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WASHINGTON, May 7 2010 (IPS) - The U.S. Congress is moving forward with a bill to sanction companies that do business in Iran despite the White House’s efforts to build international support for U.N. sanctions against the Islamic Republic.
U.S. business organisations and a number of experts here in Washington have expressed concern about the speed with which the Senate Banking and House Foreign Affairs Committee are working to reconcile the House and Senate Iran sanctions bills, and what impact this may have on the Barack Obama administration’s efforts to organise multilateral sanctions through the U.N. or negotiate a diplomatic solution with Tehran.
The administration wants Congress to hold off on the Iran sanctions legislation until a deal is reached at the U.N.
News emerged today from the U.N. that an agreement might be reached on sanctions by mid-June, but the Senate and House have indicated that they are pushing for a reconciliation of the two bills before the end of May.
“I think it’s likely to be around the end of the month or after the Memorial Day recess. All of the statements have indicated action before the recess but I wouldn’t be surprised if it goes into June,” Jim Fine, legislative secretary for foreign policy at the Friends Committee on National Legislation (FCNL), a Quaker lobby group, told IPS.
“The thing that disturbs me most is that I have seen very little evidence that the U.S. is still working the engagement track. The Iranian counterproposal to the original IAEA [International Atomic Energy Agency] proposal is worth serious consideration by the U.S. and ought to be, in its main points, accepted by the U.S.,” he said.
Tehran has indicated that it could accept, in large part, the IAEA’s proposal for exchanging Iranian low-enriched uranium for foreign made fuel rods, but wants to keep the low-enriched uranium in Iran, under IAEA safeguards, until the fuel rods are delivered.
The U.S., France and Russia had proposed that Iranian low-enriched uranium be shipped out of Iran immediately and held until the fuel rods are ready.
Some Iran specialists fault the administration for not making more generous offers to Iran during its “engagement” phase last year before moving to a containment strategy that includes additional sanctions, as well as other forms of pressure.
In their view, the “pressure track” – whether unilateral or multilateral – will not only prove ineffective, but will also strengthen Tehran’s hardliners and ultimately make war more, rather than less, likely.
Cheered on by the so-called “Israel Lobby” centred around the powerful American Israel Public Affairs Committee (AIPAC) and its Christian Zionist allies, the House of Representatives voted 412-12 last December to approve a far-reaching sanctions bill that, among other measures, would penalise foreign companies that export gasoline and other refined petroleum products to Iran.
The Senate followed with an even more sweeping bill aimed at third-country companies the following month.
Largely at the administration’s behest, however, the Democratic leadership of both the House and the Senate held off selecting delegates to a House-Senate conference committee charged with reconciling the two bills until last month.
Business leaders have expressed their concern that the rush to penalise companies doing business in Iran could have negative impacts on the U.S. economy and hurt the competitiveness of companies affected by the sanctions.
In a May 6 letter to Sen. Chris Dodd and Rep. Howard Berman, the U.S. Chamber of Commerce called attention to the business community’s concerns with the House and Senate versions of the sanctions legislation.
“Most problematic are the specific provisions in both bills that could prohibit any U.S. company from transacting routine business with critical partners from around the globe even if these transactions have no bearing on business with Iran,” read the letter.
Particularly of concern to the Chamber of Commerce is the possibility that U.S. firms would be subjected to sanctions which could penalise them for partnering with firms outside the U.S. which do business with Iran.
“In short, these extraterritorial sanctions could deliver significant harm to U.S. companies operating globally while doing little or nothing to inconvenience Iran,” said the Chamber.
It has been a hot-button issue this week as the White House’s calls for a “cooperating country status” in the legislation – a designation that would allow exemptions for companies from partner countries which are working with the U.S. on multilateral sanctions in the U.N. – was rejected by both Republican and Democratic lawmakers.
Berman, the House Foreign Affairs chair, acknowledged that the White House’s suggestion had “a certain logic” but said he was under pressure from his own party and House Republicans.
A May 3 letter by a bipartisan group of 10 senators to Berman and Dodd urged the influential legislators to make sure the final Iran sanctions bill “requires implementation of the strongest possible sanctions”.
“Specifically, we would find it difficult to support any conference report that would weaken…sanctions by providing exemptions to companies or countries engaged in the refined petroleum trade with Iran,” said the letter.
The senators explicitly rejected revisions that “would exempt companies engaged in otherwise sanctionable activities because they are incorporated in so-called ‘cooperating countries.”‘
Some in Washington see the threat of unilateral sanctions as a tool to persuade U.N. Security Council members to support multilateral sanctions and bring Iran back to the negotiating table.
“It’s a double-edged sword. It’s quite possible that the threat of unilateral sanctions may help push multilateral sanctions forward, which may help push the Iranians forward. But once you have the fact of unilateral sanctions it cuts in the opposite direction and makes it much harder to do multilateral work or convince the Iranians to move forward,” said Fine.
“The threat of unilateral sanctions could conceivably help but the fact of unilateral sanctions will be a serious impediment to any progress,” he said.
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