US Industry Mixed About Bush Energy Plan On Sanctions

Wednesday, 2 May 2001


Speculation had been running high the report would recommend a review of ILSA in particular because Vice President Richard Cheney, who chaired the energy policy task force, stated his opposition to unilateral U.S. sanctions on Iran while chief executive of oil services giant Halliburton Co. (HAL). National Foreign Trade Council President Bill Reinsch said he was disappointed the White House report wasn't more specific in its sanctions recommendation, particularly in light of Congress' apparent support for renewing ILSA this summer. The council wants Congress to let the law expire Aug. 5. "We thought it was a missed opportunity," said Reinsch, whose organization lobbies for more-lenient unilateral sanctions.

While the NFTC president welcomed a comprehensive review of sanctions, he was skeptical it would amount to much: "for years we've reviewed them. How much more reviewing do they need?" American Petroleum Institute President Red Cavaney said U.S. oil companies recognize sanctions on energy-exporting countries are "a very, very sensitive issue." "We had never expected that there would be a non-renewal of sanctions," Cavaney said. "What we hope is that within the sanctions, regimes that are out there that there might be more flexibility and other considerations factored in, and that's still - because the renewal is ahead of us - something to be determined." Sens. Gordon Smith, R-Ore., and Charles Schumer, D-N.Y., plan to introduce a bill next month to renew the five-year-old ILSA law. The law authorizes the state department to penalize non-U.S. companies making new investments of more than $20 million in Iran's petroleum sector and more than $40 million in Libya's petroleum sector.

European countries have criticized ILSA as a form of U.S. extra-territoriality. Other critics say it is merely symbolism because the penalties have never been enforced. U.S. executive orders prohibit U.S. companies from investing in Iran. As for Iraq, the U.N. Security Council is currently considering a U.K. proposal to ease sanctions on imports not deemed to support development of weapons of mass destruction, while clamping down on Iraqi oil smuggling outside a U.N.-monitored export program. The White House energy policy task force doesn't specifically address sanctions on Iraq either. Iran, Libya and Iraq together account for nearly 10% of world oil production.

-By Campion Walsh, Dow Jones Newswires

The National Foreign Trade Council is a leading business organization advocating an open rules-based world economy. Founded in 1914 by a group of American companies that supported an open world trading system, the NFTC now serves more than 500 member companies through its offices in Washington and New York.

USAHENGAGE is a coalition of over 670 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.  For more information on USAHENGAGE and the harmful effects of unilateral trade sanctions, visit the USAHENGAGE web site at www.usaengage.org.