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IRAN: U.S. business groups call on White House to drop proposed sanctions

January 28, 2010 |  8:18 am

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In his State of the Union address Wednesday night, President Obama offered a seemingly softened rhetoric toward the Islamic Republic on the issue of sanctions over its controversial nuclear program.

He said Tehran would "face growing consequences" if it failed to curb its nuclear program. But he didn't specify whether those consequences would include sanctions, as demanded by U.S. lawmakers expected to take action on a new set of proposed sanctions targeting Iran's gasoline imports.

This week, several prominent American business groups, including the U.S. Chamber of Commerce and the National Foreign Trade Council, came out strongly against sanctions.

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The groups warned White House national security advisor James Jones and high-level economic policy advisor Lawrence Summers that expanding sanctions on Iran would hurt U.S. national interests on several levels.

"The undersigned business organizations are profoundly concerned that current legislative proposals to expand U.S. sanctions on Iran would significantly undermine the U.S. national interest. ... The proposed sanctions would incite economic, diplomatic and legal conflicts with U.S. allies and could frustrate joint action against Iran," read the letter posted on foreign policy journalist Laura Rozen's blog, which was among the first outlets picking up on the story. 

They said the proposed sanctions "could prohibit any U.S. company from transacting routine business with critical partners from around the globe even if these transactions have no bearing on business" with the Islamic Republic.

"The proposals could have a large impact on the U.S. Export-Import Bank, precluding it from partnering with counterpart agencies abroad to co-finance U.S. exports that have no relation to Iran’s energy sector," read the statement.

The business groups expressed concern over Iran's controversial nuclear program, but suggested unilateral sanctions would only undermine the efforts of the U.S. and its allies in dealing with the issue.  

"The United States and our allies must present a united front in the face of Iran’s nuclear ambitions," read the letter. 

"Unfortunately, these proposals would undermine these goals with sanctions of inappropriately sweeping reach, undue constraints on the U.S. Export-Import Bank, and the elimination of executive discretion in the conduct of U.S. foreign policy," it added.  

"We urge you to weigh in vigorously with Congress to eliminate these highly problematic proposals."

Pressure for sanctions is increasing. A day after the business groups made their appeal to the White House, some lawmakers in Washington called on Obama to adopt a tougher stance on Iran. 

In a letter addressed to the president on Wednesday, a number of senators urged Obama to take action and impose "crippling sanctions" on Iran, according to United Press International.

"It is imperative to put into action your pledge of increased, meaningful pressure against the Iranian regime," read the letter, signed by Democratic, Republic and independent senators including Evan Bayh, Bob Casey, John McCain and Joe Lieberman.

Iran imports about 40% of its gasoline, mainly from the Swiss companies Vitol and Glencore, Dutch-Swiss Trafigura, France's Total, Britain's BP and an Indian company called Reliance.

If the legislation is voted through, foreign companies that have more than 20 million of investments in Iran's energy sector could be targeted, according to Agence France-Presse.

On the Senate floor on Tuesday, Senate Majority Leader Harry Reid expressed his hopes that the Senate would pass the legislation that would impose sanctions on companies that supply the Islamic Republic with gasoline.

"The act will create new pressure on the Iranian regime to help stop Iran from acquiring a nuclear weapon," the Reuters news agency quoted Reid as saying. "I am reaching out to Republican colleagues to help me find a path to get that done in the next few weeks."

-- Alexandra Sandels in Beirut

Photo: President Obama delivers his State of the Union address on Wednesday. Credit: White House. Image credit: U.S. Chamber of Commerce.