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Thursday, April 29, 2010

Obama pushing exemption that would gut US sanctions on Iran

If you want to get angry, read Eli Lake's column about how the Obama administration is trying to push through a 'cooperating country' exception in Congress' refined fuel sanctions bill. The exception would effectively ensure that China and Russia could continue to sell gasoline to Iran unfettered. The bill is currently in a House - Senate conference, and is expected to be reported out before Memorial Day (May 31) (Hat Tip: Memeorandum).
"It's incredible the administration is asking for exemptions, under the table and winking and nodding, before the legislation is signed into law," Rep. Ileana Ros-Lehtinen, Florida Republican and a conference committee member, said in an interview. A White House official confirmed Wednesday that the administration was pushing the conference committee to adopt the exemption of "cooperating countries" in the legislation.

Neither the House nor Senate version of the bill includes a "cooperating countries" provision even though the administration asked the leading sponsors of the Senate version of the bill nearly six months ago to include one.

The legislation, aimed at companies that sell Iran gasoline or equipment to refine petroleum, would impose penalties on such companies, up to the potentially crippling act of cutting off the company entirely from the American economy. It also would close a loophole in earlier Iran sanctions by barring foreign-owned subsidiaries of U.S. companies from doing business in Iran's energy sector.


"We're pushing for a 'cooperating-countries' exemption," the White House official said. "It is not targeted to any country in particular, but would be based on objective criteria and made in full consultation with the Congress."

Mrs. Ros-Lehtinen, however, said the exemption "is aimed at China and Russia specifically."

"The administration wants to give a pass to countries for merely supporting a watered-down, almost do-nothing U.N. resolution," she said.

All past sanctions against Iran have included a waiver that lets the president refrain from penalizing foreign companies that are doing business with Iran.

The "cooperating countries" language that the White House is pressing would allow the executive branch to designate countries as cooperating with the overall strategy to pressure Iran economically.

According to three congressional staffers familiar with the White House proposal, once a country is on that list, the administration wouldn't even have to identify companies from that country as selling gasoline or aiding Iran's refinement industry.

Even if, as current law allows, the administration can waive the penalties on named companies for various reasons, the "cooperating countries" language would deprive the sanctions of their "name-and-shame" power, the staffers said.

The prospect that China and Chinese firms would be exempt from penalty follows reports that Beijing is cooperating with Iran's missile program. On April 23, Jane's Defense Weekly reported that China broke ground on a plant in Iran this month that will build the Nasr-1 anti-ship missile.
Read the whole thing.
This is not the first time that the Obama administration has attempted to gut the sanctions through a 'cooperating countries' exemption. Here's what Josh Rogin reported on this issue back in March: "When we had the discussions in December about cooperating countries, it boiled down to the fact that the administration was demanding an exemption that was large enough to drive a truck through and that was not well received in the Congress," said one senior congressional aide close to the discussions.


The aide spelled out two hypothetical scenarios: In Scenario A, the Security Council puts in place a very tough sanctions regime with China's signoff. In that case, the imperative for stringent congressionally mandated sanctions could diminish.

In Scenario B, despite a year spent on engagement, sold as necessary to rally the international community, sanctions are weak and China is not forced to change its behavior. In that case, the aide said, it will be very hard for the administration to turn to Congress and say "You don't need to move on tough sanctions now."
I first reported the story here, and noted that the original proposal was a blanket exception for the P 5+1, which, as you might imagine, angered other US allies like Japan and South Korea.

Well, you didn't think Obama was going to drop it, did you?

My guess is that Democrats who are worried about their seats come November are not going to vote with Obama on this. Hopefully, that's all of them.


At 5:46 PM, Blogger NormanF said...

After experience with the "national security" waiver clause to the Jerusalem Embassy law, the last thing Congress should do is grant the executive branch unfettered discretion to gut a tough sanctions law. Every one knows Russia and China are never going to go along with tough sanctions - that's a given. The question is whether America will signal leadership and enforce its own sanctions on Iran - that matters more than whether Russia and China ever go along with a sanctions regime. What US allies are looking for is the assurance America will stand up for them when push comes to shove. So far there is no sign of that happening.

What could go wrong indeed


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