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Disarmament Diplomacy

Issue No. 26, May 1998

US Waives Sanctions on Foreign Firms Over Iran Gas Contract

On 18 May, the Clinton Administration announced the waiver of sanctions, under the 1994 Iran-Libya Sanctions Act (ILSA), against three foreign companies - Total (France - the major participant), Gazprom (Russia) and Petronas (Malaysia) - contracted to supply a gas pipeline to Iran. The move followed intense discussions on the issue at the G8 Summit in Birmingham and a separate US-EU Summit in London billed as marking an intensification in cooperation between the two sides in averting and punishing terrorism and proliferation. See Documents and Sources for details of the waiver decision and statements arising from the US-EU Summit.

Speaking on the day of the announcement, Secretary of State Madeleine Albright stated that further examples of EU businesses dealing with Iran would meet a similar US response: "In the light of [EU States'] essential cooperation, and as long as this heightened level of cooperation is maintained, we would expect that a review of our national interests in future ILSA cases involving Iran similar to South Pars, involving exploration and production of Iranian oil and gas, would result in like decisions with regard to waivers for EU companies."

On 8 May, Senate Majority Leader Trent Lott (Republican - Mississippi) and 12 other Senators (10 Republicans and 2 Democrats) had written to President Clinton urging him to proceed with sanctions. The letter stated: "A decision not to sanction will reveal the United States as a paper tiger... Indeed, the only victims of a waiver will be American companies barred from doing business in Iran. Such an outcome is as absurd as it is objectionable."

Reports: Senators urge French oil sanctions, Associated Press, 8 May; Albright sees future rulings on ILSA, Reuters, 18 May; Clinton announces waiver of US Iran-Libya sanctions Act, United States Information Service, 18 May.

© 1998 The Acronym Institute.

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