US Senator Barack Obama (D-Illinois) and Representative Barney Frank (D-Massachusetts) introduced the Iran Sanctions Enabling Act of 2007 on Wednesday in a bid to rachet up financial pressure on Iran, which is continuing its uranium enrichment program in defiance of the international community. The legislation would establish a federal list of entities that invest in Iran and remove some of the legal barriers, including the threat of certain lawsuits, for Americans who want to divest from them. "The Iranian government uses the billions of dollars it earns from its oil and gas industry to build its nuclear program and to fund terrorist groups that export its militaristic and radical ideology to Iraq and throughout the Middle East," Obama said.
Bolton: Attack Iran before it gets bomb
"Pressuring companies to cut their financial ties with Iran is critical to ensuring that sanctions have their intended result."
"This legislation makes use of one of the most successful diplomatic tools available to discourage Iran from developing nuclear weapons: the financial vise," Tom Lantos, chairman of the House Foreign Affairs Committee (HFAC), said at a press conference announcing the proposed legislation.
"We can put the squeeze on Iran using this tool; it encourages companies and individuals to remove their money from any investment that might support Tehran's heedless quest for nuclear weapons."
The move is the latest effort to use economic means as a way to curtail Iran's nuclear program. Already the US Treasury has taken action to persuade foreign companies and financial institutions to reconsider their involvement with the Iranian economy. US companies are already almost entirely barred from such investments.
Deputy Secretary Robert M. Kimmitt touted the Treasury's activity at a recent Washington Institute For Near East Studies event. "
We have worked closely with our fellow finance ministries and central banks abroad to build consensus on these financial measures, and the effect has been striking: international partners who originally resisted the idea of applying sanctions on Iran have reversed this position and now support pressuring the Iranian regime to renounce its support for WMD proliferation and to comply with its international obligations," he said.
"This is especially significant because we believe that segments of Iranian society beyond President Ahmadinejad and the Islamic Revolutionary Guard Corps -- including the mullahs, their merchant class backers, and liberalizing forces -- understand the high costs of the country's increasing isolation and the need to change its behavior."
Yet many in Congress think the executive branch hasn't done enough to pursue Iran on financial grounds. Lantos has already submitted another bill tightening US sanctions on the Islamic Republic.
The act proposed Wednesday would additionally require the US government to publish a list every six months of those companies that have an investment of more than $20 million in Iran's energy sector and establish a "Sense of the Congress" urging a federal savings plan to offer a terror-free investment option for government workers.
The legislation follows the introduction of a bill earlier this week to "strengthen sanctions against the Government of Syria, to enhance multilateral commitment to address the Government of Syria's threatening policies, to establish a program to support a transition to a democratically-elected government in Syria." It was put forth by Ileana Ros-Lehtinen (R-Florida), HFAC's ranking member.
Also this week, HFAC Middle East and South Asian subcommittee chairman Gary Ackerman (D-New York) sponsored a bill requiring the US Secretary of State to prepare a report for Congress on the efforts to bring to justice the Palestinians behind the killing of three American security personnel in Gaza in 2003.