Mr. GILMAN. Mr. Speaker, I yield 2 minutes to the gentleman from Connecticut [Mr. Gejdenson], the senior member of our Committee on International Relations.
Mr. GEJDENSON. Mr. Speaker, I would like to engage the chairman in a colloquy, if I may. I have several technical questions about H.R. 3107, as amended.
First, section 5(e) of the bill as amended states, `The President shall cause to be published in the Federal Register a list of all significant projects which have been publicly tendered in the oil and gas sector in Iran.' Will this be a comprehensive list for purposes of the sanctions provisions of the bill?
Mr. GILMAN. Mr. Speaker, will the gentleman yield?
Mr. GEJDENSON. I yield to the gentleman from New York.
Mr. GILMAN. No, Mr. Speaker the list may not necessarily be comprehensive. In such a case, the investor could be subject to sanctions under the bill notwithstanding that the project did not appear on the list published in the Federal Register.
Mr. GEJDENSON. Second, if section 5(f)(3) of the bill as amended exempts from the bill's requirement to impose sanctions `products, technology, or services provided under contracts entered into before the date on which the President publishes in the Federal Register the name of the person on whom the sanctions are to be imposed,' does this provision mean the sanctions cannot be imposed under section 5(a) or 5(b) on a person for actions taken by that person prior to the publication of that person's name in the Federal Register?
Mr. GILMAN. No, that would be an illogical construction of the provisions. Section 5(f)(3) is essentially a contract sanctity provision.
Mr. GEJDENSON. Third, I was hoping the chairman could explain how section 5(d) of the bill as amended is intended to apply. Am I correct that under section 5(d), if a parent company engages in investment activities that cause the subsidiary to be subject to sanctions, the parent itself will be subject to sanctions?
Mr. GILMAN. That is correct.
Mr. GEJDENSON. Am I also correct that if the parent company supervises and guarantees the subsidiary's investment activities, the parent will be subject to sanctions?
Mr. GILMAN. That is correct.
Mr. GEJDENSON. Am I further correct that if the parent company has an equity share or profit-sharing relationship to the investment, the parent company also will be subject to sanctions?
Mr. GILMAN. That is correct.
Mr. GEJDENSON. Finally, I would like to draw the gentleman's attention to the concern I expressed in my statement about the prospect that foreign banks may finance oil development in Iran. I would ask the gentleman, does he share my concern?
Mr. GILMAN. I certainly do. The financing of oil development in Iran poses virtually the same threat as investments in those same projects.
Mr. HAMILTON. Mr. Speaker, I yield 1 minute to the distinguished gentleman from Florida [Mr. Deutsch].
Mr. DEUTSCH. Mr. Speaker, this is a bill that unfortunately we might look back in 5 to 10 years and say this is one of the most important pieces of legislation that this Congress will pass in this session of Congress. It really is dealing with a threat that is out there, not just to the United States but to the entire world, a threat dealing with issues of Iran's terrorism in terms of their activism, in terms of the islands off Iran in the Strait of Hormuz, including their issues in terms of missiles, in terms of diesel submarines.
We have the ability by this legislation to weaken their potential to do that. That is exactly what we are trying to do. It is very narrowly, specifically drawn in terms of attacking them where it could hurt the most in terms of their ability to increase their production of oil and to gain revenues to do that.
Iran stands out as really a rogue nation today, committed to force terrorism throughout the entire planet, not just in our hemisphere. I urge support of the amendment.
Mr. GILMAN. Mr. Speaker, I yield 2 minutes to the gentleman from California [Mr. Berman].
(Mr. BERMAN asked and was given permission to revise and extend his remarks.)
Mr. BERMAN. Mr. Speaker, I seek to have a colloquy with the chairman.
I have several technical questions about provisions in the amendment in the nature of a substitute to H.R. 3107.
Mr. GILMAN. Mr. Speaker, will the gentleman yield?
Mr. BERMAN. I yield to the gentleman from New York.
Mr. GILMAN. Mr. Speaker, I will be pleased to respond to the questions of the distinguished ranking minority member of our Subcommittee on Asia and the Pacific.
Mr. BERMAN. First, I note in section 6 of the amendment in the nature of a substitute there are six possible sanctions that could be imposed pursuant to section 5. Is it the case that the President must, under section 5(a) for example, select two of the sanctions listed in section 6 to apply to a sanctioned person, but after selecting them the President may decide not to actually apply them to the sanctioned person?
Mr. GILMAN. No, that is not the intent of section 6. The sanctions identified in section 6 are intended to be mandatory when selected pursuant to either section 5(a) or 5(b)(1).
Mr. BERMAN. I thank the chairman.
Second, it is suggested that the President may have flexibility under sections 5 and 6 to impose sanctions on a person that, because of the nature of that person's business, are meaningless to that person as a practical matter. Would such action by the President be consistent with the intent of sections 5 and 6?
Mr. GILMAN. No, the imposition of meaningless sanctions would be inconsistent with our intent.
Mr. BERMAN. Finally, I note that the definition of `investment' set forth in section 14(9) states, `The term `investment' does not include the entry into, performance, or financing of a contract to sell or purchase goods, services, or technology.' What is the purpose of this exception?
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Mr. GILMAN. This language in the definition of `investment' is intended to underscore that, particularly with respect to Iran, the amendment in the nature of a substitute does not contain a trade trigger for the imposition of sanctions.
Mr. BERMAN. I thank the chairman.