House Approves Iran Sanctions Bill

Miles A. Pomper

The House April 26 overwhelmingly approved legislation tightening sanctions aimed at curbing progress in Iran’s nuclear program. The 397-21 vote came despite Bush administration concerns that the measure might harm relations with some U.S. allies.

The Senate has yet to act on the legislation, but a similar Senate bill by Sen. Rick Santorum (R-Pa.) has 58 co-sponsors, enough to ensure majority support in the 100-seat chamber.

The legislation updates and extends the Iran and Libya Sanctions Act of 1996, which was revised in 2001 and is set to expire later this year. (See ACT, September 2001.) The existing law requires the United States to impose sanctions on foreign companies that invest more than $20 million per year in Iranian oil or gas development. French, Italian, Malaysian, and Russian entities have well surpassed these limits, and the Chinese company Sinopec is planning a major investment in Iranian natural gas. But neither the Clinton or Bush administrations have ever allowed any sanctions to take effect because of diplomatic opposition to such “secondary sanctions.”

The House-passed bill would drop the Libya provisions because of Tripoli’s 2003 pledge to comprehensively dismantle its nuclear and chemical weapons programs. (See ACT, January/February 2004.) It would permit the president to impose sanctions on any person that exports, transfers, or provides to Iran “any goods, services, technology, or other items” that knowingly aid the ability of Iran to develop weapons of mass destruction or “destabilizing numbers and types of advanced conventional weapons.”

It also urges the Bush administration “to work to secure support at the United Nations Security Council for a resolution” to impose sanctions on Iran “as a result of its repeated breaches of its nuclear nonproliferation obligations.” The bill is to remain in effect until Iran has verifiably dismantled its suspected “weapons of mass destruction programs.”

The House-passed bill includes measures that tighten the application of existing sanctions. In particular, congressional aides said that it seeks to force the executive branch to investigate credible reports of sanctionable activities. The law requires that the president issue a sanctions determination within one year of receiving such a report and clear an existing two-year backlog of such investigations. It seeks to broaden the net of firms covered by these activities to institutions such as insurers, underwriters, or guarantors who knowingly help finance any investments as well as to foreign subsidiaries of U.S. firms. It also encourages U.S. pension funds and mutual funds to divest from foreign companies investing in Iran’s petroleum sector.

However, the Bush administration has not fully embraced the measure. In March testimony, Undersecretary of State for Political Affairs Nicholas Burns raised concerns that some provisions in the bill might strain relations with close U.S. allies whose help the United States will need to change Iran’s behavior.

France , Russia, and China wield vetoes as permanent members of the UN Security Council at a time that body is considering further moves in response to Iran’s failure to meet the goals of a previous Security Council presidential statement, which could include sanctions (See "Security Council Mulls Response to Iran").