Summary of H.R. 1954

Extends P.L. 104-172 for an additional 5 years.

Summary of P.L. 104-172, The "Iran and Libya Sanctions Act of 1996"

The Iran and Libya Sanctions Act, (P.L. 104-172), approved August 5,1996, mandates sanctions against foreign investment in the petroleum sectors of Iran and Libya, as well as exports of weapons, oil equipment, and aviation equipment to Libya in violation of U.N. Resolutions 748 and 883.

Iran - Congressional findings in this legislation state that the efforts of the government of Iran to acquire weapons of mass destruction (WMD), as well as its support for international terrorism, endanger the interests of the United States.

Libya - In the case of Libya, Congress found that Libya's failure to comply with Resolutions 731,748, and 883, its support of international terrorism, and its efforts to acquire weapons of mass destruction constitute a threat to international peace and security that endangers the national security of the United States.

Triggers - In general, ILSA requires the President to impose at least two out of a menu of six sanctions on foreign companies that make an investment of $20 million in one year in Iran's energy sector, or $40 million in one year in Libya's energy sector. Prior to the suspension of U.N. sanctions against Libya, which was triggered by Libya's handover of the two Pan Am 103 suspects in April 1999, foreign firms were also subject to sanctions if they exported technology to Libya that could be used to develop its energy sector, to develop weapons of mass destructions (WMD), to enhance its conventional military, or to maintain its aviation capabilities. These exports had been banned under Pan Am 103 related Security Council Resolutions 748 and 883.

Sanctions - P.L 104-172 requires the President to choose two sanctions from the following list of six sanctions: (1) a denial of Ex-Im Bank assistance; (2) denial of export licenses; (3) a prohibition on any U.S. financial institutions from making any loan to a sanctioned person over $10 million per year; (4) a prohibition on a sanctioned financial institution from serving as a primary dealer of U.S. Government bonds, or as a repository of U.S. Government funds; (5) a ban on any U.S. Government procurement of any goods or services from a sanctioned person, and; 6) import sanctions taken by the President in accordance with the International Emergency Economic Powers Act (IEEPA).

Sanctions remain in effect for up to two years, or until the President determines and certifies to Congress that the person is no longer engaging in the activity that led to the imposition of sanctions, but in no case (unless the President exercises his waiver authority) less than one year.

Waiver - There are two grounds on which the President may waive ILSA sanctions with respect to Iran. First, under Section 4(c) of ILSA, the President may waive sanctions for investment in Iran for firms of countries that join a multilateral sanctions regime, including economic sanctions, against Iran. (Section 4(d) lowers the threshold of permissible investment from $40 million to $20 million for firms of countries that do not join such a regime.) Under ILSA, the waiver for a multilateral sanctions regime and the enhanced sanction does not apply to Libya. Second, under Section 9(c) of the law, the President may waive sanctions on the grounds that doing so is important to the U.S. national interest. This waiver applies to Iran and Libya.

Termination - ILSA terminates for Iran if this country ceases efforts to acquire weapons of mass destruction and is removed from the U.S. list of state sponsors of international terrorism. For Libya, ILSA terminates if the President determines that Libya has fulfilled the requirements of all United Nations resolutions relating to the attack on Pan Am 103. (Note: On January 31, 2001, one of the Libyan suspects, Abd al-Baset al-Magrahi was convicted of the bombing. Libya has not yet fulfilled the requirements to accept responsibility and compensate the families of the victims.)

Reporting - Requires the President to report annually on the extent to which diplomatic efforts to establish a multilateral sanctions regime with respect to Iran have been successful. The law further provides that the report shall include a discussion of whether sanctions imposed by these countries have been the subject of any decision in the World Trade Organization.

- - Directs the President to submit a report to the appropriate Congressional committees 90 days after making a determination regarding sanctionable activities, on the status of his negotiations with the foreign government with primary jurisdiction.

- - Requires the President to report to Congress on the President's efforts to mount a multilateral campaign to persuade all countries to pressure Iran to cease its nuclear, chemical, biological, and missile weapons programs and its support of acts of international terrorism.

- - P.L 104-172 also required the President to submit an interim report on whether or not member states of the European Union, the Republic of Korea, Australia, Israel, or Japan, have legislative or administrative standards providing for the imposition of trade sanctions on persons or their affiliates doing business or having investments in Iran or Libya.

Expiration - The Act sunsets on August 5, 2001.