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  •   U.S. Eases Stand on Cuba, Iran Sanctions

    By Dan Balz
    Washington Post Staff Writer
    Tuesday, May 19, 1998; Page A15

    GENEVA, May 18—The United States and European nations today settled festering trade disputes over U.S. sanctions against foreign companies doing business in Cuba, Iran and Libya.

    The accords, announced in London, affect the controversial Helms-Burton Act, which requires U.S. sanctions against foreign firms that make use of confiscated property in Cuba, and the Iran-Libya Sanctions Act, which is designed to punish Iran and Libya for sponsoring terrorism.

    As part of the accord on Iran-Libya sanctions, the Clinton administration agreed not to impose economic sanctions on three major foreign energy companies that have signed a contract to develop an offshore gas field in Iran.

    Later in Geneva, with Cuban President Fidel Castro watching, President Clinton urged other nations to continue tearing down trade barriers and adapt the trading system to the demands of a rapidly changing global economy.

    The European Union had threatened to take the United States to the World Trade Organization (WTO) over the Helms-Burton Act more than a year ago but delayed taking any action as negotiators from the two countries sought to work out a compromise. U.S. officials also feared retaliation over the sanctions provisions of the Iran legislation.

    After a morning meeting with British Prime Minister Tony Blair, the current chairman of the EU, and EU President Jacques Santer, Clinton hailed the "path-breaking common approach" on Cuba and the compromise agreement on Iran. Blair put it more simply. "We've avoided a showdown over sanctions," he said.

    The United States has agreed to seek changes from Congress that would give the president greater authority to waive certain sanctions against European countries doing business in Cuba in return for what a senior U.S. official said were agreements by the Europeans that will "chill" future investment there.

    But the administration has no guarantee that Congress will agree to the changes. Senate Foreign Relations Committee chairman Jesse Helms (R-N.C.), co-author of Helms-Burton, reacted negatively to the news of the agreement.

    "It will be a cold day in you-know-where before the EU convinces me to trade the binding restrictions in the Helms-Burton law for an agreement that legitimizes their theft of American property in Cuba," Helms said. Rep. Lincoln Diaz-Balart (R-Fla.), a strongly anti-Castro Cuban American, said the administration "should not assume this has the support of Congress."

    On the Iran-Libya measure, Secretary of State Madeleine K. Albright announced that the United States had decided to forgo sanctions on three foreign companies -- Total of France, Gazprom of Russia and Petronas of Malaysia -- involved in a $2 billion investment in Iran's South Pars gas field. But she reaffirmed U.S. opposition to the joint venture in Iran.

    The waiver came after U.S. negotiators received assurances that the EU and Russia will cooperate more vigorously in frustrating Iran's efforts to develop weapons of mass destruction and to support terrorist groups. Administration officials said they concluded that, in this case, the sanctions would have had no effect on the investment and might make it more difficult to gain cooperation from Europe and Russia on other matters such as Helms-Burton and ratification of START II.

    The United States also signaled that future similar investments in Iran involving European firms would not be threatened by sanctions, although business deals involving pipeline projects would be. These same assurances do not apply to Russian companies because the United States wants further evidence of Russia's cooperation in preventing Iran from receiving sensitive technology. Despite expected future waivers for European companies, U.S. firms are still prohibited from investing in Iranian energy ventures.

    The Helms-Burton Act has been widely criticized since it was enacted in 1996. The measure allows U.S. companies and citizens to sue foreign companies that invest in expropriated property in Cuba and requires the government to deny entry into the United States to executives of foreign companies that invest in such expropriated property.

    Under current law, the president has authority to block lawsuits by waiving the provisions of the law, but must do so every six months. Clinton has done that four times. He has no authority to waive the other sanctions denying visas to executives of companies found to be in violation of the law, but that measure has been used in only one case, involving a Canadian firm.

    The administration assured EU negotiators that Clinton will ask Congress to give him the power to issue a permanent waiver to the visa restrictions, but made no commitment to try to change the section covering lawsuits.

    Clinton flew from London to Geneva to speak to the WTO, which is celebrating the 50th anniversary of the General Agreement on Tariffs and Trade. "I am determined to pursue an aggressive market-opening strategy," Clinton said.

    Clinton, who flew back home late tonight, invited trade ministers to Washington next year to design a new trading system and said future trade agreements should ensure that living standards are lifted around the world while protecting environmental, labor and health standards. He also called on the WTO to open itself to the views of environmentalists, consumers and labor organizations.

    Castro listened to Clinton's speech in the front row of the auditorium here in Geneva, but the two did not meet.

    Staff writer Thomas W. Lippman in Washington contributed to this report.

    © Copyright 1998 The Washington Post Company

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