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Week Ending August 3, 2007

H.R.2347 To authorize State and local governments to direct divestiture from, and prevent investment in, companies with investments of $20,000,000 or more in Iran's energy sector, and for other purposes.

<< Click flag for map and country data, Iran

Although the ‘findings’ section of the bill take some liberties with translations of various comments allegedly made by Iranian President Ahmadinejad regarding Israel and Zionism, the bill stands on the conclusion that the statements, when made in the context of and October meeting entitles the “World Without Zionism Conference’ represent a violation of  the 1948 Genocide Convention rulings that prohibits ‘direct and public incitement to commit genocide.’

Further, the findings note that the UN banned the supply of nuclear technology and equipment to Iran and later voted to freeze the assets of anyone doing so. Now, the findings note, there is social unrest in the country and this is the time to ratchet up economic pressure to ‘produce further political pressure within Iran.”

To increase that political pressure the bill would require that every 6 months, the Secretary of Treasury publicly publishes a list of each person within or outside the US who has an investment of more than $20 million in Iran’s energy sector including a description of the investment, dollar value, purpose and status.

Each person to be listed would be notified 30 days in advance. If the persons notified are taking specific and effective actions to terminate the investment the posting of their names can be delayed another 30 days. When they no longer have an investment their names can be removed from the list.

The bill establishes as US policy a decision of a State or local government or educational institution to divest from or prohibit investments they may have in persons that have the $20 million investment in Iran’s energy sector.

No person may bring any civil, criminal or administrative suit against any registered investment company or person for divesting those investments or avoiding investments prohibited in the bill.

The bill also establishes the sense of Congress that the Federal retirement Thrift Investment Board should initiate efforts to provide terror-free international investment options among the funds they oversee.

The provisions in bill would sunset when the President certifies that the Government of Iran has stopped supporting acts of terrorism and is no longer designated as a state-sponsor of terrorism and has ceased the pursuit, acquisition and development of nuclear, biological and chemical weapons and ballistic missiles and ballistic missile launch technology.

The bill provides no penalties for noncompliance.

Sponsor:  Rep. Barney Franks (D-MA-4^th)

Vote: Passed House 408 to 6 RC 765 July 31, 2007

Cost to the taxpayers: CBO holds that the bill would not have a significant impact on the Federal budget.

Earmark Certification:   Not applicable to this bill.

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MORE INFORMATION

The Congress finds as follows:

(1) The Convention on the Prevention and Punishment of the Crime of Genocide, completed at Paris, December 9, 1948 (commonly referred to as the `Genocide Convention') defines genocide as, among other things, the act of killing members of a national, ethnic, racial, or religious group with the intent to destroy, in whole or in part, the targeted group. In addition, the Genocide Convention also prohibits conspiracy to commit genocide, as well as `direct and public incitement to commit genocide'.

(2) 133 member states of the United Nations have ratified the Genocide Convention and thereby pledged to prosecute individuals who violate the Genocide Convention's prohibition on incitement to commit genocide, as well as those individuals who commit genocide directly.

(3) On October 27, 2005, at the World Without Zionism Conference in Tehran, Iran, the President of Iran, Mahmoud Ahmadinejad, called for Israel to be `wiped off the map,' described Israel as `a disgraceful blot [on] the face of the Islamic world,' and declared that `[a]nybody who recognizes Israel will burn in the fire of the Islamic nation's fury.' President Ahmadinejad has subsequently made similar types of comments, and the Government of Iran has displayed inflammatory symbols that express similar intent.

(4) On December 23, 2006, the United Nations Security Council unanimously approved Resolution 1737, which bans the supply of nuclear technology and equipment to Iran and freezes the assets of certain organizations and individuals involved in Iran's nuclear program, until Iran suspends its enrichment of uranium, as verified by the International Atomic Energy Agency.

(5) Following Iran's failure to comply with Resolution 1737, on March 24, 2007, the United Nations Security Council unanimously approved Resolution 1747, to tighten sanctions on Iran, imposing a ban on arms sales and expanding the freeze on assets, in response to the country's uranium-enrichment activities.

(6) There are now signs of domestic discontent within Iran, and targeted financial and economic measures could produce further political pressure within Iran. According to the Economist Intelligence Unit, the nuclear crisis `is imposing a heavy opportunity cost on Iran's economic development, slowing down investment in the oil, gas, and petrochemical sectors, as well as in critical infrastructure projects, including electricity'.

(7) Targeted financial measures represent one of the strongest non-military tools available to convince Tehran that it can no longer afford to engage in dangerous, destabilizing activities such as its nuclear weapons program and its support for terrorism.

(8) Foreign persons that have invested in Iran's energy sector, despite Iran's support of international terrorism and its nuclear program, have provided additional financial means for Iran's activities in these areas, and many United States persons have unknowingly invested in those same foreign persons.

(9) There is an increasing interest by States, local governments, educational institutions, and private institutions to seek to disassociate themselves from companies that directly or indirectly support the Government of Iran's efforts to achieve a nuclear weapons capability.

(10) Policy makers and fund managers may find moral, prudential, or reputational reasons to divest from companies that accept the business risk of operating in countries that are subject to international economic sanctions or that have business relationships with countries, governments, or entities with which any United States company would be prohibited from dealing because of economic sanctions imposed by the United States.

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