USA*ENGAGE Criticizes ILSA for Forcing "No Win" Situation

Monday, 18 May 1998

The decision by the U.S. Department of State to waive sanctions authorized under the Iran Libya Sanctions Act (ILSA) now allows the French, Russian, and Malaysian oil companies participating in a $2 billion Persian Gulf gasfield development to move ahead without U.S. participation.

ILSA, which was enacted in 1996, forces a decision among several policy options -- all of which are harmful to U.S. interests.

"Clearly the Administration has been judicious in its considerations of this issue. While the decision to grant waivers makes the best of a bad situation, it will nonetheless produce negative consequences," said Frank Kittredge, President of the National Foreign Trade Council and Vice Chairman of USA*ENGAGE. "This decision reveals the flaws of ILSA. The United States is now in the process of ceding the tremendous energy resources of much of the Persian Gulf and Caspian basin to foreign companies -- effectively withdrawing from one of the world's most plentiful energy supply sources.

"We regret that the Secretary of State's statement fails to even acknowledge that U.S. policy now effectively discriminates against U.S. companies in favor of their overseas competitors. We call on the Administration to remedy this unfairness," he continued.

USA*ENGAGE has urged the Administration to revisit U.S./Iranian policy and to encourage a multilateral effort that can effectively influence the specific problems in our bilateral relations.

"Foreign countries are no more likely to be bullied into abiding by U.S. laws than we are to be bullied into abiding by theirs. Instead of isolating Iran, ILSA has isolated the United States," Kittredge said.

"The wiser policy would be to engage in dialogue with Iran and our allies, to see if we can find diplomatic solutions to the serious problems of terrorism and weapons proliferation. We need a policy that fully accounts for America's long-term strategic, energy, and economic interests in the region. We hope that today's decision by the Clinton Administration will energize a multilateral approach that will ultimately lead to the participation of U.S. companies in the development of Iran's oil and gas resources."

USA*ENGAGE is a coalition of 671 small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad.


Contact: Eric Thomas 202/822-9491

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