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After a temporary lull, Congress is gearing up to try to pass new Iran sanctions legislation in the coming months that could severely restrict whole segments of Iranian commerce, including oil. The aim is to have votes in both chambers as early as June, with a consensus bill moving to the president’s desk before the August recess.
By then, Iran will have completed its presidential election and transfer of power, although most observers expect little change in Tehran’s stance on its nuclear program, given that Iran’s supreme leader, Ayatollah Ali Khamenei, is the ultimate arbiter of those decisions.
Capitol Hill gave the Obama administration a bit of leeway during the last round of multilateral negotiations with Iran, which took place in April. Little progress was made.
Now the House Foreign Affairs Committee is poised to mark up a bipartisan sanctions bill on May 22, and the Senate is likely not to be far behind, with lawmakers working to draft a companion measure that is expected to be released in the coming weeks.
Both the House Foreign Affairs and Senate Foreign Relations panels have hearings on Iran scheduled this week with senior Obama administration officials — Undersecretary of State for Political Affairs Wendy Sherman and Undersecretary of Treasury for Terrorism and Financial Intelligence David S. Cohen.
The House legislation is sponsored by Foreign Affairs Chairman Ed Royce, R-Calif., and ranking Democrat Eliot L. Engel, D-N.Y.,and is co-sponsored by virtually every other member of the panel. It has 324 sponsors altogether.
Royce’s and Engel’s bill (HR 850) authorizes the president to sanction foreign entities that engage in “significant financial transactions” with a long list of blacklisted Iranian banks, which would effectively make it difficult for foreign companies to conduct most forms of commerce with Iran.
Under the Royce-Engel bill, countries that reduce their trade with Iran to a significant degree would be exempt from the sanctions, much in the same way that existing U.S. laws exempt countries from oil sanctions if they significantly reduce their Iranian oil purchases.
The goal is to create a sort of de facto commercial embargo, the same way that the West has created a partial oil embargo on Iran.
The bill also aims to close several loopholes in existing sanctions that target Iranian state-own companies.
And it requires the president to report every 60 days on Iran’s latest nuclear capabilities, including an estimated timeline for when it could develop a nuclear explosive device and build a nuclear weapon, also known as “breakout capacity.” Further provisions are expected to be added in the markup, including a measure that goes after Iran’s foreign currency reserves.
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