New U.S. Iran Sanctions Bill Likely to Irk Russians

By Patrick Goodenough | June 22, 2010 | 4:18 AM EDT

Russian President Dmitry Medvedev, seen here chairing a meeting near Moscow on Monday, June 21, 2010, heads to the U.S. this week and will meet with President Obama on Thursday. (AP Photo/RIA Novosti, Vladimir Rodionov, Presidential Press service)

( – On the eve of Russian President Dmitry Medvedev’s visit to Washington, U.S. lawmakers unveiled tough new Iran sanctions legislation certain to anger Moscow.
Russia went along with a new U.N. Security Council resolution earlier this month imposing sanctions against Tehran over its nuclear activities, but made it clear that it strongly opposed moves by individual countries to enact additional, unilateral sanctions.
The foreign ministry expressed particular concern about the prospect of sanctions being imposed on companies and individuals from third countries, and warned that if any such measures affect Russian firms or individuals, Russia would take retaliatory steps.
On Monday, U.S. House and Senate lawmakers announced a conference committee agreement on a bill which, crucially, will target companies involved in selling gasoline to Iran or support for Iran’s domestic refining efforts
It would also prevent access to the U.S. banking sector of international banks involved with the Islamic Revolutionary Guard Corps (IRGC), Iran’s illicit nuclear program or its support for terrorism.
And a human rights element adds financial penalties and travel restrictions on Iranian officials judged to be complicit in rights abuses, according to a summary released by Senate Banking Committee chairman Chris Dodd and House Foreign Affairs Committee chairman Howard Berman.
They said in a statement the bill gives President Obama “a full range of tools to deal with the threats posed by Iran.”
“If applied forcefully by the president, this act will bring strong new pressure to bear on Tehran in order to combat its proliferation of weapons of mass destruction, support for international terrorism and gross human rights abuses.”
The conference committee has been working to reconcile bills which passed the House and Senate in December and January with overwhelming support.
During the process, the Obama administration pressed for the legislation to include exemptions for countries deemed to be “cooperating” in multilateral efforts to resolve the nuclear standoff.
The draft bill released Monday does not explicitly do so, although the inbuilt presidential authority to waive sanctions against specific entities is tied to countries’ cooperation.
The legislation permits the president to waive sanctions, on a case-by-case basis for a maximum 12-month period, after certifying that the country with jurisdiction over the offending entity is “closely cooperating” with the U.S. in multilateral efforts to prevent Iran from acquiring WMD or WMD-related technologies or “destabilizing numbers and types of advanced conventional weapons.”
In certifying that this is the case, the president will be expected to spell out the actions taken by the country concerned.
The waiver must also be “vital” to U.S. national security interests.
‘Disregard to partnership with Russia’
Proponents of gasoline sanctions have long argued that targeting Iran’s energy sector would be especially effective, since the country, despite its extensive oil reserves, relies on imports for up to 40 percent of its gasoline needs, due to poor domestic refinery infrastructure.
According to recent reports by the Congressional Research Service and Government Accountability Office, Russian and especially Chinese companies – including the state-controlled Sinopec and China National Petroleum Corporation – are among Iran’s leading energy partners.
Veto-wielding permanent Security Council members Russia and China only agreed to support the U.N. resolution after it was watered down during lengthy negotiations.
Since the June 9 vote, several countries have announced unilateral measures to complement the resolution.
The European Union and Australia imposed new sanctions last week, and the U.S. Treasury Department designated dozens of individuals, entities and ships associated with the government and the IRGC. Canada is expected to announce measures on Tuesday which will reportedly also target companies involved in Iran’s energy sector.
Russia complained that the E.U. and U.S. steps announced last week were “unacceptable.”
“The same story is repeated again and again,” the foreign ministry said in a statement on Thursday. “Once we take significant effort and reach an understanding at the U.N. Security Council on a set of carefully tuned sanctions on Iran, the U.S. and the E.U. don’t stop at that and, strictly speaking, show their political disregard to partnership with Russia.”
Even before the Security Council resolution passed, Russian leaders warned that unilateral sanctions would not be tolerated.
Foreign Minister Sergei Lavrov in a speech to the Russian parliament last month expressed irritation that U.S. lawmakers would seek to place national legislation over what he called “international legal acts.”
“Russia presumes that if the Security Council adopts some decisions collectively, then countries that faithfully implement these decisions cannot under any circumstances be the subject of unilateral sanctions by one or other state, adopted in circumvention of the Security Council,” he said.
“Unfortunately, the position of the United States still appears to lack an understanding of this, in my opinion, absolutely self-evident truth,” Lavrov said.
Medvedev is expected to make his views on the matter known in Washington. The Russian president is scheduled to begin his visit in California on Tuesday and to meet with Obama at the White House on Thursday.
On the eve of Medvedev’s departure, Kremlin aide Sergei Prikhodko told reporters that Moscow wanted “some guarantees” that any unilateral U.S. sanctions would not affect Russian companies, RIA Novosti reported.
The draft bill released on Monday must be passed by the conference committee, then separately by the House and Senate before it goes to the president’s desk.
Patrick Goodenough
Patrick Goodenough
Spencer Journalism Fellow