U.S. Senate Republican Policy Committee - Larry E. Craig, Chairman - Jade West, Staff Director

No. 68 May 20, 1998

H.R. 2709 -- Iran Missile Proliferation
Sanctions Act of 1997

Calendar No. 299

Reported from the House International Relations Committee, on November 4, with an amendment, by voice vote. [H. Rept. 105-375]. With additional views.

NOTEWORTHY
  • The Majority Leader has stated his intention for the Senate to consider and vote on H.R. 2709, the Iran Missile Proliferation Sanctions Act of 1997 on Thursday or Friday of this week. By a unanimous consent agreement entered into on April 3, 1998, the only amendments in order to H.R. 2709 are a Levin amendment, relating to the date of behavior subject to sanctions, and a relevant second-degree amendment, to be offered by Senator Lott. There will be one and-one half hours of debate on the bill, equally divided; and one and one-half hours on the amendments, equally divided. After such time, the Senate will vote on passage of H.R. 2709.

  • H.R. 2709 requires that the President impose certain sanctions on foreign persons where there is credible evidence they transferred, on or after August 8, 1995, items contributing to Iran's efforts to acquire, develop, or produce ballistic missiles.

  • The bill passed the House by voice vote on November 12, 1997.

  • The bill contains two waiver provisions. The President can waive the imposition of any sanction if: 1) On the basis of additional information, the President determines and reports that the foreign person did not carry out the sanctionable act; or 2) The President determines and reports that such waiver is essential to U.S. national security.

  • Title II of H.R. 2709 contains the Senate-passed implementing legislation (S. 610) to the Chemical Weapons Convention, as approved by the Senate on April 24, 1997.

BACKGROUND

Because loopholes in existing sanctions laws have been used by the Clinton Administration to avoid sanctioning firms that have transferred missile goods or technology to Iran, H.R. 2709 is intended to provide the Administration with additional leverage to address ongoing assistance by Russian institutes, research facilities, and other business entities for Iran's medium- and long-range missile programs.

According to the House report, one of the most important national security objectives in the area of nonproliferation is to prevent Iran from obtaining and improving its weapons of mass destruction. In the short-term, the most critical concern is the prospect of Iran enhancing its ballistic missile capability. Iranian acquisition of ballistic missiles with a range of 1,300 kilometers (km) or more poses an unacceptable threat to American forces in the Middle East and to our allies throughout the Persian Gulf region.

While the Committee acknowledges that Russian entities have already provided Iran with missile components, critical know-how, and technological support, the bill's main objective is to address how the United States can halt further assistance.

Unclassified reports have identified technology transfers between Russia and Iran involving construction of a delivery system for the Russian SS-4 and the Iranian Shahab-3 (with a 800-930 mile range and capable of a 1,650-pound payload) and the Iranian Shahab-4 (1,240 mile range, 2,200-pound payload) missiles. Other reports have detailed contracts signed between numerous Russian entities and Iran's Defense Industries Organization (DIO) to help produce liquid-fueled ballistic missiles and wind tunnels for missile development and related technologies.

Further, while the Committee fully supports ongoing discussions between the United States and Russian governments to put an end to this assistance, at present the Administration appears unable or unwilling to sanction the Russian entities that are providing essential missile components and technical assistance to extend the range of Iran's Scud missiles to 1,300 km. As noted in the House report, Russia's cash-strapped technical institutes and research facilities are eager to sell to Iranian weapons purchasers, thus calling Russia's adherence to the Missile Technology Control Regime into serious question. (The MTCR, the voluntary arrangement among countries sharing a common interest in limiting missile proliferation, bars sales of long-range equipment and technology to non-member countries, and includes an Annex listing items to be controlled. The MTCR was formed in 1987 by the United States with Canada, then West Germany, Italy, Japan, France, and the United Kingdom. Membership now totals 29 countries, including Russia which became a member on August 8, 1995. Non-members include Iran, Libya, Pakistan, Syria, Egypt, Turkey, Indonesia and China. Recently, China rebuffed an American proposal to formally join the MTCR, the accomplishment of which was to be the centerpiece of President Clinton's scheduled trip to China in June.)

During a full Committee hearing in October, a State Department official all but acknowledged that there is little likelihood the Administration will impose sanctions on these entities before the Iranian missile program becomes fully operational. According to unclassified intelligence reports, Iran is within a year or two of being able to deploy missiles that could deliver nuclear or chemical warheads about 850 miles -- far enough to reach Israel, Turkey and Saudi Arabia. A second missile is said to be within three years of development [Washington Post, 1/18/98].

HIGHLIGHTS

The bill requires the President to submit a report to Congress 30 days after the date of enactment, and periodically thereafter, identifying those entities where there is credible evidence they have transferred, on or after August 8, 1995, key components or technology to Iran which could assist Iran in acquiring, developing, or producing ballistic missiles. Thirty days after this report is required to be submitted, three sanctions would be imposed for a period of at least two years. The sanctions are: denying munitions licenses; prohibiting dual-use licenses; and, denying U.S. foreign assistance. The bill also contains waiver provisions.

In addition, H.R. 2709 contains implementing legislation for the Chemical Weapons Convention (CWC), which was approved by the Senate on April 24, 1997. The language in the House bill is identical to S. 610, the Chemical Weapons Implementation Act of 1997, which passed the Senate by unanimous consent on May 23, 1997. The CWC Implementation Act faithfully implements the CWC and provides protections to ensure that implementation of the Convention does not abridge the rights guaranteed by the Fourth and Fifth Amendments of the U.S. Constitution.

S. 610 designated the State Department as the U.S. National Authority to be the liaison between the Organization for the Prohibition of Chemical Weapons, (the organization established by the CWC to implement the Treaty), and other states parties. It also provides that no person may be required to waive his constitutional rights as a condition for entering into a contract with or receiving a benefit from the United States.

BILL PROVISIONS

Section 1. Short Title

The Act is titled, "Iran Missile Proliferation Sanctions Act of 1997."

Section 2. Reports on Missile Proliferation to Iran

The President is required to submit periodic reports on missile proliferation to Iran to relevant Committees. Each report must identify every foreign person for which there is credible information that on or after August 8, 1995, that person either:

  1. Transferred items on the MTCR Annex that contributed to Iran's efforts to acquire, develop, or produce ballistic missiles;

  2. Provided technical assistance or facilities which the President deems are of concern to the United States because of their direct contribution to Iran's ballistic missile efforts;

  3. Attempted to transfer items on the MTCR Annex that would have contributed to Iran's efforts; or

  4. Attempted to provide technical assistance or facilities, for the same purposes as identified above.

The Committee adopts a very low evidentiary standard, with "credible information" defined as "information that is sufficiently believable as to raise a serious question in the mind of a reasonable person as to whether a foreign person may have transferred or attempted to transfer missile goods, technology, technical assistance, or facilities" that could contribute to Iran's efforts to acquire, develop, or produce ballistic missiles. According to the report, the Committee adopts this very low evidentiary standard because of its dissatisfaction with how the evidentiary standard (which essentially is a "preponderance of evidence standard") contained in other counterproliferation laws has been applied. In practice, the Executive branch generally has delayed imposing sanctions until all doubt has been erased about whether a transfer occurred, essentially elevating the evidentiary standard of these laws to a requirement of "proof beyond a reasonable doubt." The Committee believes this practice has undermined the effectiveness of nonproliferation laws by blunting their intended deterrent effect.

Section 3. Imposition of Sanctions

Sanctions are required to be imposed on any foreign person who the report identifies as having:

  1. Transferred or attempted to transfer items on the MTCR Annex that contributed to Iran's efforts to acquire, develop or produce ballistic missiles; or

  2. Provided or attempted to provide technical assistance or facilities the President deems to be of concern to the United States because of their direct contribution to Iran's efforts, as outlined above.

Three sanctions must be imposed for a period of not less than two years:

  1. Prohibition of sales of items on the U.S. Munitions List as of August 8, 1995, and termination of sales of defense articles, defense services, and design and construction services under the Arms Export Control Act;

  2. Prohibition of exports of dual-use items listed under the Export Administration Act of 1979; and

  3. Prohibition of U.S. assistance in the form of grants, loans, credits, or guarantees.

Section 4. Waiver on Basis of Additional Information

The President may waive the imposition of any sanction otherwise required if, on the basis of additional information provided by the person in question, the President determines and reports that he is persuaded that the foreign person did not carry out the sanctionable act. The determination and report must be accompanied by a written justification describing in detail the credible information that otherwise would give rise to a sanction, the additional information which persuaded the President that the credible information was misleading or incorrect, and the President's analysis of the information.

Section 5. Waiver on Basis of National Security

The President may waive the imposition of any required sanction if he determines and reports that such waiver is essential to U.S. national security. As above, the determination and report must be accompanied by a written justification describing in detail the facts and circumstances supporting the President's conclusion.

Section 6. Additional Information Regarding Actions By Government of Primary Jurisdiction

As part of each report submitted, the President is to provide additional information regarding the knowledge and actions, or lack thereof, the government of primary jurisdiction had over that foreign person. If the government of primary jurisdiction had knowledge of the activities and failed to undertake effective efforts to prevent the act, the President is required to describe the sanctions that have been imposed on that government by the United States because of such failure.

Section 7. Purchase of Weapons Technology

Expresses the sense of Congress that the President should use his authority under section 504 of the Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act of 1992 to prevent the transfer to Iran of weapons-related material, delivery systems, and related scientific and technical expertise through purchase, barter, or other acquisition of such items.

Section 8. Definitions

Provides definitions of terms "foreign person," "person," "government of primary jurisdiction," and "MTCR Annex."

COST

Based on information from the Department of State (DOS), CBO estimates that the additional reporting requirements would cost less than $500,000 annually, assuming appropriation of the necessary funds. CBO estimates that section 7 of the bill (authorizing the use of appropriated funds to acquire weapons-related material, delivery systems, or technology to prevent their transfer to Iran) would have no budgetary impact because current law already allows DOS to take the measures authorized by that section, and enactment of H.R. 2709 would not increase spending on such activities. Because the bill would not affect direct spending on receipts, pay-as-you-go procedures would not apply.

ADMINISTRATION POSITION

While no official Statement of Administration Position on H.R. 2709 existed at press time, in an October 24, 1997, letter to the Ranking Democratic Member of the House International Relations Committee, Secretary of State Madeleine Albright commented on a draft of the Iran Missile Proliferation Act of 1997 as follows: "If presented to the President in its current form, the Secretary of State and the President's National Security Advisor would recommend that he veto this bill." [NOTE: Secretary of State Albright was commenting on the legislation in draft form, when H.R. 2709 did not contain the implementing legislation for the Chemical Weapons Convention. The final House-passed legislation, however, does contain this language.]

POSSIBLE AMENDMENTS

A U.C. Agreement, reached on March 23, 1997, allows for two possible amendments to be in order to H.R. 2709: An amendment to be offered by Sen. Levin relating to the date of behavior subject to sanctions, and a relevant second-degree amendment to be offered by Senator Lott.

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