Bloomberg
Among the companies that would be vulnerable to the sanctions are Siemens AG, Royal Dutch/Shell Group and Total SA of Europe and Inpex Corp. of Japan.
Both the Clinton and Bush administrations dodged enforcing the law after the EU threatened to fight sanctions as a violation of WTO rules. The House International Relations committee today opens hearings on a bill sponsored by Florida Republican Ileana Ros-Lehtinen that would limit the ability to delay enforcement.
The measure reflects growing impatience with Iran’s suspected nuclear weapons program, said committee chairman Henry Hyde, a Republican from Illinois. “It increasingly appears likely that there will be legislative action this year to encourage compliance with treaties that Iran itself has ratified,” Hyde said in an interview.
Hyde declined to say whether he would support the Ros- Lehtinen bill, one of several measures in Congress offered by both Republicans and Democrats that would step up sanctions against Iran or fund opposition Iranian groups.
Other Republicans who have introduced such legislation are Senator Sam Brownback of Kansas, Senator Rick Santorum of Pennsylvania and Representative Tom Tancredo of California.
Expanding Law
The U.S. prohibits American companies from investing in Iran under sanctions dating to 1979, when students in Tehran seized the U.S. embassy and held 66 Americans hostage. The U.S. has imposed additional sanctions since then, citing Iran’s alleged support of terrorism and its pursuit of nuclear weapons.
The 1996 Iran-Libya Sanctions Act imposed sanctions against companies in other nations that invest in Iran. The Clinton and Bush administrations avoided enforcing it by keeping under indefinite review the cases of foreign companies operating in Iran. The bill offered by Ros-Lehtinen would limit such reviews to 90 days.
Ros-Lehtinen said her bill also would expand the 1996 law to countries — such as France, Germany, Malaysia and Russia — that provide funding to companies operating in Iran. In addition, her measure proposes limiting the conditions under which the president could waive penalties, authorizes funding to Iranian exile groups, and bans public pension funds in the U.S. from increasing their holdings in any companies with investments in Iran.
WTO Protection
The Bush administration has taken no position on the Ros- Lehtinen measure, said Carol Thompson, a spokeswoman for the economic affairs bureau of the U.S. State Department.
The EU will seek WTO protection if the U.S. Congress passes such a bill, said Anthony Gooch, spokesman for the European Commission in Washington. The EU is concentrating on seeking an agreement on nuclear weapons with Iran that promises increased trade and cooperation, Gooch said.
Enforcement and expansion of the law’s Iran provisions would trigger “a trade war with Europe,” said William Reinsch, president of the Washington-based National Foreign Trade Council, an association of U.S. exporters whose 350 members include Exxon Mobil Corp. and ChevronTexaco Corp. The EU will “take them to the WTO and win,” he said.
The current law, as it applies to Iran, requires the president to impose any two on a list of six sanctions, such as restrictions on exports and loans by U.S. banks, against foreign companies that invest more than $20 million in Iran.
Top Priority
An estimated 220 publicly traded companies have ties to Iran, conducting “tens of billions” of dollars in business, according to Conflict Securities Advisory Group Inc., a Washington-based consultant.
U.S. companies can operate in Iran through foreign subsidiaries. General Electric Co. and Halliburton Co., which have such units, both announced in recent months that they are withdrawing from Iran, as did BP Plc of Britain. Dusseldorf, Germany-based ThyssenKrupp AG, Europe’s fourth-biggest steelmaker, has removed a representative of Iran from its supervisory board, citing U.S. pressure, The Wall Street Journal reported on Jan. 28.
Mandating enforcement of the 1996 law is a top priority this year for the American Israel Public Affairs Committee, a Washington-based lobbying group, spokesman Josh Block said.
“We are confident that there is significant concern with Iran’s behavior in Congress and they will pass the strengthened version of this legislation,” Block said. This is “one tangible way” of showing the concern.
Syria Sanctions
The Bush administration’s declining to take a position on the bill may help its chances of passage, said the National Trade Council’s Reinsch. He cited a sanctions bill against Syria that won approval last year only after Secretary of State Colin Powell withdrew his opposition.
If the House passes the measure, the more-reluctant Senate would face pressure to do likewise, Reinsch said. “The problem with these bills is if they come to a vote, people are afraid to vote against them for fear of being called pro-Iranian, even if they agree it’s a bad bill,” he said.
