ECONOMY-U.S.: Congress Unlikely to Block EU Accord With Iran, Cuba

By Jim Lobe Reprint | | Print |

Jim Lobe

WASHINGTON, May 19 1998 (IPS) - The Republican-led US Congress will assail this week’s accord between President Bill Clinton and the European Union (EU) – which effectively waives US sanctions against European companies which invest in Cuba and Iran – but are unlikely to block it, officials here say.

Although the accord, announced in London Monday after last- minute talks between Washington and EU officials, has already evoked angry reactions from some right-wing lawmakers, most observers here believe it will not face any serious challenge on Capitol Hill.

“The fact is that policy is already changing toward Iran and Cuba, and everyone recognises that,” said one aide who works for an influential Democratic senator. “No one is going to get too bent out of shape about it at this point.”

The accord, which ends damaging disputes between Washington and the EU that Brussels had referred to the World Trade Organisation (WTO), provides that Clinton will waive economic sanctions against a consortium of French, Russian, and Malaysian oil companies which signed a two-billion-dollar agreement to develop Iran’s South Pars offshore gas fields last September.

The sanctions, which targeted foreign oil companies that invest more than 20 million dollars a year in Iran’s oil-and-gas sector, were mandated by the Iran-Libya Sanctions Act (ILSA), passed by a strong majority in Congress and signed into law by Clinton in 1996.

In return, the EU agreed to add to restrictions on exports of technology to Iran that could be used to build weapons of mass destruction and to take new steps to fight against alleged Iranian terrorism.

The accord also weakens the 1996 Helms-Burton law, which swept through Congress and was signed by Clinton after Cuban warplanes shot down two civilian aircraft piloted by Florida-based Cuban- American activists opposed to President Fidel Castro, who were flying over international waters near Cuban air space.

One as-yet-unenforced provision of that law, Title Three, permits US nationals to sue foreign companies which obtain an interest in property expropriated by the Cuban government after the 1959 revolution. Another provision, Title Four, requires the president to cancel visas of top executives of those companies and their families. The law is designed to discourage foreign investment in Cuba.

Under the accord, announced in London, Clinton will ask Congress to amend the Helms-Burton law to provide the president with the authority to waive Title Four. Most Republicans are not likely support such a measure, but experts doubt they will fight hard against it. “The temperature on Cuba has really changed up here,” said the Democratic aide, “so an amendment is not beyond the realm of possibility.”

In exchange, the EU agreed to “inhibit” future European acquisitions of expropriated property, in part by establishing a global registry of confiscated property to which firms considering investments in Cuba would be referred. The understanding, according to US officials, is that governments will not provide companies interested in such property with subsidies, loans or guarantees.

Right-wing lawmakers here greeted the accord with outrage. “For me to accept this agreement offered by the European Union would be to condone thievery and dishonesty,” argued Sen. Jesse Helms, who, as chair of the Foreign Relations Committee, would preside over hearings to amend the Helms-Burton law along the lines promised by Clinton. “To our European friends, I say this: no deal.”

Similarly, Sen. Alfonse D’Amato, ILSA’s main author, denounced Clinton for waiving its sanctions. “The decision is a mistake,” he said. “It will send a signal to others that they can do business as usual with Iran at a time when Iran continues to pursue weapons of mass destruction.”

But most observers agreed with Secretary of State Madeleine Albright that the accord was necessary to prevent further damage to ties between Washington and Brussels, which had strongly objected to the extraterritorial reach of both ILSA and Helms- Burton.

US officials pointed out that the two laws had not only proven ineffectual, but had also hurt Washington’s ability to win EU support for more pressing issues, such as containing Iraq and the nuclear arms race in South Asia.

“When you have automatic sanctions with no room for flexibility, it can sometimes prevent you from accomplishing the very purposes the act intends,” said Undersecretary of State Stuart Eizenstat, who negotiated the accord.

Beyond those considerations, tensions with both Iran and Cuba have eased somewhat in recent months, particularly since Iran’s new president, Mohamed Khatami, addressed a conciliatory message to the US public via the Cable News Network (CNN) last December and Pope John Paul II made his historic visit to Cuba the following month.

In March, Clinton eased a number of sanctions which he had imposed against Cuba in recent years and is now considering throwing the administration’s support behind a bill to exempt food and medicine from Washington’s 36-year-old trade embargo against Havana. Helms, who strongly objected to that proposal, has issued an alternative exemptions plan that would require that Cuba’s Catholic Church distribute humanitarian aid – an offer which has already been rejected by Castro.