Iran and Libya Sanctions Act
Encyclopedia
The Iran and Libya Sanctions Act of 1996 (ILSA) was a 1996 act of Congress
that imposed economic sanctions on firms doing business with Iran
and Libya
. On September 30, 2006, the act was renamed to the Iran Sanctions Act (ISA), as it no longer applied to Libya, and extended until December 31, 2011. As of March 2008, ISA sanctions had not been enforced against any non-US company; the act allows the president to waive sanctions on a case-by-case basis, though this waiver is subject to renewal every six months. Despite the restrictions on American investment in Iran, FIPPA provisions apply to all foreign investors, and many Iranian expatriates based in the US continue to make substantial investments in Iran.
report states that "ILSA was introduced in the context of a tightening of U.S. sanctions on Iran during the first term of the Clinton administration." In the year leading up to passage of the act, President
Bill Clinton
had issued several executive orders with respect to Iran, including Executive Order 12957 of March 15, 1995, banning U.S. investment in Iran's energy sector, and Executive Order 12959 of May 6, 1995, which banned U.S. trade with and investment
in Iran. These were intended to respond to the Iranian nuclear program
and Iranian support for terrorist organizations
, including Hezbollah, Hamas
, and Palestine Islamic Jihad.
resources in Iran will be imposed two out of seven possible sanctions, by the U.S.:
107-24. It expired in August 2006.
In the 109th Congress
, a bill, the Iran Freedom Support Act was introduced in both houses
to extend the provisions of ILSA indefinitely and to impose a time limit for the administration to determine whether an investment violates ILSA. The House of Representatives
legislation, H.R. 282 was sponsored by Ileana Ros-Lehtinen
and 360 sponsors. It was introduced on January 6, 2005, was reported by committee on March 15, 2006, and passed the House on April 26, 2006, by a vote of 397-21, with 14 not voting. The companion Senate legislation, S. 333 was introduced on February 9, 2005, sponsored by Senator Richard Santorum and 62 cosponsors, and was referred to the Foreign Relations Committee
. The bill was not reported by the committee and died.
However, the next year, H.R. 5877, "To amend the Iran and Libya Sanctions Act of 1996 to extend the authorities provided in such Act until September 29, 2006," was introduced to the House. Sponsored by Ileana Ros-Lehtinen and cosponsored by International Relations Committee chair Henry Hyde
, Gary Ackerman
, and Tom Lantos
, the legislation was introduced to the House on July 25, 2006. It passed the next day by voice vote
, was passed by the Senate by unanimous consent
on July 31, and was signed into law by President
George W. Bush
on August 4, 2006.
On September 30, 2006, the act was renamed to the Iran Sanctions Act (ISA), as it no longer applied to Libya, and extended until December 31, 2011. The Iran Freedom and Support Act
passed later that year. The Iran Refined Petroleum Sanctions Act of 2009
, still a bill in Congress, would amend the Iran Sanctions Act to expand the president's ability to punish companies aiding Iran's petroleum sector.
Act of Congress
An Act of Congress is a statute enacted by government with a legislature named "Congress," such as the United States Congress or the Congress of the Philippines....
that imposed economic sanctions on firms doing business with Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
and Libya
Libya
Libya is an African country in the Maghreb region of North Africa bordered by the Mediterranean Sea to the north, Egypt to the east, Sudan to the southeast, Chad and Niger to the south, and Algeria and Tunisia to the west....
. On September 30, 2006, the act was renamed to the Iran Sanctions Act (ISA), as it no longer applied to Libya, and extended until December 31, 2011. As of March 2008, ISA sanctions had not been enforced against any non-US company; the act allows the president to waive sanctions on a case-by-case basis, though this waiver is subject to renewal every six months. Despite the restrictions on American investment in Iran, FIPPA provisions apply to all foreign investors, and many Iranian expatriates based in the US continue to make substantial investments in Iran.
Background
A United States Department of StateUnited States Department of State
The United States Department of State , is the United States federal executive department responsible for international relations of the United States, equivalent to the foreign ministries of other countries...
report states that "ILSA was introduced in the context of a tightening of U.S. sanctions on Iran during the first term of the Clinton administration." In the year leading up to passage of the act, President
President
A president is a leader of an organization, company, trade union, university, or country.Etymologically, a president is one who presides, who sits in leadership...
Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
had issued several executive orders with respect to Iran, including Executive Order 12957 of March 15, 1995, banning U.S. investment in Iran's energy sector, and Executive Order 12959 of May 6, 1995, which banned U.S. trade with and investment
Foreign direct investment
Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...
in Iran. These were intended to respond to the Iranian nuclear program
Nuclear program of Iran
The nuclear program of Iran was launched in the 1950s with the help of the United States as part of the Atoms for Peace program. The support, encouragement and participation of the United States and Western European governments in Iran's nuclear program continued until the 1979 Iranian Revolution...
and Iranian support for terrorist organizations
Allegations of Iranian state terrorism
Since the declaration of the Islamic Republic of Iran in 1979, the government of Iran has been accused by a number of states, including the United States, Israel and some European countries, of funding, providing equipment, weapons, training and giving sanctuary to terrorists.The United States...
, including Hezbollah, Hamas
Hamas
Hamas is the Palestinian Sunni Islamic or Islamist political party that governs the Gaza Strip. Hamas also has a military wing, the Izz ad-Din al-Qassam Brigades...
, and Palestine Islamic Jihad.
Provisions
The Act targeting both U.S. and non-U.S. business making certain investments in Iran. Under ILSA, all foreign companies that provide investments over $20 million for the development of petroleumPetroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
resources in Iran will be imposed two out of seven possible sanctions, by the U.S.:
- denial of Export-Import Bank of the United StatesExport-Import Bank of the United StatesThe Export-Import Bank of the United States is the official export credit agency of the United States federal government. It was established in 1934 by an executive order, and made an independent agency in the Executive branch by Congress in 1945, for the purposes of financing and insuring...
assistance; - denial of export licenses for exports to the violating company;
- prohibition on loans or credits from U.S. financial institutionFinancial institutionIn financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries...
s of over $10 million in any 12-month period; - prohibition on designation as a primary dealer for U.S. government debt instruments;
- prohibition on serving as an agent of the United States or as a repository for U.S. government funds;
- denial of U.S. government procurementProcurementProcurement is the acquisition of goods or services. It is favourable that the goods/services are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location...
opportunities (consistent with World Trade OrganizationWorld Trade OrganizationThe World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
obligations); and - a ban on all or some imports of the violating company.
Renewal and expiration
ILSA included a five-year sunset clause and was renewed in August 2001 for another five years under Public LawPublic law
Public law is a theory of law governing the relationship between individuals and the state. Under this theory, constitutional law, administrative law and criminal law are sub-divisions of public law...
107-24. It expired in August 2006.
In the 109th Congress
109th United States Congress
The One Hundred Ninth United States Congress was the legislative branch of the United States, composed of the United States Senate and the United States House of Representatives, from January 3, 2005 to January 3, 2007, during the fifth and sixth years of George W. Bush's presidency. House members...
, a bill, the Iran Freedom Support Act was introduced in both houses
Chambers of parliament
Many parliaments or other legislatures consist of two chambers : an elected lower house, and an upper house or Senate which may be appointed or elected by a different mechanism from the lower house. This style of two houses is called bicameral...
to extend the provisions of ILSA indefinitely and to impose a time limit for the administration to determine whether an investment violates ILSA. The House of Representatives
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
legislation, H.R. 282 was sponsored by Ileana Ros-Lehtinen
Ileana Ros-Lehtinen
Ileana Ros-Lehtinen is the U.S. Representative for , serving since 1989. She is a member of the Republican Party....
and 360 sponsors. It was introduced on January 6, 2005, was reported by committee on March 15, 2006, and passed the House on April 26, 2006, by a vote of 397-21, with 14 not voting. The companion Senate legislation, S. 333 was introduced on February 9, 2005, sponsored by Senator Richard Santorum and 62 cosponsors, and was referred to the Foreign Relations Committee
United States Senate Committee on Foreign Relations
The United States Senate Committee on Foreign Relations is a standing committee of the United States Senate. It is charged with leading foreign-policy legislation and debate in the Senate. The Foreign Relations Committee is generally responsible for overseeing and funding foreign aid programs as...
. The bill was not reported by the committee and died.
However, the next year, H.R. 5877, "To amend the Iran and Libya Sanctions Act of 1996 to extend the authorities provided in such Act until September 29, 2006," was introduced to the House. Sponsored by Ileana Ros-Lehtinen and cosponsored by International Relations Committee chair Henry Hyde
Henry Hyde
Henry John Hyde , an American politician, was a Republican member of the United States House of Representatives from 1975 to 2007, representing the 6th District of Illinois, an area of Chicago's northwestern suburbs which included O'Hare International Airport...
, Gary Ackerman
Gary Ackerman
Gary Leonard Ackerman is the U.S. Representative for , serving since a special election in 1983. He is a member of the Democratic Party...
, and Tom Lantos
Tom Lantos
Thomas Peter "Tom" Lantos was a Democratic member of the United States House of Representatives from 1981 until his death, representing the northern two-thirds of San Mateo County and a portion of southwest San Francisco...
, the legislation was introduced to the House on July 25, 2006. It passed the next day by voice vote
Voice vote
A voice vote is a voting method used by deliberative assemblies in which a vote is taken on a topic or motion by responding verbally....
, was passed by the Senate by unanimous consent
Unanimous consent
In parliamentary procedure, unanimous consent, also known as general consent, or in the case of the parliaments under the Westminster system, leave of the house, is a situation in which no one present objects to a proposal. The chair may state, for instance: "If there is no objection, the motion...
on July 31, and was signed into law by President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
on August 4, 2006.
On September 30, 2006, the act was renamed to the Iran Sanctions Act (ISA), as it no longer applied to Libya, and extended until December 31, 2011. The Iran Freedom and Support Act
Iran Freedom and Support Act
The Iran Freedom Support Act is an Act of Congress that appropriated $10 million and directed the President of the United States to spend that money in support of groups opposed to the Iranian government. Opponents claimed the bill was a first step towards a US-led invasion of the country.In...
passed later that year. The Iran Refined Petroleum Sanctions Act of 2009
Iran Refined Petroleum Sanctions Act of 2009
The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 is a bill passed by the U.S. Congress that would apply further sanctions on the government of Iran. A previous iteration of the bill, the Iran Refined Petroleum Sanctions Act of 2009 , would extend U.S...
, still a bill in Congress, would amend the Iran Sanctions Act to expand the president's ability to punish companies aiding Iran's petroleum sector.