Iran and Libya Sanctions Act
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.
A United States Department of State 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 Hezbollah, Hamas, and Palestine Islamic Jihad, that are considered as terrorist organizations by US.
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 petroleum resources in Iran will be imposed two out of seven possible sanctions, by the U.S.:
- denial of Export-Import Bank of the United States assistance;
- denial of export licenses for exports to the violating company;
- prohibition on loans or credits from U.S. financial institutions 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 procurement opportunities (consistent with World Trade Organization obligations); and
- a ban on all or some imports of the violating company.
Renewal and expiration
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.