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Title III — Sanctions with respect to the development and use of Iranian digital currency

H.R. 7321 · 115th Congress · Dec 17, 2018 · Lineage

III Sanctions with respect to the development and use of Iranian digital currency

Sec. 301 Definitions

In this title:
(1)
Correspondent account; payable-through account— The terms correspondent account and payable-through account have the meanings given those terms in section 5318A of title 31, United States Code.
(2)
Digital currency exchange— The term digital currency exchange means any organization, association, or group of persons, whether incorporated or unincorporated, which constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of digital currencies or for otherwise performing with respect to digital currencies the functions commonly performed by an exchange as that term is generally understood, and includes the market place and the market facilities maintained by such digital currency exchange.
(3)
Foreign person— The term foreign person means a person that is not a United States person.
(4)
Iranian digital currency— The term Iranian digital currency means any digital currency, digital coin, or digital token that was issued by, for, or on behalf of the Government of Iran.
(5)
United States person— The term United States person means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or person in the United States.

Sec. 302 Findings

Congress makes the following findings:
(1)
On February 13, 2018, the Under Secretary of the Treasury for Terrorism and Financial Intelligence stated that “Rogue regimes like Venezuela experiment with and use digital and virtual currencies to hide their ill-gotten gains and finance their illicit activities. Recently, for example, Venezuela announced plans to create the “petro” digital currency to try and sidestep our powerful sanctions.”.
(2)
In April 2018, the Minister of Information and Communications Technology of Iran stated that “the experimental model was ready” for a digital currency developed by the Government of Iran.
(3)
In June 2018, the Deputy for Management and Investment at the Directorate for Scientific and Technological Affairs of Iran stated that “We are trying to prepare the grounds to use a domestic digital currency in the country … This currency would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions.”.
(4)
In October 2018, the head of the Civil Defense Organization of Iran stated that “cryptocurrencies can help bypass certain sanctions through untraceable banking operations”.

Sec. 303 Prohibition on transactions related to, provision of financing for, and other dealings in Iranian digital currency

(a)
In general— All transactions related to, provision of financing for, and other dealings in Iranian digital currency by a United States person or within the United States are prohibited.
(b)
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 knowingly violates, attempts to violate, conspires to violate, or causes a violation of subsection (a) to the same extent that such penalties apply to a person that knowingly commits an unlawful act described in section 206(a) of such Act.

Sec. 304 Sanctions with respect to foreign persons that engage in significant transactions for the sale, supply, or transfer to Iran of significant goods or services used in connection with the development of Iranian digital currency

The President shall impose 5 or more of the sanctions described in section 6(a) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note) with respect to any foreign person that the President determines knowingly engages, on or after the date of the enactment of this Act, in a significant transaction for the sale, supply, or transfer to Iran of significant goods or services, or technological support, used in connection with the development of Iranian digital currency.

Sec. 305 Sanctions with respect to foreign persons that conduct or facilitate significant transactions related to the purchase or sale of Iranian digital currency or maintain significant amounts in Iranian digital currency

(a)
In general— The President may impose the sanctions described in subsection (b) with respect to a foreign person if the President determines that the foreign person, on or after the date of the enactment of this Act—
(1)
knowingly conducts or facilitates any significant transaction related to the purchase or sale of Iranian digital currency or a derivative, swap, future, forward, or other similar contract the value of which is based on the exchange rate of Iranian digital currency; or
(2)
maintains significant amounts denominated in Iranian digital currency outside the territory of Iran.
(b)
Sanctions described— The sanctions to be imposed on a foreign person under this subsection are the following:
(1)
Correspondent and payable-through account limitations— With respect to any digital currency exchange subject to sanctions under subsection (a), prohibiting the opening, and imposing strict conditions on the maintaining, in the United States of a correspondent account or payable-through account by the digital currency exchange.
(2)
Blocking of property— Blocking and prohibiting all transactions in all property and interests in property of the foreign person if such property and interests in property are in the United States, come within the United States, or are or come within the possession or control of a United States person.
(3)
Visa ban— With respect to a foreign person who is an alien, inadmissibility to the United States and ineligibility to receive a visa or other documentation to enter the United States.
(c)
Exception To comply with united nations headquarters agreement and other international obligations— The sanctions under subsection (b)(3) may not be imposed on an individual if admitting that individual to the United States is necessary to permit the United States to comply with the Agreement regarding the Headquarters of the United Nations, signed at Lake Success June 26, 1947, and entered into force November 21, 1947, between the United Nations and the United States, or with other applicable international obligations.

Sec. 306 Report on progress of Government of Iran in creating a sovereign cryptocurrency

(a)
In general— Not later than 120 days after the date of the enactment of this Act, the Secretary of the Treasury shall submit to Congress a report on the status of the progress of the Government of Iran in creating a sovereign cryptocurrency.
(b)
Elements— The report required by paragraph (1) shall include the following:
(1)
An assessment of the progress of the Government of Iran in creating a sovereign cryptocurrency.
(2)
A description of the technical details of what is being developed, including whether the Government of Iran intends to—
(A)
fork an existing blockchain or create a new one;
(B)
make the blockchain open or closed; or
(C)
involve the Central Bank of Iran.
(3)
An assessment of the state and non-state actors that are assisting the Government of Iran in creating a sovereign cryptocurrency, including the governments of the People’s Republic of China, the Russian Federation, the Bolivarian Republic of Venezuela, and the Republic of Turkey.
(4)
An assessment of the effect that successful development, deployment, and maintenance by the Government of Iran of a sovereign cryptocurrency would have on the effectiveness of existing United States sanctions with respect to Iran.
(5)
An assessment of the technology and infrastructure that the Government of Iran would need to develop, deploy, and maintain a national digital currency, including a cryptocurrency.
(6)
An identification of the countries that have agreed to assist the United States in blocking efforts to bypass or evade United States sanctions relating to Iran or bypass or evade countermeasures and risk mitigation practices outlined by the Financial Action Task Force.