[Congressional Record Volume 147, Number 80 (Monday, June 11, 2001)]
[Senate]
[Pages S6050-S6051]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        IRAN-LIBYA SANCTIONS ACT

  Mr. KENNEDY. Mr. President, I strongly support S. 994, which would 
extend the Iran-Libya Sanctions Act for 5 years.
  Current U.S. law imposes economic sanctions on foreign companies that 
invest in Libya's oil sector, but those sanctions expire on August 5th. 
The need for the sanctions is as strong today as when they were enacted 
in 1996. They deserve to be extended. Easing sanctions on Libya by 
allowing the law to expire would have a far-reaching negative effect on 
the battle against international terrorism and the twelve-year pursuit 
of justice for the 270 victims of the bombing of Pan Am Flight 103.
  Current law requires the President to impose at least 2 out of 6 
sanctions listed in the statute on foreign companies that invest more 
than $20 million in 1 year in Iran's energy sector, or $40 million in 1 
year in Libya's energy sector. The 6 sanctions are the following:
  (1) Denial of Export-Import Bank loans, credits, or credit guarantees 
for U.S. exports to the firm.
  (2) Denial of licenses for the U.S. export of military or militarily-
useful technology to the firm.
  (3) Denial of U.S. bank loans exceeding $10 million in 1 year to the 
firm.
  (4) If the sanctioned firm is a financial institution, a prohibition 
on the firm's service as a primary dealer in U.S. government bonds; 
and/or a prohibition on the firm's service as a repository for U.S. 
government funds.
  (5) Prohibition on U.S. government procurement from the firm.
  (6) A restriction on imports from the firm.
  Under Section 9(c) of current law, the President may waive the 
sanctions on the ground that doing so is important to the U.S. national 
interest. For Libya, the law terminates if the President determines 
that Libya has fulfilled the requirements of all U.N. resolutions 
relating to the 1988 bombing of Pan Am Flight 103. Those conditions, 
which were imposed by the international community, require the 
Government of Libya to accept responsibility for the actions of its 
intelligence officer, disclose information about its involvement in the 
bombing, provide appropriate compensation for the families of the 
victims of Pan Am Flight 103, and fully renounce international 
terrorism.
  President Bush has emphasized his support for these conditions. As he 
stated on April 19, ``We have made it clear to the Libyans that 
sanctions will remain until such time as they not only compensate for 
the bombing of the aircraft, but also admit their guilt and express 
remorse.'' Yet the Government of Libya continues to refuse to meet the 
conditions of the international community. Until it does, both the 
United States and the international community should continue to impose 
sanctions on the regime.
  Despite the conventional wisdom that economic sanctions do not work, 
they have been effective in the case of Libya. As a result of the 
United Nations sanctions, the U.S. sanctions, and diplomatic pressure, 
the Libyan Government finally agreed in 1999 to a trial by a Scottish 
court sitting in the Netherlands of two Libyans indicted for the 
bombing. Last January 31, one of the defendants, a Libyan intelligence 
agent, was convicted of murder for that atrocity.

  The court's decision clearly implicated the Libyan Government. The 
conviction was a significant diplomatic and legal victory for the world 
community, for our nation, which was the real target of the terrorist 
attack, and for the families of the victims of Pan Am Flight 103.
  The Iran Libya Sanctions Act is also intended to help level the 
playing field for American companies, which have been prohibited from 
investing in Libya by a Presidential Order issued by President Reagan 
in 1986. The statute enacted in 1996 imposed sanctions on foreign 
companies that invest more than $40 million in any year in the Libyan 
energy sector. The objective of the 1996 law is to create a 
disincentive for foreign companies to invest in Libya and help ensure 
that American firms are not disadvantaged by the U.S. sanctions. Since 
the sanctions on U.S. firms will continue, it is essential to extend 
the sanctions on foreign firms as well.
  The Administration has indicated that it has no evidence of 
violations of the law by foreign companies. But some foreign companies 
are clearly poised to invest substantially in the Libyan petroleum 
sector, in violation of the law. A German company, Wintershall, is 
reportedly considering investing hundreds of millions of dollars in the 
Libyan oil industry.
  Allowing current law to lapse before the conditions specified by the 
international community are met would give a green light to foreign 
companies to invest in Libya, putting American companies at a clear 
disadvantage. It would reward the leader of Libya, Colonel Qadhafi, for 
his continuing refusal to comply with the U.N. resolutions. It would 
set an unwise precedent of disregard for U.N. Security Council 
Resolutions. It would undermine our ongoing diplomatic efforts in the 
Security Council to prevent the international sanctions from being 
permanently lifted until Libya complies with the U.N. conditions. And 
it would prematurely signal a warming in U.S.-Libyan relations.
  Our European allies would undoubtedly welcome the expiration of the 
U.S. sanctions. European companies are eager to increase their 
investments in Libya, but they do not want to be sanctioned by the 
United States. They are ready to close the book on the bombing of Pan 
Am Flight 103, and open a new chapter in relations with Libya.
  But the pursuit of justice is not only for American citizens. 
Citizens of 22 countries were murdered on Pan Am Flight 103, including 
citizens of many European countries. The current sanctions were enacted 
on behalf of these

[[Page S6051]]

citizens as well. Our government should be actively working to persuade 
European countries that it is premature to rehabilitate Libya.
  Some have proposed extending the law for two years, rather than five 
years as our bill proposes. I strongly support a five-year extension.
  If we reduce the time period, Colonel Qadhafi will have an incentive 
to continue stonewalling, as he has done since the verdict was 
announced last January, and wait until the law expires.
  Extending the law that requires sanctions on foreign companies that 
invest in Libya for another five years is in both the security interest 
of the United States and the security interest of the international 
community. Profits in Libya should not come at the expense of progress 
against international terrorism and justice for the families of the 
victims of Pan Am Flight 103.

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