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    Clinton Approves Sanctions For Investors in Iran, Libya

    By Eric Pianin
    Washington Post Staff Writer
    Tuesday, August 6 1996; Page A08

    President Clinton signed legislation yesterday imposing harsh economic sanctions on companies that make future investments in Iranian and Libyan petroleum ventures and vowed to wage an international battle against terrorism, with or without the support of key U.S. allies.

    The bill, crafted by Congress to deny Iran and Libya revenue that could be used to finance terrorist attacks, has drawn sharp criticism from France, Germany and other European allies that say it could do serious damage to their economies. A spokesman for the French Foreign Ministry in Paris yesterday charged that the legislation would "create a particularly dangerous precedent for the security and development of commerce."

    But Clinton brushed aside the complaints, declaring at a White House bill-signing ceremony that "every advanced country is going to have to make up its mind whether it can do business with people by day who turn around and fuel attacks on their innocent civilians by night."

    Later, during a foreign policy address at George Washington University, Clinton chided Congress for refusing to pass measures he has sought to combat domestic terrorism, including expanded wiretapping authority for the FBI and a requirement that chemical markers be used in manufacturing black and smokeless powders that are commonly used in making bombs. He said he would press for action on those and other measures when Congress returns next month from its August recess.

    "I want to make it clear to the American people that while we can defeat terrorists, it will be a long time before we defeat terrorism," Clinton said in calling for tougher law enforcement measures, tighter security at airports and greater international cooperation. "America will remain a target because we are uniquely present in the world . . . because we have taken a tougher stand against terrorism, and because we are the most open society on Earth."

    As he signed the economic sanctions legislation, the president described Iran and Libya as "two of the most dangerous supporters of terrorism in the world." He said the legislation would help to deny those countries the money they need to finance international terrorism and would limit the flow of resources necessary to obtain weapons of mass destruction. He also said it would intensify pressure on Libya to extradite the suspects in the bombing of Pan Am Flight 103 over Lockerbie, Scotland.

    Clinton was joined in the Oval Office by relatives of victims of the 1988 downing of that flight. Also present were Secretary of State Warren Christopher, Attorney General Janet Reno, national security adviser Anthony Lake, Sen. Alfonse M. D'Amato (R-N.Y.) and GOP and Democratic House members.

    Lawmakers frequently cited the case of Pan Am 103, as well as last month's explosion of Trans World Airlines Flight 800, in which a bomb is suspected, as they pressed for passage of the sanctions legislation. Libya and Iran are on the State Department's list of nations supporting terrorism, and the United States has banned trade with both.

    The legislation will impose sanctions on foreign companies that provide new investments of more than $40 million for the development of oil and gas resources in Iran or Libya. It also sanctions foreign companies that violate existing United Nations prohibitions against trade with Libya involving arms, certain oil equipment and civil aviation services.

    A French firm, Total SA, has been active in Iran and Libya. Some U.S. officials were outraged last year when the company took over development of two giant offshore oil and gas fields in Iran after the United States barred Conoco and other American companies from the project. Total SA has been among foreign oil companies trying to buy the assets of U.S. producers in Libya. While U.S. oil companies are barred from operating in Libya, they have maintained their ownership stakes.

    Administration officials stressed yesterday that the legislation would not affect companies or individuals currently doing business in the two countries, only those that enter into new contracts or investments. Punishment could include denial of Export-Import Bank assistance, prohibition on loans or credits from U.S. financial institutions of more than $10 million in any 12-month period or denial of U.S. government procurement opportunities. U.S. companies already are barred from doing business with Iran and Libya.

    © Copyright 1996 The Washington Post Company

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