U.S. Business Groups Urge Obama Administration to Oppose Legislation to Broaden Scope of Iran Sanctions

Several leading U.S. business organizations and associations sent a letter today to National Security Advisor James Jones and National Economic Council Director Lawrence Summers urging the Obama Administration to oppose the Iran sanctions bills currently pending in Congress.

The bills, the Iran Refined Petroleum Sanctions Act of 2009 (H.R. 2194), which passed the House in December by a wide margin, and the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2009 (S. 2799), which was approved by the Senate Banking Committee and placed on the Senate calendar, would expand the scope of current U.S. sanctions on Iran in a variety of ways, including making a number of changes to the Iran Sanctions Act, requiring certain sanctions to be imposed against non-U.S. companies that supply refined petroleum products to Iran and broadening the circumstances in which a U.S. company
could be penalized when one of its non-U.S. subsidiaries engages in business with Iran.

The letter states:

While we agree that preventing Iran from developing the capability to produce nuclear weapons is an urgent U.S. national security objective, the unilateral, extraterritorial, and overly broad approach of these bills would undercut rather than advance this critical objective.

The proposed sanctions would incite economic, diplomatic, and legal conflicts with U.S. allies and could frustrate joint action against Iran. They could prohibit any U.S. company from transacting routine business with critical partners from around the globe even if these transactions have no bearing on business with Iran. These provisions could encompass a very large portion of the global trade community with consequences that in our view have not been adequately assessed.

The proposals could have a large impact on the U.S. Export-Import Bank, precluding it from partnering with counterpart agencies abroad to co-finance U.S. exports that have no relation to Iran’s energy sector. A significant portion of the bank’s portfolio could be impacted, compromising its ability to boost U.S. exports.

The letter concludes by requesting the Obama Administration to "weigh in vigorously with Congress to eliminate these highly problematic proposals."

The letter was signed by the National Foreign Trade Council, the U.S. Chamber of Commerce, USA*Engage, the Business Roundtable, the Coalition for Employment through Exports, the Emergency Committee for American Trade, the National Association of Manufacturers, the Organization for International Investment and the U.S. Council for International Business.

The full text of the letter can be found here.

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In other Iran sanctions-related news, German engineering firm Siemens announced at its annual shareholder meeting today that starting in mid-2010 the company  would no longer accept any new orders from Iran.

In addition, Bloomberg today published a detailed story today entitled "Dubai Helps Iran Evade Sanctions as Smugglers Ignore U.S. Laws," describing how Dubai is used as a conduit to supply U.S. goods to Iran.