A planned multibillion dollar investment in Iran’s gas industry has emerged as the latest test of the Clinton administration’s resolve to fight international terrorism.
The French oil giant Total has entered the final stages of a plan to develop a vast gas project that would revitalize Iran’s fuel industry well into the 21st century.
Under last year’s Iran-Libya Sanctions Act, President Clinton is required to review the project and consider imposing sanctions against Total that could include sharp restrictions on trade with the United States.
The Total investment comes as the Clinton administration faces congressional criticism for continued support for relaxed anti-terrorism regulations on Syria. Congressional critics have also hit the administration for failing to fully implement last year’s anti-terrorism law.
The Iran-Libya Sanctions Act requires the president to impose sanctions against foreign companies that invest more than $40 million in the fuel industries of those countries. Because gas is pumped into aging oil fields to extend their lives, the Total deal has tremendous implications for Iran’s future.
Without the development of Iran’s South Pars gas field, experts say, Tehran’s access to capital from its oil holdings will continue to dwindle.
At a House International Relations Committee hearing last week, State Department officials said they are monitoring the Total deal.
“We have made clear to Total as well as to the French government at very high levels that we will take appropriate action if we find that sanctionable activity has occurred,” said Alan Larsen, U.S. assistant secretary of state for economic and business affairs.
Officials said that although no sanctions have yet been leveled, they plan to continue monitoring companies that do business with Iran.
The sanctions law has had a “chilling effect” on investments in Iran, Larsen told the committee. He said Iran has sought investments for 11 projects, but had no takers.
While Congress has hailed the State Department for its threat of sanctions on companies doing business with Iran, criticism is mounting for the Clinton administration’s policy toward Syria.
Both the House and Senate voted earlier this month to take away the State Department’s authority to exempt Syria from U.S. laws barring Americans from trading with countries deemed state supporters of terrorism.
The Clinton administration has vowed to fight the measure.
While Syria remains on the State Department’s list of state sponsors of terrorism, the Clinton administration has waived the ban on U.S. investment in Syria as an incentive for Damascus to reopen peace talks with Israel.
“To treat Syria as we treat, say, Iran, we think there has to be a distinction made,” said Nicholas Burns, State Department spokesman.
“However difficult the Middle East peace talks have been, Syria has been at the table for a number of years,” he said.
Although Syria is still banned from direct U.S. aid, congressional sources estimated that Damascus benefits from nearly $200 million in U.S. business each year.
As Congress girds for battle with the administration on Syrian sanctions, behind the scenes, lawmakers are continuing to push the State Department to implement a provision of last year’s anti-terrorism law that would restrict fund raising for terrorist groups — including many supported by Syria.
The State Department has yet to draw up a list of overseas terrorist groups. Without such classifications, the FBI cannot enforce the law’s ban on fund raising for such groups.
“The Clinton administration fought hard to include a provision increasing its authority to prohibit persons within the United States from providing material support or resources to foreign terrorist organizations,” 42 members of Congress wrote in a July 17 letter to Secretary of State Madeleine Albright.
“We are concerned that the administration has not fully utilized the tools granted to it” in the law, the letter said.
State Department officials refused to comment on why they have not published the list. One official said plans are in the works to publish it later this summer.
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