Congress is pressing ahead with a new package of crippling sanctions on Iran, expanding on financial penalties and targeting Tehran's energy and shipping sectors in the hope that economic pressure undercuts its suspected nuclear weapons program.
House and Senate negotiators reached agreement late Monday on legislation that builds on the current penalties directed at financial institutions that do business with Iran's central bank. The new bill would impose sanctions on anyone who mines uranium with Iran; sells, leases or provides oil tankers to Tehran; or provides insurance to the National Iranian Tanker Co., the state-run shipping line.
Lawmakers hope to vote on the bill this week before their monthlong August recess, with a House vote possible Wednesday. The measure has one crucial backer — the powerful American Israel Public Affairs Committee, the pro-Israel lobbying group — and extensive support from Republicans and Democrats.
"This bipartisan, bicameral Iran sanctions legislation strengthens current U.S. law by leaps and bounds," said Rep. Ileana Ros-Lehtinen, R-Fla., chairwoman of the House Foreign Affairs Committee. "It updates and expands U.S. sanctions, and counters Iran's efforts to evade them. The bill sends a clear message to the Iranian regime that the U.S. is committed, through the use of sanctions, to preventing Iran from crossing the nuclear threshold."
The United States and Europe argue that depriving Iran of its oil income thwarts its suspected drive for nuclear weapons. Iran has exported 2.5 million barrels of oil a day to Europe, China, India, Japan and South Korea. U.S. officials say the penalties have reduced Iran oil exports to less than 1.8 million barrels a day, costing Tehran about $63 million daily.
Unless Iranians "come clean on their nuclear program, end the suppression of their people and stop supporting terrorist activities, they will face deepening international isolation and even greater economic and diplomatic pressure," said Sen. Tim Johnson, D-S.D., chairman of the Senate Banking Committee.
Ros-Lehtinen and Johnson and their staffs worked for weeks behind closed doors reconciling a bill the House passed in December and one the Senate approved in May. Johnson said they incorporated a number of provisions sought by proponents of tough sanctions.
The bill would penalize anyone who works in Iran's petroleum, petrochemical or natural gas sector, or helps Tehran's oil and gas industry by providing goods, services, technology or infrastructure.
Any entity that insures or reinsures investments in Iran's oil sector would be penalized. So would anyone who helps Iran avoid sanctions through reflagging of vessels.
The bill would target the Iranian Revolutionary Guard Corps and anyone who assists the paramilitary group, including foreign government agencies.
The bill also would deny visas and freeze assets on individuals and companies that supply Iran with technology that could be used against its citizens, such as tear gas, rubber bullets and surveillance equipment. The bill extends those sanctions on human rights violators to Syria, where President Bashar Assad's regime is accused of a bloody crackdown against protesters.
The bill requires companies that trade on the U.S. stock exchange to disclose any Iran-related business to the Securities and Exchange Commission.
Late last year, Congress overwhelmingly approved sanctions targeting foreign financial institutions that do business with Iran's central bank by barring them from opening or maintaining correspondent operations in the United States. Those sanctions applied to foreign central banks only for transactions that involve the sale or purchase of petroleum or petroleum products.
The new bill expands on those penalties.
The rare display of bipartisanship on the legislation came amid high-stakes talk about the effectiveness of sanctions, which by the numbers alone have reduced Iran's oil exports.
"All the sanctions and diplomacy so far have not set back the Iranian program by one iota," Israeli Prime Minister Benjamin Netanyahu said this past weekend.
Israeli leaders have contemplated a military strike on Iran to stop it from developing nuclear weapons. Iran insists that the uranium enrichment work is for peaceful purposes.
Traveling in the Mideast, Defense Secretary Leon Panetta acknowledged that stiff international sanctions have yet to compel Iran to give up its nuclear ambitions. He insisted that more pressure eventually would lead Iran to "do what's right."
"These sanctions are having a serious impact in terms of the economy in Iran," he told reporters Monday. "And while the results of that may not be obvious at the moment, the fact is that they have expressed a willingness to negotiate (with the U.S., Britain, France, Germany, Russia and China) and they continue to seem interested in trying to find a diplomatic solution."
A few lawmakers said they were frustrated that the legislation didn't go far enough.
Several proponents of tough sanctions, such as Rep. Ted Deutch, D-Fla., Sen. Mark Kirk, R-Ill., Rep. Robert Dold, R-Ill., and Rep. Brad Sherman, D-Calif., had pressed negotiators to blacklist Iran's energy sector, labeling it a "zone of proliferation concern." That would effectively ban all business with Iran. But the bill says the president should impose sanctions and the provision is non-binding.
Mark Dubowitz, a sanctions expert and executive director of the Foundation for Defense of Democracies, described the legislation as a "strong bill that fills numerous loopholes and tightens the sanctions requirements, but it could be a lot tougher" if Congress understood as much about the psychology as the legality of sanctions. Dubowitz said Iran often figures out ways to get around the penalties.