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July 22, 2009 

Iran Refined Petroleum Sanctions May Move Forward if U.S. Engagement With Iran Fails

The House Foreign Affairs Committee held a hearing today on recent developments in Iran and their implications for U.S. Policy. In his opening statement, Committee Chairman Howard Berman (D-CA) said that if engagement with Iran does not work he is prepared to move forward with the Iran Refined Petroleum Sanctions Act (H.R. 2192) as early as this fall.

Specifically, Representative Berman said:

I agree with the President’s timetable. If by autumn the Iranians are not responsive to US efforts to engage them, it likely will be time to move on, hopefully in close coordination with our allies and other key countries.

That is also my approach regarding H.R. 2194, the Iran Refined Petroleum Sanctions Act, which I introduced with the Ranking Member in April, and which is now co-sponsored by well over half the Members of the House.

My bill would impose sanctions on companies that are involved in exporting refined petroleum products to Iran or in helping Iran to increase or maintain its existing domestic refining capacity.

This legislation would force companies in the energy sector to choose between doing business with Iran, or doing business with the United States.

The Iranian economy is heavily dependent on imports of refined petroleum, so this legislation -- if it becomes law -- would significantly increase economic pressure on Iran, and hopefully persuade the regime to change its current course.

When I introduced H.R. 2194, I said that I did not intend to immediately move it through the legislative process. I wanted – and still want – to give the Administration’s efforts to engage Iran every possible chance to succeed, within a reasonable time frame.

I view the bill as a “sword of Damocles” over the Iranians – a clear hint of what will happen if they do not engage seriously and move rapidly to suspend their uranium enrichment program, as required by numerous UN Security Council resolutions.

If engagement doesn’t work, then I am prepared to mark up the bill in Committee early this fall.
If enacted, the Iran Refined Petroleum Sanctions Act, which currently has 260 co-sponsors, requires any foreign entity that exports refined petroleum to Iran, or otherwise enhances Iran’s ability to import refined petroleum (such as financing, brokering, underwriting or providing ships for such activity), to be subject to a number of financial and other sanctions that would effectively bar the foreign entity from doing business in the United States.

The bill also would impose sanctions on any entity that provides goods or services that enhance Iran’s ability to maintain or expand its domestic production of refined petroleum, including any assistance in refinery constructions, modernization or repair.
The full text of Representative Berman's opening remarks at the hearing can be found here.

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