Expanding Iran sanctions to foreign refined product suppliers

New House and Senate bills would expand US pressure on Iran to drop its nuclear weapons program by barring that country's foreign refined product suppliers from doing business in the US.

US trade sanctions have applied to Iran since 1996. One goal of denying that country's national oil company access to American goods, services and technology has been to punish its government for allegedly trying to gain nuclear weapons.

Several members of Congress now want the US to be ready to turn up the heat. They've introduced bills in the House and Senate which would bar foreign suppliers of refined products to Iran from effectively doing business in the United States.

HR 2194, which Rep. Howard L. Berman (D-Calif.) introduced on Apr. 30, also would apply to any non-US firm which finances, brokers, underwrites or provides ships to help Iran import refined products. It also would apply to any foreign entity which provides goods and services for Iran's refining industry.

The country's limited refining capacity makes it necessary for it to import 25% of the petroleum products it consumes, according to Berman, who chairs the House Foreign Affairs Committee. Without these imports, much of the country's national economy would grind to a halt, he maintained.

Won't move immediately

Berman said he doesn't plan to start his bill, which has six Democratic and Republican cosponsors, on its way through the legislative process soon because he fully supports the Obama administration's strategy of direct diplomatic strategy with Iran.

"However, should engagement with Iran not yield the desired results in a reasonable period of time, we will have no choice but to press forward with additional sanctions, such as those contained in this bill, that could truly cripple the Iranian economy," he continued.

Berman introduced his bill one day after Sen. Evan Bayh (D-Ind.) introduced a similar measure on the other side of the US Capitol. Bayh said that his bill, S. 908, was designed to give US President Barack H. Obama another diplomatic tool to keep Iran from getting nuclear weapons.

"This bill gives the president the express authority to target the regime's Achilles heel," said Minority Whip Jon Kyl (R-Ariz.), one of S. 908's 24 Democratic and Republican cosponsors.

'Give them a choice'

"We know who these companies are (Shell, Vito, BP, and Reliance) and we need to give them a choice: You can do business with Iran's $250 billion economy or our $13 trillion economy, but not both," he continued.

Mark Dubowitz, executive director of the Foundation for Defense of Democracies in Washington, said on May 1 that the bills sent a strong message that Iran's nuclear weapons program won't be tolerated.

"Like Chairman Berman, we all hope the regime will see the light and that this legislation will not be needed. Congress recognizes that diplomacy is more likely to succeed if Iran's leaders understand that they will face dire consequences if they press ahead with their illegal nuclear program," he said.

But the bills probably are more symbolic than substantive since two of the multi-national companies Kyl mentioned, BP and Shell, have US subsidiaries with a significant part of this country's refining capacity.

Contact Nick Snow at nicks@pennwell.com

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