Congress strikes deal on tougher sanctions for Iran's suppliers

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By Colum Lynch and Thomas Erdbrink
Washington Post Staff Writers
Tuesday, June 22, 2010

U.S. lawmakers on Monday reached agreement on legislation that would penalize Iran's business partners for selling the country gasoline, investing in its refineries, or providing financial services to firms linked to its political and military elite.

Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate banking committee, and Rep. Howard L. Berman (D-Calif.), chairman of the House Foreign Affairs Committee, said in a statement announcing the pact that the new measure would expand on sanctions imposed recently by the U.N. Security Council and the European Union.

The new bill signals a more confrontational approach to Iran than that taken by the Obama administration.

It would reinforce existing U.S. sanctions, penalizing American companies for violations by foreign subsidiaries and barring some of Iran's financial partners from U.S. financial markets. The bill would also target violators of human rights and increase criminal penalties of up to $1 million in fines or 20 years in jail for violators of any sanctions.

"If applied forcefully by the President, this act will bring strong new pressure to bear on Tehran in order to combat its proliferation of weapons of mass destruction, support for international terrorism, and gross human rights abuses," Dodd and Berman said in a joint statement.

The draft bill was hailed by the American Israel Public Affairs Committee (AIPAC), the pro-Israel lobbying group. If passed, it would be "the toughest piece of Iran sanctions legislation ever passed by Congress," the group said in a statement.

Some critics have questioned the effectiveness of sanctions in general, noting that the Iranians may simply develop new business partners in Asia and the Persian Gulf and that Iran is significantly lessening its dependence on refined oil imports.

The sanctions accord came as Iran moved to ban two U.N. inspectors from working in the country. A senior Iranian official said Monday that the inspectors from the International Atomic Energy Agency had filed "untruthful" reports on the Islamic republic's controversial nuclear program.

Greg Webb, a spokesman for the IAEA, rejected Iran's claims, saying that the agency's reports have been accurate and that the IAEA "has full confidence in the professionalism and impartiality of the inspectors concerned."

Nations that cooperate with the agency have the right to reject inspectors by name. IAEA officials said that the two inspectors would be replaced and that monitoring of Iran's nuclear program would continue.

Officials said the dispute centers on a section of the most recent IAEA report, issued last month, noting that a potentially important piece of equipment had been removed from an Iranian lab between inspectors' visits to the site in January and April.

The device, an electrochemical cell, has multiple purposes but can be used to make uranium metal -- a form of nuclear fuel critical to building a warhead for a bomb. In a letter to the IAEA as well as in appearances before the agency's board, Iran has denied that the device was removed.

IAEA officials in Vienna said that Iran's decision to ban the inspectors has more to do with the country's displeasure at the latest international sanctions against it than the disagreement over the missing device.

"This isn't really about that," said an official in Vienna who spoke on the condition of anonymity because he was not authorized to discuss tracking of Iran's nuclear program. Banning inspectors is "wonderfully symbolic and probably looks great at home," the official said. "They need to react somehow . . . but at the end of the day we're still going to be able to do our job."

Erdbrink reported from Tehran. Staff writers Greg Miller and Glenn Kessler contributed to this report.


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