POLITICS-US: Sanctions Against Iran Set to Continue Despite Khatami

By Jim Lobe Reprint | | Print |

Jim Lobe

WASHINGTON, Jun 14 2001 (IPS) - The US Congress appears determined to extend far-reaching unilateral sanctions against Teheran for another five years, despite last week’s landslide re-election of reformist President Mohamed Khatami and the growing frustration of US oil companies eager to return to Iran.

The administration of President George W. Bush is unhappy about the Congressional initiative. It came to office on a pro-corporate platform opposed, in principle, to unilateral sanctions and its new energy policy calls for increasing the global supply of energy sources available to US consumers.

While the administration says policy toward Iran – which accounts for about five percent of annual global oil production – remains officially under review, it wants Congress to shorten the sanctions’ duration to two years.

“A five-year renewal would tie our hands (and) could precipitate trans-Atlantic tensions,” according to an administration statement.

But Congress is unlikely to go along. The International Relations Committee of the House of Representatives Wednesday began the process of extending the Iran-Libya Sanctions Act (ILSA), which requires the president to impose tough sanctions against foreign companies that invest more than 20 million dollars in Iran’s energy sector, for five years.

In a stunning show of the pro-Israel lobby’s influence, some 236 of the 435-member House and 74 of 100 senators have already signed on to the five-year extension.

“The initial reason for applying sanctions on Iran are as compelling today as when ILSA was enacted five years ago,” said Rep. Tom Lantos, the ranking Democrat on the committee.

“Iran continues to support terrorism. It continues to develop weapons of mass destruction, including nuclear weapons. And it fanatically opposes not only the peace process but the very existence of our ally Israel,” Lantos argued.

ILSA, which expires in August, complements a 1995 executive order by former President Bill Clinton making it illegal for US companies to invest in Iran. In addition to punishing both Libya and Iran for their alleged support of terrorism, its intent was to discourage foreign oil companies from taking advantage of the executive ban on US companies.

In fact, Clinton, who tried to improve relations with Iran after Khatami’s first election in 1997, never actually invoked ILSA to impose sanctions against foreign companies that invested there. The result is that US companies, which have had to sit on the sidelines while Shell, France’s Total, Russia’s Gazprom, and Malaysia’s Petronas landed lucrative new contracts, have become ever more frustrated by the ban.

Bush has not yet made clear whether he intends to move against foreign companies under ILSA but it is virtually certain that he will not lift or significantly ease Clinton’s order in the short term despite growing pressure to do so from oil companies which helped fund his election campaign.

Khatami’s huge election victory will strengthen the oil companies’ case but not enough to overcome the pro-Israel lobby on Capitol Hill, which argues that the Iranian president, despite apparently good intentions, has been unable to wrest control of Teheran’s security forces or foreign policy from more conservative forces sanctioned by the country’s spiritual leader, Ayatollah Ali Khameini.

“Notwithstanding (Khatami’s) liberalisation efforts, Iran has recently stepped up its support to Islamic radical movements that carry out terrorist attacks against Israel and has made every effort to disrupt efforts to promote the peace process in the Middle East,” declared the International Relations Committee’s Republican chairman, Henry Hyde.

“While the recent re-election of President Khatami does give some encouragement to the voices of reform inside Iran, there is little evidence that he has control over his country’s foreign and security policy,” Hyde added. He noted that the State Department, in an April report, described Iran as the most active state sponsor of terrorism in 2000.

Even US foreign policy experts and veterans who agree with that assessment nevertheless disagree with Congress’ hard line.

A blue-ribbon task force assembled by the influential Atlantic Council argued, in a report released Friday, that current US economic sanctions against Iran were declining in value “because they were imposed unilaterally, and because Iran has now found alternative investors and suppliers.”

“The 1995-96 US sanctions on Iran were imposed during a period of a global oil surplus, but the world is now entering a period of global energy scarcity,” the report noted. “US companies are losing opportunities to their European and Asian competitors.”

Brent Scowcroft, the national security adviser when Bush’s father was president, chaired the task force. Its report, which was signed by senior Middle East and foreign policy makers from the Carter, Clinton and Reagan administrations, called on Washington to remove all unilateral energy-related sanctions and take other steps to “remove unnecessary irritants” in current ties between the two nations. These include mandatory fingerprinting and photographing of all Iranian visitors to the United States

The report further stressed that such initiatives should be taken regardless of whether Iran responds in kind. “Given the current internal power struggle in Iran, an approach that insists on a specific quid pro quo form of reciprocity is unlikely to be successful,” it said.

“Even if Iran does not respond, the United States will have removed obstacles to the attainment of its objectives,” it argued.

The argument in the report appeared designed above all to appeal to key members of the new administration, notably Vice President Dick Cheney who, as chairman of Texas-based oil-supply firm Halliburton Co., had spoken out strongly and frequently against unilateral economic sanctions against Iran and other countries. As vice president, Cheney directed the preparation of the energy policy and has raised the alarm about diminishing global supply.

In a statement Wednesday, the State Department stressed that it continued to have reservations about ILSA and unilateral sanctions more generally, adding that these continued to be the subject of an administration review. A five-year ILSA extension, it warned, would “limit Executive Branch flexibility and the potential to effect desirable changes in (Iran’s) policies.”