Iran and Libya Sanctions Act
|Long title||An Act to impose sanctions on persons making certain investments directly and significantly contributing to the enhancement of the ability of Iran or Libya to develop its petroleum resources, and on persons exporting certain items that enhance Libya's weapons or aviation capabilities or enhance Libya's ability to develop its petroleum resources, and for other purposes.|
|Acronyms (colloquial)||ILSA, IOSA|
|Nicknames||Iran Oil Sanctions Act of 1996|
|Enacted by||the 104th United States Congress|
|Effective||August 5, 1996|
|Statutes at Large||110 Stat. 1541|
|Titles amended||50 U.S.C.: War and National Defense|
|U.S.C. sections amended||50 U.S.C. ch. 35 § 1701 et seq.|
The Iran and Libya Sanctions Act of 1996 (ILSA) was a 1996 act of the United States Congress that imposed economic sanctions on firms doing business with Iran and Libya. On September 20, 2004, the President signed an Executive Order to terminate the national emergency with respect to Libya and to end IEEPA-based economic sanctions on Libya. On September 30, 2006, the Act was renamed the Iran Sanctions Act (ISA). The Act was originally limited to five years, and has been extended several times. On December 1, 2016, ISA was extended for a further ten years.
The Act empowers the President to waive sanctions on a case-by-case basis, which is subject to renewal every six months. As at March 2008, ISA sanctions had not been enforced against any non-US company. 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.
In 1995, in response to the Iranian nuclear program and Iranian support for Hezbollah, Hamas, and Palestine Islamic Jihad, that are considered terrorist organizations by the US, 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.
The Act targets both U.S. and non-U.S. business making certain investments in Iran. Under ISA, 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 2005, the Iran Freedom Support bill 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 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 was referred to the Foreign Relations Committee. The bill was not reported by the committee and died.
On July 25, 2006, bill H.R. 5877, to extend ILSA until September 29, 2006, was introduced in the House, and passed the next day by voice vote. It 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, ILSA was renamed 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 Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 amended the Iran Sanctions Act to expand the president's ability to punish companies aiding Iran's petroleum sector.
On December 1, 2016, ISA was extended for a further ten years.
- Zengerle, Patricia (1 December 2016). "Extension of Iran Sanctions Act passes U.S. Congress". Reuters. Retrieved 2 December 2016.
- "Iran", Investment regulations, Economist Intelligence Unit, 19 March 2008
- Wright, Steven. The United States and Persian Gulf Security: The Foundations of the War on Terror, Ithaca Press, 2007 ISBN 978-0-86372-321-6
- Public Law 107-24