Here are the points:
Background:
- Extraterritorial sanctions or secondary sanctions are nothing new. Arab Boycott, Israel boycott of Arab imports, Apartheid boycott, LIBERTAD are all examples of such policy.
- ILSA is a 1996 US law that permits the US government to punish companies who invest in the petroleum sector in Iran and Libya. Investment in Iran is viewed as more income for a regime that supplies weapons and funds to terrorits organizations and destabilizes the region.
- Later, the law was amended to exclude Libya from the law (as US normalized relations with that country) and is now named ISA (Iran Sanctions Act).
- Since the inception of ISA, there hasn't been a single instance of actual enforcement despite multiple oil development projects in Iran undertaken by foreign companies. The US administration is reluctant to enforce the measures, fearing retaliation by other countries. Instead, US presidents have waived the application of ISA sanctions for the purpose of national interest.
- Defiance by the Iranian government and the arrival of a radical president (Ahmadhinejad) exacerbated the situation, prompting US Congress to pressure the US government to enforce ISA. Congress is now hoping to pass a law that would remove the presidential waiver authority, making mandatory the application of sanctions against foreign companies under ISA.
Companies who invest in Iran's oil sector:
- Many European and Asian companies invest in Iran's oil sector.
- Due to pressure from the US Treasury Department, many European and Japanese companies have been increasingly cautious about investing in Iran. Banks from these countries have also been reluctant to provide financial services for the purpose of these investments.
- Similar to the situation in Sudan, in countries where Western and Japanese companies are reluctant to invest, you will be sure to find Chinese companies actively seeking businesses. Iran is no exception.
- However, Iran is mostly interested in the technology of Western/Japanese companies.
- The American Enterprise Institute (AEI) has published a list of companies who do business in Iran. The publication of such list was purposed to bring awareness within the US (especially in Capitol Hill) and ultimately to pressure the US government to punish companies who do business in Iran.
The list can be viewed here: http://www.aei.org/iraninteractive/
Latest Developments:
- Cheney is keen on bombing Iran.
- Rice is opposed to the idea of striking Iran.
- Gates' position has not been made public yet, but according to my sources, Pentagon is more likely to go along with Cheney over Rice.
- The aforementioned sanctions legislation (H.R. 1400) will likely be vetoed by Bush.
- Other bills designed to list companies who do business with Iran and to encourage fund managers of retirement funds etc to divestment from such companies will probably by the end of the year.
- Iran will likely master nuclear technology by 1Q of 2009.
- US-Iran talks on Iraq will continue, but US will be less willing to discuss the nuclear issue under such forum.
- There are around 200 Iranians detained in Iraq by US and UK military.
Just some food for thought.
Background:
- Extraterritorial sanctions or secondary sanctions are nothing new. Arab Boycott, Israel boycott of Arab imports, Apartheid boycott, LIBERTAD are all examples of such policy.
- ILSA is a 1996 US law that permits the US government to punish companies who invest in the petroleum sector in Iran and Libya. Investment in Iran is viewed as more income for a regime that supplies weapons and funds to terrorits organizations and destabilizes the region.
- Later, the law was amended to exclude Libya from the law (as US normalized relations with that country) and is now named ISA (Iran Sanctions Act).
- Since the inception of ISA, there hasn't been a single instance of actual enforcement despite multiple oil development projects in Iran undertaken by foreign companies. The US administration is reluctant to enforce the measures, fearing retaliation by other countries. Instead, US presidents have waived the application of ISA sanctions for the purpose of national interest.
- Defiance by the Iranian government and the arrival of a radical president (Ahmadhinejad) exacerbated the situation, prompting US Congress to pressure the US government to enforce ISA. Congress is now hoping to pass a law that would remove the presidential waiver authority, making mandatory the application of sanctions against foreign companies under ISA.
Companies who invest in Iran's oil sector:
- Many European and Asian companies invest in Iran's oil sector.
- Due to pressure from the US Treasury Department, many European and Japanese companies have been increasingly cautious about investing in Iran. Banks from these countries have also been reluctant to provide financial services for the purpose of these investments.
- Similar to the situation in Sudan, in countries where Western and Japanese companies are reluctant to invest, you will be sure to find Chinese companies actively seeking businesses. Iran is no exception.
- However, Iran is mostly interested in the technology of Western/Japanese companies.
- The American Enterprise Institute (AEI) has published a list of companies who do business in Iran. The publication of such list was purposed to bring awareness within the US (especially in Capitol Hill) and ultimately to pressure the US government to punish companies who do business in Iran.
The list can be viewed here: http://www.aei.org/iraninteractive/
Latest Developments:
- Cheney is keen on bombing Iran.
- Rice is opposed to the idea of striking Iran.
- Gates' position has not been made public yet, but according to my sources, Pentagon is more likely to go along with Cheney over Rice.
- The aforementioned sanctions legislation (H.R. 1400) will likely be vetoed by Bush.
- Other bills designed to list companies who do business with Iran and to encourage fund managers of retirement funds etc to divestment from such companies will probably by the end of the year.
- Iran will likely master nuclear technology by 1Q of 2009.
- US-Iran talks on Iraq will continue, but US will be less willing to discuss the nuclear issue under such forum.
- There are around 200 Iranians detained in Iraq by US and UK military.
Just some food for thought.
