Netanyahu: US House sanctions send 'clear message' to Iranian regime

Prime minister welcomes US decision to impose tightened sanctions on Iran's petroleum sector.

By HERB KEINON, MICHAEL WILNER, JERUSALEM POST COR
Netanyahu with American, Israeli flag USE THIS ONE390 (photo credit: מוטי מילרוד )
Netanyahu with American, Israeli flag USE THIS ONE390
(photo credit: מוטי מילרוד )
Prime Minister Binyamin Netanyahu on Thursday warmly welcomed a US House of Representatives decision imposing new, punishing sanctions on Iran.
Netanyahu said the move sent an important message that Iran will not get a period of grace because of Hassan Rouhani’s victory in the election.
“Following the Iranian elections, the House of Representatives has sent a clear message to the Iranian regime that international pressure will increase until Iran meets its obligations and ceases its pursuit of a nuclear weapons capability. We will judge Iran by its actions alone,” the prime minister said.
The US House of Representatives passed a bill on Wednesday by a commanding 400-20 bipartisan majority to tighten sanctions on Iran’s petroleum sector. The move came just days before the inauguration of Rouhani on Sunday as Iran’s new president.
Sources in the Prime Minister’s Office said the congressional move was important because it was the first time an international body has stepped up the sanctions since Rouhani was elected to replace Mahmoud Ahmadinejad in June.
Netanyahu has called for the world not to “let its guard down” because of the election of someone perceived by some in the West as a “moderate, ” but rather to keep up intense pressure on Tehran.
“This is a message to the Iranians that they don’t get a year of grace, that words and smiles will not be enough, and that if they do not want sanctions upgraded, they will have to take tangible measures,” the sources said.
“The timing of this measure is crucial,” the sources added.
“These are the first serious measures taken after the election.”
The US 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 monthlong summer recess, sources told The Jerusalem Post.
The 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.
And yet, despite Western efforts to divorce Iran from its customers, the Persian state still exports more than 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.
Previously, for diplomatic reasons, these companies were given a pass. But the exemptions will expire after a yearlong grace period, during which Iran’s customers will face the choice of finding oil elsewhere or being cut out of the US economy.
The 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 barrels.
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.
Dubowitz noted that past sanctions “tended to be frontloaded,” suggesting that Iran might experience the impact of this new round by the end of the year.
“Everything is really coming to a head in the next 12 months,” Dubowitz said.
On the House floor during the debate on the bill, Rep. Keith Ellison (D-Minnesota) stood nearly alone against his colleagues, saying that 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?” Rep. David Price (D-North Carolina) joined Ellison in opposing the bill.
“The 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 shown unanimous, bipartisan support for the bill.
“I 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 chief negotiator.”
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 legislation.
The bill, H.R. 850, had 375 cosponsors in the 435-member body. 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 provisions.
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.
In a statement to the Post, the White House says it still has “some concerns over the specific contents of the legislation” and hopes to work on fixing those in the Senate draft.
“Following his inauguration, we hope President-elect Rouhani and the Iranian government will engage substantively with the international community to reach a diplomatic solution to Iran’s nuclear program,” said Bernadette Meehan, spokeswoman for the National Security Council. “We and our international partners remain ready to meet at the earliest opportunity once Iran is prepared to do so.”
“We continue to work with Congress on all sanctions legislation concerning Iran,” State Department spokeswoman Jen Psaki told journalists the day before the vote, calling the administration’s sanctions regimen against Iran “unrelenting.”
The State Department declined to comment on the specific House vote.
“Iran 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.”
China 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 regulations.
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.