S. 2329 — Introduced in Senate

II 113th CONGRESS 2d Session S. 2329 IN THE SENATE OF THE UNITED STATES May 13, 2014 Mrs. Shaheen (for herself, Mr. Rubio, Mr. Casey, Ms. Ayotte, Mr. Cardin, Mr. Risch, Mr. Markey, Mr. Cornyn, Mrs. Gillibrand, and Mr. Graham) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To prevent Hezbollah from gaining access to international financial and other institutions, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the Hezbollah International Financing Prevention Act of 2014. (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 Hezbollah to international financial and other institutions Sec. 101. Findings; statement of policy. Sec. 102. Sanctions with respect to financial institutions that engage in certain transactions. Sec. 103. Report on imposition of sanctions on certain satellite providers that carry al-Manar TV. Sec. 104. Report on activities of foreign governments to disrupt global logistics networks and fundraising, financing, and money laundering activities of Hezbollah. Sec. 105. Appropriate congressional committees defined. TITLE II—Designation of Hezbollah as a major drug smuggling enterprise and a transnational criminal organization Sec. 201. Designation of Hezbollah as significant foreign narcotics traffickers. Sec. 202. Designation of Hezbollah as a significant transnational criminal organization. Sec. 203. Appropriate congressional committees defined. TITLE III—Miscellaneous provisions Sec. 301. Rule of construction. Sec. 302. Regulatory authority. Sec. 303. Termination. I Prevention of access by Hezbollah to international financial and other institutions 101. Findings; statement of policy (a) Findings Congress finds the following: (1) The United States Government holds Hezbollah responsible for the largest number of American deaths overseas by a terrorist organization prior to the attacks of September 11, 2001, including a number of attacks on and hostage takings targeting Americans in Lebanon during the 1980s, including the bombing of the United States Embassy in Beirut in April 1983 and the bombing of the United States Marine barracks in October 1983. (2) Hezbollah’s operations outside of Lebanon, including its participation in bombings of Israeli and Jewish institutions in Argentina during the 1990s, recent support to Shiite insurgents in Iraq, recent attacks and attempted attacks in Europe, Southeast Asia, and elsewhere, and extensive international operational, logistical, and financial networks have rendered it a capable and deadly adversary with global reach. (3) Hezbollah has been designated as a terrorist organization by the United States since 1995, and remains on foreign terrorist organization and Specially Designated Terrorist lists. (4) In March 2013, a Cypriot court convicted a Hezbollah member for participation in a criminal organization, planning to commit a crime and money laundering. In June 2013, the Government of Bulgaria concluded that Hezbollah was responsible for the 2012 Burgas bombing, which killed 6 people. (5) In July 2013, the European Union designated the military wing of Hezbollah as a terrorist organization. The designation helps to facilitate European law enforcement agencies’ actions against Hezbollah’s fundraising, logistical activity, and terrorist plotting on European soil. (6) In July 2013, the Gulf Cooperation Council, consisting of Saudi Arabia, Qatar, Bahrain, Kuwait, Oman, and the United Arab Emirates, declared Hezbollah a terrorist organization. (7) Hezbollah continues to provide material assistance, including assuming a combat role, in Syria, and aids the Government of Iran and the Government of Syria in their human rights and other abuses perpetrated against the Syrian people. (8) An estimated 5,000 Hezbollah fighters are supporting the regime of Bashar al-Assad in Syria by fighting on his behalf and by providing military training, advice, and logistical support to regime forces. (9) Hezbollah continues to serve as a proxy of Iran, in its effort to target the United States and its allies and interests. (10) Hezbollah’s global logistics and financial network serves as a lifeline to the organization, and enables it to consolidate power within Lebanon and provides it with the capabilities to perpetrate complex attacks internationally. (11) Hezbollah has evolved into a significant drug smuggling organization, and also engages in other serious criminal activity, including money laundering, counterfeiting pharmaceuticals, and trade in conflict diamonds. (12) In April 2013, the Department of the Treasury blacklisted two Lebanese exchange houses, Kassem Rmeiti & Co. and Halawi Exchange Co., for laundering drug profits for Hezbollah. (13) In February 2011, the Department of the Treasury blacklisted the Lebanese Canadian Bank as of primary money laundering concern, alleging that it moved approximately $200,000,000 as part of a drug trafficking network that profited Hezbollah. (14) The Department of Justice reports that 29 of the 63 organizations on its Fiscal Year 2010 Consolidated Priority Organization Targets list, which includes the most significant international drug trafficking organizations threatening the United States, were associated with terrorist groups. There is concern about Hezbollah’s drug and criminal activities, as well as indications of links between al-Qaeda in the Lands of the Islamic Maghreb and the drug trade. (15) Al-Manar, the Lebanese satellite television station affiliated with Hezbollah broadcasting from Beirut, Lebanon, was designated as a Specially Designated Global Terrorist entity in May 2006, but continues to be carried by international broadcasting agents. (16) Hezbollah continues to present a threat to the United States and its allies and interests. (b) Statement of policy It shall be the policy of the United States to— (1) prevent Hezbollah’s global logistics and financial network from operating in order to curtail funding of its domestic and international activities; and (2) utilize all available diplomatic, legislative, and executive avenues to combat the criminal activities of Hezbollah as a means to block the ability of Hezbollah to fund its global terrorist activities. 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 90 days after the date of the enactment of this Act, the Secretary of the Treasury, in consultation with the Secretary of State, shall 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 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 the activities of Hezbollah or any of its agents or affiliates 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.); (B) knowingly facilitates the activities of a person acting on behalf of or at the direction of, or owned or controlled by, a person described in subparagraph (A); (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 this subsection, or an order or regulation prescribed under 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) 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 Secretary of the Treasury 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. (5) Regulations The Secretary of the Treasury shall prescribe and implement regulations to carry out this subsection. (b) Requirements for financial institutions maintaining accounts for foreign financial institutions (1) In general Not later than 180 days after the date of the enactment of this Act, 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) Report to the Department of the Treasury with respect to financial transactions or other financial services provided with respect to any activity described in subsection (a)(2). (B) Provide timely and accurate information to domestic financial institutions maintaining a correspondent account or payable-through account in the United States for a foreign financial institution with respect to any activity described in subsection (a)(2). (C) 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 activity described in subsection (a)(2). (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. (c) Waiver The Secretary of the Treasury, in consultation with the Secretary of State, may waive the application of a prohibition or condition imposed with respect to a foreign financial institution pursuant to subsection (a) on and after the date that is 30 days after the Secretary of the Treasury, with the concurrence of the Secretary of State— (1) determines that such a waiver is vital to the national security interests of the United States; and (2) submits to the appropriate congressional committees a report describing the reasons for the determination. (d) Provisions relating to foreign central banks (1) Report 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 finds engages in one or more activities described in subsection (a)(2)(D); and (B) provides a detailed description of each such activity. (2) Special rule to allow for termination of sanctionable activity The Secretary of the Treasury shall not be required to apply sanctions under subsection (a) to a foreign central bank described in the report required under paragraph (1) if the Secretary of the Treasury, in consultation with the Secretary of State, certifies in writing to the appropriate congressional committees that— (A) the foreign central bank— (i) is no longer engaging in the activity described in subsection (a)(2)(D) for which the bank was identified in the report; or (ii) has taken significant verifiable steps toward terminating the activity not later than 90 days after the date on which the Secretary makes such certification; and (B) the Secretary has received reliable assurances from the government with primary jurisdiction over the foreign central bank that the foreign central bank will not engage in any activity described in subsection (a)(2)(D) in the future. (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) 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), (K), (M), (N), (R), or (Y) of section 5312(a)(2) of title 31, United States Code. (D) Foreign financial institution; domestic financial institution (i) Foreign financial institution The term foreign financial institution— (I) has the meaning of that term as determined by the Secretary of the Treasury; and (II) includes a foreign central bank. (ii) Domestic financial institution The term domestic financial institution has the meaning of that term as determined by the Secretary of the Treasury. (E) Money laundering The term money laundering means any of the activities described in paragraph (1), (2), or (3) of section 1956(a) of title 18, United States Code, with respect to which penalties may be imposed pursuant to that section. (2) Other definitions The Secretary of the Treasury may further define the terms used in this section in the regulations prescribed under this section. 103. 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 a report that includes— (1) a list of all satellite, broadcast, Internet, or other providers that knowingly transmit or otherwise broadcast the content of al-Manar TV, and any affiliates or successors thereof; and (2) with respect to all providers included on the list pursuant to paragraph (1)— (A) an identification of those providers that have been sanctioned pursuant to Executive Order 13224 (66 Fed. Reg. 49079; 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, the reason why sanctions have not been imposed. (b) Form The report required by subsection (a) shall be submitted in unclassified form to the greatest extent possible, and may contain a classified annex. 104. Report on activities of foreign governments to disrupt global logistics networks and fundraising, financing, and money laundering activities of Hezbollah (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 a report that includes— (1) a list of countries in which Hezbollah maintains important portions of its global logistics networks; (2) with respect to each country on the list required by paragraph (1)— (A) an assessment of whether the government of the country is taking adequate measures to disrupt the global logistics networks of Hezbollah within the territory of the country; and (B) in the case of a country the government of which is not taking adequate measures to disrupt those networks— (i) an assessment of the reasons that government is not taking adequate measures to disrupt those networks; and (ii) a description of measures being taken by the United States Government to encourage that government to improve measures to disrupt those networks; (3) a list of countries in which Hezbollah, or any of its agents or affiliates, conducts significant fundraising, financing, or money laundering activities; and (4) with respect to each country on the list required by paragraph (3)— (A) an assessment of whether the government of the country is taking adequate measures to disrupt the fundraising, financing, or money laundering activities of Hezbollah and its agents and affiliates within the territory of the country; and (B) in the case of a country the government of which is not taking adequate measures to disrupt those activities— (i) an assessment of the reasons that government is not taking adequate measures to disrupt those activities; and (ii) a description of measures being taken by the United States Government to encourage the government of that country to improve measures to disrupt those activities. (b) Form The report required by subsection (a) shall be submitted in unclassified form to the greatest extent possible, and may contain a classified annex. 105. Appropriate congressional committees defined In this title, 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. II Designation of Hezbollah as a major drug smuggling enterprise and a transnational criminal organization 201. Designation of Hezbollah as significant foreign narcotics traffickers (a) In general Not later than 90 days after the date of the enactment of this Act, the President shall determine if Hezbollah meets the criteria specified for designation as a significant foreign narcotics trafficker under section 804 of the Foreign Narcotics Kingpin Designation Act (21 U.S.C. 1903). (b) Affirmative determination If the President determines under subsection (a) that Hezbollah meets the criteria specified for designation as a significant foreign narcotics trafficker under section 804 of the Foreign Narcotics Kingpin Designation Act (21 U.S.C. 1903), the President shall designate Hezbollah as a significant foreign narcotics trafficker under that section. (c) Negative Determination (1) In general If the President determines under subsection (a) that Hezbollah does not meet the criteria specified for designation as a significant foreign narcotics trafficker under section 804 of the Foreign Narcotics Kingpin Designation Act (21 U.S.C. 1903), the President shall submit to the appropriate congressional committees a report that contains a detailed justification as to which criteria have not been met. (2) Form The report required under paragraph (1) shall be submitted in unclassified form, but may contain a classified annex, if necessary. 202. Designation of Hezbollah as a significant transnational criminal organization (a) In general Not later than 90 days after the date of the enactment of this Act, the President shall determine if Hezbollah meets the criteria specified for designation as a significant transnational criminal organization under Executive Order 13581 (76 Fed. Reg. 44757; relating to blocking property of transnational criminal organizations). (b) Affirmative determination If the President determines under subsection (a) that Hezbollah meets the criteria specified for designation as a significant transnational criminal organization under Executive Order 13581, the President shall designate Hezbollah a significant transnational criminal organization under that order. (c) Negative Determination (1) In general If the President determines under subsection (a) that Hezbollah does not meet the criteria specified for designation as a significant transnational criminal organization under Executive Order 13581, the President shall submit to the appropriate congressional committees a report that contains a detailed justification as to which criteria have not been met. (2) Form The report required under paragraph (1) shall be submitted in unclassified form, but may contain a classified annex, if necessary. 203. Appropriate congressional committees defined In this title, the term appropriate congressional committees means— (1) the Committee on Foreign Affairs, the Committee on Financial Services, and the Committee on the Judiciary of the House of Representatives; and (2) the Committee on Foreign Relations, the Committee on Banking, Housing, and Urban Affairs, and the Committee on the Judiciary of the Senate. III Miscellaneous provisions 301. Rule of construction Nothing in this Act shall apply to the authorized intelligence activities of the United States. 302. Regulatory authority The President shall, not later than 90 days after the date of the enactment of this Act, promulgate regulations as necessary for the implementation of this Act. 303. Termination Each provision of this Act shall cease to be in effect beginning 30 days after the date on which the President certifies to Congress that Hezbollah— (1) is no longer designated as a foreign terrorist organization pursuant to section 219 of the Immigration and Nationality Act (8 U.S.C. 1189); and (2) is no longer listed in the Annex to Executive Order 13224 (66 Fed. Reg. 49079; relating to blocking property and prohibiting transactions with persons who commit, threaten to commit, or support terrorism).