A bill that would extend US sanctions to Iranian energy joint ventures, expand sanctions on Iran's petrochemical sector and identify other sanctionable activities of the Iranian government was approved by the Senate Banking, Housing and Urban Affairs Committee Thursday.
The bill would, for the first time, extend sanctions under the Iran Sanctions Act to companies entering into new energy-related joint ventures anywhere in the world where Iran's government is a substantial partner or investor. The provision also includes any venture where Iran would gain access to advanced energy technology.
The bill also gives teeth to a 2011 decision by the Obama administration to specifically target Iran's petrochemical sector. It lists specific petrochemicals contained in Obama's November executive order and specifies the types of investments and aid to the country's petrochemical sector that would trigger sanctions.
An amendment to the bill by Senator Robert Menendez, Democrat-New Jersey, would require the US Department of the Treasury to determine if the National Iranian Oil Co. and the National Iranian Tanker Co. are agents or affiliates of Iran's Revolutionary Guard Corps.
If the US determines that is the case, then sanctions that impose strict conditions on financial accounts in the US would apply to financial institutions that facilitate their transactions.
"The National Iranian Oil Co., the National Iranian Tanker Co. and their many subsidiaries are critical elements in the IRGC's controlled energy sector, including in the crude oil supply chain," Menendez said during a committee hearing.
"The National Iranian Oil Co. is the gateway through which Iran's oil exits the country and refined petroleum products from foreign companies enter the country," he added.
The bill did not include a provision, originally proposed by Menendez, that would block ships from loading or unloading cargo in US ports if they have visited a port in Iran, Syria or North Korea in the preceding 180 days.
The reason the provision was not included in the bill is because it is not under the Banking Committee's jurisdiction, a Menendez aide said Thursday. But Menendez does intend to offer the provision as an amendment when the bill comes to the full Senate for debate, the aide added.
A similar provision was included in a version of the bill that passed the full House in December.
In a related development, a bill was introduced in the Senate on Thursday that would bar companies who engage in business or trading activity with Iran from buying oil from the Strategic Petroleum Reserve (SPR). The measure, authored by Senators Lisa Murkowski, Republican-Alaska, and Maria Cantwell, Democrat-Washington, also calls for the Government Accountability Office to report on sanction violators.
Last July, Murkowski questioned a decision by the Department of Energy to allow Vitol to participate in the sale of crude from the SPR.
Murkowski cited some evidence that Vitol had agreed to trade in Iranian crude and questioned whether the company's activities should be sanctioned under the Iran Sanctions Act. But DOE said it had reviewed its agreement with Vitol to ensure that the company was not subject to sanctions.
"Tough sanctions are one of the most effective policy instruments we have to prevent Iran from becoming a nuclear power," Murkowski said in a statement. "Unfortunately, last summer we realized that companies who do business with Iran are legally able to purchase oil from our nation's strategic stockpiles. This legislation would close that loophole by adding a new certification requirement before companies are allowed to engage in any future SPR transactions."
