Update On Iran Sanctions, Jun 22nd, 2010

Jun 22nd, 2010

Update On Iran Sanctions

Dear ORIA Member:

A conference agreement on Iran sanctions legislation appears to have been reached. Among the agreed provisions is re-imposition of the import ban on all Iranian goods and services, which would block U.S. imports of Iranian carpets and pistachios, reversing the Clinton-era lifting of the embargo. ORIA members should prepare for the end of this trade for the foreseeable future. The import ban would go into effect 90 days after enactment.

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Senate Banking Committee Chairman Chris Dodd (D-CT) and House Foreign Relations Committee Chairman Howard Berman (D-CA) today released an agreed joint text of a bill that would impose tough new sanctions against Iran. The two committee chairs said the text is now being reviewed by House and Senate conferees, although the House is already anticipating a vote on the bill later this week.

Notably, the bill would require the U.S. government to identify countries of “diversion concern,” that is, countries that are prone to re-exporting sensitive goods to Iran. It would also call for new export licensing requirements to be met when exporting certain goods to countries of diversion concern. However, the bill does not designate any countries at the start, and requires the administration to make these judgments. It would also impose an import ban on all Iranian goods and services, which would block U.S. imports of carpets and pistachios, goods that were allowed U.S. entry under the Clinton Administration.

The bill would largely maintain the Administration’s flexibility in waiving sanctions when a national interest reason is found, and also includes language allowing the Administration to waive sanctions against countries found to be cooperating on multilateral sanctions against Iran, which could be used to exempt many companies that might otherwise be targeted. Obama’s State Department pressed hard for this language.

According to a summary, the bill (H.R. 2194) would also:

· Expand the scope of sanctions authorized under ISA by imposing sanctions on foreign companies — including insurance, financing and shipping companies — that sell Iran goods, services, or know-how that assist it in developing its energy sector;

· Ban U.S. banks from engaging in financial transactions with foreign banks doing business with the IRGC or facilitating Iran’s illicit nuclear program or its support for terrorism;

· Impose significant financial penalties and travel restrictions on Iran’s human rights abusers;

· Ban U.S. government procurement contracts for any foreign company that exports to Iran technology used to restrict the free flow of information or to disrupt, monitor, or otherwise restrict freedom of speech, and;

· Provide a legal framework by which U.S. states, local governments, and certain other investors can divest their portfolios of foreign companies involved in Iran’s energy sector. Strengthen efforts to stop black-market diversion of sensitive technologies to Iran.

In addition to the possibility of a vote on H.R. 2194, the House on May 28 passed the National Defense Authorization Act for FY 2011, which would prohibit the Defense Secretary from entering into any procurement contract with entities that have commercial activity in Iran’s energy sector.

I will continue to keep you apprised of legislative actions this week.

Regards,

Lucille J. Laufer
Executive Director

Oriental Rug Importers Assoc.
100 Park Plaza Drive
Secaucus, New Jersey 07094

Tele 201.866.5054
Fax. 201.866.6169
Email. llaufer@oria.org