US industry accepts 5-year extension of Iran-Libya sanctions
Energy industry associations swallowed their disappointment and any possible protests after President George W. Bush signed a 5-year extension of the Iran-Libya Sanctions Act.
By the OGJ Online Staff
HOUSTON, Aug. 7 -- US energy industry associations swallowed their disappointment and any possible protests after President George W. Bush signed a 5-year extension of the Iran-Libya Sanctions Act on Friday.
The original 1996 act, which allows the US to punish companies or countries that invest more than $20 million/year in Iran or Libya, would have expired Aug. 5 (OGJ Online, Aug 3, 2001). But the US Congress sent the 5-year extension to the president on Thursday, and he signed it without fanfare Friday.
"I believe that we should review sanctions frequently to assess their effectiveness and continued suitability," Bush said in signing the bill.
"A new provision in this bill mandates a report on the impact of certain actions taken pursuant to the act. I approve of this statutory mandated requirement to periodically assess the effectiveness of sanctions and to recommend whether the Congress should terminate or modify the act," he said. "The act also continues the president's power to waive sanctions in the national interest."
A nonbinding provision calls on Congress to consider rescinding the law sooner, pending the outcome of a White House sanctions report. Speaker of the House Dennis Hastert (R-Ill.) in a July 24 letter to pro-industry lawmaker Rep. Bill Thomas (R-Calif.), chairman of the House Committee on Ways and Means, pledged to expedite a future vote, provided the White House recommends that sanctions are a bad policy at some future date.
Members of the administration had wanted only a 2-year extension, opening the door to the small possibility of a presidential veto that failed to materialize. The White House knew some kind of sanctions bill would likely still become law after the extension passed by overwhelming margins in both the House and Senate, allowing Congress to override the president's action if necessary.
If industry associations representing US energy companies eager to do business in the two oil producing countries are disappointed, they weren't saying so this week.
"We don't have to react to everything that Congress and the president do. Our position is well known," said a spokesman for the American Petroleum Institute in Washington on Tuesday.
In June, Edward D. Porter of API's Policy Analysis and Statistics Department issued a report that claimed US economic sanctions against Iran, Iraq, and Libya "have both failed to achieve their intended goals and instead have produced unintended and perverse consequences."
Porter said, "Even if they worked as intended, such policies could raise worldwide oil prices by as much as 25%, offsetting much or all of any revenue loss to the target countries due to reduced output, while costing consumers more than $160 billion annually in increased oil prices and reducing world GDP by more than $100 billion annually."
However, the head of another industry association Tuesday told OGJ Online, "There's no need for us to come out angry (about the extension). We don't support terrorism."
Congress passed the Iran-Libya Sanctions Act in 1996 to punish those nations for their support of terrorist activities.
The strongest supporters of the latest legislation included families of the victims of the Pan Am 103 bombing. Those families blame terrorists groups supported by Libya for the 1988 incident.
The revised law allows the US to apply sanctions against any company investing more than $20 million/year in the energy production of either nation. Many other countries, especially those with international energy companies, oppose the US sanctions.
The US has not applied the sanctions yet to any company. But both government and industry officials have said the policy is an effective deterrent to foreign investment in those countries.