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Iran Threat Reduction and Syria Human Rights Act of 2012

Floor Speech

By:
Date:
Location: Washington DC

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Mr. JOHNSON of South Dakota. Mr. President, I rise in strong support of the Iran Threat Reduction and Syria Human Rights Act, our legislation which embodies a bipartisan, bicameral agreement to reconcile the current Senate and House-passed versions of Iran sanctions legislation. Once implemented, this comprehensive new set of sanctions will help dramatically to increase the pressure on Iranian government leaders to abandon their illicit nuclear activities and support for terrorism. This bill passed the House of Representatives by an overwhelming bipartisan vote of 421 to 6 earlier this evening. I hope all of my colleagues will join me in supporting it so that it can be adopted by the Senate and signed into law by the President as soon as possible.

So far, in the sputtering P5+1 negotiations, Iran has shown no clear signs of a willingness to work with the international community to engage in a serious way on nuclear issues. It remains to be seen whether Iran will ultimately be willing to work towards progress on the central issues at upcoming negotiating sessions, or whether the meetings will simply be another in a series of stalling actions to buy time to enrich additional uranium and further fortify their nuclear program. That is why I think it necessary to intensify the pressure, and move forward quickly now on this new package that leaves no doubts about U.S. resolve on this issue. As we all recognize, economic sanctions are not an end: they are a means to an end. That end is to apply enough pressure to secure agreement from Iran's leaders to fully, completely and verifiably abandon their illicit nuclear activities.

Isolated diplomatically, economically, and otherwise, Iran must understand that the patience of the international community is fast running out. With these new sanctions, including those targeted at the I-R-G-C, we are pressing Iran's military and political leaders to make 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 continue to face sustained multilateral economic and diplomatic pressure, and deepen their international isolation.

This legislation is based on the Senate bill which passed with unanimous support in May. It incorporates new measures from Democrats and Republicans in the House and Senate. The sanctions contained in this bill reach more deeply into Iran's energy sector than ever before, and build on the sweeping banking sanctions Congress enacted 2 years ago to reach to insurance, shipping, trade, finance and other sectors, targeting those who help to bolster Iranian government revenues which support their illicit nuclear activities.

As I have said before, the prospect of a nuclear-armed Iran is the most pressing foreign policy challenge we face, and we must continue to do all we can--politically, economically, and diplomatically--to avoid that result. In recent months, we have seen increased signs that the Iranian regime is feeling the pressure of existing sanctions. Their currency has plummeted, their trade revenues have been sharply curtailed, and they are under increasing pressure from the oil sanctions regime currently in place. With passage of this bill, we are taking another significant step to block the remaining avenues for the Iranians to fund their illicit behavior and evade sanctions. The bill also requires sanctions on those who purchase new Iranian sovereign debt, thereby further limiting the regime's ability to finance its illicit activities.

In addition, there are substantial new sanctions for anyone who engages
in joint ventures with the National Iranian Oil Company, NIOC; provides insurance or re-insurance to the National Iranian Oil Company or the National Iranian Tanker Company, NITC; helps Iran evade oil sanctions through reflagging or other means; or sells, leases, or otherwise provides oil tankers to Iran, unless they are from a country that is sharply reducing its oil purchases from Iran.

The bill also expands sanctions against Iranian and Syrian officials for human rights abuses, including against those who engage in censorship, jamming and monitoring of communications, and tracking of Internet use by ordinary Iranian citizens.

Many of my colleagues, both Democrats and Republicans, have helped us get to this point. I want to particularly thank Chairman Ros-Lehtinen of the House Foreign Affairs Committee. Without her help, we would not be here. I also want to thank my colleagues, including Senator Menendez, who crafted many of its original provisions, and Senators Schumer, Gillibrand, Lautenberg, Brown, Kyl, Lieberman, and others who contributed their ideas. I also want to thank Majority Leader Reid for his tireless efforts to enact a strong comprehensive sanctions bill.

Finally, I want to thank the staff who crafted the details of this bill, and worked long hours in intensive discussions over the last several weeks to get it done. They include Patrick Grant, Steve Kroll, Georgina Cannon, Ingianni Acosta and Colin McGinnis of my Committee staff; Dr. Yleem Poblete, Matt Zweig, and Ari Friedman of Chairman Ros-Lehtinen's staff; John O'Hara and Andrew Olmem of Senator Shelby's staff, and Shanna Winters, Dr. Richard Kessler, and Alan Makovsky of Ranking Member Berman's staff.

All told, when enacted this bill and other efforts by the President will significantly increase pressure on Iran to abandon its illicit nuclear activities. I ask unanimous consent to have printed in the Record a detailed summary of the bill. I urge all my colleagues to support this measure.

There being no objection, the material was ordered to be printed in the Record, as follows:

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Mr. JOHNSON of South Dakota. I thank Senator Lautenberg for his longstanding leadership on this issue. As I have previously noted, it is long past time for foreign subsidiaries of U.S. companies to end their business in Iran. That is already happening due to US and international pressure on the business and financial sectors, and this new provision will accelerate that process. Firms realize the huge risks such activity poses, reputationally and otherwise, to their companies. I note that it is already a violation of U.S. law for U.S. subsidiaries to engage in sanctionable activity in Iran's energy sector and certain other activities under U.S. sanctions laws. It is also a violation of U.S. trade law for a U.S. firm to do business of any kind in Iran via a subsidiary that it directs. The balance that has been struck in prior law is to focus only on the activity of U.S. companies. Foreign subsidiaries are not, by definition, U.S. companies, and your provision takes a major new step forward in this area of the law. I agree with you that the way we have addressed this issue authorizing for the first time penalties on U.S. parents if their foreign subsidiaries engages in an activity that would be sanctionable if committed by a U.S. person--is a sound and responsible one, and will hopefully shut down this activity once and for all.

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Mr. JOHNSON of South Dakota. The bill would authorize the imposition of similar civil penalties on such U.S. parent companies.

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Mr. JOHNSON of South Dakota. I agree this legislation mandates penalties on a U.S. parent company if its foreign subsidiary has knowledge or should have had knowledge that the subsidiary was doing prohibited business with Iran, even if the U.S. parent company has no knowledge of these transactions.

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Mr. JOHNSON of South Dakota. Humanitarian trade, including agricultural commodities, food, medicine and medical products has long been specifically exempted by Congress from successive rounds of Iran sanctions legislation, as long as such trade is licensed by the Department of the Treasury's Office of Foreign Assets Control, or OFAC.

With the sharp drop in the value of Iran's currency, and the worsening economic situation in Iran, it is becoming more apparent that U.S. financial sanctions targeting Iran's banking sector are causing increased concern among U.S. and other businesses, and banks of our allies engaged in such trade.

The fear is that engaging in humanitarian trade in the current sanctions environment might lead to sanctions for legitimately licensed humanitarian trade. We must underscore with other countries and their banks that humanitarian trade with Iran is not subject to sanctions if it is appropriately licensed by OFAC.

This has been a concern since the Senate first considered this bill and this concern still remains. It is not and has not been the intent of U.S. policy to harm the Iranian people by prohibiting humanitarian trade that is licensed by the U.S. Treasury Department, and we should do all we can to avoid this outcome. OFAC consistently issues many licenses, both general and specific, for this type of trade.

The practical financing difficulties arising today between banks and those engaging in licensed humanitarian trade can be best addressed by U.S. government officials, who should do more to make it clear that no U.S. sanctions will be imposed against third-country banks that facilitate OFAC-licensed or exempted humanitarian trade. The Administration must continue to make this clear in public statements, in private meetings with foreign financial institutions, and elsewhere as appropriate. Misinterpretation of U.S. law, among foreign financial institutions, should no longer deny the people of Iran the benefit of OFAC-approved humanitarian trade.

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