Ileana Ros-Lehtinen, R-Fla., and Howard Berman, D-Cal, Sanctions on Iran Human Rights Abusers 

Sanctions on Iran Human Rights Abusers

Rep. Ileana Ros-Lehtinen, R-Fla., chairwoman of the House Foreign Affairs Committee, and Rep. Howard Berman of California, the panel's top Democrat, have introduced a bill that would impose penalties on human rights abusers in Iran, including freezing their U.S.-based assets, denying them visas and prohibiting financial or business transactions with any U.S. entity.

The round of sanctions also would target foreign companies that do energy business with Iran's Revolutionary Guard; expand help to pro-democracy groups in Iran; and require all companies, U.S. and foreign-based, that are registered with the Securities and Exchange Commission to report on whether they are conducting activities with Iran that could trigger sanctions. The bill also would restrict the travel of Iranian diplomats to a 25-mile radius of New York and Washington.

The powerful Revolutionary Guard controls companies and organizations that have links to weapons proliferation, as well as companies and organizations involved in nuclear or ballistic missile activities.

"The international community has recognized the unique distinction of the Iranian institution which not only is the leading influence in the development of their nuclear program but is one of the primary forces of the repression of the Iranian peoples," Berman said in a statement. "We must stay ahead of the curve and find ways to complement the sanctions which is the best course of action to persuade Iran to change its conduct."

The new legislation, which has the backing of several key Republicans and Democrats on the committee, builds on sanctions that Congress overwhelmingly passed — and President Barack Obama signed — last summer. Those penalties targeted exports of gasoline and other refined petroleum products to Iran and banned U.S. banks from doing business with foreign banks providing services to the Revolutionary Guard. The United Nations and the European Union have also imposed sanctions on Iran.

"U.S. policy toward Iran has offered a lot of bark, but not enough bite," Ros-Lehtinen said in a statement. "This new bipartisan legislation would bring to bear the full weight of the U.S. by seeking to close the loopholes in existing energy and financial sanctions laws, while increasing the type and number of sanctions to be imposed."

The United States has tried repeatedly to coax Iran into international negotiations with the U.S., Russia, China, Britain, France and Germany over its nuclear program. Iran contends that its program is designed to generate electricity, not build weapons.

Berman said that while the world has been riveted by the democratic movements throughout the Arab world this past spring, it would be a mistake to ignore the threat posed by Iran.

"Iran's effort to get nuclear weapons capability is the most serious security challenge we face," Berman said in an interview Sunday. He specifically mentioned the proliferation of barter arrangements between Iran and others, saying the new proposed sanctions would "constrain the circumvention."

He said he had notified the Obama administration of the sanctions legislation. A similar bipartisan measure has been proposed in the Senate.

Last week, an expert panel assembled by the United Nations said Iran was continuing to use "front companies, concealment methods in shipping, financial transactions and the transfer of conventional arms and related materiel" to circumvent U.N. sanctions. But the panel also said the penalties have succeeded in slowing Iran's nuclear and ballistic missile programs.


December 13, 2011 update
It looks like sanctions directed at Iran's Central Bank  will come out of Conference Committee in a form that the president approves. 

Here is a summary of what got changed from the original legislation proposed by Senators Kirk and Menendez: 

You can view the bill online here (Iran provision on page 879):
The Administration – especially Secretary Geithner – waged an all-out effort to weaken the Menendez-Kirk amendment imposing crippling sanctions on the Central Bank of Iran.  This was a surprise to Senators Menendez and Kirk because they already had agreed to put two presidential waivers in their amendment to give the Administration the flexibility it requested.  Despite strong Administration opposition and a letter from Secretary Geithner, all 100 U.S. Senators supported the Menendez-Kirk amendment. 

Following that defeat, the Administration worked overtime with some members of the House and Senate Armed Services Committees to weaken the amendment.  Outside the conference committee, Senator Menendez, Chairwoman Ros-Lehtinen (R-FL), Rep. Sherman (D-CA) and Rep. Berman (D-CA) argued that the original amendment should stand.  Inside the committee, Chairman Buck McKeon (R-CA) and Senator John McCain (R-AZ) successfully resisted most of the Administration’s attempts to weaken the bipartisan Menendez-Kirk amendment.  Moving forward, the Congress will need to hold the Administration’s feet to the fire to actually collapse the Central Bank of Iran and force international financial institutions to choose between doing business in the U.S. and doing business in Iran.

Here are the four changes to the Menendez-Kirk amendment agreed to by the conference committee:

1) Imposition of Sanctions.  Under the original Menendez-Kirk amendment, if a foreign financial institution continues to conduct transactions through the Central Bank of Iran, the President was required to prohibit that institution from opening or maintaining correspondent and payable-through accounts in the United States.  Under the conference report, if a foreign financial institution continues to conduct transactions through the Central Bank of Iran, the President is required to “prohibit orimpose strict conditions on” that institution maintaining correspondent and payable-through accounts in the United States, and outright prohibit that institution from opening such accounts - 'strict conditions' is weaker than 'prohibit'.

2) National Security Waiver.  Under the original Menendez-Kirk amendment, the President could waive the imposition of sanctions if he notified Congress that such a waiver was “vital to the national security” of the United States.  Under the conference report, the President can waive the imposition of sanctions if he notifies the Congress that such a waiver is “in the national security interest” of the United States - a weaker standard.

3) Report on Energy Supply.  Under the original Menendez-Kirk amendment, the Energy Information Administration (EIA), in consultation with the Secretary of the Treasury, is required to report regularly to the Congress on the availability and price of non-Iranian oil on the global market.  Under the conference report, the EIA report must also be made in consultation with the Secretary of State and the Director of National Intelligence.  This opens other pressure points on what such a report would say.

4) Technical Affirmation of Powers.  The conference report adds a new section, implied but not specifically contained in the Menendez-Kirk amendment, that the President has the power to publish rules to implement these sanctions, to order the publication of documents, and to levy penalties against those who conspire to violate the law.  This was a good change clarifying enforcement powers if used against Iran's bank.

In the end, the House and Senate will now send the first-ever sanctions against the Central Bank of Iran to the President’s desk soon for his signature.  The increased flexibility provided to the Administration by sympathetic conferees means we will all have to work very hard in the coming year to hold the Administration accountable to ensure that any financial institution doing business with the Central Bank of Iran is actually forced by our own government to choose between doing business in the U.S. and doing business in Iran.  Rest assured, we will do our part.

Kirk introduced an amendment to the defense authorization bill would force the administration to cut off from the U.S. financial system any bank that does business with the CBI. The administration, led by Treasury Undersecretary David Cohen, has been lobbying against the Kirk amendment because they believe it could risk harm to the U.S. economy. . . .

US Senate approves sanctions against Iran's Central Bank 100-0 despite administration's objections.

Senators unanimously approve amendment that would allow U.S. president to sanction foreign banks engaging in 'significant' transactions with the Central Bank of Iran.

By ReutersThe Senate unanimously approved tougher sanctions against Iran on Thursday, voting to penalize foreign financial institutions that do business with Iran's central bank, the main conduit for its oil revenues.The Senate acted despite warnings from Obama administration officials who said threatening U.S. allies might not be the best way to get their cooperation in action against Iran.Administration officials said they were indeed looking to sanction Iran's central bank, but in a calibrated manner, to avoid roiling oil markets or antagonizing allies.The United States already bars its own banks from dealing with the Iranian central bank, so U.S. sanctions would operate by dissuading other foreign banks from doing so by threatening to cut them off from the U.S. financial system.

The United States and its Western allies have supported multiple rounds of sanctions on Iran, seeking to persuade it to curtail its nuclear work. Washington suspects Tehran of using its civilian nuclear program to develop an atomic bomb, although Iran says its program is solely to produce electricity.

The Senate voted 100-0 for an amendment sponsored by Senator Robert Menendez, a Democrat, and Senator Mark Kirk, a Republican, that would allow the U.S. president to sanction foreign banks found to have carried out a "significant financial transaction with the Central Bank of Iran."

"We seek to break the stable financial intermediary in between Iranian oil contracts and the outside world, so that it will just be easier to buy oil from elsewhere," Kirk said in debate this week.

The sanctions were approved as an amendment to a huge defense bill that passed later on Thursday in the Senate. Similar provisions have passed a House of Representatives committee, increasing the likelihood that some version will be sent to Obama for his signature into law -- or possible veto.

On November 21, the United States, Britain and Canada announced new sanctions on Iran's energy and financial sectors, but the Obama administration stopped short of targeting Iran's central bank, a step that U.S. officials said could send oil prices skyrocketing and jeopardized global economic recovery.

"The Obama administration strongly supports increasing the pressure on Iran, and that includes properly designed and targeted sanctions against the central bank of Iran, appropriately timed as part of a carefully phased and sustainable policy toward bringing about Iranian compliance with its obligations," U.S. Undersecretary of State Wendy Sherman told the Senate Foreign Relations Committee earlier on Thursday, several hours before the Senate vote.

World oil markets

The Senate amendment provides a six-month grace period before sanctions would kick in for petroleum transactions with Iran's Central Bank, a move that appeared designed to give world oil markets time to adjust.

It includes a "waiver" letting the president suspend the sanctions if he deems it vital to U.S. national security.

"Our judgment is that the best course to pursue at this time is not to apply a mechanism that puts at risk the largest financial institutions, the central banks, of our closest allies," Undersecretary of the Treasury David Cohen told the Senate Foreign Relations Committee.

Sherman and Cohen drew a rebuke from Menendez, who argued he had agreed to make changes in the amendment to suit the Obama administration only to find that it still rejected the legislation.

"I am extremely disappointed," Menendez said. "At your request, we engaged in an effort to come to a bipartisan agreement that I think is fair and balanced and now you come here and vitiate that very agreement."

"You should have said we want no amendment, not that you don't care for that amendment," he added.

The Obama administration's chief concerns appear to be that the amendment could be a blunt instrument that might send oil prices higher and undercut support for sanctions among U.S. allies, whose backing has been vital to pass four U.N. Security Council sanctions resolutions against Iran.

While the Obama administration steps carefully, some countries in Europe are seeking to push forward a Europe-wide boycott of Iranian crude imports. EU foreign ministers in Brussels failed on Thursday to move forward with a plan backed by France and Britain to ban shipments, but agreed to examine expanding sanctions.

Tightening financial sanctions have already complicated Iran's oil trade. Last December, India's central bank scrapped a clearing house system with Iran, forcing refiners to scramble to arrange other means of payment in order to keep shipments flowing.

It is unclear whether further sanctions on financial dealings would affect shipments to countries like China, Iran's biggest buyer.

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