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Financial Times: US House backs tough Iran sanctions

By Daniel Dombey andHarvey Morris at the UN and Hugh,Williamsonin Berlin
Published: September 26 2007 03:00 | Last updated: September 26 2007 03:00

The US House of Representatives backed a tough new Iran sanctions bill yesterday which would punish energy companies that invested in Iran – brushing aside lobbying from European governments and opposition from the Bush administration.

The 397-16 vote on the Iran Counter-Proliferation bill, which would make sanctions mandatory on energy companies investing more than $20m (€14.1m, £9.9m) in the Islamic republic, came a day after President Mahmoud Ahmadi-Nejad of Iran gave a speech at Columbia University, New York, and hours before he addressed the United Nations.

“Since 1999, giant companies such as Royal Dutch Shell, France’s Total, Italy’s ENI and Inpex of Japan have invested over $100bn in the Iranian energy industry, and the US has done nothing to stop them,” said Congressman Tom Lantos, the bill’s sponsor.

Legislation passed in the 1990s establishes a set of sanctions for companies investing in Iran – ranging from banning large-scale US bank loans for such groups to prohibiting them from participating in US government procurement.

But that legislation also gives the US president a waiver on introducing such sanctions. Presidents Bill Clinton and George W. Bush have consistently used the waiver, but the Lantos bill would abolish it.

Nicholas Burns, the number three at the state department, has warned Congress that such legislation could hit the common front with European countries in tackling Iran’s nuclear programme – a message European Union diplomats have sought to re-inforce.

However, the proposal is far from certain to become law in its current form, since a parallel measure in the Senate would be less hard-hitting and would leave Mr Bush’s waiver intact.

“It is the Senate that is extremely leery of doing anything that would rankle the Europeans,” said Cliff Kupchan, an analyst at the Eurasia Group, a Washington-based consultancy.

“At the end of the day, revocation of the waiver is unlikely. That said, the administration and Congress are going to join hands on moving forward on new sanctions.”

Mr Ahmadi-Nejad said in a speech to the UN General Assembly yesterday: “In the last two years, abusing the Security Council, the arrogant powers have repeatedly accused Iran and even made military threats and imposed illegal sanctions against it.

“Unfortunately the Security Council, in dealing with this obvious legal issue [of Iran’s nuclear programme] . . .failed to uphold justice and protect the rights of the Iranian people.”

Mr Ahmadi-Nejad added: “Peoples and governments are not obliged to obey the injustice of certain powers.”

Without specifically naming the US, he said: “These powers. . . have lost thecompetence to lead the world.”

Although President Bush made only a passing reference to Iran in his own speech to the UN yesterday, Nicolas Sarkozy, his French counterpart, reprised his country’s recent tough line against Tehran.

Allowing Iran to acquire nuclear weapons could destabilise the world and lead to war, the French leader told the UN GeneralAssembly. President Sarkozy has called for French companies to pull back from doing business with Iran -a line also pushed byGermany.

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