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Congress mulls tough new Iran sanctions

As Iran appears to move closer to resuming nuclear activities, support has been quietly building in Congress for new U.S. sanctions, including penalties that could affect multinational companies and this country’s foreign aid recipients.
/ Source: The Associated Press

As Iran appears to move closer to resuming nuclear activities, support has been quietly building in Congress for new U.S. sanctions, including penalties that could affect multinational companies and this country’s foreign aid recipients.

The legislation would put the United States on a more confrontational course than the one pursued by President Bush. He has supported European efforts to offer Iran incentives in exchange for abandoning its nuclear program.

More than 200 members of the House of Representatives — nearly half the body — are co-sponsoring a bill that would tighten and codify existing sanctions, bar subsidiaries of U.S. companies from doing business in Iran and cut foreign aid to countries that have businesses investing in Iran.

More lawmakers — both Republicans and Democrats — are adding their names to the bill every week.

Major hurdles ahead
The measure faces big hurdles before becoming law, however. Support may not be as strong in the Senate, which is considering a more limited version. Key lawmakers in both chambers could block the legislation. The White House has not taken a position, but it generally opposes congressional efforts to steer foreign policy.

“We will have the perennial and traditional battle with the executive branch as to who can have a say on foreign policy initiatives,” said Rep. Ileana Ros-Lehtinen, R-Fla., the House bill’s main sponsor.

But momentum would likely build if Iran carries out its threat to resume some nuclear activities and its talks break down with Britain, France and Germany, which are negotiating on behalf of the European Union, or EU.

In Tehran, Iranian lawmakers instructed the government Sunday to develop a nuclear fuel cycle, which would include resuming the process of enriching uranium, which could be used in developing atomic weapons.

The legislation is expected to get a boost when one of the most influential lobbying groups, the American Israel Political Action Committee, holds its annual meeting in Washington this month. AIPAC has made the bill a high priority.

“It will certainly, along with other things, be part of the agenda when thousands of members of AIPAC go to Capitol Hill” to lobby Congress, said Josh Block, a spokesman for the pro-Israel group.

Business group balks
A pro-business group, the National Foreign Trade Council, is opposing the bill, but its president, Bill Reinsch, said “the deck is kind of stacked against us.”

“People don’t like to have it look like they’re voting against something that will stick it to an unpopular country,” he said. “So, yeah, we’re worried about it.”

The administration says Iran’s nuclear activities are intended to build a bomb, while Iran says it seeks only to generate electricity. It suspended uranium-enrichment activities in November while it negotiates with the Europeans

If the talks fail, the White House would likely look for EU support to take Iran to the U.N. Security Council, where it could face international sanctions.

Blow to U.S.-EU relations?
Ray Takeyh of the private Council on Foreign Relations said sanctions imposed by Congress could hurt U.S.-EU cooperation if they penalize European companies doing business in Iran.

He said it would be difficult for Bush to say he supports EU diplomacy “but we are going to sanction the following British, French and German firms.”

Ros-Lehtinen said relations with Europe are not her main concern.

“I believe that having a stronger, safer world and regional stability is far better than whether we can have crumpets and tea with European leaders,” she said.

The EU objected to a 1996 law that called for penalties against foreign companies that invested more than $20 million a year in Iran’s energy sector. Seeking European cooperation on Iran, neither Bush nor his predecessor, Bill Clinton, penalized companies.

The House bill and a similar one in the Senate proposed by Sen. Rick Santorum, R-Pa., would make it more difficult for presidents to use endless investigations and national security waivers to avoid penalizing companies. They would also authorize funding for pro-democracy groups in Iran.

High stakes for firms, investors
Before being endorsed last month by the House International Relations subcommittee on the Middle East, chaired by Ros-Lehtinen, the provisions affecting foreign aid and subsidiaries of U.S. businesses were added.

Also added were requirements that pensions and mutual funds inform investors about any investments they hold in companies doing business with Iran. The bill recommends that the funds drop these holdings.

It also calls for the United States to seek U.N. sanctions if Iran fails to provide unrestricted access to international nuclear inspectors.

The House bill now goes before the full International Relations Committee and the Senate bill to its counterpart, the Foreign Relations Committee. The chairmen of both panels, Rep. Henry Hyde, R-Ill., and Sen. Richard Lugar, R-Ind., tend to be skeptical about sanctions and are likely to give strong weight to the administration’s viewpoint.

Ros-Lehtinen said Hyde has told her diplomatic efforts should be given more time, and she doesn’t expect the full committee to consider the bill soon. But she added: “As the situation with Iran becomes more critical, I think we may see some movement in that direction.”