Iran-China Energy Sanctions Act of 2023

Floor Speech

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Mr. McHENRY. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5923) to impose restrictions on correspondent and payable- through accounts in the United States with respect to Chinese financial institutions that conduct transactions involving the purchase of petroleum or petroleum products from Iran, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 5923

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

This Act may be cited as the ``Iran-China Energy Sanctions Act of 2023''. SEC. 2. SANCTIONS ON FOREIGN FINANCIAL INSTITUTIONS WITH RESPECT TO THE PURCHASE OF PETROLEUM PRODUCTS AND UNMANNED AERIAL VEHICLES FROM IRAN.

Section 1245(d) of the National Defense Authorization Act for Fiscal Year 2012 (22 U.S.C. 8513a(d)) is amended--

(1) by redesignating paragraph (5) as paragraph (6); and

(2) by inserting after paragraph (4) the following new paragraph:

``(5) Applicability of sanctions with respect to chinese financial institutions.--

``(A) In general.--For the purpose of paragraph (1)(A), a `significant financial transaction' includes any transaction--

``(i) by a Chinese financial institution (without regard to the size, number, frequency, or nature of the transaction) involving the purchase of petroleum or petroleum products from Iran; and

``(ii) by a foreign financial institution (without regard to the size, number, frequency, or nature of the transaction) involving the purchase of Iranian unmanned aerial vehicles (UAVs), UAV parts, or related systems.

``(B) Determination required.--Not later than 180 days after the date of the enactment of this paragraph and every year thereafter for 5 years, the President shall--

``(i) determine whether any--

``(I) Chinese financial institution has engaged in a significant financial transaction as described in paragraph (1)(A)(i); and

``(II) financial institution has engaged in a significant financial transaction as described in paragraph (1)(A)(ii); and

``(ii) transmit the determination under clause (i) to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.''.

Mr. Speaker, I rise in support of H.R. 5923, the Iran-China Energy Sanctions Act, sponsored by the gentleman from New York (Mr. Lawler).

Currently, Iran is subject to a comprehensive set of sanctions, but we know there are loopholes. Under current law, the President is required to blacklist foreign financial institutions that undertake significant transactions with sanctioned Iranian banks.

However, we know that these significant transactions are leaving much of the country's energy trade untouched. Last year, Iran's oil exports rose by 50 percent, reaching a 5-year high. Most of these exports went to China.

Mr. Lawler's bill makes clear that any petroleum-related transaction between Iran and China, no matter how small, will put Chinese banks at risk of being sanctioned. Closing this loophole is essential to ensuring China's financial institutions begin to finally crack down on this illicit oil trade.

Additionally, I am pleased to see this legislation includes a proposal offered by Mr. Foster of Illinois. When we reported this legislation in November, Mr. Foster and Mr. Lawler discussed the inclusion of tougher sanctions to target Iran's sales of unmanned aerial vehicles, or UAVs. This is now included in the text we are considering today.

News of this weekend's actions by Iran against our most sacred ally in the world, Israel, is a good example of why we need this law and this bill.

Iran has become a major supplier of UAV technologies to Russia and other rogue regimes--we see this in Ukraine, and we saw that in the targeting of Israel this weekend--by providing the ayatollahs with funds that can be recycled for terrorism purposes. The sooner we put an end to these exports, the better.

Again, I thank Mr. Lawler for his leadership in authoring this bill, and I urge my colleagues on both sides of the aisle to support it.

Mr. Speaker, this is an important bill that is quite timely. We reported this bill out in November when we could have had more restrictive action against the Iranian regime than is currently in place by this administration and a more aggressive stance against regimes that want to do harm globally.

This is an important bill that is bipartisan out of the House Financial Services Committee. I commend Mr. Gottheimer and Mr. Lawler for their work here, as well as Mr. Foster's important addition to the bill since the bipartisan product that is quite timely for us to put further restrictions on the Iranian regime.

Mr. Speaker, I ask support from my colleagues and ask for a ``yes'' vote and yield back the balance of my time.

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Mr. McHENRY. Mr. Speaker, on that I demand the yeas and nays.

The yeas and nays were ordered.

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