House Bill Targets Foreign Investors in Iran and Libya

WASHINGTON — Defying warnings of retaliation by America’s closest allies, the House unanimously passed a bill Wednesday threatening sanctions against foreign investors in key industries of Iran and Libya, branded terrorist states by the U.S. government.

Approved 415 to 0, the bill now goes to a congressional conference committee that will try to reconcile it with a similar bill passed by the Senate six months ago. Because both versions give the president authority to waive the sanctions if he deems it in the national interest, administration officials said President Clinton probably will sign the final bill when it is passed by Congress.

But enactment of the law is expected to infuriate Western European governments that, along with Canada and Latin American countries, have condemned a similar U.S. law targeting foreign companies doing business in Cuba.

British, French and other European diplomats in Washington have made it clear that they are even more exercised by the impending law covering Iran, where European firms have far more investments than they have in Cuba. The diplomats insist that contact with the outside world enhances the position of Iranian moderates and that any attempt to isolate the country encourages its extremists.

But Rep. Howard L. Berman (D-Panorama City) dismissed the European argument. “They have been engaged in this constructive dialogue for years and years and years with nothing to show for it,” he said. “The support for terrorism continues. I suggest that these arguments . . . are all smoke screens for commercial interests.”

The bill targets two countries that are rich in oil and listed by the State Department as sponsors of international terrorism. “The premise of this bill,” said Rep. Lee H. Hamilton (D-Ind.), ranking member of the House International Relations Committee, “is that the best way to curb Iran and Libya’s dangerous conduct is to limit the oil and gas export earnings that help pay for it.”

The House bill calls for sanctions against foreign companies or individuals who invest more than $40 million a year in the Iranian oil industry or who sell weapons, planes or oil equipment to Libya in defiance of U.N. sanctions.

The bill would require the president to impose two or more sanctions from a long list. It includes the denial of Export-Import Bank assistance, the prohibition of exports to an offending company, a ban on American bank loans of more than $10 million, a halt in the U.S. government purchase of any goods from an offending company and a host of trade sanctions available to the president under other laws.

The House list of possible sanctions is slightly longer than the list in the Senate bill. The House bill also requests that the president try to persuade other countries to support an international regime of sanctions against Iran. Despite these differences, a conference committee is expected to have little difficulty working out a new bill acceptable to both houses of Congress and the president.

During the House debate, only Rep. Toby Roth (R-Wis.) rose to challenge the bill. “This legislation would impose a secondary boycott on our closest allies,” he said. “The sponsors argue that the bill will force Europe to choose between trading with us and trading with Iran and Libya. This will never work.”

But when the bill was put to a vote, Roth joined the rest of his colleagues in voting for it.

Times staff writer Norman Kempster contributed to this report.