Banking Committee Approves Dodd-Shelby Iran Sanctions Bill

October 29, 2009

WASHINGTON - Today the Senate Banking Committee unanimously approved the Dodd-Shelby Comprehensive Iran Sanctions, Accountability, and Divestment Act.

"Earlier this year, I believe that all of us were deeply troubled to see the Iranian regime violently punishing its own citizens for calling for fair and open elections in their nation. And we have watched with growing concern the illicit nuclear activities of this troubled regime, including their deception about the previously secret enrichment facility at Qum," said Chris Dodd (D-CT), Chairman of the Senate Banking Committee. "And so today, Senator Shelby and I have worked to put together comprehensive legislation dealing with Iran sanctions."

"Our approach acknowledges the gross human rights abuses that Iran's people suffer at the hands of Iran's security forces - with the approval of its political leadership - and the widening chasm that has opened between the regime and the people of Iran."

The bill will:

· expand the Iran Sanctions Act to cover a range of financial institutions and businesses and extend sanctions to oil and gas pipelines and tankers;
· impose new sanctions on entities involved in exporting certain refined petroleum products to Iran or building Iran's domestic refining capacity;
· impose a broad ban on direct imports from Iran to the US and exports from the US to Iran, exempting food and medicines;
· require the Administration freeze the assets of Iranians, including Iran's Revolutionary Guard Corps, who are active in weapons proliferation or terrorism;
· require the President to determine and report to Congress if investments in Iran's energy sector are eligible for sanctions;
· enable Americans to divest from energy firms doing business with the Iranian regime;
· strengthen export controls to stop the illegal black market export of sensitive technology to Iran through other countries and impose tough new licensing requirements on those who refuse to cooperate; and
· prohibit the U.S. government from purchasing goods from firms that do business in Iran's energy sector, or that provide sensitive communications technology to monitor, jam or otherwise disrupt communications among Iranians, or between the Iranian people and the outside world.

"We must send a clear signal to Iran's leaders that, if they continue to defy the will of the international community, our nation is prepared to confront them on that," Dodd concluded

Below is Chairman Dodd's Statement as prepared for delivery and a summary of the bill.

STATEMENT

"Today we consider an important bill to confront a very serious threat to the security of our nation, the United States, of Israel and our other allies in the Middle East and Europe - the prospect of a nuclear-armed Iran."

"Last year, after very careful consideration and I might add some very thoughtful and good hearings, this committee reported out a bipartisan bill, that Senator Shelby and I authored, to put additional pressure on the Iranian regime to come clean on its nuclear program. Unfortunately, despite virtually unanimous support in this committee that bill never was considered on the Senate floor because a very small number of our colleagues objected to moving forward."

"Earlier this year, I believe that all of us were deeply troubled to see the Iranian regime violently punishing its own citizens for calling for fair and open elections in their nation."

"And we have watched with growing concern the illicit nuclear activities of this troubled regime, including their deception about the previously secret enrichment facility at Qum."

"And so today, Senator Shelby and I have worked with all of you and others to put together comprehensive legislation dealing with Iran sanctions."

"The President of the United States has rightly adopted a two-track policy, in my view, of engagement backed by the prospect of further sanctions and I support his approach. Our legislation strengthens what has come to be known as the 'pressure track.'"

"We must send a clear signal to Iran's leaders that, if they continue to defy the will of the international community, our nation is prepared to confront them on that."

"We must convince them that they face a clear choice. They can end the suppression of their people, come clean on their nuclear program, suspend enrichment, and stop supporting terrorist activities around the globe. Or they can face sustained, progressively intensifying multilateral economic and diplomatic pressure - including tougher sanctions - thus deepening their international isolation. And if they continue to refuse, they will then face the unilateral sanctions contained in this bill."

"Our approach acknowledges the gross human rights abuses that Iran's people suffer at the hands of Iran's security forces - with the approval of its political leadership - and the widening chasm that has opened between the regime and the people of Iran."

"Our legislation contains a number of human rights provisions, including Senator Schumer's bill to impose a sweeping ban on U.S. government contracts on companies which provide communications monitoring or jamming technology to the government of Iran."

"Those who help Iran's government to suppress the everyday speech and internet communications of its people will be punished."

"More broadly, the our legislation imposes a range of tough new sanctions on Iran, facilitates divestment from firms working in its energy sector, and addresses the growing black market in dual use technologies going to Iran from the United States via third nations."

"It is clear that recent progress on the nuclear issue is attributable to Iran's leaders feeling the heat of increased international pressure and the specter of biting sanctions. But further progress is needed, and will depend on that same pressure."

"Tehran has now provided international inspectors with access to the nuclear site at Qum, and their report will be forthcoming soon. Iran's government had committed to sending most of its low-enriched uranium abroad for processing for medical purposes - but now seems to be delaying, and wavering on this commitment. Whether this commitment will be kept or prove to be yet another stall tactic remains to be seen. Given their track record, nailing it down and then tightly verifying its implementation will be absolutely critical."

"Just as we did last year, in this committee, we have incorporated ideas from many of our Senate colleagues into one Committee bill."

"Senators Bayh, Lieberman, and Kyl have proposed penalties on companies that support Iran's import of refined petroleum products or bolster its domestic capacity."

"Senators Brownback and Casey proposed authorizing state and local governments to divest from companies involved in critical business with Iran."

"As I mentioned, Senator Schumer proposed banning government contracts to firms that provide technology used by the Iranian regime to monitor or disrupt communications of its citizens with one another and the outside world."

"Senator Menendez proposed targeting sanctions against Iran's Revolutionary Guard Corps, its affiliates and front organizations for supporting terrorism and contributing to proliferation, and Senator Johanns pressed for renewed targeting of Iran's proxy Hezbollah in the same way."

"Senator Bunning urged tight reporting requirements on sanctions. I am grateful to all my colleagues who have contributed to the product before us - it is a strong and vital bill as a result of these additions. I appreciate their efforts and know that if the Senate's parliamentary rules did not preclude cosponsors for an original committee bill which I will present to the full Senate on behalf of the committee in my role as chair - that they would all want to be included as original cosponsors of this bill and I appreciate that very, very much."

"In addition, we have incorporated our own proposals to tighten our trade embargo, enhance Treasury's mandate to freeze assets tied to terrorism and proliferation, crack down on the black market export of technology to the regime, and expand the scope of other sanctions."

"All of these ideas are included in this legislation. In recent weeks, our staff has worked to accommodate concerns from various members, enabling us, I hope, to move forward with broad bipartisan support, so that we can send an overwhelmingly clear signal of our common resolve in this body that Iran must finally come clean on its nuclear program and rejoin the community of responsible nations."

Dodd-Shelby Comprehensive Iran Sanctions, Accountability, & Divestment Act
Summary As Passed by the Full Committee

The Iranian regime has engaged in serious human rights abuses against its own citizens, funded terrorist activity throughout the Middle East, and pursued illicit nuclear activities posing a serious threat to the security of the United States and our allies. The Comprehensive Iran Sanctions, Accountability, and Divestment Act strengthens sanctions and supports the President as he pursues a dual track of engagement and sanctions.

Human Rights Abuses: Sense of Congress that the President should: press the Iranian Government to respect its citizens' human rights and religious freedoms; identify Iranian officials responsible for violating these rights; and respond appropriately, including prohibiting their entry into the U.S. and freezing their assets. Also calls for additional funds for the Secretary of State to collect and share information on human rights abuses.

ISA Procurement Ban: Prohibits the U.S. government from purchasing goods from companies that are sanctionable under the Iran Sanctions Act.

Communications Procurement Ban (Schumer): Prohibits the U.S. government from contracting with companies that export sensitive communications jamming or monitoring technology to Iran, which allow the regime to restrict communications between Iranian citizens or between Iranians and the outside world - such as the oppressive activities that occurred during this summer's protests over election abuses.

Assets Freeze: Strengthens and codifies into law the Treasury Department's freeze on assets of Iranian officials and associates who support terrorism and proliferation activities.

Sanctions on Investments: Expands sanctions on foreign companies investing over $20 million in Iran's oil and gas sector to certain financial institutions, foreign subsidiaries, insurers, export credit agencies, and others.

Subsidiaries: Requires U.S companies be sanctioned for the activities of their subsidiaries established specifically to circumvent sanctions if they invest over $20 million in Iran's energy sector.

Refined Petroleum Sanctions (Bayh-Kyl-Lieberman): Requires the President sanction companies involved in exporting refined petroleum products to Iran or in developing oil refineries within Iran by restricting their foreign exchange transactions, access to U.S. banks, and acquisition, holding, or transfer of property in the U.S.

ISA Report: Requires the Administration to report to Congress a list of the companies that are sanctionable under the Iran Sanctions Act and whether or not sanctions will be applied.

Trade Ban: Codifies into law and strengthens the Treasury Department's ban on trade with Iran, with exceptions for the export of food, medicine, humanitarian aid and the exchange of informational materials.

National Interest Waiver: The President can waive sanctions if he finds it is in the national interest of the United States, but must report to Congress describing the reasons for the waiver.

Counter-Terrorist Financing Resources: Authorizes funds for the Terrorism and Financial Intelligence Office (TFI) and the Financial Crimes Enforcement Network (FinCEN) at the Treasury Department.

Divestment (Brownback-Casey): Authorizes states, local governments, and mutual funds to divest from firms investing in Iran's energy sector, and protects private asset managers from lawsuits over fiduciary duties.

Black-Market Proliferation Networks: Requires the U.S. assist Iran's trading partners in preventing the re-export of sensitive dual use technology to Iran via third countries and to subject these countries to significant restrictions on exports if they refuse U.S. assistance.

Sense of Congress: Includes a sense of Congress that the U.S. should continue to aggressively target Iran's Revolutionary Guard Corps and Hezbollah for sanctions and consider new sanctions against Iran's Central Bank.