Tags: White | House | Iran | Sanctions

White House Seeks Exemptions on Iran Sanctions

Thursday, 29 Apr 2010 10:12 AM

By Dan Weil

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The White House is urging Congress to include an exemption in the next round of Iran sanctions that would leave out companies from “cooperating countries.”

That stipulation would probably free Chinese and Russian firms from the penalties designed to deter corporate investment in Iran, The Washington Times reports.

The Obama administration has repeatedly bent over backwards, generally without success, to get China and Russia to participate in sanctions against Iran.

"It's incredible the administration is asking for exemptions, under the table and winking and nodding, before the legislation is signed into law," Rep. Ileana Ros-Lehtinen, R-Fla., told The Times.

A House-Senate conference committee is negotiating The Comprehensive Iran Sanctions, Accountability, and Divestment Act. And the bill is expected to be completed by Memorial Day.

Neither the House nor Senate version of the bill contained a "cooperating countries" provision, despite the administration’s request to Senate sponsors of the bill that they include one.

"We're pushing for a 'cooperating-countries' exemption," a White House official told The Times. "It is not targeted to any country in particular, but would be based on objective criteria and made in full consultation with the Congress."

Rep. Howard Berman, D-Cal., who sponsored the bill in the House, said there is a "certain logic" to the administration's request, even though other congressional members pointed out “cooperating countries” could mean anyone.

Members on both sides of the aisle are looking for stronger sanctions.

On the Republican side, Rep. Dan Burton of Indian said, “We have to do whatever is necessary to stop Iran from getting nuclear weapons," according to The Nation.

Rep. Ed Royce, R-Cal., said the United States and its allies should enforce "crushing" sanctions, and “even crushing sanctions might not do the job."

Many Democrats express the same sentiment.

Rep. Gary Ackerman, D-N.Y., advocates "suffocating" sanctions on Iran. But he said, "Success in this effort is unlikely" and that Iran will "have a nuclear weapon in less than two years," The Nation reports.

All past U.S. sanctions against Iran allowed the president to avoid penalizing foreign companies that do business with Iran at his discretion.

The new legislation would apply penalties to companies selling gasoline or petroleum refining equipment to Iran. The most severe punishment would bar companies from dealing with the United States.

The bill also would tighten a previous loophole by banning foreign-owned subsidiaries of U.S. energy companies from doing business in Iran.

While Iran is one of the world's biggest oil exporters, it can’t refine as much oil into gasoline as its own population needs. The Iranian government implemented gasoline rationing in 2007.

Three congressional staffers told The Times that once a country is on the list of those exempt from the sanctions, the White House wouldn't even have to publicly identify companies from that country who are doing business in Iran’s energy sector.

Thus, the "cooperating countries" language would take away the "name-and-shame" power from the sanctions, the staffers said.

"'The cooperating country status would send a signal to the energy sector that the Obama administration is not serious about penalizing those companies that continue to do business with the Iranian energy sector, the lifeblood of the men who rule Iran, " Mark Dubowitz, executive director of the Foundation for the Defense of Democracies, told The Times.

Comments from Christophe de Margerie, chief executive of the French national oil company Total, back up Dubowitz’ point.

He told Reuters Tuesday that his company will halt business in Iran only if required by law.
"I've been asked by certain people to reconsider," he said. "I say, 'OK, make it official.'"

As for China, there is strong evidence that it is assisting Iran with its missile program.

Jane's Defense Weekly reported April 23 that China has started building a plant in Iran to produce the Nasr-1 anti-ship missile.

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