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Aipac Report on Iran’s Activities Aimed at Urging Further Sanctions

April 12, 1995
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As Iran continues to export terrorism around the world, the American Israel Public Affairs Committee is attempting to prod U.S. lawmakers to cut off all economic ties with the rogue state.

In a 74-page study released April 2, AIPAC, the pro-Israel lobby, details Iran’s terrorist activities, nuclear capability and international trade relations. The report also tries to head off criticism by detailing the effects that a true trade embargo would have on American businesses.

Despite Iran’s outlaw status, the United States is Iran’s largest trading partner, according to the study, “Comprehensive Sanctions Against Iran, A Plan for Action.”

Last year, U.S. oil companies bought 33 percent of Iran’s oil exports, worth $4.25 billion. U.S. firms exported an additional $329 million in goods to Iran, according to the study.

Although direct trade with Iran is banned, many American companies circumvent restrictions by purchasing Iranian oil through their European subsidiaries.

“By cutting all its trade and economic ties with Iran, the United States will be ending the anomaly of being both the regime’s loudest critic and largest trading partner,” the study said.

It suggests banning all U.S. trade with Iran, deterring European and Japanese companies from trading with Iran and cutting off multilateral financial support for Iran from institutions such as the World Bank.

Expanded sanctions would restrict Iran’s ability to buy weapons and technology and support terrorist groups such as Hezbollah and Hamas, the report said.

To be effective, sanctions must target Iran’s oil industry and credit- worthiness, the report said.

“Iran is vulnerable to an embargo on its oil exports and to a termination of its availability to secure and reschedule its international credit and loans.” the study said.

“Economic sanctions can work,” an AIPAC official familiar with the study said. Similar actions against Iraq have been successful, the official said.

“The U.S. is on the right tract with Iraq.” and activists would like to see the administration take the same tact with Iran, the official said.

Sanctions have the potential to make Iran “sober up and have a real interest in changing the direction the country is moving,” the official said.

Although cutting business ties to Iran would initially have a negative impact on U.S. oil companies, the companies could make up the shortfall through trade with the region’s other oil producers, the study said.

Administration officials are reportedly considering a proposal to win support for an embargo from American oil giants with strong financial ties to Iran.

Instead of buying Iranian oil, the proposal suggests that these companies purchase Saudi Arabian surplus oil in an effort to help the cash-strapped regime pay off its estimated $5 billion debt it owes for the purchase of American fighter planes.

Many of the ideas outlined in the report could soon become law. Sen. Alfonse D’Amato (R-N Y.) and Rep. Peter King (R-N Y.) have introduced legislation to ban trade between Iran and U.S. companies, including their European subsidiaries.

The bill, known as the “Comprehensive Iran Sanctions Act,” would also make it difficult for multilateral financial institutions, such as the World Bank, to support Iran.

A companion piece of legislation designed to prod European and Japanese companies to impose sanctions on Iran is also on the table in the Senate.

That bill would prevent the U.S. government from doing business with these companies and would ban export licenses for sensitive technology to these companies. In the House, where import sanctions must originate, lawmakers will consider imports into the United States from the sanctioned European and Japanese firms.

The Senate Banking Committee, which D’Amato chairs, plans to vote on a final draft of the legislation when Congress returns later this month from its spring recess, according to a Capitol Hill aide.

The House International Relations Committee also expects to take up the bill after Congress returns from its recess.

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