White House seeks 2-year extension for Iran, Libya sanctions

A controversial law designed to punish foreign oil companies that invest in Iran or Libya should only be extended 2 years, the White House told a congressional committee Wednesday. Lawmakers in both the House and Senate have pledged to renew the law before it expires in August.

June 13, 2001

2 min read

By the OGJ Online Staff

WASHINGTON, DC, June 13 -- A controversial law designed to punish foreign oil companies that invest in Iran or Libya should only be extended 2 years, the White House told the House Committee on International Relations Wednesday.

House Subcommittee on the Middle East Chairman Benjamin Gilman (R-NY), the author of the law, introduced a plan last month to renew the legislation through August 2006. Congressional leaders in both the House and Senate have pledged to renew the law before it expires in August (OGJ Online, May 23, 2001).

The full committee started making revisions to the Gilman bill but is not expected to finalize those changes until possibly next week because of scheduling conflicts.

In a written statement to the committee, the State Department said leaving the law in place for the full 5 years "would tie all our hands" as the administration seeks to formulate a new sanctions policy for Iran, Libya, and other countries that the US is at odds with on national security matters. It said a 5-year period would also "precipitate trans-Atlantic tension" since some US allies in Europe vehemently oppose the current legislation.

In their present forms, both the House and Senate bills give President George W. Bush wide latitude on whether to impose economic sanctions. The Clinton administration chose to use a provision in the law that allows the president to waive sanctions if they were in the national interest or if they could impair national security. No country or foreign company has ever been formally sanctioned under the law.

The oil industry opposes the legislation, saying it leaves US companies at a competitive disadvantage, angers allies, and does not discourage countries from pursuing foreign policy goals the US finds objectionable.

Proponents of the bill say the legislation has discouraged investment in Libya and Iran and sends a signal that the US will not help countries that seek to disrupt the Middle East peace process.