NATIONAL FOREIGN TRADE COUNCIL, INC.

TEL:  (202) 887-0278                         

FAX:  (202) 452-8160

1625 K STREET, NW, WASHINGTON, DC 20006-1604

Dear Member of Congress:

            You will soon be asked to support renewal of the Iran and Libya Sanctions Act of 1996 (ILSA), which expires on August 5.  ILSA has proven to be a failure and we urge you to oppose efforts to renew this legislation. 

The reasons for not rushing a vote on ILSA are compelling. Given the evolving political climate in the Middle East and the current world energy situation, President Bush needs time and flexibility to craft a policy toward the Middle East and the Caspian.

 ILSA, a secondary boycott which imposes sanctions on non-U.S. companies that make significant investments in Iran and Libya’s oil and gas sector, has alienated key allies and trading partners such as Canada and the European Union. As Congress considers new policies toward the region, there should be an assessment of its effectiveness and impact on U.S. agriculture, jobs, and energy security. Non-renewal will have no impact on the Executive Order sanctions that prohibit trade and investment in Iran and Libya by U.S. companies. In the case of Libya, it is diplomacy, and not unilateral sanctions, that is helping to resolve bilateral issues.

Specifically, we urge you to oppose renewal of ILSA and to work with the Administration to adapt U.S. policy to today’s realities:

·        ILSA has failed in its main objective of halting foreign investment in Iran’s oil and gas sector, which has received $10.5 billion of foreign investment since 1997. U.S. companies are currently excluded from Iran’s development of its 90 billion barrels of oil reserves.

·        Iran’s June 8 presidential election will affect the balance of power within Iran. Renewal of ILSA before its presidential election would send exactly the wrong signal, strengthening the very forces in Iran most opposed to U.S. interests.

·        ILSA has hurt American farmers. U.S. agricultural exports to Iran, now allowed under strict licensing requirements, have not been able to overcome the well-established supplier relationships with our competitors that U.S. sanctions have fostered.

·        Removing sanctions on Iran is a top priority for U.S. business, especially during an economic slowdown and a developing energy crisis.

The U.S. has a significant national interest in Iran’s future because of its geographical location, size and economic potential. A majority of Iran’s population has been born since the 1979 revolution. Dramatic and unpredictable changes are taking place in its society and politics. The U.S. should not renew failed sanctions that do not serve long-term U.S. national interests.

Sincerely,

            Aerospace Industries Association

            American Association of Exporters and Importers

            American Farm Bureau Federation

            American Hardware Manufacturers Association

            American Petroleum Institute

            Emergency Committee for American Trade

            International Association of Drilling Contractors

            National Association of Manufacturers

            National Electrical Manufacturers Association

            National Foreign Trade Council

            Organization for International Investment

            USA*Engage

            U.S. Council for International Business 

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