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March 19, 2011

House Unveils Bill to Expand Sanctions, Impose Oil Embargo on Iran

Ileana Ros-Lehtinen

Washington, DC – Top members of the House Foreign Affairs Committee have introduced new legislation designed to implement new “crippling sanctions” against Iran, including an embargo on Iranian oil exports that would bring the U.S. closer to imposing the types of sanctions carried out against Saddam Hussein’s Iraq.

The new sanctions bill—entitled the Iran Threat Reduction Act (H.R.1905)—would also reduce Presidential discretion regarding how sanctions are implemented, forcing the President to adopt a more unilateral approach that could erode the international consensus established through diplomatic efforts.

The measure was sponsored by the top members of the House Foreign Affairs Committee, the Middle East Subcommittee, and the Terrorism Subcommittee and was rushed to be introduced in time for the upcoming American Israel Public Affairs Committee (AIPAC) conference that will send thousands of AIPAC members to the Hill to press Congress to pass new Iran sanctions.

The House Foreign Affairs Committee is expected to consider H.R.1905 in June, and a similar Senate sanctions package is also in the works.

Oil Embargo

H.R.1905 would impose a de facto embargo on Iranian exports of petroleum, oil, and natural gas. While Ros-Lehtinen and others have long discussed imposing an embargo on Iranian energy exports, there have been concerns that a straightforward oil embargo would spook oil markets and dramatically increase the price of gas.

So, instead the bill imposes prohibitively cumbersome requirements that potential oil purchasers would need to satisfy in order to avoid U.S. sanctions. Embargo supporters have said this burden of proof would intensify the “hassle factor” enough to create practical effect of an embargo.

The oil embargo imposed against Iraq in the 1990s leading up to 2003 invasion of that country was estimated by UNICEF to have contributed to the deaths of half a million Iraqi children. While H.R.1905 retains existing law requiring the White House to assess the humanitarian impact of U.S. sanctions on Iran, the new legislation takes the unprecedented step of denying any waiver authority for the President to ease the embargo.

Taking on the President

Additionally, the bill significantly reduces the President’s authority to decide whether to impose other sanctions. While the Obama Administration has become the first administration to impose energy sanctions on Iran—penalizing energy firms based in Switzerland and Belarus, and convincing five European firms to end business in Iran—many in Congress have expressed frustration that “economic warfare” measures have not been taken against more energy companies , most notably Chinese firms.

Diplomatic efforts by the Obama Administration—including successfully persuading the European Union, Japan, South Korea, and Australia to impose sanctions on Iran’s energy and financial sectors—and multilateral sanctions enacted at the UN Security Council, have also not satisfied Congress.

Chairwoman Ros-Lehtinen has accused the President of “ignoring the law” and has said that H.R.1905 will “mandate enforcement” of sanctions by the President. Whereby the President may currently waive sanctions when he determines it is “necessary to the national interest of the United States,” the new legislation would only allow him to waive sanctions if “failure to exercise such waiver authority would pose an unusual and extraordinary threat to the vital national security interests of the United States.” It would also require the Secretary of State to brief Congress every three months regarding the Administration’s sanctions efforts.

The weakening of Presidential waiver authority was a point of significant contention during last year’s passage of Iran sanctions. Only once has a president utilized the Iranian sanctions waiver authority when President Clinton exercised the waiver in 1998.

The bill also codifies into law a number of Executive Orders on Iran sanctions—meaning that the President would no longer have the flexibility to amend or rescind those orders. Hence, the President would not be able to put forth any offer to ease certain sanctions in return for an Iranian agreement on human rights or its nuclear program; he would have to ask Congress to pass legislation to grant him this authority.

Broadening “Crippling” Sanctions and Unintended Consequences

H.R.1905 broadens U.S. sanctions to sanction companies whose subsidiaries are found to violate sanctions. It expands sanctionable activity to include construction of any infrastructure used to deliver refined petroleum products within Iran, including building ports, railways, and roads. The bill also would impose sanctions on the purchase of Iranian sovereign debt.

Additionally, the bill expands the number and types of sanctions the President must impose against companies found in violation of sanctions and requires companies to detail any activities that could be sanctionable in their Security and Exchange Commission filings.

The measure rejects recently proposed Treasury regulations and would require more onerous certification procedures for U.S. financial institutions regarding Iran. While U.S. banks are prohibited from dealing directly with Iran, sanctions passed last year have had the effect of blocking foreign banks from dealing with Iran for otherwise legal transactions.

A number of unintended consequences have resulted from those measures—including increased difficulty for Iranian-Americans to send legal family remittances to Iran, the suspension of testing for Iranian students seeking to study in the U.S., and new burdens that have prevented medicine from being sent to Iran and blocked humanitarian organizations from sending relief into Iran. The new bill does not address these issues but would instead ratchet up those sanctions.

Democracy Promotion and Blanket Human Rights Sanctions

President Obama is also the first president to impose human rights sanctions on ten Iranian government officials for human rights violations and worked closely with the EU to implement human rights sanctions on thirty-two Iranian government officials.

H.R.1905 would reverse the current process of investigating, identifying and spotlighting human rights violators. It would automatically designate every official in the Iranian government as a human rights abuser, and require the President to determine who has not been responsible for violations.

The bill also includes direct funding efforts for democracy promotion and encourages the U.S. to expand contacts with opposition groups in Iran (so long as they advocate “the adherence by Iran to non-proliferation regimes”), but fails to take simple measures actually called for by Iranian human rights and democracy activists.

Iranian human rights defenders like Shirin Ebadi have highlighted how U.S. sanctions have prevented Iranians from accessing satellite Internet and obtaining communications hardware and software. U .S. sanctions continue to block Iranians from buying Skype credits to communicate outside of government surveillance, accessing satellite Internet, obtaining hardware to access Internet and satellite television, freely downloading software to circumvent government filters, and purchasing website domains. But similar to a recent Senate bill on Iranian human rights and democracy promotion, these issues remain unaddressed.

Perpetual Sanctions Push

It was just last June that Congress passed new Iran sanctions, the Comprehensive Iran Sanctions Accountability and Divestment Act (CISADA). The Obama Administration managed to prevent the package from preempting multilateral efforts at the UN, but eventually the measure passed.

At the time, leaders of the Iran’s indigenous human rights and democracy movement warned that sanctions and other measures to isolate Iran undermine Iran’s human rights and democracy movement. Mehdi Karoubi, a top figure in the Green Movement, has described the sanctions as a gift to Iranian hardliners.

“These sanctions have given an excuse to the Iranian government to suppress the opposition by blaming them for the unstable situation of the country,” Karoubi said. “Look at Cuba and North Korea. Have sanctions brought democracy to their people? They have just made them more isolated and given them the opportunity to crack down on their opposition without bothering themselves about the international attention.”

But less than a year after the last round of U.S. sanctions, organizations that supported that push, including AIPAC, the neoconservative Foundation for Defense of Democracies, and the Mujahadeen-e-Khalq (MEK), are once again pressing Congress and the Administration to ramp up further sanctions against Iran.

 

 

 

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