amended by adding at the end the following:
``SEC. 104. DIPLOMATIC INITIATIVES.
``Not later than 90 days after the date of the enactment of this
section, the President shall instruct--
``(1) the Secretary of State to increase cooperation with
countries in the Western Hemisphere to assist in strengthening
the capacity of governments to prevent hostile activity by Iran
and disrupt and degrade Hizballah's illicit networks operating
in the region, including diplomatic engagement that involves--
``(A) efforts to target and expose illicit networks,
arrest perpetrators, freeze assets, and attack Iran and
Hizballah's use of illicit networks using international
trade and banking systems;
``(B) efforts to revoke or deny visas from those
implicated in Hizballah's activity in the region,
including lawyers, accountants, business partners,
service providers, and politicians who knowingly
facilitate or fail to take measures to counter
Hizballah's illicit finance in their own jurisdictions;
``(C) efforts to assist willing nations with the
development of counter-organized crime legislation, the
strengthening of financial investigative capacity, and
a fully-vetted counter-organized crime judicial model
in places plagued with corruption; and
``(D) efforts to persuade governments in the region
to list Hizballah as a terrorist organization;
``(2) the United States Permanent Representative to the
Organization of American States to work to secure support at
the Organization of American States for a resolution that would
declare Hizballah as a terrorist organization and address
Hizballah's illicit networks operating in the region;
``(3) the United States Ambassador to the Organization for
Security and Cooperation in Europe (OSCE) to work to secure a
report on compliance by participating states with OSCE Decision
Number 1063, the `Consolidated Framework for the Fight Against
Terrorism', in regard to Hizballah, with particular focus on
the mandate to `suppress the financing of terrorism, including
its links with money-laundering and illegal economic
activities', especially as it relates transatlantic relations,
including with Latin America and the Caribbean; and
``(4) United States diplomats to work with international
forums, including the Financial Action Task Force, to identify
government entities within Latin America and the Caribbean that
provide support, facilitation, or assistance to individuals
affiliated with Hizballah in the Western Hemisphere.''.
(2) Clerical amendment.--The table of contents for the
Hizballah International Financing Prevention Act of 2015 is
amended by inserting after the item related to section 103 the
following new item:
``Sec. 104. Diplomatic initiatives.''.
TITLE II--NARCOTICS TRAFFICKING AND SIGNIFICANT TRANSNATIONAL CRIMINAL
ACTIVITIES OF HIZBALLAH
SEC. 201. BLOCKING OF PROPERTY OF AFFILIATED NETWORKS OF HIZBALLAH.
(a) In General.--Section 201 of the Hizballah International Financing
Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 note) is
amended to read as follows:
``SEC. 201. IMPOSITION OF SANCTIONS WITH RESPECT TO AFFILIATED NETWORKS
OF HIZBALLAH.
``(a) In General.--Not later than 120 days after the date of the
enactment of this section, and as appropriate thereafter, the President
shall impose the sanctions described in subsection (b) with respect to
affiliated networks of Hizballah, including by reason of significant
transnational criminal activities of such networks.
``(b) Sanctions Described.--The sanctions described in this
subsection are sanctions applied with respect to a foreign person
pursuant to Executive Order 13581 (75 Fed. Reg. 44,757) (as such
Executive order was in effect on the day before the date of the
enactment of this section).
``(c) Definition.--In this section, the term `Hizballah' has the
meaning given such term in section 102(f).''.
(b) Clerical Amendments.--The table of contents for the Hizballah
International Financing Prevention Act of 2015 is amended--
(1) by striking the item relating to title II and inserting
the following:
``TITLE II--IMPOSITION OF SANCTIONS WITH RESPECT TO AFFLIATED NETWORKS
OF HIZBALLAH AND REPORTS AND BRIEFINGS ON NARCOTICS TRAFFICKING AND
SIGNIFICANT TRANSNATIONAL CRIMINAL ACTIVITIES OF HIZBALLAH'';
and
(2) by striking the item relating to section 201 and
inserting the following:
``Sec. 201. Imposition of sanctions with respect to affiliated networks
of Hizballah.''.
(c) Effective Date.--The amendments made by this section take effect
on the date that is 90 days after the date of the enactment of this
Act.
SEC. 202. REPORT ON RACKETEERING ACTIVITIES ENGAGED IN BY HIZBALLAH.
(a) In General.--Section 202 of the Hizballah International Financing
Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 note) is
amended to read as follows:
``SEC. 202. REPORT ON RACKETEERING ACTIVITIES ENGAGED IN BY HIZBALLAH.
``(a) In General.--Not later than 120 days after the date of the
enactment of the Hizballah International Financing Prevention
Amendments Act of 2017, and annually thereafter for the following 5
years, the Assistant Attorney General for the Criminal Division of the
Department of Justice and the Administrator of the Drug Enforcement
Administration, in coordination with the Secretary of the Treasury and
the heads of other applicable Federal agencies, shall jointly submit to
the appropriate congressional committees a report on the following:
``(1) Activities that Hizballah, and agents and affiliates of
Hizballah, have engaged in that are racketeering activities.
``(2) The extent to which Hizballah, and agents and
affiliates of Hizballah, engage in a pattern of such
racketeering activities.
``(b) Form of Report.--Each report required under subsection (a)
shall be submitted in an unclassified form but may contain a classified
annex.
``(c) Definitions.--In this section:
``(1) Appropriate congressional committees.--The term
`appropriate congressional committees' means--
``(A) the Committee on the Judiciary and the
Committee on Foreign Affairs of the House of
Representatives; and
``(B) the Committee on the Judiciary and the
Committee on Foreign Relations of the Senate.
``(2) Hizballah.--The term `Hizballah' has the meaning given
that term in section 102(f).
``(3) Racketeering activity.--The term `racketeering
activity' has the meaning given that term in section 1961(1) of
title 18, United States Code.''.
(b) Clerical Amendment.--The table of contents for the Hizballah
International Financing Prevention Act of 2015 is amended by striking
the item relating to section 202 and inserting the following:
``Sec. 202. Report on racketeering activities engaged in by
Hizballah.''.
SEC. 203. MODIFICATION OF REPORT ON ACTIVITIES OF FOREIGN GOVERNMENTS
TO DISRUPT GLOBAL LOGISTICS NETWORKS AND
FUNDRAISING, FINANCING, AND MONEY LAUNDERING
ACTIVITIES OF HIZBALLAH.
(a) In General.--Section 204(a)(1) of the Hizballah International
Financing Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701
note) is amended--
(1) in the matter preceding subparagraph (A), by striking
``this Act'' and inserting ``the Hizballah International
Financing Prevention Amendments Act of 2017, and annually
thereafter for the following 5 years'';
(2) in subparagraph (D)(ii)(II), by striking ``and'' at the
end;
(3) in subparagraph (E), by striking ``and free-trade
zones.'' and inserting ``free-trade zones, business
partnerships and joint ventures, and other investments in small
and medium-sized enterprises;''; and
(4) by adding at the end the following:
``(F) a list of provinces, municipalities, and local
governments outside of Lebanon that expressly consent
to, or with knowledge allow, tolerate, or disregard the
use of their territory by Hizballah to carry out
terrorist activities, including training, financing,
and recruitment;
``(G) a description of the total aggregate revenues
and remittances that Hizballah receives from the global
logistics networks of Hizballah, including--
``(i) a list of Hizballah's sources of
revenue, including sources of revenue based on
illicit activity, revenues from Iran,
charities, and other business activities; and
``(ii) a list of Hizballah's expenditures,
including expenditures for ongoing military
operations, social networks, and external
operations;
``(H) a survey of national and transnational legal
measures available to target Hizballah's financial
networks;
``(I) a review of Hizballah's international
operational capabilities, including in the United
States; and
``(J) a review of--
``(i) the total number and value of
Hizballah-related assets seized and forfeited;
and
``(ii) the total number of indictments,
prosecutions, and extraditions of Hizballah
members or affiliates.''.
(b) Report on Estimated Net Worth of and Determination With Respect
to Senior Hizballah Members.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, and not less frequently than
annually thereafter for the following 2 years, the President
shall submit to the appropriate congressional committees a
report that contains--
(A) the estimated total net worth of each individual
described in paragraph (2);
(B) a description of how funds of each individual
described in paragraph (2) were acquired, and how such
funds have been used or employed; and
(C) a determination of whether each individual
described in paragraph (2) meets the criteria described
in paragraph (3) or (4) of section 1263(a) of the
National Defense Authorization Act for Fiscal Year 2017
(Public Law 114-328; 22 U.S.C. 2656 note).
(2) Individuals described.--The individuals described in this
paragraph are the following:
(A) The Secretary General of Hizballah.
(B) Members of the Hizballah Politburo.
(C) Any other individual that the President
determines is a senior foreign political figure of
Hizballah, is associated with Hizballah, or otherwise
provides significant support to Hizballah.
(3) Form of report; public availability.--
(A) Form.--The report required under paragraph (1)
shall be submitted in unclassified form but may include
a classified annex.
(B) Public availability.--The unclassified portion of
the report required under paragraph (1) shall be made
available to the public and posted on the website of
the Department of State and all United States Embassy
websites.
(4) Definitions.--In this subsection:
(A) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(i) the Committee on Foreign Affairs and the
Committee on Financial Services of the House of
Representatives; and
(ii) the Committee on Foreign Relations and
the Committee on Banking, Housing, and Urban
Affairs of the Senate.
(B) Funds.--The term ``funds'' means--
(i) cash;
(ii) equity;
(iii) any other intangible asset the value of
which is derived from a contractual claim,
including bank deposits, bonds, stocks, a
security (as defined in section 2(a) of the
Securities Act of 1933 (15 U.S.C. 77b(a))), or
a security or an equity security (as those
terms are defined in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C.
78c(a))); and
(iv) anything else of value that the
President determines to be appropriate.
(C) Senior foreign political figure.--The term
``senior foreign political figure'' has the meaning
given that term in section 1010.605 of title 31, Code
of Federal Regulations (or any successor regulation).
SEC. 204. REPORT ON COMBATING THE ILLICIT TOBACCO TRAFFICKING NETWORKS
USED BY HIZBALLAH AND OTHER FOREIGN TERRORIST
ORGANIZATIONS.
(a) In General.--Not later than 180 days after the date of the
enactment of this Act, the President shall submit to the appropriate
congressional committees a report on combating the illicit tobacco
trafficking networks used by Hizballah and other foreign terrorist
organizations to finance their operations, as described in the report
submitted to Congress in December 2015 by the Department of State, the
Department of Justice, the Department of the Treasury, the Department
of Homeland Security, and the Department of Health and Human Services
entitled, ``The Global Illicit Trade in Tobacco: A Threat to National
Security.''.
(b) Matters To Be Addressed.--The report required by subsection (a)
shall include the following:
(1) A description of the steps to be taken by Federal
agencies to combat the illicit tobacco trafficking networks
used by Hizballah, other foreign terrorist organizations, and
other illicit actors.
(2) A description of the steps to be taken to engage State
and local law enforcement authorities in efforts to combat
illicit tobacco trafficking networks operating within the
United States.
(3) A description of the steps to be taken to engage foreign
government law enforcement and intelligence authorities in
efforts to combat illicit tobacco trafficking networks
operating outside the United States.
(4) Recommendations for legislative or administrative action
needed to address the threat of illicit tobacco trafficking
networks.
(c) Appropriate Congressional Committees Defined.--In this section,
the term ``appropriate congressional committees'' means--
(1) the Committee on Foreign Affairs, the Committee on Armed
Services, the Committee on Homeland Security, the Committee on
the Judiciary, the Committee on Financial Services, and the
Committee on Ways and Means of the House of Representatives;
and
(2) the Committee on Foreign Relations, the Committee on
Armed Services, the Committee on Homeland Security and
Governmental Affairs, the Committee on the Judiciary, the
Committee on Banking, Housing, and Urban Affairs, and the
Committee on Finance of the Senate.
TITLE III--GENERAL PROVISIONS
SEC. 301. REGULATORY AUTHORITY.
(a) In General.--The President shall, not later than 180 days after
the date of the enactment of this Act, prescribe regulations as
necessary for the implementation of this Act and the amendments made by
this Act.
(b) Briefing to Congress.--Not later than 10 days before the
prescription of regulations under subsection (a), the President shall
brief the appropriate congressional committees of the proposed
regulations and the provisions of this Act and the amendments made by
this Act that the regulations are implementing.
(c) Appropriate Congressional Committees Defined.--In this section,
the term ``appropriate congressional committees'' means--
(1) the Committee on Foreign Affairs and the Committee on
Financial Services of the House of Representatives; and
(2) the Committee on Foreign Relations and the Committee on
Banking, Housing, and Urban Affairs of the Senate.
SEC. 302. IMPLEMENTATION; PENALTIES; JUDICIAL REVIEW; EXEMPTIONS.
(a) In General.--Title I of the Hizballah International Financing
Prevention Act of 2015 (Public Law 114-102; 50 U.S.C. 1701 note), as
amended by sections 103 and 105 of this Act, is further amended by
adding at the end the following:
``SEC. 105. IMPLEMENTATION; PENALTIES; JUDICIAL REVIEW; EXEMPTIONS;
RULE OF CONSTRUCTION.
``(a) Implementation.--The President may exercise all authorities
provided under sections 203 and 205 of the International Emergency
Economic Powers Act (50 U.S.C. 1702 and 1704) to carry out sections 101
and 103.
``(b) Penalties.--The penalties provided for in subsections (b) and
(c) of section 206 of the International Emergency Economic Powers Act
(50 U.S.C. 1705) shall apply to a person that violates, attempts to
violate, conspires to violate, or causes a violation of regulations
prescribed to carry out section 101 or 103 to the same extent that such
penalties apply to a person that commits an unlawful act described in
subsection (a) of such section 206.
``(c) Procedures for Judicial Review of Classified Information.--
``(1) In general.--If a finding, or a prohibition, condition,
or penalty imposed as a result of any such finding, is based on
classified information (as defined in section 1(a) of the
Classified Information Procedures Act (18 U.S.C. App.)) and a
court reviews the finding or the imposition of the prohibition,
condition, or penalty, the President may submit such
information to the court ex parte and in camera.
``(2) Rule of construction.--Nothing in this subsection shall
be construed to confer or imply any right to judicial review of
any finding under section 101 or 103 or any prohibition,
condition, or penalty imposed as a result of any such finding.
``(d) Exemptions.--The following activities shall be exempt from
sections 101 and 103:
``(1) Any authorized intelligence, law enforcement, or
national security activities of the United States.
``(2) Any transaction necessary to comply with United States
obligations under the Agreement between the United Nations and
the United States of America regarding the Headquarters of the
United States, signed at Lake Success June 26, 1947, and
entered into force November 21, 1947, or under the Convention
on Consular Relations, done at Vienna April 24, 1963, and
entered into force March 19, 1967, or any other United States
international agreement.
``(e) Rule of Construction.--Nothing in section 101 or 103 shall be
construed to limit the authority of the President under the
International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) or
under any other provision of law.''.
(b) Clerical Amendment.--The table of contents for the Hizballah
International Financing Prevention Act of 2015 is amended by inserting
after the item relating to section 104, as added by section 105(c) of
this Act, the following new item:
``Sec. 105. Implementation; penalties; judicial review; exemptions;
rule of construction.''.
Summary and Purpose
Hizballah has been designated a Foreign Terrorist
Organization by the U.S. Department of State since 1997.
Hizballah is responsible for some of the deadliest attacks
against American citizens and, as former Secretary of Defense
Robert Gates observed, possesses ``far more rockets and
missiles than most governments in the world.'' While Hizballah
has been sanctioned under the Hizballah International Financing
Prevention Act of 2015 and designated pursuant to multiple
executive orders and provisions of law, this legislation
specifically expands efforts to target the organization's
international financial and logistics networks, including its
efforts to raise funds utilizing illicit means. These support
networks not only provide funding and logistics for the
terrorist group, but also a platform to conduct terrorist
attacks. The intent of this legislation is to continue to
increase the aggregate risk associated with knowingly aiding
Hizballah's international operations.
This bipartisan legislation will broaden sanctions against
Hizballah's fundraising and recruitment efforts; agencies and
instrumentalities of foreign states that provide arms and
related material to Hizballah; and imposes sanctions on
Hizballah for its involvement in transnational organized crime,
including narcotics trafficking. It also contains robust
reporting requirements that will focus the administration's
information gathering on Hizballah's global logistics and
financial network. In doing so, it provides a comprehensive
framework for addressing Hizballah's support network and
fulfills the objective of the legislation, which is to prevent
Hizballah's global logistics and financial network from
operating in order to curtail the funding of its international
activities.
Background and Need for Legislation
In recent years, the U.S. has taken multiple financial
steps to counter the ability of Hizballah, a terrorist
organization with reputedly sophisticated financial expertise.
Nonetheless, Hizballah has been able to exploit the
international financial system and move and store illicit
assets. Hizballah criminal enterprises--some formal, some
informal--span the globe. From narcotics to international used
car sales, and from money laundering to procurement front
companies, U.S. law enforcement now sees multiple cases where
the Hizballah-affiliated criminal operators are themselves
acting as ``super-facilitators'' for a wide range of crimes and
clients. With the Treasury Department's designation of Lebanese
Canadian Bank SAL in February 2011 as a financial institution
of primary money laundering concern, Hizballah's role in Latin
American cocaine trafficking (and the laundering of such
illicit proceeds through informal value transfer mechanisms),
trade-based money laundering schemes that span the globe, and
the exploitation of Lebanese exchange houses were publicly
revealed.
Since 2011, pressure on the group has persisted through
targeted financial sanctions, law enforcement investigations,
and judicial prosecutions. On December 18, 2015, the 114th
Congress enacted the Hizballah International Financing
Prevention Act of 2015 (P.L. 114-102), which requires enhanced
restrictions on foreign financial institutions that facilitate
financial transactions and services for Hizballah. Adding
pressure, the European Union partially designated Hizballah a
terrorist organization in 2013 and the Gulf Cooperation Council
and the Arab League designated Hizballah a terrorist
organization in March 2016.
And yet, Hizballah continues to threaten stability in
Lebanon, Syria, throughout the Middle East region, and beyond.
Hizballah continues to use its media appendages for propaganda,
organizing, recruitment, and fundraising purposes by operating
its own television channel, Al-Manar, radio station, Radio Al-
Nour, and a media company, the Lebanese Media Group. Each of
these were designated as terrorist entities by the U.S.
Treasury Department in 2006. Additionally, Hizballah's refining
of its online recruitment and fundraising tools require a
response from Congress.
The Iran-Hizballah Relationship
The 2016 State Department Country Reports on Terrorism
states that Iran ``continued its terrorist-related activity in
2016, including support for Hizballah. Iran used the Islamic
Revolutionary Guard Corps-Qods Force (IRGC-QF) to implement
foreign policy goals, provide cover for intelligence
operations, and create instability in the Middle East. Iran has
acknowledged the involvement of the IRGC-QF in the conflicts in
Iraq and Syria and the IRGC-QF is Iran's primary mechanism for
cultivating and supporting terrorists abroad.'' Iran's support
for Hizballah is a centerpiece of this effort.
Hizballah acts in support of its own interests as well as
those of Iran, including through acts of terrorism and other
armed action. The relationship began when Lebanese Shi'a
clerics of the pro-Iranian Lebanese Da'wa (Islamic Call) Party
began to organize, following the Israeli occupation of Lebanon,
into what later was unveiled in 1985 as Hizballah. Iran sent
IRGC forces to Lebanon to help develop the group's military
capabilities, and these IRGC forces subsequently evolved into
the IRGC-QF. The most recent State Department report on
international terrorism says that Hizballah continues to be
``capable of operating around the globe.'' The report adds that
Iran has provided Hizballah with ``hundreds of millions of
dollars'' and has ``trained thousands of [Hizballah] fighters
at camps in Iran.'' It is clear that Iran's support for
Hizballah has helped the organization become a major force in
Lebanon's politics and allowed the group to assert a de facto
veto over Lebanese political developments.
Iranian leaders have long worked with Hizballah to pressure
and threaten Israel. Hizballah's attacks on Israeli forces in
its self-declared ``security zone'' in southern Lebanon
contributed to an Israeli withdrawal from that territory in May
2000. Hizballah fired Iranian-supplied rockets on Israel's
northern towns and cities during a July-August 2006 war with
Israel, and in July 2006 Hizballah damaged an Israeli warship
with an Iran-supplied C-802 sea-skimming missile. Since that
conflict, Iran has resupplied Hizballah with, according to some
sources, over 100,000 rockets and missiles, some capable of
reaching nearly all areas in Israel from south Lebanon, as well
as upgraded artillery, anti-ship, anti-tank, and anti-aircraft
capabilities. In addition, Iran bought significant quantities
of C-802s from China in the 1990s.
Iran has directed and facilitated Hizballah's involvement
in the Syrian conflict on behalf of the Assad regime, whose
continuation in power is in the interests of both Iran and
Hizballah. Syria is the key conduit through which the IRGC-QF
arms and assists Hizballah. Throughout Syria's internal
conflict, Israel has carried out occasional air strikes inside
Syria against Iranian arms shipments to Hizballah. In January
2015, Hizballah attacked an Israeli military convoy near the
Lebanon-Israel-Syria tri-border area, killing two Israeli
soldiers, but the incident did not escalate. On February 3,
2017, under Executive Order 13224, the United States imposed
sanctions on eight IRGC-QF and allied individuals for providing
funds to Hizballah and related activities. One of the
designated individuals was accused of procuring aviation spare
parts for the IRGC-QF.
The committee has strong concerns about the role that Iran
and Hizballah could potentially play in a post-ISIS Syria. The
United States, Russia, and Jordan negotiated a de-escalation
zone in Southern Syria, which has the potential to create a
safe haven for Hizballah and Iranian actors, thereby
exacerbating existing tensions and creating a corridor from
Tehran to the Mediterranean through Iraq, Syria, and Lebanon.
Additionally, the committee is concerned regarding Iranian
efforts to move high-tech materiel to Hizballah in Lebanon,
including the reported establishment of production facilities
in Lebanon and Syria for Hizballah of sophisticated missiles.
U.N. Security Council Resolution (UNSCR) 1701 on Lebanon,
adopted in 2006, requires member states to prevent the export
of unauthorized arms to Lebanon from or through their
territories and authorizes the United Nations Interim Force in
Lebanon (UNIFIL) to assist the Lebanese Government in securing
its borders at the Lebanese Government's request. The United
States and others have provided assistance to the LAF as well
as to Lebanon's Internal Security Forces (ISF), designed in
part to improve their capability to enforce arms provisions of
UNSCR 1701. In September of this year, the UNIFIL mandate was
expanded to allow UNIFIL to take all necessary action to stop
its area of operations from being used for hostile activities
and calls on UNIFIL to establish a more visible presence,
stepping up its patrols and inspections to disrupt Hizballah's
illicit activities.
Thus, there is a need for the United States to expand and
promote the enforcement of UNSCR 1701, with respect to halting
the flow of illegal weapons into Lebanon by Hizballah and Iran,
in particular.
Hizballah's Global Activities and Financing
Middle East
Hizballah is based in Lebanon and also has operated
extensively in Syria since at least 2013. In Lebanon, the group
functions as both an armed militia and a domestic political
party. Since its emergence in the 1980s, Hizballah has clashed
with Israeli forces in Lebanon--and has continued to target
Israeli forces following the latter's withdrawal from Lebanon
in 2000. Hizballah's last major clash with Israel occurred in
2006 and highlighted Hizballah's capacity to launch thousands
of rockets into Israel. Since then, Israeli officials have
sought to draw attention to Hizballah's weapons buildup--
including reported upgrades to the range and precision of its
projectiles--and its alleged use of Lebanese civilian areas as
strongholds. Most recently, reports that Iran and Hizballah
have established production lines of sophisticated missiles in
southern Lebanon and Syria highlight the need for additional
legislation.
Hizballah is also a prominent political force in Lebanon.
As a member of the March 8 political coalition, it is allied
with Christian political parties such as that of Lebanese
President Michel Aoun. Hizballah has participated in elections
since 1992 and currently holds two cabinet posts. It has also
fared well in municipal elections, winning seats in conjunction
with allied Shi'a Amal party representatives in many areas of
southern and eastern Lebanon. Hizballah operates a vast network
of schools, clinics, youth programs, private businesses, and
provides local security--leading some to describe the group as
``a state within a state.'' Hizballah leader Hassan Nasrallah
has stated that the group receives its funding from Iran and
that this funding has not been disrupted by recent U.S.
legislation.
Hizballah personnel have played significant roles in
battles inside Syria, including in the Syrian military campaign
that eventually recaptured the city of Aleppo from opposition
control in late 2016. In addition to conducting military
operations, Hizballah trains Syrian paramilitary forces, known
as National Defense Forces (NDF), to improve their capacity to
hold cleared terrain. Hizballah reportedly maintains between
4,000 and 8,000 fighters in Syria, although it has reportedly
lost over a thousand fighters in Syria to date, including
several senior leaders.
Hizballah reportedly maintains a limited presence in Yemen,
and Yemen's Government has accused Hizballah of training Houthi
rebels and in some cases fighting alongside them. In 2013, the
U.S. Department of the Treasury imposed sanctions on Hizballah
member Khalil Harb, who it described as responsible for
Hizballah's activities in Yemen. According to the designation,
``Since the summer of 2012, Harb has been involved in the
movement of large amounts of currency to Yemen through Saudi
Arabia and the UAE, and in late 2012, Harb advised the leader
of a Yemeni political party that the party's monthly Hizballah
funding of $50,000 was ready for pick up.'' The United States
and Saudi Arabia jointly imposed sanctions on Hashem
Safieddine, a key member of Hizballah's executive council,
which oversees their group's political, organizational, social
and educational activities. It was the first time that the U.S.
and Saudi Arabia coordinated such an action. However, more
action is necessary.
Africa
Although Hizballah does not appear to have carried out
armed activities in Africa, the State Department says that it
receives ``financial support from Lebanese Shia communities''
on the continent, among other locations. The laundered proceeds
of certain organized crime activities in West Africa, which is
home to sizable Lebanese diaspora populations, are a reported
financing source. Notably, under Executive Order 13224 in 2009,
the U.S. Treasury Department designated two alleged West
Africa-based Hizballah supporters for targeted financial
sanctions including Kassim Tajideen, a dual Lebanese-Belgian
citizen who settled in Sierra Leone in the 1970s and later
moved to Cote d'Ivoire. He is described as ``an important
financial contributor to Hizballah who operates a network of
businesses in Lebanon and Africa.'' Lebanese national Abd al
Menhem Qubaysi is described as ``a Cote d'Ivoire-based
Hizballah supporter and . . . the personal representative of
Hizballah Secretary General Hassan Nasrallah.'' Treasury also
identified Qubaysi as helping to ``recruit new members for
Hizballah's military ranks in Lebanon'' through a Cote
d'Ivoire-based foundation. Treasury further designated two
brothers and business partners of Tajideen in 2010, one of whom
was described as ``a primary Hizballah fundraiser and prominent
Hizballah supporter in The Gambia.'' In March 2017, Moroccan
authorities arrested Tajideen while he was transiting through
Morocco en route to Lebanon from Guinea. He was extradited to
the United States, where he has pled not guilty to conspiracy,
fraud, and money laundering.
In 2013, in designating two Lebanon-based financial
institutions as being ``of primary money-laundering concern,''
U.S. Treasury and Drug Enforcement Agency (DEA) officials
described a ``drug-money-laundering network'' in which the
proceeds of drug trafficking from South America through West
Africa to Europe were allegedly being laundered ``for the
benefit of Hizballah.'' Reports of Hizballah links in the
region emerge periodically--in 2013, for example, Nigerian
authorities arrested three Lebanese on suspicion of being
members of the group, reportedly uncovering a stash of heavy
weapons in one of their residences. The trio was later
acquitted of charges that they were plotting attacks against
Western and Israeli targets inside Nigeria, although one was
found guilty on weapons charges.
Iran has reportedly smuggled arms to both Hamas and
Hizballah through East Africa. Sudan, until recently, was
widely viewed as a significant transit country for Iranian
smuggling to the groups, but it reportedly ceased cooperation
with the trafficking in 2014, according to U.S. and Israeli
officials.
Western Hemisphere
U.S. policymakers have had concerns since the 1990s about
the activities of Hizballah and Iran in Latin America. Both
groups carried out two bombings in Buenos Aires--the 1992
bombing of the Israeli Embassy in Buenos Aires that killed 29
people and the 1994 bombing of the Argentine-Israeli Mutual
Association (AMIA) that killed 85 people. The State Department
asserted in its June 2016 Country Reports on Terrorism that
Hizballah ``continued to maintain a presence in the region,
with members, facilitators, and supporters engaging in activity
in support of the organization,'' including efforts to build
the organization's ``infrastructure in South America and
fundraising, both through licit and illicit means.''
This characterization was reiterated in April 2017 by
Admiral Kurt Tidd, Commander of the U.S. Southern Command
(SOUTHCOM), in presenting the command's 2017 posture statement
to Congress. According to Admiral Tidd, ``Hizballah members,
facilitators, and supporters engage in licit and illicit
activities in support of the organization, moving weapons,
cash, and other contraband to raise funds and build Hizballah's
infrastructure in the region.'' Other contraband includes the
trafficking of illicit drugs. Because of Hizballah's role in
the two bombings in Argentina in the 1990s, Admiral Tidd
maintained that Hizballah is probably the most dangerous
terrorist group in the region.
The State Department's terrorism report noted Hizballah
fundraising activities in the tri-border area (TBA) of
Argentina, Brazil, and Paraguay and the presence of Hizballah
supporters and sympathizers in Venezuela. The TBA has long been
used for arms and drug trafficking, contraband smuggling,
document and currency fraud, money laundering, and the
manufacture and movement of pirated goods.
The Treasury Department has imposed sanctions (utilizing
anti-terrorism and anti-drug sanctions programs) on numerous
individuals and companies in Latin America over the years for
providing support to Hizballah. These have included sanctions
against individuals and entities in the TBA countries of
Argentina, Brazil, and Paraguay as well as in Colombia, Panama,
and Venezuela. In February 2016, the DEA announced enforcement
actions against a Hizballah network reported to be working with
South American drug cartels responsible for supplying large
amounts of cocaine to U.S. and European markets. A DEA
operation in October 2016 reportedly uncovered a money
laundering ring linked to Colombian drug traffickers and
alleged Hizballah associates.
For more than a decade, U.S. policymakers have had concerns
about the Venezuelan Government's permissive environment that
has allowed for activities benefiting known terrorist groups,
including Hizballah. In February 2017, a bipartisan group of
Members of Congress wrote a letter to President Trump
expressing several concerns about current Venezuelan Vice
President Tareck El Aissami, including that he may have
provided support for Hizballah. Later that month, the Treasury
Department imposed financial sanctions on El Aissami and an
associate for playing a significant role in drug trafficking
associated with Colombian, Mexican, and Venezuelan drug
traffickers, although not with Hizballah.
Europe
Terrorism experts assert that Hizballah has been active in
Europe for decades. In the 1980s and 1990s, Hizballah
operatives carried out bombings in France and Spain as well as
assassinations in Germany and Italy. Hizballah has sought to
recruit members in Europe and has used Europe as a launching
pad for operatives seeking to infiltrate Israel. In 1997, for
example, a German convert to Islam was recruited and trained by
Hizballah and sent to Israel (using his own German passport) to
conduct surveillance on prospective targets for attack.
According to the Bulgarian Interior Ministry, Hizballah was
responsible for the July 2012 bombing at the airport in Burgas,
Bulgaria that killed five Israeli tourists and their Bulgarian
bus driver. The group may have been planning similar attacks
against Israeli tourists in Cyprus. In separate cases in 2013
and 2015, two individuals were convicted in Cypriot courts of
being Hizballah operatives. Both admitted that Hizballah was
intending to mount attacks in Cyprus targeting Israeli or
Jewish interests. In the 2015 case, one of the Hizballah
operatives was found to be stockpiling tons of ammonium nitrate
fertilizer, a potential explosive. Israeli investigators
reportedly believe that Hizballah may have been using Cyprus as
a ``point of export'' from which to funnel explosives to other
European countries.
Analysts also contend that Hizballah has used Europe as a
primary base for fundraising and financial services for years,
and has developed an extensive web of fundraising and
logistical support cells in several European countries. In
2014, for example, Germany shut down the Orphan Children
Project Lebanon for being a Hizballah fundraising front
organization. Europe is also considered to be a transit point
for Hizballah money derived from drug trafficking and money
laundering, and concerns appear to be growing about alleged
Hizballah weapons and technology procurement operations in
Europe. In 2014, the U.S. Treasury Department imposed sanctions
on a Lebanese consumer electronic business for functioning as a
``key Hizballah procurement network,'' suspected of purchasing
technology and equipment from companies in Europe and elsewhere
to develop drones for Hizballah to use over Israel and Syria.
In February 2016, the U.S. Drug Enforcement Authority arrested
several members of Hizballah, including the reported leaders of
Hizballah's European operations, on charges related to using
millions of dollars from the sale of cocaine in the U.S. and
Europe to purchase weapons in Syria.
In July 2013, the European Union (EU) added Hizballah's
military wing to its so-called ``common terrorist list,''
thereby requiring all EU member states to freeze the group's
assets and ensure that financial resources are not made
available (within EU jurisdiction). The designation also
requires EU member states to provide law enforcement assistance
to each other in related police investigations and legal
proceedings. The EU had been under considerable pressure for
years (from the United States, Israel, and some EU member
states) to include the whole Hizballah organization on its
common terrorist list, but previously, EU consensus had proved
elusive. There are concerns that the EU has not actually used
the legal authority of the Hizballah ban to go after the group
in a meaningful way.
Southeast Asia
Hizballah activities in Southeast Asia during the 2010s
appear to continue but to be few in number. In January 2012,
Thai police arrested Hussein Atris, a Lebanese Hizballah
member, who was suspected of being involved in preparations for
a terrorist attack on a tourist site in Bangkok. Some analysts
surmised, however, that bomb-making materials found at a site
rented by Atris indicated that Bangkok is more of a center for
Hizballah smuggling and planning rather than a target for
attacks. No completed bombs or weapons were found at the site.
Hizballah International Financing Prevention Act of 2015
In December 2015, the 114th Congress enacted a sanctions
bill targeting parties that facilitate financial transactions
for Hizballah's benefit (H.R. 2297, P.L. 114-102). The
Hizballah International Financing Prevention Act of 2015
requires, inter alia, that the President prohibit or impose
strict conditions on the opening or maintaining in the United
States of a correspondent account or a payable-through account
by a foreign financial institution that knowingly: Facilitates
a transaction or transactions for Hizballah; facilitates a
significant transaction or transactions of a person on
specified lists of specially designated nationals and blocked
persons, property, and property interests for acting on behalf
of or at the direction of, or being owned or controlled by,
Hizballah; engages in money laundering to carry out such an
activity; or facilitates a significant transaction or provides
significant financial services to carry out such an activity.
The President, however, is authorized to waive the application
of sanctions if he finds it in the national security interests
of the United States to do so.
In addition to substantial Iranian support, Hizballah has
for decades helped fund its terrorist and social service
initiatives through a diverse portfolio of commercial
activities. On May 3, 2016, the Banque du Liban (BdL),
Lebanon's central bank--in compliance with new U.S.
legislation--issued a circular ordering banks to close accounts
belonging to individuals and institutions associated with the
organization. Hundreds of such Hizballah-linked accounts have
since been closed, according to BdL, threatening the militia's
social support network and commercial interests. It is widely
believed that in response to these financial pressures,
Hizballah detonated a bomb on June 12, 2016, outside the
headquarters of Blom Bank in central Beirut, injuring two and
substantially damaging the bank's offices. BdL's circular,
issued May 3, builds on Basic Circular 126 of 2012, which
called on Lebanese financial institutions to ``deal with
[foreign correspondents] in conformity with the laws,
regulations, procedures, sanctions and restrictions adopted . .
. by the sovereign authorities in the correspondents' home
countries.'' Beyond reminding banks of Basic Circular 126, the
May 3 circular mandates that banks report account closures to
the Special Investigation Commission, or SIC, Lebanon's
Financial Intelligence Unit. The May 3 circular itself does not
indicate that banks need BdL approval to close accounts.
While the U.S. regulations present a fairly high bar for
action against foreign banks, press reporting and anecdotal
accounts claim that Lebanese banks were closing scores of
accounts for undesignated individuals, including Hizballah-
affiliated hospitals, members of parliament, and even family
members. Western banks have adopted no-tolerance policies with
regard to foreign correspondents in the wake of large
sanctions-related enforcement actions in recent years.
Hearings
During the present Congress, the committee has continued
its active oversight regarding Hizballah, including multiple
hearings related to the content of H.R. 3329, such as:
October 11, 2017, Subcommittee on the Middle East and
North Africa hearing, ``U.S. Policy Toward Lebanon''
(Mr. Michael Ratney, Deputy Assistant Secretary, Bureau
of Near Eastern Affairs, U.S. Department of State; Ms.
Jeanne Pryor, Acting Deputy Assistant Administrator,
Bureau for the Middle East, U.S. Agency for
International Development).
October 4, 2017, Subcommittee on Terrorism,
Nonproliferation, and Trade hearing, ``Iranian Backed
Militias: Destabilizing the Middle East'' (Michael
Knights, Ph.D., Lafer Fellow, The Washington Institute
for Near East Policy; Mr. Aram Nerguizian, Senior
Associate, Burke Chair in Strategy, Center for
Strategic and International Studies; Kenneth Pollack,
Ph.D., Resident Scholar, American Enterprise Institute;
Ms. Melissa Dalton, Senior Fellow and Deputy Director,
International Security Program, Center for Strategic
and International Studies).
June 8, 2017, full committee hearing, ``Attacking
Hezbollah's Financial Network: Policy Options''
(Matthew Levitt, Ph.D., Director and Fromer-Wexler
Fellow, Stein Program on Counterterrorism and
Intelligence, The Washington Institute for Near East
Policy; David Asher, Ph.D., Member, Board of Directors,
Center on Sanctions and Illicit Finance, Foundation for
Defense of Democracies; Mr. Derek Maltz, Executive
Director, Governmental Relations, Pen-Link, Ltd; Mara
Karlin, Ph.D., Associate Professor of Practice and
Associate Director of Strategic Studies, School for
Advanced International Studies, Johns Hopkins
University).
May 24, 2017, Subcommittee on Terrorism,
Nonproliferation, and Trade hearing, ``Nuclear Deal
Fallout: The Global Threat of Iran'' (Mr. Ilan Berman,
Senior Vice President, American Foreign Policy Council;
Ray Takeyh, Ph.D., Hasib J. Sabbagh Senior Fellow for
Middle East Studies, Council on Foreign Relations;
Daniel L. Byman, Ph.D., Senior Fellow, Center for
Middle East Policy, Brookings Institution).
March 29, 2017, Subcommittee on the Middle East and
North Africa hearing, ``Testing the Limits: Iran's
Ballistic Missile Program, Sanctions, and the Islamic
Revolutionary Guard Corps'' (Kenneth Katzman, Ph.D.,
Specialist in Middle Eastern Affairs, Congressional
Research Service; Mr. Michael Eisenstadt, Kahn Fellow,
Director of Military and Security Studies Program, The
Washington Institute for Near East Policy; Ms.
Elizabeth Rosenberg, Senior Fellow and Director,
Energy, Economics and Security Program, Center for a
New American Security).
February 16, 2017, full committee hearing, ``Iran on
Notice'' (Mr. Scott Modell, Managing Director, The
Rapidan Group; Ms. Katherine Bauer, Blumenstein-Katz
Family Fellow, The Washington Institute for Near East
Policy; Mr. David Albright, Founder and President,
Institute for Science and International Security;
Andrew Exum, Ph.D., Contributing Editor, The Atlantic).
Committee Consideration
On September 28, 2017, the Committee on Foreign Affairs
marked up H.R. 3329 in open session, pursuant to notice. An
amendment in the nature of a substitute (offered by Chairman
Royce) and five amendments to that amendment in the nature of a
substitute (offered, respectively, by Mr. Boyle, Mr. Cicilline,
Mr. Duncan, Ms. Ros-Lehtinen, and Mr. Schneider) were
considered en bloc with the underlying bill, and were agreed to
by voice vote.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of rules of
the House of Representatives, the committee reports that
findings and recommendations of the committee, based on
oversight activities under clause 2(b)(1) of House Rule X, are
incorporated in the descriptive portions of this report,
particularly in the ``Background and Purpose of Legislation''
and ``Section-by-Section Analysis'' sections.
New Budget Authority, Tax Expenditures, and Federal Mandates
In compliance with clause 3(c)(2) of House Rule XIII and
the Unfunded Mandates Reform Act (P.L. 104-4), the committee
adopts as its own the estimate of new budget authority,
entitlement authority, tax expenditure or revenues, and Federal
mandates contained in the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974.
Congressional Budget Office Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 19, 2017.
Hon. Edward R. Royce, Chairman,
Committee on Foreign Affairs,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3329, the
Hizballah International Financing Prevention Amendments Act of
2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Jacob Fabian,
who can be reached at 226-2860.
Sincerely,
Keith Hall.
Enclosure
cc:
Honorable Eliot L. Engel
Ranking Member
H.R. 3329--Hizballah International Financing Prevention Amendments Act
of 2017.
As ordered reported by the House Committee on Foreign
Affairs on September 28, 2017.
H.R. 3329 would expand federal sanctions and reporting
requirements related to illicit interactions with Hizballah, a
foreign terrorist organization based in Lebanon. It would
direct the President to identify and impose sanctions on
foreign people and entities engaged in fundraising and
recruitment activities for Hizballah. The bill also would
require the President to apply the sanctions in Executive Order
13581 to affiliated networks of Hizballah. That executive order
blocked the U.S. held assets of certain criminal organizations
from being transferred, paid, exported, or withdrawn. Finally,
federal agencies would be required to develop policies and
prepare multiple reports related to Hizballah, including
reports on certain diplomatic matters as well as on illicit
transactions with foreign financial institutions, cooperation
with foreign governments, racketeering, and trafficking in
tobacco.
Based on an analysis of information from the Administration
and the costs of similar activities, CBO estimates that
administering the sanctions and implementing the reporting
requirements would cost about $1 million over the 2018-2022
period, subject to the availability of appropriated funds.
Enacting H.R. 3329 would increase the number of people and
entities that would be subject to civil or criminal penalties
and the number of people who would be denied visas by the
Department of State. Penalties are recorded in the budget as
revenues and a portion of those penalties can be spent without
further appropriation. Most visa fees are retained by the
Department of State and spent without further appropriation,
but some fees are deposited in the Treasury as revenues. Pay-
as-you-go procedures apply to this legislation because enacting
it would affect direct spending and revenues. However, CBO
estimates that implementing those sanctions would affect very
few additional people or entities and thus have insignificant
effects on both revenues and direct spending because of the
broad scope of restrictions in existing law and regulation that
address illicit activities involving Hizballah.
CBO estimates that enacting H.R. 3329 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2028.
H.R. 3329 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA).
If the sanctions imposed by the President under the bill
prevent U.S. entities from gaining access to property or from
engaging in transactions that would otherwise be permitted
under current law, the bill would impose a private-sector
mandate as defined in UMRA. The cost of the mandate would be
any forgone income directly related to the newly prohibited
transactions or blocked property. Because of the broad scope of
existing U.S. sanctions involving Hizballah, CBO expects the
number of entities and individuals in the United States that
could be affected by the legislation would be small. Further,
CBO expects that the loss of income from any restrictions in
the bill would be relatively low. Therefore, CBO estimates that
the aggregate cost of the mandates would fall below the annual
threshold established in UMRA for private-sector mandates ($156
million in 2017, adjusted annually for inflation).
The CBO staff contacts for this estimate are Jacob Fabian
(for federal costs) and Logan Smith (for private-sector
mandates). The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
Directed Rule Making
Pursuant to clause 3(c) of House Rule XIII, as modified by
section 3(i) of H. Res. 5 during the 115th Congress, the
committee notes that H.R. 3329 contains no directed rule-making
provisions.
Non-Duplication of Federal Programs
Pursuant to clause 3(c)(5) of House Rule XIII, the
committee states that no provision of this bill establishes or
reauthorizes a program of the Federal Government known to be
duplicative of another Federal program, a program that was
included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance.
Performance Goals and Objectives
The objective of this legislation is to broaden financial
sector sanctions against Hizballah, force other critical
designations regarding that terrorist organization, and target
its media appendages, which aid in Hizballah's financing and
logistics networks. The overriding goal is to prevent
Hizballah's global logistics and financial network from
operating, in order to curtail the funding of its international
activities. Performance goals associated with these objectives
include, but are not limited to, the following:
LA verifiable decrease in Hizballah's ability
to fundraise or otherwise transfer funds through
foreign financial institutions, or businesses operating
as financial institutions.
LA verifiable decrease in Hizballah's ability
to carry out operations against targets
internationally.
LAn increase in U.S. Government and allied
action taken against Hizballah's illicit networks.
Congressional Accountability Act
H.R. 3329 does not apply to terms and conditions of
employment or to access to public services or accommodations
within the legislative branch.
New Advisory Committees
H.R. 3329 does not establish or authorize any new advisory
committees.
Earmark Identification
H.R. 3329 contains no congressional earmarks, limited tax
benefits, or limited tariff benefits as described in clauses
9(e), 9(f), and 9(g) of House Rule XXI.
Section-by-Section Analysis
Section 1. Short Title and Table of Contents. States that
the bill may be cited as the ``Hizballah International
Financing Prevention Amendments Act of 2017'' and divides the
bill into three corresponding titles.
TITLE I--PREVENTION OF ACCESS BY HIZBALLAH TO INTERNATIONAL FINANCIAL
AND OTHER INSTITUTIONS
Section 101. Mandatory Sanctions with Respect to
Fundraising and Recruitment Activities for Hizballah. Targets
Hizballah's grassroots outreach by imposing mandatory, third-
party sanctions in the form of property blocking and visa
denials against anyone that provides significant financial,
material, or technological support for Hizballah's fundraising
and recruitment efforts. In response to existing U.S.
sanctions, including the underlying Hizballah International
Financing Prevention Act, Hizballah has increased grassroots
fundraising efforts in an effort to make its revenue streams
more resistant to U.S. pressure. For example, Hizballah
launched an online crowdsourcing campaign entitled ``Equip a
Mujahid,'' which called for donations, large or small, payable
all at once or in installments, to equip Hizballah fighters.
Section 102. Modification of Report with Respect to
Financial Institutions that Engage in Certain Transactions.
Requires the President to provide additional reporting on the
role that banks and other financial institutions connected to
state-sponsors of terrorism play in supporting Hizballah. Also
calls for sanctions on financial institutions that serve
Lebanese Government officials affiliated with Hizballah.
Despite its increasing reliance on grassroots fundraising and
criminal activity, Hizballah still receives significant funding
from Iran and Syria, with payments often laundered through
banks and other financial institutions in those countries.
Section 103. Sanctions Against Foreign States that Support
Hizballah. Imposes sanctions against agencies of foreign
governments that provide Hizballah with financial support,
arms, or other assistance. Stiffer sanctions are imposed on
designated state-sponsors of terrorism--such as Iran and Syria.
Hizballah has received sophisticated military, training, and
financial assistance from Iran, Syria, and Russia.
Section 104. Prohibitions and Conditions with Respect to
Certain Accounts Held by Foreign Financial Institutions. Amends
existing law to sanction foreign financial institutions that
facilitate Iran and its Revolutionary Guards' (IRGC) support
for Hizballah. Iran and the IRGC remain a key source of
military and financial support for Hizballah, facilitating many
of the group's destabilizing activities.
Section 105. United States Strategy to Prevent Hostile
Activities by Iran and Disrupt and Degrade Hizballah's Illicit
Networks in the Western Hemisphere. This provision requires the
establishment of a regional strategy to push back against
Iranian influence in the Western Hemisphere. Additionally, this
provision highlights and recognizes the designation by the Gulf
Cooperation Council of Hizballah as a terrorist organization.
The U.S. should help amplify this designation by working
through the Terrorist Financing Targeting Center. It also calls
on the US to take additional measures with respect to the
Europeans and within the Organization of American States to
further designate Hizballah as a terrorist organization.
TITLE II--NARCOTICS TRAFFICKING AND SIGNIFICANT TRANSNATIONAL CRIMINAL
ACTIVITIES OF HIZBALLAH
Section 201. Blocking of Property of Hizballah. Identifies
Hizballah's networks as a transnational criminal organization,
and applies existing sanctions that block the property of
persons who are affiliated with or provide assistance to
Hizballah. Hizballah has turned to organized crime as an
important funding source, to include drug trafficking, selling
counterfeit currency and cigarettes, and money laundering via
the Lebanese banking system. In 2016, U.S. Government
investigations exposed Hizballah's efforts to move large
quantities of cocaine into the U.S. and Europe. The U.S. is
actively pursuing the group's various criminal funding
mechanisms. These efforts target the drug smuggling and money
laundering operations through which Hizballah obtains funds,
and features inter-agency cooperation to seize assets and
develop targeted sanctions. This provision is intended to
further aid those processes.
Section 202. Report on Racketeering Activities Engaged in
by Hizballah. Requires the Department of Justice and Drug
Enforcement Agency, in coordination with the Departments of the
Treasury and State, to prepare a report on Hizballah activities
that may be considered racketeering. This will provide greater
insight into how the U.S. can more effectively leverage law
enforcement tools to target Hizballah's international financial
networks. Hizballah's extensive criminal activities appear to
constitute racketeering, which would provide new avenues for
U.S. policy to counter Hizballah's financial networks.
Section 203. Modification of Report on Activities of
Foreign Governments to Disrupt Global Logistics Networks and
Fundraising, Financing, and Money Laundering Activities of
Hizballah. Expands reporting on Hizballah's fundraising
ventures, financial safe havens, income, assets, expenses,
operational capabilities, and efforts the administration is
pursuing to effectively dismantle Hizballah's financial
networks. Requires the President to submit a report on the
estimated net worth of Hizballah's senior leadership,
supporters, and associates, in addition to a determination as
to whether they should be sanctioned for their activities for
corruption. The committee believes that this may involve
certain elements within the March 8th Coalition, to include
individuals associated with Amal and the Free Patriotic
Movement who are key Hizballah supporters, among others. As
Hizballah's fundraising and logistics networks is diverse--to
include both support from state-sponsors of terror and criminal
activity--the United States, our allies, and partners must
adapt efforts to disrupt these destabilizing activities.
Additionally, this section includes language demonstrating a
need to fund and reinvigorate the multi-agency task force that
had considerable success tracking Hizballah networks in the
late 2000s.
Section 204. Report on Combating the Illicit Tobacco
Trafficking Networks Used by Hizballah and Other Foreign
Terrorist Organizations. Requires the President to prepare a
report on steps the United States is taking to combat the
illicit tobacco trafficking networks used by Hizballah, foreign
terrorist organizations, and other illicit actors.
TITLE III--GENERAL PROVISIONS
Section 301. Regulatory Authority. This section requires
the creation of the regulations necessary to implement this
act, and to brief Congress on these regulations.
Section 302. Implementation; Penalties; Judicial Review;
Exemptions; Rule of Construction. This section contains
administrative provisions related to the implementation and
penalties described in this act. U.S. intelligence, law
enforcement, and national security activities are exempt from
these penalties, as are transactions to complete U.S. treaty
obligations.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
HIZBALLAH INTERNATIONAL FINANCING PREVENTION ACT OF 2015
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Hizballah
International Financing Prevention Act of 2015''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Statement of policy.
TITLE I--PREVENTION OF ACCESS BY HIZBALLAH TO INTERNATIONAL FINANCIAL
AND OTHER INSTITUTIONS
[Sec. 101. Report on imposition of sanctions on certain satellite
providers that carry al-Manar TV.]
Sec. 101. Mandatory sanctions with respect to fundraising and
recruitment activities for Hizballah.
Sec. 102. Sanctions with respect to financial institutions that engage
in certain transactions.
Sec. 103. Sanctions against foreign states that support Hizballah.
Sec. 104. Diplomatic initiatives.
Sec. 105. Implementation; penalties; judicial review; exemptions; rule
of construction.
[TITLE II--REPORTS AND BRIEFINGS ON NARCOTICS TRAFFICKING AND
SIGNIFICANT TRANSNATIONAL CRIMINAL ACTIVITIES OF HIZBALLAH
TITLE II--IMPOSITION OF SANCTIONS WITH RESPECT TO AFFLIATED NETWORKS OF
HIZBALLAH AND REPORTS AND BRIEFINGS ON NARCOTICS TRAFFICKING AND
SIGNIFICANT TRANSNATIONAL CRIMINAL ACTIVITIES OF HIZBALLAH
[Sec. 201. Report and briefing on narcotics trafficking by Hizballah.]
Sec. 201. Imposition of sanctions with respect to affiliated networks of
Hizballah.
[Sec. 202. Report and briefing on significant transnational criminal
activities of Hizballah.]
Sec. 202. Report on racketeering activities engaged in by Hizballah.
* * * * * * *
TITLE I--PREVENTION OF ACCESS BY HIZBALLAH TO INTERNATIONAL FINANCIAL
AND OTHER INSTITUTIONS
[SEC. 101. REPORT ON IMPOSITION OF SANCTIONS ON CERTAIN SATELLITE
PROVIDERS THAT CARRY AL-MANAR TV.
[(a) In General.--Not later than 90 days after the date of
the enactment of this Act, the President shall submit to the
appropriate congressional committees and leadership a report on
the following:
[(1) The activities of all satellite, broadcast,
Internet, or other providers that have knowingly
entered into a contractual relationship with al-Manar
TV, and any affiliates or successors thereof.
[(2) With respect to all providers described in
paragraph (1)--
[(A) an identification of those providers
that have been sanctioned pursuant to Executive
Order 13224 (50 U.S.C. 1701 note; relating to
blocking property and prohibiting transactions
with persons who commit, threaten to commit, or
support terrorism); and
[(B) an identification of those providers
that have not been sanctioned pursuant to
Executive Order 13224 and, with respect to each
such provider, any information indicating that
the provider has knowingly entered into a
contractual relationship with al-Manar TV, and
any affiliates or successors of al-Manar TV.
[(b) Form of report.--The report required by subsection (a)
shall be submitted in unclassified form to the greatest extent
possible, but may include a classified annex.
[(c) Appropriate Congressional Committees and Leadership
Defined.--In this section, the term ``appropriate congressional
committees and leadership'' means--
[(1) the Speaker, the minority leader, the
Committee on Foreign Affairs, the Committee on
Financial Services, and the Permanent Select Committee
on Intelligence of the House of Representatives; and
[(2) the majority leader, the minority leader, the
Committee on Foreign Relations, the Committee on
Banking, Housing, and Urban Affairs, and the Select
Committee on Intelligence of the Senate.]
SEC. 101. MANDATORY SANCTIONS WITH RESPECT TO FUNDRAISING AND
RECRUITMENT ACTIVITIES FOR HIZBALLAH.
(a) In General.--The President shall, on or after the date
of the enactment of this section, impose the sanctions
described in subsection (b) with respect to any foreign person
that the President determines knowingly assists, sponsors, or,
provides significant financial, material, or technological
support for--
(1) Bayt al-Mal, Jihad al-Bina, the Islamic
Resistance Support Association, the Foreign Relations
Department of Hizballah, the External Security
Organization of Hizballah, or any successor or
affiliate thereof;
(2) al-Manar TV, al Nour Radio, or the Lebanese
Media Group, or any successor or affiliate thereof;
(3) a foreign person determined by the President to
be engaged in fundraising or recruitment activities for
Hizballah; or
(4) a foreign person owned or controlled by a
foreign person described in paragraph (1), (2), or (3).
(b) Sanctions Described.--
(1) In general.--The sanctions described in this
subsection are the following:
(A) Asset blocking.--The exercise of all
powers granted to the President by the
International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.) (except that the
requirements of section 202 of such Act (50
U.S.C. 1701) shall not apply) to the extent
necessary to block and prohibit all
transactions in all property and interests in
property of a foreign person determined by the
President to be subject to subsection (a) if
such property and interests in property are in
the United States, come within the United
States, or are or come within the possession or
control of a United States person.
(B) Aliens ineligible for visas, admission,
or parole.--
(i) Visas, admission, or parole.--
An alien who the President determines
is subject to subsection (a) is--
(I) inadmissible to the
United States;
(II) ineligible to receive
a visa or other documentation
to enter the United States; and
(III) otherwise ineligible
to be admitted or paroled into
the United States or to receive
any other benefit under the
Immigration and Nationality Act
(8 U.S.C. 1101 et seq.).
(ii) Current visas revoked.--
(I) In general.--The
issuing consular officer, the
Secretary of State, or the
Secretary of Homeland Security
shall revoke any visa or other
entry documentation issued to
an alien who the President
determines is subject to
subsection (a), regardless of
when issued.
(II) Effect of
revocation.--A revocation under
subclause (I) shall take effect
immediately and shall
automatically cancel any other
valid visa or entry
documentation that is in the
possession of the alien.
(2) Penalties.--The penalties provided for in
subsections (b) and (c) of section 206 of the
International Emergency Economic Powers Act (50 U.S.C.
1705) shall apply to a person that violates, attempts
to violate, conspires to violate, or causes a violation
of regulations prescribed under paragraph (1)(A) to the
same extent that such penalties apply to a person that
commits an unlawful act described in subsection (a) of
such section 206.
(c) Implementation.--The President may exercise all
authorities provided under sections 203 and 205 of the
International Emergency Economic Powers Act (50 U.S.C. 1702 and
1704) to carry out this section.
(d) Waiver.--
(1) In general.--The President may, for periods not
to exceed 180 days, waive the imposition of sanctions
under this section with respect to a foreign person or
foreign persons if the President certifies to the
appropriate congressional committees that such waiver
is in the national security interests of the United
States.
(2) Consultation.--
(A) Before waiver exercised.--Before a
waiver under paragraph (1) takes effect with
respect to a foreign person, the President
shall notify and brief the appropriate
congressional committees on the status of the
involvement of the foreign person in activities
described in subsection (a).
(B) After waiver exercised.--Not later than
90 days after the issuance of a waiver under
paragraph (1) with respect to a foreign person,
and every 120 days thereafter while the waiver
remains in effect, the President shall brief
the appropriate congressional committees on the
status of the involvement of the foreign person
in activities described in subsection (a).
(e) Report.--Not later than 90 days after the date of the
enactment of the Hizballah International Financing Prevention
Amendments Act of 2017, and every 180 days thereafter, the
President shall submit to the appropriate congressional
committees a report that lists the foreign persons that the
President has credible evidence knowingly assists, sponsors, or
provides significant financial, material, or technological
support for the foreign persons described in paragraph (1),
(2), (3), or (4) of subsection (a).
(f) Definitions.--In this section:
(1) Admitted; alien.--The terms ``admitted'' and
``alien'' have meanings given those terms in section
101 of the Immigration and Nationality Act (8 U.S.C.
1101).
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Affairs, the
Committee on Ways and Means, the Committee on
the Judiciary, and the Committee on Financial
Services of the House of Representatives; and
(B) the Committee on Foreign Relations, the
Committee on Banking, Housing, and Urban
Affairs, and the Committee on the Judiciary of
the Senate.
(3) Entity.--The term ``entity''--
(A) means a partnership, association,
corporation, or other organization, group, or
subgroup; and
(B) includes a governmental entity
(4) Fundraising or recruitment activities.--The
term ``fundraising or recruitment activities'' includes
online fundraising and other online commercial
activities, or other means of such fundraising,
recruitment, and retention, as determined by the
President.
(5) Hizballah.--The term ``Hizballah'' has the
meaning given such term in section 102(f).
(6) Person.--The term ``person'' means an
individual or entity.
(7) United states person.--The term ``United States
person'' means a United States citizen, permanent
resident alien, entity organized under the laws of the
United States (including foreign branches), or a person
in the United States.
SEC. 102. SANCTIONS WITH RESPECT TO FINANCIAL INSTITUTIONS THAT ENGAGE
IN CERTAIN TRANSACTIONS.
(a) Prohibitions and Conditions With Respect to Certain
Accounts Held by Foreign Financial Institutions.--
(1) In general.--Not later than 120 days after the
date of the enactment of this Act, the President shall
prescribe regulations to prohibit, or impose strict
conditions on, the opening or maintaining in the United
States of a correspondent account or a payable-through
account by a foreign financial institution that the
President determines, on or after such date of
enactment, engages in an activity described in
paragraph (2).
(2) Activities described.--A foreign financial
institution engages in an activity described in this
paragraph if the foreign financial institution--
(A) knowingly facilitates a significant
transaction or transactions for Hizballah;
(B) knowingly facilitates a significant
transaction or transactions of a person
identified on the list of specially designated
nationals and blocked persons maintained by the
Office of Foreign Assets Control of the
Department of the Treasury and the property and
interests in property of which are blocked
pursuant to the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.)
for acting on behalf of or at the direction of,
or being owned or controlled by, Hizballah;
(C) knowingly engages in money laundering
to carry out an activity described in
subparagraph (A) or (B); or
(D) knowingly facilitates a significant
transaction or transactions or provides
significant financial services to carry out an
activity described in subparagraph (A), (B), or
(C).
(3) Penalties.--The penalties provided for in
subsections (b) and (c) of section 206 of the
International Emergency Economic Powers Act (50 U.S.C.
1705) shall apply to a person that violates, attempts
to violate, conspires to violate, or causes a violation
of regulations prescribed under this subsection to the
same extent that such penalties apply to a person that
commits an unlawful act described in subsection (a) of
such section 206.
(4) Procedures for judicial review of classified
information.--
(A) In general.--If a finding under this
subsection, or a prohibition, condition, or
penalty imposed as a result of any such
finding, is based on classified information (as
defined in section 1(a) of the Classified
Information Procedures Act (18 U.S.C. App.))
and a court reviews the finding or the
imposition of the prohibition, condition, or
penalty, the President may submit such
information to the court ex parte and in
camera.
(B) Rule of construction.--Nothing in this
paragraph shall be construed to confer or imply
any right to judicial review of any finding
under this subsection or any prohibition,
condition, or penalty imposed as a result of
any such finding.
(b) Waiver.--
(1) In general.--The President may waive, on a
case-by-case basis, the application of a prohibition or
condition imposed with respect to a foreign financial
institution pursuant to subsection (a) for a period of
not more than 180 days, and may renew the waiver for
additional periods of not more than 180 days, on and
after the date on which the President--
(A) determines that such a waiver is in the
national security interests of the United
States; and
(B) submits to the appropriate
congressional committees a report describing
the reasons for such determination.
(2) Form.--The report required by paragraph (1)(B)
shall be submitted in unclassified form, but may
contain a classified annex.
(c) Special Rule To Allow for Termination of Sanctionable
Activity.--The President shall not be required to apply
sanctions to a foreign financial institution described in
subsection (a) if the President certifies in writing to the
appropriate congressional committees that--
(1) the foreign financial institution--
(A) is no longer engaging in the activity
described in subsection (a)(2); or
(B) has taken and is continuing to take
significant verifiable steps toward terminating
the activity described in that subsection; and
(2) the President has received reliable assurances
from the government with primary jurisdiction over the
foreign financial institution that the foreign
financial institution will not engage in any activity
described in subsection (a)(2) in the future.
[(d) Report on Foreign Central Banks.--
[(1) In general.--Not later than 90 days after the
date of the enactment of this Act, and every 180 days
thereafter, the Secretary of the Treasury shall submit
to the appropriate congressional committees a report
that--
[(A) identifies each foreign central bank
that the Secretary determines engages in one or
more activities described in subsection
(a)(2)(D); and
[(B) provides a detailed description of
each such activity.
[(2) Form of Report.--Each report required by
paragraph (1) shall be submitted in unclassified form,
but may include a classified annex.]
(d) Report on Financial Institutions Organized Under the
Laws of State Sponsors of Terrorism.--
(1) In general.--Not later than 90 days after the
date of the enactment of the Hizballah International
Financing Prevention Amendments Act of 2017, and
annually thereafter for a period not to exceed three
years, the President shall submit to the appropriate
congressional committees a report that--
(A) identifies each foreign financial
institution described in paragraph (2) that the
President determines engages in one or more
activities described in subsection (a)(2);
(B) provides a detailed description of each
such activity; and
(C) contains a determination with respect
to each such foreign financial institution that
is identified under subparagraph (A) as
engaging in one or more activities described in
subsection (a)(2) as to whether or not such
foreign financial institution is in violation
of Executive Order 13224 (50 U.S.C. 1701 note;
relating to blocking property and prohibiting
transactions with persons who commit, threaten
to commit, or support terrorism) or section
2339B of title 18, United States Code, by
reason of engaging in one or more such
activities.
(2) Foreign financial institution described.--
(A) In general.--A foreign financial
institution described in this paragraph is a
foreign financial institution--
(i) that, wherever located, is--
(I) organized under the
laws of a state sponsor of
terrorism or any jurisdiction
within a state sponsor of
terrorism;
(II) owned or controlled by
the government of a state
sponsor of terrorism;
(III) located in the
territory of a state sponsor of
terrorism; or
(IV) owned or controlled by
a foreign financial institution
described in subclause (I),
(II), or (III); and
(ii) the capitalization of which
exceeds $10,000,000.
(B) State sponsor of terrorism.--In this
paragraph, the term ``state sponsor of
terrorism'' means a country the government of
which the Secretary of State has determined is
a government that has repeatedly provided
support for acts of international terrorism for
purposes of--
(i) section 6(j) of the Export
Administration Act of 1979 (50 U.S.C.
4605(j)) (as continued in effect
pursuant to the International Emergency
Economic Powers Act (50 U.S.C. 1701 et
seq.));
(ii) section 620A of the Foreign
Assistance Act of 1961 (22 U.S.C.
2371);
(iii) section 40 of the Arms Export
Control Act (22 U.S.C. 2780); or
(iv) any other provision of law.
(e) Implementation.--The President may exercise all
authorities provided under sections 203 and 205 of the
International Emergency Economic Powers Act (50 U.S.C. 1702 and
1704) to carry out this section.
(f) Definitions.--
(1) In general.--In this section:
(A) Account; correspondent account;
payable-through account.--The terms
``account'', ``correspondent account'', and
``payable-through account'' have the meanings
given those terms in section 5318A of title 31,
United States Code.
(B) Appropriate congressional committees.--
The term ``appropriate congressional
committees'' means--
(i) the Committee on Foreign
Affairs and the Committee on Financial
Services of the House of
Representatives; and
(ii) the Committee on Foreign
Relations and the Committee on Banking,
Housing, and Urban Affairs of the
Senate.
(C) Financial institution.--The term
``financial institution'' means a financial
institution specified in subparagraph (A), (B),
(C), (D), (E), (F), (G), (H), (I), (J), (K),
(M), (N), (P), (R), (T), (Y), or (Z) of section
5312(a)(2) of title 31, United States Code.
(D) Foreign financial institution.--The
term ``foreign financial institution'' has the
meaning given that term in section 1010.605 of
title 31, Code of Federal Regulations.
(E) Hizballah.--The term ``Hizballah''
means--
(i) the entity known as Hizballah
and designated by the Secretary of
State as a foreign terrorist
organization pursuant to section 219 of
the Immigration and Nationality Act (8
U.S.C. 1189); or
(ii) any person--
(I)(aa) the property or
interests in property of which
are blocked pursuant to the
International Emergency
Economic Powers Act (50 U.S.C.
1701 et seq.); and
[(II)] (bb) who is
identified on the list of
specially designated nationals
and blocked persons maintained
by the Office of Foreign Assets
Control of the Department of
the Treasury as an agent,
instrumentality, or affiliate
[of Hizballah.] of Hizballah;
or
(II) who the President
determines is an agent or
affiliate of, or is owned or
controlled by Hizballah.
(F) Money laundering.--The term ``money
laundering'' includes the movement of illicit
cash or cash equivalent proceeds into, out of,
or through a country, or into, out of, or
through a financial institution.
(2) Other definitions.--The President may further
define the terms used in this section in the
regulations prescribed under this section.
SEC. 103. SANCTIONS AGAINST FOREIGN STATES THAT SUPPORT HIZBALLAH.
(a) Sanctions Against Certain Agencies and
Instrumentalities of Foreign States.--
(1) In general.--Not later than 90 days after the
date of the enactment of this section, and as
appropriate thereafter, the President shall impose the
sanctions described in paragraph (3) with respect to
any agency or instrumentality of a foreign state
described in paragraph (2).
(2) Agency or instrumentality described.--An agency
or instrumentality of a foreign state described in this
paragraph is an agency or instrumentality of a foreign
state that the President determines has, on or after
the date of the enactment of this section, knowingly--
(A) directly or indirectly conducted combat
operations with, or supported combat operations
of, Hizballah or an entity owned or controlled
by Hizballah; or
(B) directly or indirectly provided
significant financial or material support for,
or significant arms or related material to,
Hizballah or an entity owned or controlled by
Hizballah.
(3) Sanctions described.--The sanctions described
in this paragraph are the exercise of all powers
granted to the President by the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.) (except
that the requirements of section 202 of such Act (50
U.S.C. 1701) shall not apply) to the extent necessary
to block and prohibit all transactions in all property
and interests in property of an agency or
instrumentality of a foreign state if such property and
interests in property are in the United States, come
within the United States, or are or come within the
possession or control of a United States person.
(b) Sanctions Against State Sponsors of Terrorism.--
(1) In general.--In the case of an agency or
instrumentality of a foreign state that engages in the
activities described in subsection (a) that is an
agency or instrumentality of a foreign state described
in paragraph (2), the President shall, pursuant to
section 6 of the Export Administration Act of 1979 (as
continued in effect pursuant to the International
Emergency Economic Powers Act (50 U.S.C. 1701 et
seq.)), require a license under the Export
Administration Regulations to export or re-export to
that foreign state any item designated by the Secretary
of Commerce as ``EAR 99'', other than food, medicine,
medical devices, or similarly licensed items.
(2) Foreign state described.--A foreign state
described in this paragraph is a foreign state that--
(A) the President determines has, on or
after the date of the enactment of this
section, knowingly provided significant
financial or material support for, or arms or
related material to--
(i) Hizballah; or
(ii) an entity owned or controlled
by Hizballah; and
(B) is a state sponsor of terrorism.
(c) Waiver.--
(1) In general.--The President may, for periods not
to exceed 180 days, waive the imposition of sanctions
under this section with respect to a foreign state or
an agency or instrumentality of a foreign state if the
President certifies to the appropriate congressional
committees that such waiver is vital to the national
security interests of the United States.
(2) Consultation.--
(A) Before waiver exercised.--Before a
waiver under paragraph (1) takes effect with
respect to a foreign state or an agency or
instrumentality of a foreign state, the
President shall notify and brief the
appropriate congressional committees on the
status of the involvement of the foreign state
in activities described in subsection (b)(2) or
involvement of the agency or instrumentality of
a foreign state in activities described in
subsection (a)(2), as the case may be.
(B) After waiver exercised.--Not later than
90 days after the issuance of a waiver under
paragraph (1) with respect to a foreign state
or an agency or instrumentality of a foreign
state, and every 120 days thereafter while the
waiver remains in effect, the President shall
brief the appropriate congressional committees
on the status of the involvement of the foreign
state in activities described in subsection
(b)(2) or involvement of the agency or
instrumentality of a foreign state in
activities described in subsection (a)(2), as
the case may be.
(d) Report on Supply Chain of Hizballah's Missile
Production Facilities.--
(1) In general.--Not later than 120 days after the
date of the enactment of this subsection, the President
shall submit to the appropriate congressional
committees a report that contains the following:
(A) An analysis of the foreign and domestic
supply chain that significantly facilitates,
supports, or otherwise aids Hizballah's
acquisition or development of missile
production facilities.
(B) A description of the geographic
distribution of the foreign and domestic supply
chain described in subparagraph (A).
(C) An assessment of the provision of
goods, services, or technology transferred to
Hizballah by the Government of Iran or its
affiliates to indigenously manufacture or
otherwise produce missiles.
(D) An identification of foreign persons
that have, on or after the date of the
enactment of this subsection, and based on
credible evidence--
(i) knowingly provided significant
financial or material support for, or
significant arms or related material
to, Hizballah or an entity owned or
controlled by Hizballah; or
(ii) knowingly facilitated the
transfer of significant arms or related
materiel to Hizballah utilizing
commercial aircraft or air carriers.
(E) A description of the steps that the
President is taking to disrupt the foreign and
domestic supply chain described in subparagraph
(A).
(2) Form.--The report required under paragraph (1)
shall be submitted in unclassified form, but may
contain a classified annex.
(e) Definitions.--In this section:
(1) Agency or instrumentality of a foreign state;
foreign state.--The terms ``agency or instrumentality
of a foreign state'' and ``foreign state'' have the
meanings given those terms in section 1603 of title 28,
United States Code.
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Affairs, the
Committee on Financial Services, the Committee
on Ways and Means, and the Committee on the
Judiciary of the House of Representatives; and
(B) the Committee on Foreign Relations, the
Committee on Banking, Housing, and Urban
Affairs, and the Committee on the Judiciary of
the Senate.
(3) Arms or related material.--The term ``arms or
related material'' means--
(A) nuclear, biological, chemical, or
radiological weapons or materials or components
of such weapons;
(B) ballistic or cruise missile weapons or
materials or components of such weapons;
(C) destabilizing numbers and types of
advanced conventional weapons;
(D) defense articles or defense services,
as those terms are defined in paragraphs (3)
and (4), respectively, of section 47 of the
Arms Export Control Act (22 U.S.C. 2794); or
(E) defense information, as that term is
defined in section 644 of the Foreign
Assistance Act of 1961 (22 U.S.C. 2403).
(4) Export administration regulations.--The term
``Export Administration Regulations'' means subchapter
C of chapter VII of title 15, Code of Federal
Regulations (as in effect on the date of the enactment
of this Act).
(5) Hizballah.--The term ``Hizballah'' has the
meaning given that term in section 102(f).
(6) State sponsor of terrorism.--In this paragraph,
the term ``state sponsor of terrorism'' means a country
the government of which the Secretary of State has
determined is a government that has repeatedly provided
support for acts of international terrorism for
purposes of--
(A) section 6(j) of the Export
Administration Act of 1979 (50 U.S.C. 4605(j))
(as continued in effect pursuant to the
International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.));
(B) section 620A of the Foreign Assistance
Act of 1961 (22 U.S.C. 2371);
(C) section 40 of the Arms Export Control
Act (22 U.S.C. 2780); or
(D) any other provision of law.
SEC. 104. DIPLOMATIC INITIATIVES.
Not later than 90 days after the date of the enactment of
this section, the President shall instruct--
(1) the Secretary of State to increase cooperation
with countries in the Western Hemisphere to assist in
strengthening the capacity of governments to prevent
hostile activity by Iran and disrupt and degrade
Hizballah's illicit networks operating in the region,
including diplomatic engagement that involves--
(A) efforts to target and expose illicit
networks, arrest perpetrators, freeze assets,
and attack Iran and Hizballah's use of illicit
networks using international trade and banking
systems;
(B) efforts to revoke or deny visas from
those implicated in Hizballah's activity in the
region, including lawyers, accountants,
business partners, service providers, and
politicians who knowingly facilitate or fail to
take measures to counter Hizballah's illicit
finance in their own jurisdictions;
(C) efforts to assist willing nations with
the development of counter-organized crime
legislation, the strengthening of financial
investigative capacity, and a fully-vetted
counter-organized crime judicial model in
places plagued with corruption; and
(D) efforts to persuade governments in the
region to list Hizballah as a terrorist
organization;
(2) the United States Permanent Representative to
the Organization of American States to work to secure
support at the Organization of American States for a
resolution that would declare Hizballah as a terrorist
organization and address Hizballah's illicit networks
operating in the region;
(3) the United States Ambassador to the
Organization for Security and Cooperation in Europe
(OSCE) to work to secure a report on compliance by
participating states with OSCE Decision Number 1063,
the ``Consolidated Framework for the Fight Against
Terrorism'', in regard to Hizballah, with particular
focus on the mandate to ``suppress the financing of
terrorism, including its links with money-laundering
and illegal economic activities'', especially as it
relates transatlantic relations, including with Latin
America and the Caribbean; and
(4) United States diplomats to work with
international forums, including the Financial Action
Task Force, to identify government entities within
Latin America and the Caribbean that provide support,
facilitation, or assistance to individuals affiliated
with Hizballah in the Western Hemisphere.
SEC. 105. IMPLEMENTATION; PENALTIES; JUDICIAL REVIEW; EXEMPTIONS; RULE
OF CONSTRUCTION.
(a) Implementation.--The President may exercise all
authorities provided under sections 203 and 205 of the
International Emergency Economic Powers Act (50 U.S.C. 1702 and
1704) to carry out sections 101 and 103.
(b) Penalties.--The penalties provided for in subsections
(b) and (c) of section 206 of the International Emergency
Economic Powers Act (50 U.S.C. 1705) shall apply to a person
that violates, attempts to violate, conspires to violate, or
causes a violation of regulations prescribed to carry out
section 101 or 103 to the same extent that such penalties apply
to a person that commits an unlawful act described in
subsection (a) of such section 206.
(c) Procedures for Judicial Review of Classified
Information.--
(1) In general.--If a finding, or a prohibition,
condition, or penalty imposed as a result of any such
finding, is based on classified information (as defined
in section 1(a) of the Classified Information
Procedures Act (18 U.S.C. App.)) and a court reviews
the finding or the imposition of the prohibition,
condition, or penalty, the President may submit such
information to the court ex parte and in camera.
(2) Rule of construction.--Nothing in this
subsection shall be construed to confer or imply any
right to judicial review of any finding under section
101 or 103 or any prohibition, condition, or penalty
imposed as a result of any such finding.
(d) Exemptions.--The following activities shall be exempt
from sections 101 and 103:
(1) Any authorized intelligence, law enforcement,
or national security activities of the United States.
(2) Any transaction necessary to comply with United
States obligations under the Agreement between the
United Nations and the United States of America
regarding the Headquarters of the United States, signed
at Lake Success June 26, 1947, and entered into force
November 21, 1947, or under the Convention on Consular
Relations, done at Vienna April 24, 1963, and entered
into force March 19, 1967, or any other United States
international agreement.
(e) Rule of Construction.--Nothing in section 101 or 103
shall be construed to limit the authority of the President
under the International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.) or under any other provision of law.
TITLE II--REPORTS AND BRIEFINGS ON NARCOTICS TRAFFICKING AND
SIGNIFICANT TRANSNATIONAL CRIMINAL ACTIVITIES OF HIZBALLAH
[SEC. 201. REPORT AND BRIEFING ON NARCOTICS TRAFFICKING BY HIZBALLAH.
[(a) Report.--
[(1) In general.--Not later than 120 days after the
date of the enactment of this Act, the President shall
submit to the appropriate congressional committees and
leadership a report on the activities of Hizballah
related to narcotics trafficking worldwide.
[(2) Form.--The report required by paragraph (1)
shall be submitted in unclassified form to the greatest
extent possible, but may include a classified annex.
[(b) Briefing.--Not later than 30 days after the submission
of the report required by subsection (a), the President shall
provide to the appropriate congressional committees and
leadership a briefing on--
[(1) the report;
[(2) procedures for designating Hizballah as a
significant foreign narcotics trafficker under the
Foreign Narcotics Kingpin Designation Act (21 U.S.C.
1901 et seq.); and
[(3) Government-wide efforts to combat the
narcotics trafficking activities of Hizballah.
[(c) Appropriate Congressional Committees and Leadership
Defined.--In this section, the term ``appropriate congressional
committees and leadership'' means--
[(1) the Speaker, the minority leader, the
Committee on Foreign Affairs, the Committee on
Financial Services, the Committee on the Judiciary, and
the Permanent Select Committee on Intelligence of the
House of Representatives; and
[(2) the majority leader, the minority leader, the
Committee on Foreign Relations, the Committee on
Banking, Housing, and Urban Affairs, the Committee on
Finance, the Committee on the Judiciary, and the Select
Committee on Intelligence of the Senate.
[SEC. 202. REPORT AND BRIEFING ON SIGNIFICANT TRANSNATIONAL CRIMINAL
ACTIVITIES OF HIZBALLAH.
[(a) Report.--
[(1) In general.--Not later than 120 days after the
date of the enactment of this Act, the President shall
submit to the appropriate congressional committees and
leadership a report on the significant transnational
criminal activities of Hizballah, including human
trafficking.
[(2) Form.--The report required by paragraph (1)
shall be submitted in unclassified form to the greatest
extent possible, but may include a classified annex.
[(b) Briefing.--Not later than 30 days after the submission
of the report required by subsection (a), the President shall
provide to the appropriate congressional committees and
leadership a briefing on--
[(1) the report;
[(2) procedures for designating Hizballah as a
significant transnational criminal organization under
Executive Order 13581 (75 Fed. Reg. 44,757); and
[(3) Government-wide efforts to combat the
transnational criminal activities of Hizballah.
[(c) Appropriate Congressional Committees and Leadership
Defined.--In this section, the term ``appropriate congressional
committees and leadership'' means--
[(1) the Speaker, the minority leader, the
Committee on Foreign Affairs, the Committee on
Financial Services, the Committee on the Judiciary, and
the Permanent Select Committee on Intelligence of the
House of Representatives; and
[(2) the majority leader, the minority leader, the
Committee on Foreign Relations, the Committee on
Banking, Housing, and Urban Affairs, the Committee on
Finance, the Committee on the Judiciary, and the Select
Committee on Intelligence of the Senate.]
SEC. 201. IMPOSITION OF SANCTIONS WITH RESPECT TO AFFILIATED NETWORKS
OF HIZBALLAH.
(a) In General.--Not later than 120 days after the date of
the enactment of this section, and as appropriate thereafter,
the President shall impose the sanctions described in
subsection (b) with respect to affiliated networks of
Hizballah, including by reason of significant transnational
criminal activities of such networks.
(b) Sanctions Described.--The sanctions described in this
subsection are sanctions applied with respect to a foreign
person pursuant to Executive Order 13581 (75 Fed. Reg. 44,757)
(as such Executive order was in effect on the day before the
date of the enactment of this section).
(c) Definition.--In this section, the term ``Hizballah''
has the meaning given such term in section 102(f).
SEC. 202. REPORT ON RACKETEERING ACTIVITIES ENGAGED IN BY HIZBALLAH.
(a) In General.--Not later than 120 days after the date of
the enactment of the Hizballah International Financing
Prevention Amendments Act of 2017, and annually thereafter for
the following 5 years, the Assistant Attorney General for the
Criminal Division of the Department of Justice and the
Administrator of the Drug Enforcement Administration, in
coordination with the Secretary of the Treasury and the heads
of other applicable Federal agencies, shall jointly submit to
the appropriate congressional committees a report on the
following:
(1) Activities that Hizballah, and agents and
affiliates of Hizballah, have engaged in that are
racketeering activities.
(2) The extent to which Hizballah, and agents and
affiliates of Hizballah, engage in a pattern of such
racketeering activities.
(b) Form of Report.--Each report required under subsection
(a) shall be submitted in an unclassified form but may contain
a classified annex.
(c) Definitions.--In this section:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on the Judiciary and the
Committee on Foreign Affairs of the House of
Representatives; and
(B) the Committee on the Judiciary and the
Committee on Foreign Relations of the Senate.
(2) Hizballah.--The term ``Hizballah'' has the
meaning given that term in section 102(f).
(3) Racketeering activity.--The term ``racketeering
activity'' has the meaning given that term in section
1961(1) of title 18, United States Code.
* * * * * * *
SEC. 204. REPORT ON ACTIVITIES OF FOREIGN GOVERNMENTS TO DISRUPT GLOBAL
LOGISTICS NETWORKS AND FUNDRAISING, FINANCING, AND
MONEY LAUNDERING ACTIVITIES OF HIZBALLAH.
(a) Report.--
(1) In general.--Not later than 90 days after the
date of the enactment of [this Act] the Hizballah
International Financing Prevention Amendments Act of
2017, and annually thereafter for the following 5
years, the President shall submit to the appropriate
congressional committees a report that includes--
(A) a list of countries that support
Hizballah or in which Hizballah maintains
important portions of its global logistics
networks;
(B) with respect to each country on the
list required by subparagraph (A)--
(i) an assessment of whether the
government of the country is taking
adequate measures to disrupt the global
logistics networks of Hizballah within
the territory of the country; and
(ii) in the case of a country the
government of which is not taking
adequate measures to disrupt such
networks--
(I) an assessment of the
reasons that government is not
taking such adequate measures;
and
(II) a description of
measures being taken by the
United States to encourage that
government to improve measures
to disrupt such networks;
(C) a list of countries in which Hizballah,
or any of its agents or affiliates, conducts
significant fundraising, financing, or money
laundering activities;
(D) with respect to each country on the
list required by subparagraph (C)--
(i) an assessment of whether the
government of the country is taking
adequate measures to disrupt the
fundraising, financing, or money
laundering activities of Hizballah and
its agents and affiliates within the
territory of the country; and
(ii) in the case of a country the
government of which is not taking
adequate measures to disrupt such
activities--
(I) an assessment of the
reasons that government is not
taking such adequate measures;
and
(II) a description of
measures being taken by the
United States to encourage that
government to improve measures
to disrupt such activities;
[and]
(E) a list of methods that Hizballah, or
any of its agents or affiliates, utilizes to
raise or transfer funds, including trade-based
money laundering, the use of foreign exchange
houses, [and free-trade zones.] free-trade
zones, business partnerships and joint
ventures, and other investments in small and
medium-sized enterprises;
(F) a list of provinces, municipalities,
and local governments outside of Lebanon that
expressly consent to, or with knowledge allow,
tolerate, or disregard the use of their
territory by Hizballah to carry out terrorist
activities, including training, financing, and
recruitment;
(G) a description of the total aggregate
revenues and remittances that Hizballah
receives from the global logistics networks of
Hizballah, including--
(i) a list of Hizballah's sources
of revenue, including sources of
revenue based on illicit activity,
revenues from Iran, charities, and
other business activities; and
(ii) a list of Hizballah's
expenditures, including expenditures
for ongoing military operations, social
networks, and external operations;
(H) a survey of national and transnational
legal measures available to target Hizballah's
financial networks;
(I) a review of Hizballah's international
operational capabilities, including in the
United States; and
(J) a review of--
(i) the total number and value of
Hizballah-related assets seized and
forfeited; and
(ii) the total number of
indictments, prosecutions, and
extraditions of Hizballah members or
affiliates.
(2) Form.--The report required by paragraph (1)
shall be submitted in unclassified form to the greatest
extent possible, and may contain a classified annex.
(3) Global logistics networks of hizballah.--In
this subsection, the term ``global logistics networks
of Hizballah'', ``global logistics networks'', or
``networks'' means financial, material, or
technological support for, or financial or other
services in support of, Hizballah.
(b) Briefing on Hizballah's Assets and Activities Related
To Fundraising, Financing, and Money Laundering Worldwide.--Not
later than 90 days after the date of the enactment of this Act,
and every 180 days thereafter, the Secretary of State, the
Secretary of the Treasury, and the heads of other applicable
Federal departments and agencies shall provide to the
appropriate congressional committees a briefing on the
disposition of Hizballah's assets and activities related to
fundraising, financing, and money laundering worldwide.
(c) Appropriate Congressional Committees Defined.--In this
section, the term ``appropriate congressional committees''
means--
(1) the Committee on Foreign Affairs, the Committee
on Financial Services, and the Permanent Select
Committee on Intelligence of the House of
Representatives; and
(2) the Committee on Foreign Relations, the
Committee on Banking, Housing, and Urban Affairs, and
the Select Committee on Intelligence of the Senate.
* * * * * * *
----------
COMPREHENSIVE IRAN SANCTIONS, ACCOUNTABILITY, AND DIVESTMENT ACT OF
2010
* * * * * * *
TITLE I--SANCTIONS
* * * * * * *
SEC. 104. MANDATORY SANCTIONS WITH RESPECT TO FINANCIAL INSTITUTIONS
THAT ENGAGE IN CERTAIN TRANSACTIONS.
(a) Findings.--Congress makes the following findings:
(1) The Financial Action Task Force is an
intergovernmental body whose purpose is to develop and
promote national and international policies to combat
money laundering and terrorist financing.
(2) Thirty-three countries, plus the European
Commission and the Cooperation Council for the Arab
States of the Gulf, belong to the Financial Action Task
Force. The member countries of the Financial Action
Task Force include the United States, Canada, most
countries in western Europe, Russia, the People's
Republic of China, Japan, South Korea, Argentina, and
Brazil.
(3) In 2008 the Financial Action Task Force
extended its mandate to include addressing ``new and
emerging threats such as proliferation financing'',
meaning the financing of the proliferation of weapons
of mass destruction, and published ``guidance papers''
for members to assist them in implementing various
United Nations Security Council resolutions dealing
with weapons of mass destruction, including United
Nations Security Council Resolutions 1737 (2006) and
1803 (2008), which deal specifically with proliferation
by Iran.
(4) The Financial Action Task Force has repeatedly
called on members--
(A) to advise financial institutions in
their jurisdictions to give special attention
to business relationships and transactions with
Iran, including Iranian companies and financial
institutions;
(B) to apply effective countermeasures to
protect their financial sectors from risks
relating to money laundering and financing of
terrorism that emanate from Iran;
(C) to protect against correspondent
relationships being used by Iran and Iranian
companies and financial institutions to bypass
or evade countermeasures and risk-mitigation
practices; and
(D) to take into account risks relating to
money laundering and financing of terrorism
when considering requests by Iranian financial
institutions to open branches and subsidiaries
in their jurisdictions.
(5) At a February 2010 meeting of the Financial
Action Task Force, the Task Force called on members to
apply countermeasures ``to protect the international
financial system from the ongoing and substantial money
laundering and terrorist financing (ML/TF) risks''
emanating from Iran.
(b) Sense of Congress Regarding the Imposition of Sanctions
on the Central Bank of Iran.--Congress--
(1) acknowledges the efforts of the United Nations
Security Council to impose limitations on transactions
involving Iranian financial institutions, including the
Central Bank of Iran; and
(2) urges the President, in the strongest terms, to
consider immediately using the authority of the
President to impose sanctions on the Central Bank of
Iran and any other Iranian financial institution
engaged in proliferation activities or support of
terrorist groups.
(c) Prohibitions and Conditions With Respect to Certain
Accounts Held by Foreign Financial Institutions.--
(1) In general.--Not later than 90 days after the
date of the enactment of this Act, the Secretary of the
Treasury shall prescribe regulations to prohibit, or
impose strict conditions on, the opening or maintaining
in the United States of a correspondent account or a
payable-through account by a foreign financial
institution that the Secretary finds knowingly engages
in an activity described in paragraph (2).
(2) Activities described.--A foreign financial
institution engages in an activity described in this
paragraph if the foreign financial institution--
(A) facilitates the efforts of the
Government of Iran (including efforts of Iran's
Revolutionary Guard Corps or any of its agents
or affiliates)--
(i) to acquire or develop weapons
of mass destruction or delivery systems
for weapons of mass destruction; or
(ii) to provide support for
organizations designated as foreign
terrorist organizations under section
219(a) of the Immigration and
Nationality Act (8 U.S.C. 1189(a)),
including Hizballah (as defined in
section 102(f)(1)(E) of the Hizballah
International Financing Prevention Act
of 2015 (Public Law 114-102; 50 U.S.C.
1701 note)), and any affiliates or
successors thereof, or support for acts
of international terrorism (as defined
in section 14 of the Iran Sanctions Act
of 1996 (Public Law 104-172; 50 U.S.C.
1701 note));
(B) facilitates the activities of--
(i) a person subject to financial
sanctions pursuant to United Nations
Security Council Resolution 1737
(2006), 1747 (2007), 1803 (2008), or
1929 (2010), or any other resolution
that is agreed to by the Security
Council and imposes sanctions with
respect to Iran; or
(ii) a person acting on behalf of
or at the direction of, or owned or
controlled by, a person described in
clause (i);
(C) engages in money laundering to carry
out an activity described in subparagraph (A)
or (B);
(D) facilitates efforts by the Central Bank
of Iran or any other Iranian financial
institution to carry out an activity described
in subparagraph (A) or (B); or
(E) facilitates a significant transaction
or transactions or provides significant
financial services for--
(i) Iran's Revolutionary Guard
Corps or any of its agents or
affiliates whose property or interests
in property are blocked pursuant to the
International Emergency Economic Powers
Act (50 U.S.C. 1701 et seq.); or
(ii) a person whose property or
interests in property are blocked
pursuant to that Act in connection
with--
(I) Iran's proliferation of
weapons of mass destruction or
delivery systems for weapons of
mass destruction; or
(II) Iran's support for
international terrorism.
(3) Penalties.--The penalties provided for in
subsections (b) and (c) of section 206 of the
International Emergency Economic Powers Act (50 U.S.C.
1705) shall apply to a person that violates, attempts
to violate, conspires to violate, or causes a violation
of regulations prescribed under paragraph (1) of this
subsection to the same extent that such penalties apply
to a person that commits an unlawful act described in
section 206(a) of that Act.
(4) Determinations regarding nioc and nitc.--
(A) Determinations.--For purposes of
paragraph (2)(E), the Secretary of the Treasury
shall, not later than 45 days after the date of
the enactment of the Iran Threat Reduction and
Syria Human Rights Act of 2012--
(i) determine whether the NIOC or
the NITC is an agent or affiliate of
Iran's Revolutionary Guard Corps; and
(ii) submit to the appropriate
congressional committees a report on
the determinations made under clause
(i), together with the reasons for
those determinations.
(B) Form of report.--A report submitted
under subparagraph (A)(ii) shall be submitted
in unclassified form but may contain a
classified annex.
(C) Applicability with respect to petroleum
transactions.--
(i) Application of sanctions.--
Except as provided in clause (ii), if
the Secretary of the Treasury
determines that the NIOC or the NITC is
a person described in clause (i) or
(ii) of paragraph (2)(E), the
regulations prescribed under paragraph
(1) shall apply with respect to a
significant transaction or transactions
or significant financial services
knowingly facilitated or provided by a
foreign financial institution for the
NIOC or the NITC, as applicable, for
the purchase of petroleum or petroleum
products from Iran, only if a
determination of the President under
section 1245(d)(4)(B) of the National
Defense Authorization Act for Fiscal
Year 2012 (22 U.S.C. 8513a(d)(4)(B))
that there is a sufficient supply of
petroleum and petroleum products
produced in countries other than Iran
to permit purchasers of petroleum and
petroleum products from Iran to reduce
significantly their purchases from Iran
is in effect at the time of the
transaction or the provision of the
service.
(ii) Exception for certain
countries.--If the Secretary of the
Treasury determines that the NIOC or
the NITC is a person described in
clause (i) or (ii) of paragraph (2)(E),
the regulations prescribed under
paragraph (1) shall not apply to a
significant transaction or transactions
or significant financial services
knowingly facilitated or provided by a
foreign financial institution for the
NIOC or the NITC, as applicable, for
the purchase of petroleum or petroleum
products from Iran if an exception
under paragraph (4)(D) of section
1245(d) of the National Defense
Authorization Act for Fiscal Year 2012
(22 U.S.C. 8513a(d)) applies to the
country with primary jurisdiction over
the foreign financial institution at
the time of the transaction or the
provision of the service.
(iii) Rule of construction.--The
exceptions in clauses (i) and (ii)
shall not be construed to limit the
authority of the Secretary of the
Treasury to impose sanctions pursuant
to the regulations prescribed under
paragraph (1) for an activity described
in paragraph (2) to the extent the
activity would meet the criteria
described in that paragraph in the
absence of the involvement of the NIOC
or the NITC.
(D) Definitions.--In this paragraph:
(i) Nioc.--The term ``NIOC'' means
the National Iranian Oil Company.
(ii) Nitc.--The term ``NITC'' means
the National Iranian Tanker Company.
(d) Penalties for Domestic Financial Institutions for
Actions of Persons Owned or Controlled by Such Financial
Institutions.--
(1) In general.--Not later than 90 days after the
date of the enactment of this Act, the Secretary of the
Treasury shall prescribe regulations to prohibit any
person owned or controlled by a domestic financial
institution from knowingly engaging in a transaction or
transactions with or benefitting Iran's Revolutionary
Guard Corps or any of its agents or affiliates whose
property or interests in property are blocked pursuant
to the International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.).
(2) Penalties.--The penalties provided for in
section 206(b) of the International Emergency Economic
Powers Act (50 U.S.C. 1705(b)) shall apply to a
domestic financial institution to the same extent that
such penalties apply to a person that commits an
unlawful act described in section 206(a) of that Act
if--
(A) a person owned or controlled by the
domestic financial institution violates,
attempts to violate, conspires to violate, or
causes a violation of regulations prescribed
under paragraph (1) of this subsection; and
(B) the domestic financial institution knew
or should have known that the person violated,
attempted to violate, conspired to violate, or
caused a violation of such regulations.
(e) Requirements for Financial Institutions Maintaining
Accounts for Foreign Financial Institutions.--
(1) In general.--The Secretary of the Treasury
shall prescribe regulations to require a domestic
financial institution maintaining a correspondent
account or payable-through account in the United States
for a foreign financial institution to do one or more
of the following:
(A) Perform an audit of activities
described in subsection (c)(2) that may be
carried out by the foreign financial
institution.
(B) Report to the Department of the
Treasury with respect to transactions or other
financial services provided with respect to any
such activity.
(C) Certify, to the best of the knowledge
of the domestic financial institution, that the
foreign financial institution is not knowingly
engaging in any such activity.
(D) Establish due diligence policies,
procedures, and controls, such as the due
diligence policies, procedures, and controls
described in section 5318(i) of title 31,
United States Code, reasonably designed to
detect whether the Secretary of the Treasury
has found the foreign financial institution to
knowingly engage in any such activity.
(2) Penalties.--The penalties provided for in
sections 5321(a) and 5322 of title 31, United States
Code, shall apply to a person that violates a
regulation prescribed under paragraph (1) of this
subsection, in the same manner and to the same extent
as such penalties would apply to any person that is
otherwise subject to such section 5321(a) or 5322.
(f) Waiver.--The Secretary of the Treasury may waive the
application of a prohibition or condition imposed with respect
to a foreign financial institution pursuant to subsection (c)
or section 104A or the imposition of a penalty under subsection
(d) with respect to a domestic financial institution on and
after the date that is 30 days after the Secretary--
(1) determines that such a waiver is necessary to
the national interest of the United States; and
(2) submits to the appropriate congressional
committees a report describing the reasons for the
determination.
(g) Procedures for Judicial Review of Classified
Information.--
(1) In general.--If a finding under paragraph (1)
or (4) of subsection (c) or section 104A, a
prohibition, condition, or penalty imposed as a result
of any such finding, or a penalty imposed under
subsection (d), is based on classified information (as
defined in section 1(a) of the Classified Information
Procedures Act (18 U.S.C. App.)) and a court reviews
the finding or the imposition of the prohibition,
condition, or penalty, the Secretary of the Treasury
may submit such information to the court ex parte and
in camera.
(2) Rule of construction.--Nothing in this
subsection shall be construed to confer or imply any
right to judicial review of any finding under paragraph
(1) or (4) of subsection (c) or section 104A, any
prohibition, condition, or penalty imposed as a result
of any such finding, or any penalty imposed under
subsection (d).
(h) Consultations in Implementation of Regulations.--In
implementing this section and the regulations prescribed under
this section, the Secretary of the Treasury--
(1) shall consult with the Secretary of State; and
(2) may, in the sole discretion of the Secretary of
the Treasury, consult with such other agencies and
departments and such other interested parties as the
Secretary considers appropriate.
(i) Definitions.--
(1) In general.--In this section:
(A) Account; correspondent account;
payable-through account.--The terms
``account'', ``correspondent account'', and
``payable-through account'' have the meanings
given those terms in section 5318A of title 31,
United States Code.
(B) Agent.--The term ``agent'' includes an
entity established by a person for purposes of
conducting transactions on behalf of the person
in order to conceal the identity of the person.
(C) Financial institution.--The term
``financial institution'' means a financial
institution specified in subparagraph (A), (B),
(C), (D), (E), (F), (G), (H), (I), (J), (M), or
(Y) of section 5312(a)(2) of title 31, United
States Code.
(D) Foreign financial institution; domestic
financial institution.--The terms ``foreign
financial institution'' and ``domestic
financial institution'' shall have the meanings
of those terms as determined by the Secretary
of the Treasury.
(E) Money laundering.--The term ``money
laundering'' means the movement of illicit cash
or cash equivalent proceeds into, out of, or
through a country, or into, out of, or through
a financial institution.
(2) Other definitions.--The Secretary of the
Treasury may further define the terms used in this
section in the regulations prescribed under this
section.
* * * * * * *
[all]
