Subchapter XVI. Divestment, Prohibition on Investment of Certain Public Funds.
Part A. Sudan.
§ 1–335.01. Definitions.
For the purposes of this part, the term:
(1) “Active Business Operations” means all Business Operations that are not Inactive Business Operations.
(2) “Business Operations” means engaging in commerce in any form in Sudan, including by acquiring, developing, maintaining, owning, selling, possessing, leasing, or operating equipment, facilities, personnel, products, services, personal property, real property, or any other apparatus of business or commerce.
(3) “Company” means any sole proprietorship, for-profit or nonprofit organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, or other entity or business association, including all wholly-owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of such entities or business associations, that exists for for-profit or nonprofit purposes.
(4) “Complicit” means taking actions during any preceding 20-month period which have directly supported or promoted the genocidal campaign in Darfur, including preventing Darfur’s victimized population from communicating with each other, encouraging Sudanese citizens to speak out against an internationally approved security force for Darfur, or actively working to deny, cover up, or alter the record on human rights abuses in Darfur.
(5) “Direct Holdings” in a company means all securities of that company held directly by the Public Fund or in an account or fund in which the Public Fund owns all shares or interests.
(6) “Government of Sudan” means the government in Khartoum, Sudan, which is led by the National Congress Party (formerly known as the National Islamic Front) or any successor government formed on or after October 13, 2006 (including the coalition National Unity Government agreed upon in the Comprehensive Peace Agreement for Sudan. The term “Government of Sudan” shall not include the regional government of southern Sudan.
(7) “Inactive Business Operations” means the mere continued holding or renewal of rights to property previously operated for the purpose of generating revenues but not presently deployed for such purpose.
(8) “Indirect Holdings” in a company means all securities of that company held in an account or fund, such as a mutual fund, managed by one or more persons not employed by the Public Fund, in which the Public Fund owns shares or interests together with other investors not subject to the provisions of this part.
(9) “Marginalized Populations of Sudan” include the portion of the population in the Darfur region that has been genocidally victimized; the portion of the population of southern Sudan victimized by Sudan’s North-South civil war; the Beja, Rashidiya, and other similarly underserved groups of eastern Sudan; the Nubian and other similarly underserved groups in Sudan’s Abyei, Southern Blue Nile, and Nuba Mountain regions; and the Amri, Hamadab, Manasir, and other similarly underserved groups of northern Sudan.
(10) “Military Equipment” means:
(A) Weapons, arms, military supplies, and equipment that readily may be used for military purposes, including radar systems or military-grade transport vehicles; or
(B) Supplies or services sold or provided directly or indirectly to any force actively participating in armed conflict in Sudan.
(11) “Mineral Extraction Activities” include exploring, extracting, processing, transporting, or wholesale selling or trading of elemental minerals or associated metal alloys or oxides (ore), including gold, copper, chromium, chromite, diamonds, iron, iron ore, silver, tungsten, uranium, and zinc, and facilitating such activities, including by providing supplies or services in support of such activities.
(12)(A) “Oil-Related Activities” include:
(i) Owning rights to oil blocks;
(ii) Exporting, extracting, producing, refining, processing, exploring for, transporting, selling, or trading of oil;
(iii) Constructing, maintaining, or operating a pipeline, refinery, or other oil-field infrastructure; and
(iv) Facilitating such activities, including by providing supplies or services in support of such activities.
(B) The mere retail sale of gasoline and related consumer products shall not be considered Oil-Related Activities.
(13) “Power Production Activities” means any Business Operations that involve a project commissioned by the National Electricity Corporation of Sudan or other similar Government of Sudan entity whose purpose is to facilitate power generation and delivery, including establishing power-generating plants or hydroelectric dams, selling or installing components for the project, providing service contracts related to the installation or maintenance of the project, and facilitating such activities, including by providing supplies or services in support of such activities.
(14) “Public Fund” means the assets of the District of Columbia Retirement Board, the Board of Trustees in charge of the District of Columbia Retirement Board.
(15) “Scrutinized Company” means a company, other than a Social Development Company which is not complicit in the Darfur genocide, that meets the criteria set forth in any of the following subparagraphs:
(A)(i) The company has Business Operations that involve contracts with, or provision of supplies or services, to:
(I) The Government of Sudan;
(II) Companies in which the Government of Sudan has any direct or indirect equity share;
(III) Government of Sudan-commissioned consortiums or projects; or
(IV) Companies involved in Government of Sudan-commissioned consortiums or projects; and
(ii)(I)(aa) More than 10% of the company’s revenues or assets linked to Sudan involve Oil-Related Activities or Mineral Extraction Activities;
(bb) Less than 75% of the company’s revenues or assets linked to Sudan involve contracts with, or provision of Oil-Related or Mineral Extracting products or services to, the regional government of southern Sudan or a project or consortium created exclusively by that regional government; and
(cc) The company has failed to take Substantial Action; or
(II)(aa) More than 10% of the company’s revenues or assets linked to Sudan involve Power Production Activities;
(bb) Less than 75% of the company’s Power Production Activities include projects whose intent is to provide power or electricity to the Marginalized Populations of Sudan; and
(cc) The company has failed to take Substantial Action;
(B) The company is complicit in the Darfur genocide;
(C) The company supplies Military Equipment within Sudan, unless it clearly shows that the Military Equipment cannot be used to facilitate offensive military actions in Sudan or the company implements rigorous and verifiable safeguards to prevent use of that equipment by forces actively participating in armed conflict, including, through post-sale tracking of the equipment by the company, certification from a reputable and objective third party that the equipment is not being used by a party participating in armed conflict in Sudan, or sale of the equipment solely to the regional government of southern Sudan or any internationally recognized peacekeeping force or humanitarian organization.
(16) “Scrutinized Companies List” means a list of Scrutinized Companies compiled in accordance with § 1-335.02.
(17) “Social Development Company” means a company whose primary purpose in Sudan is to provide humanitarian goods or services, including medicine or medical equipment, agricultural supplies or infrastructure, educational opportunities, journalism-related activities, information or information materials, spiritual-related activities, services of a purely clerical or reporting nature, food, clothing, or general consumer goods that are unrelated to Oil-Related Activities, Mineral Extraction Activities, or Power Production Activities.
(18) “Substantial Action” means:
(A) Adopting, publicizing, and implementing a formal plan to cease Business Operations within one year and to refrain from any new Business Operations;
(B) Undertaking significant humanitarian efforts on behalf of one or more Marginalized Populations of Sudan; or
(C) Through engagement with the Government of Sudan, materially improving conditions for the genocidally victimized population in Darfur.
§ 1–335.02. Identification of companies.
(a) Within 90 days after February 2, 2008, the Public Fund shall make its best efforts to identify all Scrutinized Companies in which the Public Fund has Direct Holdings, Indirect Holdings, or could possibly have such holdings in the future. Such efforts shall include, as appropriate:
(1) Reviewing and relying, as appropriate in the Public Fund’s judgment, on publicly available information regarding companies with Business Operations in Sudan, including information provided by nonprofit organizations, research firms, international organizations, and government entities;
(2) Contacting asset managers contracted by the Public Fund that invest in companies with Business Operations in Sudan;
(3) Contacting other institutional investors that have divested from, or engaged with, companies that have Business Operations in Sudan.
(b) By the first meeting of the Public Fund following the 90-day period set forth in subsection (a) of this section, the Public Fund shall compile all Scrutinized companies identified into a Scrutinized Companies List.
(c) The Public Fund shall update the Scrutinized Companies List on a quarterly basis based on information from sources, including those listed in subsection (a) of this section.
§ 1–335.03. Required actions.
(a) Except as provided in subsections (c), (d), and (e) of this section, during the period that a company on the scrutinized Company List has Active Business Operations, the Public Fund shall sell, redeem, divest, or withdraw all publicly-traded securities of the company according to the following schedule:
(1) At least 50% of the assets shall be removed from the Public Fund’s assets under management by 6 months after the company’s most recent appearance on the Scrutinized Companies List.
(2) All of such assets shall be removed from the Public Fund’s assets under management within 12 months after the company’s most recent appearance on the Scrutinized Companies List.
(b) Except as provided in subsections (c), (d), and (e) of this section, the Public Fund shall not acquire securities of companies on the Scrutinized Companies List that have Active Business Operations.
(c) A company which the United States government affirmatively declares to be excluded from its present or any future federal sanctions regime relating to Sudan shall not be subject to the divestment or investment prohibition of subsections (a) and (b) of this section.
(d) Notwithstanding anything herein to the contrary, subsections (a) and (b) of this section shall not apply to Indirect Holdings in actively-managed investment funds; provided, that the Public Fund shall submit letters to the managers of actively-managed investment funds containing companies with Scrutinized Active Business Operations requesting that they consider removing such companies from the fund or create a similar actively-managed fund with Indirect Holdings devoid of such companies; provided further, that if the manager creates a similar fund, the Public Fund shall replace all applicable investments with investments in the similar fund in an expedited time period consistent with prudent investing standards. For the purposes of this section, private equity funds shall be deemed to be actively-managed investment funds.
(e) Notwithstanding the foregoing, the District of Columbia Retirement Board shall comply with the requirements of this part only to the extent consistent with:
(1) Its fiduciary duties under Chapters 7 and 9 of this title [§ 1-701 et seq. and § 1-901 et seq.]; and
(2) Section 5 of the Sudan Accountability and Divestment Act of 2007, approved December 31, 2007 (121 Stat. 2516; 50 U.S.C. § 1701, note).
§ 1–335.04. Reporting.
(a) Repealed.
(b) Annually thereafter, the Public Fund shall report as part of the annual report required under § 1-909.02(b)(13), the following:
(1) All investments sold, redeemed, divested, or withdrawn in compliance with § 1-335.03(a);
(2) All prohibited investments under § 1-335.03(b);
(3) Any progress made under § 1-335.03(d); and
(4) A list of any investments held by the Public Fund that would have been divested under § 1-335.03 but for § 1-335.03(e), including a statement of the reasons why a sale or transfer of the investments is inconsistent with the fiduciary responsibilities of the District of Columbia Retirement Board and the circumstances under which the District of Columbia Retirement Board anticipates that it will sell, transfer, or reduce the investment.
§ 1–335.05. Indemnification.
Present, future, and former District of Columbia Retirement Board members and employees shall be indemnified by the District of Columbia from all claims and liability, including court costs and attorney’s fees, because of any action taken pursuant to this part.
§ 1–335.06. Reinvestment in certain companies with Active Business Operations.
(a)(1) Notwithstanding anything herein to the contrary, the Public Fund shall be permitted to cease divesting from certain Scrutinized Companies pursuant to § 1-335.03(b) or reinvest in certain Scrutinized Companies from which it divested pursuant to § 1-335.03(a) if clear and convincing evidence shows that the value for all assets under management by the Public Fund becomes equal to or less than .50% (50 basis points) of the hypothetical value of all assets under management by the Public Fund assuming no divestment for any company had occurred under § 1-335.03(a).
(2) Cessation of divestment, reinvestment, or any subsequent ongoing investment authorized by this section shall be strictly limited to the minimum steps necessary to avoid the contingency set forth in paragraph (1) of this subsection.
(b) For any cessation of divestment, reinvestment, or subsequent ongoing investment authorized by this section, the Public Fund shall provide a written report to the Council and the Mayor in advance of initial reinvestment, updated semiannually thereafter, as applicable, setting forth the reasons and justification, supported by clear and convincing evidence, for its decisions to cease divestment, reinvest, or remain invested in companies with Active Business Operations.
(c) This section shall not apply to reinvestment in companies on the ground that they have ceased to have Active Business Operations.
§ 1–335.07. Enforcement.
The Mayor shall enforce this part and may bring such legal action as is necessary to do so.
Part B. Government of Iran.
§ 1–336.01. Definitions.
For the purposes of this part, the term:
(1) “Company” means any sole proprietorship, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, or other entity or business association that exists for the purpose of making profit.
(2) “Direct holdings” in a company means all securities of the company that are held directly by the public fund or in an account or fund in which the public fund owns all shares or interests.
(3) “Government of Iran” means the government of Iran, its instrumentalities, and companies owned or controlled by the government of Iran.
(4) “Inactive business activities” means the mere continued holding or renewal of rights to property previously operated for the purpose of generating revenues but not presently deployed for such purpose.
(5) “Indirect holdings” in a company means all securities of the company that are held in an account or fund, such as a mutual fund, managed by one or more persons not employed by the public fund, in which the public fund owns shares or interests together with other investors not subject to the provisions of this part.
(6) “Iran” means the Islamic Republic of Iran.
(7) “Petroleum resources” means petroleum or natural gas.
(8) “Public fund” means the assets of the District of Columbia Retirement Board.
(9) “Scrutinized business activities” means business activities that have resulted in a company becoming a scrutinized company.
(10) “Scrutinized company” means any company that, with actual knowledge, on or after August 5, 1996, has made an investment of $20 million or more in Iran’s petroleum sector which directly or significantly contributes to the enhancement of Iran’s ability to develop the petroleum resources of Iran.
(11) “Substantial action specific to Iran” means adopting, publicizing, and implementing a formal plan to cease scrutinized business activities within one year and to refrain from any such new business activities.
§ 1–336.02. Identification of companies.
(a) Within 90 days after March 21, 2009, the public fund shall make its best efforts to identify all scrutinized companies in which the public fund has direct or indirect holdings. Such efforts shall include reviewing and relying, as appropriate in the public fund’s judgment, on publicly available information regarding companies that have invested more than $20 million in any given year since August 5, 1996, in Iran’s petroleum energy sector, including information provided by nonprofit organizations, research firms, international organizations, and government entities.
(b) On or before the 1st meeting of the public fund held 90 days after March 21, 2009, the public fund shall compile a list of all scrutinized companies entitled “Scrutinized Companies With Activities in the Iran Petroleum Energy Sector List”.
(c) The public fund shall update and make publicly available annually the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List.
§ 1–336.03. Required actions.
(a) For each scrutinized company on the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List:
(1)(A)(i) For each company in which the public fund has direct holdings newly identified under § 1-336.02, the public fund shall send a written notice informing the company of its scrutinized company status and that it may become subject to divestment by the public fund.
(ii) The notice shall inform the company of the opportunity to clarify its Iran-related activities and encourage the company, within 90 days, to cease its scrutinized business activities or convert such activities to inactive business activities to avoid qualifying for divestment by the public fund. The notice shall be sent no later than 135 days after the company is placed on the list.
(B) If, within 90 days after the public fund’s notice to a company pursuant to this paragraph, the company announces by public disclosure substantial action specific to Iran, the public fund may maintain its direct holdings, but the company shall remain on the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List pending completion of its cessation of scrutinized business activities.
(2)(A) If, after 90 days following the public fund’s 1st notice to a company pursuant to paragraph (1) of this subsection, the company has not announced by public disclosure substantial action specific to Iran, or the public fund determines or becomes aware that the company continues to have scrutinized business activities, the public fund, within 8 months after the expiration of such 90-day period, shall sell, redeem, divest, or withdraw all publicly-traded securities of the company from the public fund’s direct holdings.
(B) If the public fund determines or becomes aware that a company that ceased scrutinized business activities following engagement pursuant to paragraph (1) of this subsection has resumed such activities, the public fund shall:
(i) Send a written notice to the company as required under paragraph (1)(A)(ii) of this subsection;
(ii) Add the company to the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List; and
(iii) Sell, redeem, divest, or withdraw as may be required by subparagraph (A) of this paragraph.
(C) The public fund shall monitor the scrutinized company that has announced by public disclosure substantial action specific to Iran. If, after one year, the public fund determines or becomes aware that the company has not implemented such substantial action, within 3 months after the expiration of such one-year period, the public fund shall sell, redeem, divest, or withdraw all publicly-traded securities of the company from the public fund’s direct holdings, and the company also shall be immediately reintroduced onto the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List.
(b) The public fund shall not acquire securities of companies on the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List.
(c) Notwithstanding the provisions of this part, subsection (a)(2) of this section shall not apply to the public fund’s indirect holdings; provided, that the public fund shall submit letters to the managers of any managed investment funds containing companies on the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List that they consider removing such companies from the fund or create a similar actively-managed fund having indirect holdings devoid of such companies. If the manager creates a similar fund without such securities or if such funds are created elsewhere, the District of Columbia Retirement Board shall determine within 6 months whether to replace all applicable investments with investments in the similar fund in an expedited time period consistent with prudent investing standards. For the purposes of this section, a private equity fund shall be deemed to be an actively-managed investment fund.
(d) The District of Columbia Retirement Board shall comply with the requirements of this part only to the extent consistent with:
(1) Its fiduciary duties under Chapters 7 and 9 of this title [§ 1-701 et seq. and § 1-901 et seq.]; and
(2) Section 5 of the Sudan Accountability and Divestment Act of 2007, approved December 31, 2007 (121 Stat. 2516; 50 U.S.C. § 1701 note).
§ 1–336.04. Reporting.
(a) Repealed.
(b) Annually thereafter, the public fund shall report as part of the annual report required under § 1-909.02(b)(14), the following:
(1) All investments sold, redeemed, divested, or withdrawn in compliance with § 1-336.03(a);
(2) All prohibited investments under § 1-336.03(b);
(3) Any progress made under § 1-336.03(e);
(4) A list of all publicly-traded securities held directly by the public fund; and
(5) A list of any investments held by the public fund that would have been divested under § 1-336.03(a), but for § 1-336.03(d), including a statement of the reasons why a sale or transfer of the investments is inconsistent with the fiduciary responsibilities of the District of Columbia Retirement Board, and the circumstances under which the District of Columbia Retirement Board anticipates that it will sell, transfer, or reduce the investments.
§ 1–336.05. Liability.
Present, future, and former District of Columbia Retirement Board members and employees shall be indemnified by the District of Columbia from all claims and liability, including court costs and attorney’s fees, because of any action taken pursuant to this part.
§ 1–336.06. Sunset.
This part shall expire upon the occurrence of any of the following:
(1) The Congress or President of the United States unambiguously states, by means including legislation, executive order, or written certification from the President to Congress, that the government of Iran has ceased to pursue the capabilities to develop nuclear weapons and support international terrorism;
(2) The United States revokes all sanctions imposed against the government of Iran; or
(3) The Congress or President of the United States affirmatively and unambiguously declares, by means including legislation, executive order, or written certification from the President to Congress, that mandatory divestment of the type provided for in this part interferes with the conduct of United States foreign policy.
