US House To tighten Iran Sanctions.

Key members of the US Congress on March 6 backed a legislative effort to force the Bush administration to sanction oil firms and states which sign deals with Iran. The move came as new multi-billion-dollar oil and gas deal with Tehran were under negotiation and as the UNSC was debating stronger sanctions on Iran.

Tom Lantos, chairman of the House of Representatives Foreign Affairs Committee, said the only way to persuade Iran to give up its nuclear programme without military action was through diplomacy backed by strong sanctions. In remarks which drew support from Democratic and Republican colleagues, he accused the Bush administration of abusing its authority by waiving penalties under the existing US Iran Sanctions Act promised "those halcyon days for the oil industry are over", saying: "My legislation will increase exponentially the economic pressure on Iran, and empower our diplomatic efforts by strengthening the Iran Sanctions Act. It will put an end to the administration's ability to waive sanctions against foreign companies that invest in Iran's energy industry. If...Shell moves forward with its proposed $10 bn deal with Iran, it will be sanctioned. If Malaysia moves forward with a similar deal, it too will be sanctioned. The same treatment will be accorded to China and India should they finalise deals with Iran".

Florida Rep Ileana Ros-Lehtinen, the panel's senior Republican, said Iran's economy was heavily dependent on the energy sector, adding: "We are at a critical juncture and the opportunity for successful application of our sanctions has never been greater".

But Undersecretary of State Nicholas Burns expressed concern that if the US focus shifted from working with European and other allies to expand sanctions on Iran, to imposing sanctions on US allies and foreign companies, the international coalition arrayed against Iran could unravel.

The Iran Sanctions Act, enacted in 1995, requires the US government to impose sanctions on foreign firms which invest more than $20m a year in Iran's energy sector. Burns said the administration has co-ordinated a series of diplomatic initiatives which has begun to "throw Iran off its stride" and urged Congress to be patient so they can work. He said that, in addition to drafting a new UNSC sanctions resolution with major powers and cracking down on Iran's access to financial markets, the administration had given new warnings to states and foreign firms that they faced penalties if they proceeded with business deals with Iran. He said France, Germany and Japan had reduced export credits for Iran and other states had privately committed to do the same. (Iran is one of the world's largest beneficiaries of export credits with $22.3 bn in exposure reported by the OECD in 2005.

However, many experts including US analysts are predicting a US-led war against Iran (see news10-Iran-NukeIssueMar5-07).