Bloomberg News

Berman Resists Pressure to Weaken Iran Sanctions Measure

December 12, 2011

(Adds Ros-Lehtinen starting in fourth paragraph, additional comments from Berman starting in seventh.)

Dec. 8 (Bloomberg) -- Rep. Howard Berman of California, the ranking Democrat on the House Foreign Affairs Committee, vowed to resist pressure from the Obama administration to weaken legislation intended to isolate the Central Bank of Iran.

“I will not -- and Congress should not -- give in to entreaties from the administration or elsewhere to dilute our approach to sanctions on the Central Bank of Iran’s petroleum transactions,” Berman said today at a conference sponsored by the Foundation for the Defense of Democracies, a policy group in Washington.

The group has pressed Congress and the White House to support sanctions targeting Iran’s energy and banking sectors in an effort to cripple Iran’s economy and persuade the regime to drop its suspected nuclear weapons program.

Also today, Representative Ileana Ros-Lehtinen of Florida, chairman of the House Foreign Affairs Committee, said in an interview that she expects a House vote as early as Dec. 13 on separate Iran sanctions legislation.

Her bill includes sanctions on Iran’s Central Bank, drafted by Berman, and penalties for individuals who do business with Iran’s petroleum industry. The legislation goes further than a unanimously passed Senate amendment by requiring visa denials and the freezing of assets of certain Iranian officials, as well as penalties for officials who are determined responsible for human rights abuses after that country’s 2009 presidential elections.

Central Bank Targeted

Last week, the Senate unanimously passed an amendment in a defense authorization bill, sponsored by Illinois Republican Mark Kirk and New Jersey Democrat Robert Menendez, that would empower the president to bar foreign financial institutions that do business with Iran’s central bank from having correspondent bank accounts in the U.S. If enacted, it could be harder for foreign companies to pay for oil imports from Iran, the world’s third-largest crude exporter.

Berman, who is on the House-Senate conference committee on the defense legislation, said he opposes the administration’s efforts to weaken the amendment. He is proposing to reduce the time delay to 120 days from 180 days before the measure would take effect. The 120-day lag is enough time to work on international support and to reduce disruption to oil markets, he said.

The Obama administration opposes the legislation, saying it threatens to send the price of oil soaring and to fracture the international coalition currently backing sanctions on Iran.

Oil Importers

Several U.S. allies, including Japan, South Korea, Italy and India, are among the five leading importers of Iranian crude oil. The South Korean government is considering a drastic cut or suspension of crude oil imports from Iran to support international efforts to pressure the Tehran regime, according to the Yonhap news agency.

Crude oil for January delivery dropped $2.15, or 2.1 percent, to settle at 98.34 on the New York Mercantile Exchange. The prospect of oil topping $150 a barrel within a year has become the biggest bet in the options market as the U.S. and Europe work to limit Iran’s crude sales.

The number of outstanding calls to buy oil at $150 next December has jumped 29 percent since a Nov. 8 United Nations inspectors’ report on the Persian Gulf country’s nuclear program, to more than any other option on the New York Mercantile Exchange. The contracts equate to about 38 million barrels of oil, or 43 percent of daily global demand, based on data from the U.S. Energy Department.

Supporters of sanctions on Iran’s central bank say such measures would significantly impede the country’s ability to export oil. The Central Bank of has become a vital intermediary for purchasers of Iranian crude because existing sanctions against the Persian Gulf country have constrained Iran’s ability to access the international financial sector to settle oil trades, said Mark Dubowitz, director of the Iran Energy Project at the Foundation for the Defense of Democracies.

The Ros-Lehtinen bill is H.R. 1905.

--With assistance from Asjylyn Loder in New York. Editors: Terry Atlas, Justin Blum

To contact the reporters on this story: Indira A.R. Lakshmanan in Washington at ilakshmanan@bloomberg.net; Michelle Jamrisko in Washington at mjamrisko@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus