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Panel Votes to Sanction Those Conducting Business with Iran

By Thomas W. Lippman
The Washington Post

Shrugging off strong objections from U.S. allies, a key House committee voted 32-0 Thursday to impose far-reaching economic sanctions on foreign corporations that do business with the oil industries of Iran or Libya.

A similar but somewhat narrower measure has already cleared the Senate, with Clinton administration approval. At least two more House committees must approve the bill before it reaches the full House, but congressional sentiment against Iran in particular is so strong that members predicted quick passage.

Following on the heels of President Clinton's signature of a new law subjecting foreign companies that invest in Cuba to U.S. court action, the Iran-Libya measure has outraged major U.S. trading partners such as Canada and the 15-nation European Union.

They have accused the United States of trying to impose its law on them, and of trying to force them to pursue what they see as a futile policy of seeking to change the behavior of hostile states through isolation.

The United States can expect to be the target of formal complaints filed with the World Trade Organization, which was set up with strong U.S. backing to enforce international free-trade agreements, administration officials said Thursday. Complaints were aired informally at a WTO trade council meeting Tuesday, Europeans diplomats said, but no formal charges have been filed because no sanctions have actually been imposed.

"We see certain risks to United States policy interests," Deputy Assistant Secretary of State C. Richard Welch, leader of the administration's Iran sanctions team, told the House International Relations Committee as it marked up the legislation for passage Thursday. "But there are considerable benefits also" from trying to head off investments in the economies of hostile nations, he said.

"The administration supports sanctions, but we want them to hurt Iran more than they hurt us," said acting Assistant Secretary of State Barbara Larkin, signaling that the administration prefers the Senate version because it carries less risk of retaliation by U.S. trade partners.

Clinton has already barred U.S.-owned corporations from doing business with Iran, which the United States regards as the major state sponsor of international terrorism, but other nations have not followed Washington's lead.

"American diplomacy has a taste for embargoes and boycotts which we do not share," a European ambassador said Thursday. "You have always used that as a weapon, with a remarkable degree of ineffectiveness."

Legislation aimed at isolating Cuba, Iran and Libya economically amounts to a "secondary boycott," the ambassador said. "That is unacceptable. We have not elected the American Congress, we never voted for it, and I don't see why we should let it legislate for the rest of the world."

At Thursday's committee session, Rep. Doug Bereuter, R-Neb., read a letter from the European Union expressing "our strong and unequivocal opposition" to the bill.

Rep. Tom Lantos, D-Calif., responded that the Europeans have forfeited their standing to complain about U.S. legislation by continuing to do business with "sickening regimes." He said "the Europeans come in with no moral standing on these issues."