It was farce the first time around. Which makes it what this time?
Brushing aside the objections of the Bush administration, a House of Representatives panel on Thursday overwhelmingly approved legislation to thwart foreign investment in Iran’s oil and gas sector.
The 37-3 vote in the International Relations Committee is intended to punish Tehran for its nuclear ambitions and comes at a critical time of US diplomacy, with Washington attempting to persuade its allies to support UN actions against Iran.
The legislation — called the Iran Freedom Support Act — renews and strengthens existing sanctions, cuts off aid to countries that have companies investing in Iran and authorizes financial assistance to Iranian opposition groups.
Basically, the legislation would replace the Iran Libya Sanctions Act (Ilsa) that is set to expire this July. Ilsa applied sanctions to non-US oil and gas companies that invest in Iran. US companies are already banned from doing business with Tehran. However, the panel moved to ensure US companies do not subvert the ban by including a provision in the legislation that also prevents subsidiaries of US companies from doing business in Iran.
Under the new bill, all references to Libya would be dropped, as Tripoli in 2003 reached a deal with Washington to give up its nuclear program, facilitating US oil and gas companies’ return to the North African country.
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The trigger for sanctions on non-US oil and gas companies is $40 million in investment annually, while the threshold for withholding US assistance to countries that have companies investing in Iran is $20 million a year. The sanctions on non-US companies have also been expanded to include goods and services and petroleum byproducts.
The measure also requires managers of public and private pension plans and mutual funds to notify investors that the funds are invested in companies that are subject to sanctions.
State Dept. told Congress the bill is “not helpful” and creates tension with European allies. Bush will eventually sign it anyway.
4:49 pm on March 15, 2006
