- The Washington Times - Thursday, June 21, 2001

A House committee yesterday rejected a Bush administration bid to buy time for a comprehensive review of U.S. policy toward Iran by approving a five-year extension of a law that penalizes foreign companies that invest in the Iranian and Libyan energy industries.

The Bush administration had asked for a two-year extension to the expiring law, arguing that a five-year renewal would undercut its plans for a comprehensive study and a revamping of U.S. policy toward Iran, including sanctions.

But the House International Relations Committee, by a vote of 41-3, approved a full five-year renewal of the 1996 Iran-Libya Sanctions Act, a law that has drawn the ire of numerous European and Asian countries.

Business groups including the National Foreign Trade Council, the U.S. Chamber of Commerce and the National Association of Manufacturers also have complained that the law irritates American allies without curbing investment flow to Iran and Libya.

The committee ultimately heeded the calls by pro-Israel groups and lawmakers who view the law as a necessary tool to wield influence over Iran and Libya.

"This act has helped to discourage foreign energy firms from investing in Iran´s and Libya´s energy sectors," said committee Chairman Henry J. Hyde, Illinois Republican.

The law, which expires in August, was drafted in 1996 as a means to choke off funding for terrorism and the development of weapons of mass destruction by cutting off Iran´s and Libya´s access to capital.

The sanctions law requires the president to hit foreign companies with a variety of penalties if they invest more than $20 million a year in Iran´s energy sector or more than $40 million in Libya´s.

The committee voted to lower the threshold for sanctions in Libya´s case to $20 million.

The original law also allows the president to forgo sanctions if he deems it is in the national interest, a provision former President Clinton used repeatedly.

In a defeat for the Bush administration, the panel rejected by a 34-9 vote an amendment proposed by Rep. Ron Paul, Texas Republican, that would have extended the law for only two years.

Mr. Paul argued that a two-year renewal would give the administration "a little bit of flexibility."

Rep. Doug Bereuter, Nebraska Republican, asked members to show "a certain degree of deference" to the still-young administration´s wishes.

But Rep. Benjamin A. Gilman, a New York Republican and one of the original authors of the legislation, said a two-year extension would not deter foreign energy firms from investing in Iran and Libya.

"We should not give them the impression that they can wait us out," Mr. Gilman said.

House aides said the administration, facing certain defeat, had not mounted a strong effort to reduce the law´s duration.

The committee vote also dealt a heavy blow to USA-Engage, the broad coalition of industry groups and small businesses that has lobbied hard against "unilateral" American sanctions — ones that are not supported by other countries.

"In five years, [the Iran-Libya law] has failed to achieve any progress toward its stated goals," said Bill Reinsch, vice chairman of USA-Engage.

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