[Congressional Record Volume 142, Number 109 (Tuesday, July 23, 1996)]
[House]
[Pages H8125-H8127]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  IRAN AND LIBYA SANCTIONS ACT OF 1996

  Mr. GILMAN. Mr. Speaker, I ask unanimous consent to take from the 
Speaker's table the bill, (H.R. 3107) to impose sanctions on persons 
making certain investments directly and significantly contributing to 
the enhancement of the ability of Iran and Libya to develop its 
petroleum resources, and on persons exporting certain items that 
enhance Libya's weapons or aviation capabilities or enhance Libya's 
ability to develop its petroleum resources, and for other purposes, 
with a Senate amendment thereto and concur in the Senate amendment.
  The Clerk read the title of the bill.
  The Clerk read the Senate amendment, as follows:

       Senate amendment:
       Page 7, strike out all after line 7, over to and including 
     line 20 on page 8 and insert:
       (b) Mandatory Sanctions With Respect to Libya.--
       (1) Violations of prohibited transactions.--Except as 
     provided in subsection (f), the President shall impose 2 or 
     more of the sanctions described in paragraphs (1) through (6) 
     of section 6 if the President determines that a person has, 
     with actual knowledge, on or after the date of the enactment 
     of this Act, exported, transferred, or otherwise provided to 
     Libya any goods, services, technology, or other items the 
     provision of which is prohibited under paragraph 4(b) or 5 of 
     Resolution 748 of the Security Council of the United Nations, 
     adopted March 31, 1992, or under paragraph 5 or 6 of 
     Resolution 883 of the Security Council of the United Nations, 
     adopted November 11, 1993, if the provision of such items 
     significantly and materially--
       (A) contributed to Libya's ability to acquire chemical, 
     biological, or nuclear weapons or destabilizing numbers and 
     types of advanced conventional weapons or enhanced Libya's 
     military or paramilitary capabilities;
       (B) contributed to Libya's ability to develop its petroleum 
     resources; or
       (C) contributed to Libya's ability to maintain its aviation 
     capabilities.
       (2) Investments that contribute to the development of 
     petroleum resources.--Except as provided in subsection (f), 
     the President shall impose 2 or more of the sanctions 
     described in paragraphs (1) through (6) of section if the 
     President determines that a person has, with actual 
     knowledge, on or after the date of the enactment of this Act, 
     made an investment of $40,000,000 or more (or any combination 
     of investments of at least $10,000,000 each, which in the 
     aggregate equals or exceeds $40,000,000 in any 12-month 
     period), that directly and significantly contributed to the 
     enhancement of Libya's ability to develop its petroleum 
     resources.

  Mr. GILMAN (during the reading). Mr. Speaker, I ask unanimous consent 
the Senate amendment be considered as read and printed in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  Mr. HAMILTON. Reserving the right to object, Mr. Speaker, I do not 
intend to object, but I will yield to the gentleman from New York [Mr. 
Gilman] to explain the bill. I would then reclaim my time to pose some 
questions and make a few comments about the measure.
  Mr. GILMAN. Mr. Speaker, will the gentleman yield?
  Mr. HAMILTON. I yield to the gentleman from New York.
  Mr. GILMAN. Mr. Speaker, I am very pleased to bring before the House 
H.R. 3107, the Iran and Libya Sanctions Act of 1996, as amended, which 
mandates sanctions on persons making investments that would enhance the 
ability of Iran to explore for, extract, refine, or transport by 
pipeline petroleum resources.
  The text of this bill is identical to that adopted by the Senate on 
July 16 on an amendment offered by Senators Kennedy and D'Amato which 
modified

[[Page H8126]]

the sanctions regime in regard to investments in Libya making it fully 
consistent with the regime in place on Iran.
  Passage of the bill in its present form clears this legislation for 
transmittal to the President. In light of the growing possibility that 
a terrorist act led to the destruction of TWA Flight 800 and the 
growing likelihood that state-sponsored terrorism poses an increasing 
threat to Americans inside and outside the United States, we should 
have in place the strongest possible deterrent to any future acts of 
terrorism supported by such rogue regimes as Iran and Libya.
  Enactment of this bill today will accomplish this objective.
  Its other provisions would also establish a mandatory sanctions 
regime on foreign persons who violate U.N. Security Council Resolutions 
748 and 883 by selling weapons, aviation equipment and oil equipment to 
Libya, a country responsible for the cowardly and unforgivable attack 
on Pan Am Flight 103 in December 1988.
  I urge my colleagues to pass this urgently needed legislation.
  Mr. HAMILTON. Reclaiming my time, Mr. Speaker, if the gentleman from 
New York will permit, I would like to ask him a couple of questions. My 
understanding is that the Senate made two major changes in the bill 
before sending it to the House.
  First, the Senate added mandatory sanctions for certain foreign 
investments in Libya's energy sector. The House bill would have imposed 
mandatory sanctions only on certain foreign exports to Libya and on 
certain investments in Iran.
  Second, the Senate increased from 1 to 2 the number of sanctions the 
President would be required to impose on firms that engaged in 
prohibited investment or trade with Libya. The House bill would require 
the President to impose only one sanction on Iran.
  My impression is that as a result of the Senate amendments the 
sanctions in the bill before us today are tougher on Libya than they 
are on Iran. Is that the understanding of the gentleman from New York?
  Mr. GILMAN. Mr. Speaker, if the gentleman will further yield, the 
Senate amendment made sanctions against investments that contribute to 
the development of Libya's petroleum resources mandatory rather than 
discretionary. It makes the investment regime toward Libya fully 
consistent with that adopted by this body in regard to Iran.
  Mr. HAMILTON. Is it the gentleman's understanding, however, that the 
sanctions in this bill today are tougher on Libya than they are on 
Iran?
  Mr. GILMAN. The gentleman is correct.
  Mr. HAMILTON. I am supporting the bill, of course, but it does seem 
to me the rationale is less clear. Iran poses a far more serious threat 
to the United States national interests in my judgment than does Libya, 
and if the gentleman agrees with me on that point, perhaps the 
gentleman could explain why we should sanction foreign companies that 
do business with Libya more harshly than we sanction companies that do 
business with Iran.
  Before the gentleman responds, may I simply add that the bill that 
passed the House last month would have imposed mandatory sanctions only 
on certain exports to Libya, and my understanding is that the 
administration and the Committee on Ways and Means opposed mandatory 
sanctions on investment in Libya for two reasons:
  First, since there is already substantial foreign investment in 
Libya, they argued that hitting investment with mandatory sanctions 
would only have a marginal impact on Libya's energy sector but would 
anger many of our biggest trade partners; and, second, the 
administration and the Committee on Ways and Means were concerned that 
unilateral United States measures could jeopardize existing 
international cooperation in Libya.

  In light of these arguments, is the gentleman from New York concerned 
that enactment of the bill in its current form would weaken the 
existing international sanctions regime against Libya?
  Mr. GILMAN. If the gentleman will further yield, in response to the 
gentleman's query, Libya has already established a clear track record 
of noncompliance with the U.N. Security Council Resolutions 731, 748 
and 883. The failure of the Libyan Government to hand over for trial 
the two suspects in the Pan Am bombing is in itself a matter of grave 
concern, threatening peace and security in that entire region.
  The world community would appear to have very few remaining 
alternatives in that regard. They include additional sanctions and the 
imposition of penalties for noncompliance and some kind of collective 
security action directed against the Libyan regime.
  I am certain that most of us would agree that we should try to put in 
place any and all measures designed to bring Libya into compliance 
before we undertake any effort for a collective security operation to 
establish a blockade or initiate some kind of military action against 
Libya.
  I would also note that the U.N. already has in place oil field 
equipment sanctions against Libya. Additional sanctions in this bill on 
investment in Libya's oil sector simply complements and further 
strengthens those existing sanctions.
  Furthermore, we should not lose sight of the fact that there are 
reports of increased violations of the existing U.N. sanctions on 
Libya. Adoption of these amendments today will help us to address those 
problems.
  Mr. HAMILTON. I thank the gentleman for his answers.
   Mr. Speaker, further reserving the right to object, may I say a 
couple of things about the bill that is before us at this moment?
  I support the bill because, as the gentleman from New York has 
indicated, the conduct of Iran and Libya remains far outside 
international norms, and our allies have simply not done enough to help 
us change that conduct. Rhetoric alone is not sufficient, steps to 
increase the economic isolation of Iran and Libya are warranted, and 
this bill takes U.S. policy in the right direction.
  The objective of economic sanctions must always be to maximize 
economic pressure on the target countries while minimizing economic and 
other costs for ourselves. If the measures in this bill are not 
deployed carefully, they will run the risk of causing us more harm than 
they cause either Iran or Libya. That is because many of our closest 
allies and biggest trading partners have told us they view this bill as 
an effort to force them to change their policies toward Iran and Libya. 
They consider such pressure a threat to their sovereignty; they have 
promised to respond.
  What will they do? Nobody knows for sure, but I see two potential 
problems to United States national interests: One, international 
cooperation on Iran and Libya could be reduced rather than increased. 
United States policies, not the policies of Iran and Libya, could 
become the focus of international attention. Iran and Libya surely 
would take comfort in seeing our allies gang up on us rather than 
against them. Second, retaliatory steps by our trading partners could 
prove costly to American workers and firms.

                              {time}  1215

  The national interest waiver in this bill will help the President 
steer us clear of these potential costs to U.S. interests. It is my 
hope that the President will be able to use waivers and the possibility 
of sanctions to open a window of opportunity for negotiations on 
multilateral steps that would be more effective than unilateral 
sanctions in influencing the conduct of Iran and Libya. But waivers and 
sanctions are blunt policy instruments. We are handing the President a 
difficult task and a heavy responsibility without giving him all the 
policy tools he may need. He will have to exercise the limited 
discretion this bill gives him with great skill.
  This bill deserves our support, and so will our President as he seeks 
to carry it out.
  Mr. ROTH. Mr. Speaker, first let me again commend the gentleman from 
New York [Mr. Gilman] for his work on this issue. No one can question 
his commitment to fighting terrorism and proliferation.
  Moreover, there is no doubt that Iran and Libya are rouge states. The 
leaders of these regimes continue to violate every standard of 
acceptable behavior. I share the goals of turning Iran and Libya away 
from terrorism, away from making weapons of mass destruction and

[[Page H8127]]

away from brutality against their own people. And I agree that current 
U.S. Policy is failing badly, not achieving any of these goals. But I 
fear this legislation is a step backward, not forward. In my judgment, 
this bill will likely not work, for four reasons.
  First, economic sanctions simply do not work in today's world when 
the United States acts alone. The Soviet grain embargo is the greatest 
example of a unilateral sanction with terrific goals and utterly 
ineffective results that cost billions in dollars of U.S. exports. But 
the same can be said for any number of U.S. unilateral sanctions.
  Iran has 65 million people and a $300 billion economy. Libya has 5 
million people and a $33 billion economy. Neither country can be 
isolated, geographically or economically. In both countries, exports 
are growing. From 1988 to 1994, Iran's exports grew nearly 50 percent, 
to $19 billion. Libya's exports grew nearly 10 percent, to $8 billion.
  The reality is none of Iran's or Libya's major trading partners will 
go along with our sanctions. Not Germany. Not France. Not Italy. Not 
Spain. And not Japan. Without their cooperation, how will our sanctions 
ever work?
  This brings me to the second flaw in this bill. This legislation 
would impose a secondary boycott on our closest allies. The sponsors 
argue that the bill will force Europe to choose between trading with us 
and trading with Iran and Libya. This will never work.
  The primary effect of this bill has been to unify the European 
Union--all 15 members--against our policy toward Iran and Libya. Just 
like the extraterritorial reach of the 1982 Soviet pipeline embargo 
unified Europe. If this becomes law, we should expect blocking statutes 
to prevent European companies from complying, as well as retaliatory 
actions. Libya is a major source of petroleum for Western Europe. How 
can we expect those countries to forego Libya's oil? It simply will not 
happen.
  Aside from Europe's interests in Libya, the Moslem countries of the 
Middle East, South Asia, and the Caucasus will not comply. Look what is 
happening with Iran. Pakistan now has an economic alliance with Iran. 
The Ukraine, Kazakhstan, Armenia, Turkmenistan, and Azerbaijan all are 
pursuing trade and investment with Iran. With these countries, Iran is 
likely to be a major partner in developing oil and gas resources in 
central Asia.
  We have invested a lot in cultivating good relations with these 
former Soviet Republics. Are we now going to impose sanctions and throw 
away all our work over the past 5 years? If we do sanction these 
countries, how will they respond?
  This legislation will not isolate Iran and Libya. It will isolate us. 
No one should be surprised. After all, the Arab League boycott of 
Israel has been a total failure. We and the Europeans all prevented our 
companies from complying. The same thing could happen with this 
legislation.

  Third, this bill could prove a mistake because it provides the 
leaders of Iran and Libya with a convenient excuse for their own 
failures. Both regimes have inflicted great suffering on their people. 
The elites siphon off more and more money to prop up their own 
positions. But as the discontent rises among the Libyan and Iranian 
people, Qadhafi and the Ayatollahs will just point to the United States 
and say: ``See what the Americans are doing to you.''
  Fourth, I am concerned that this is the easy way out for the 
administration. Enactment of this bill will replace the more necessary 
need. The administration, I'm convinced, will continue to fail to do 
the harder work of leading a coherent, multilateral response to the 
appalling policies of Iran. The test of our policy must be its impact 
on Iran's current regime. It is not enough that our goals are laudable. 
Our actions must be focused on stopping Iran's dangerous behavior, and 
this takes the hard work of multilateral action.
  Mr. Speaker, in sum, Iran and Libya threaten international peace and 
security. Our goal must be to change their behavior. Whatever we do, it 
must be effective. We need our allies with us, not against us. There 
was a time when the United States could sound the alarm and Europe 
would rally to our side. That day is over. Economic sanctions and 
secondary boycotts have not--and will not--work when they are 
unilateral.
  With enactment of this bill, I'm concerned we will have jeopardized 
our relations with the very countries whose support we need to 
eventually reach the goal of turning Iran and Libya away from their 
current terrorist behavior.
  Mr. DEUTSCH. Mr. Speaker, I rise today in strong support of the Iran-
Libya Oil Sanctions Act. This bill is important to the United States 
because it seeks to limit Iran's and Libya's ability to destabilize the 
Middle East. These sanctions will limit both countries' ability to 
export terrorism and upset the peace process in the Middle East.
  I am a strong advocate of this bill because it will hit these parish 
nations where it hurts--oil production. By limiting foreign investment 
into the petroleum sector, this legislation will prevent both nations 
from funding the expansionist military policies. It will make it more 
difficult for Iran to purchase additional diesel submarines whose sole 
purpose is to close off oil exports from the gulf. It will hinder 
Libyan efforts to increase their stockpile of chemical weapons. And 
most importantly it will constrict Iran's ability to obtain a nuclear 
weapon.
  This bill sends a clear message to both Iran and Libya that America 
will not sit idly and watch them build up their military capabilities 
for the sole purpose of regional intimidation. I urge my colleagues to 
support final passage of this bill.
  Mr. HAMILTON. Mr. Speaker, I withdraw my reservation of objection.
  The SPEAKER pro tempore (Mr. Hayworth). Is there objection to the 
request of the gentleman from New York?
  There was no objection.
  The SPEAKER pro tempore. Is there objection to the original request 
of the gentleman from New York?
  There was no objection.
  A motion to reconsider was laid on the table.

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