By the OGJ Online Staff
WASHINGTON, DC, June 28 -- Senate Banking Committee Chairman Paul Sarbanes (D-Md.) Thursday endorsed a 5-year extension of a controversial law designed to punish foreign oil companies that invest more than $20 million/year in Iran or Libya.
"Lessening of the time frame from 5 to 2 years as some have proposed could be seen as a sign of a lack of US resolve," Sarbanes said at a hearing on the subject.
The House Committee on International Relations voted to renew the legislation through August 2006 (OGJ Online, June 20, 2001). A floor vote is not expected until after the 1-week July 4 recess.
It is not clear when the Senate will mark up its version. However, a strong bipartisan coalition has pledged to renew the law this summer before it expires this August. It also appears that many of those same lawmakers also want to reject a White House proposal to extend the law by only 2 years (OGJ Online, May 23, 2001).
The White House has warned that a 5-year extension will be counterproductive and will complicate an interagency review of sanctions policy now under way.
"Sanctions must do more than provide psychological satisfaction," the State Department told the committee. "They must be part of an integrated policy."
It is uncertain whether US President George W. Bush would consider vetoing the legislation in its present form. The Iran Libya Sanctions Act of 1996 gives the president wide latitude with regard to sanctions. And in fact it was the threat of sanctions, rather than actual trade bans, that discouraged investment in either country, US officials say.
Former President Bill Clinton never imposed any of the sanctions allowed for under the law, instead exempting European countries from penalty because it was in "the national interest" to do so.