WASHINGTON -- The US House of Representatives passed a bill on Wednesday
containing punishing new sanctions against Iran, entrenching the US
position on the Islamic Republic's controversial nuclear program just
days before the inauguration of their new president, Hassan Rouhani.
Senate is expected to support the legislation— the toughest sanctions
package to date, targeting what remains of Iran's oil sector— once
Congress reconvenes from its month-long summer recess, sources told The Jerusalem Post.
bill aims to bring Iranian oil exports essentially down to zero within a
year from full passage. Iran has already experienced a 60 percent
decrease in oil exports since 2011 due to sanctions.
despite Western efforts to divorce Iran from its customers, the Persian
state still exports over a million barrels a day. Because of the high
price of oil, Iran experienced its fourth best year on record for oil
revenues in 2012.
Those remaining customers— companies
concentrated mostly in China, South Korea, India and Turkey— will no
longer be granted exemptions for their activities by the Treasury
Department if Wednesday's legislation becomes law.
Iranian Foreign Ministry spokesman Abbas Araqchi said intensifying sanctions against Iran "makes the nuclear issue more complex and more difficult to resolve".
"It will not help a resolution to the nuclear issue, rather it would help Iran consolidate its nuclear rights," Fars news agency quoted him as saying.
Iran called the bill counterproductive and Turkey, an importer of Iranian oil, said it would struggle to cut imports any further after having already reduced them by 40 percent.
A Turkish official reacted to the proposed sanctions, saying further cuts "would greatly stretch Turkey". Turkey's refiner Tupras has already increased purchases from Saudi Arabia, Libya and Iraq.
given a pass for diplomatic reasons, the exemptions will expire after a
year-long grace period, during which Iran's customers will face the
choice of finding oil elsewhere or else be cut out of the US economy.
US says there is spare capacity in the global market to replace Iran’s
exports. Libyan oil production is back online since its revolution ended
in 2011, and Saudi Arabia is prepared to accommodate Iran’s customers,
with spare production capacity already at 2 million to 2.5 million
Mark Dubowitz, executive director of the Foundation for
Defense of Democracies in Washington, said that House members were keen
on voting on the bill before Rouhani's Sunday inauguration, and said the
legislation would "massively intensify" ailing conditions in Iran.
noted that past sanctions regimens "tended to be front loaded,"
suggesting that Iran might experience the impacts of this new round by
the end of the year.
"Everything is really coming to a head in the next twelve months," Dubowitz said.
the House floor during debate on the bill, Representative Keith Ellison
(D-Minnesota) stood nearly alone against his colleagues, saying that
Mr. Rouhani ran his presidential campaign "on a policy of promise to
pursue a path of moderation."
"Obviously we don't have
rose-colored glasses," Ellison said, calling on the chamber to wait for a
round of negotiations with the new Iranian government. "Why don't we
wait and see?"
Representative David Price (D-North Carolina) joined Ellison in opposing the bill.
bill before us today could not come at a worse time," Price charged,
noting that he has voted previously in favor of harsh sanctions against
Iran. The bill "could slam the opportunity shut" to test the genuineness
of Rouhani's overtures, he said.
Eliot Engel (D-New York),
ranking member of the House Foreign Affairs Committee, noted that his
committee had cast unanimous, bipartisan support for the bill.
have no reason to believe that the results of the recent Iranian
election will fundamentally alter Iran's current course," Engel said in
his speech on the floor, charging that Rouhani "was directly involved in
efforts to deceive the international community when he served as Iran's
House Speaker John Boehner called the
sanctions "strong and targeted," and said they provided the president
with the "political and economic tools" required to tighten the screws
on the Iranian government. In an unusual sight, House Minority Leader
Nancy Pelosi joined Boehner on the floor to voice support for the
The bill, H.R. 850, had 375 cosponsors in the
435-member body. The bill passed by a large margin of 400-20, but the
Obama administration, which in previous rounds had pushed for exemptions
for Chinese and Turkish companies, has voiced reservations in recent
days over the timing and consequences of some of the bill's strictest
Uncertain how Rouhani will act in his first months as
president, Obama would like to give him time, officials say. And the
threatened expiration of exemptions may not intimidate Chinese
companies, forcing the US to make decisions that would harm its own
economy or, alternatively, renege on the law's requirements, weakening
America's diplomatic clout.
"We continue to work with Congress on
all sanctions legislation concerning Iran," State Department
spokesperson Jen Psaki told journalists the day before the vote, calling
the administration's sanction's regimen against Iran "unrelenting."
The State Department declined to comment on the specific House vote.
is increasingly cut off from the global financial system," Psaki
continued. "Significant amounts of Iranian oil are coming off the
market. The Iranian currency is plummeting in value. And firms all over
the world are divesting themselves of business with Iran."
stands to lose the most from the new legislation. Iran remains its
third-largest source of oil after Saudi Arabia and Angola, and the
companies that facilitate that trade have major assets in the United
States. PetroChina, China’s largest oil producer, is one such company
listed on the New York Stock Exchange.
These Chinese firms have
repeatedly voiced their opposition to extraterritorial sanctions and to
taking orders from the United States.
The House bill also targets
other loopholes in the current sanctions regimen, including foreign
exchange reserves that have allowed Iran to deal in euros. It also
targets Iranian shipping with stricter inspection and flagging
The US and European Union have increased sanctions
pressure on Iran significantly since early 2012, seeking a diplomatic
solution to the Islamic Republic's pursuit of nuclear technology. The
West believes Iran is developing the capability to build nuclear weapons
through converging uranium enrichment and weaponization programs.