March 5, 2009

Kyl’s answer to Iran: protectionism and isolation

Guest post by Jill Marie Parillo of Physicians for Social Responsibility
Senator Jon Kyl (R-AZ), the Senate’s Republican whip, offered up an amendment late today to the omnibus appropriations bill intended to push Iran one step closer to total isolation from the international community.  
The proposed Amendment (SA 634) text:

Sec. __. (a) Except as provided under subsection (b), none of the funds made available under this Act may be spent by a Federal agency in a new contract or other expenditure of Federal funds with a company identified by the Department of the Treasury Office of Foreign Assets Control (OFAC) as having a business presence in Iran’s energy sector, including Iran’s refineries, refined petroleum products, and oil and natural gas fields.
(b) The President may waive the application of subsection (a), on a case-by-case basis, if the President–
(1) determines that such waiver is necessary for the national security interests of the United States; and
(2) submits an unclassified report to Congress, with a classified annex if necessary, that describes the reasons such waiver is necessary.

This Amendment could hurt relations with U.S. allies by singling out large companies in those nations for punishment.  For example, France’s Total (TOTF.PA) is about to finalize a $5 billion deal with Iran on March 20 to develop further the South Pars gas field.
It is doubtful, though, that any amendments will be allowed, since if they did the House would have to reconsider the bill–and the federal government officially runs out of money on Friday night.  
Many Senators are voicing concerns over advancements in Iran’s nuclear program, but this is not the answer. Pushing Iran into further isolation through trade restrictions will increase tension in Iran’s relations with the West, increasing the threat Iran perceives and with it the chance that Iran will want to build the bomb as a security assurance.
Increasing trade and direct dialogue with Iran will assist in bringing Iran back into the international community, decreasing tension with the West, and lowering the chance that Iran will build the bomb.

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