The SPEAKER pro tempore (Mr. Stearns). Pursuant to the rule, the gentleman from New York [Mr. Gilman] and the gentleman from Indiana [Mr. Hamilton] each will control 20 minutes.

The Chair recognizes the gentleman from New York [Mr. Gilman].

(Mr. GILMAN asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I rise in support of H.R. 3107, the Iran and Libya Sanctions Act of 1996 which mandates sanctions on persons making investments that would enhance the ability of Iran to explore for, extract, refine, or transport by pipeline petroleum resources.

It would also establish a mandatory sanctions regime on foreign persons who violate United Nations Security Council Resolutions 748 and 883 by selling weapons, aviation equipment, and oil equipment to Libya, a country responsible for the cowardly and unforgivable attack on Pan Am flight 103 in December 1988.

I take great pleasure in bringing before the House a bill that would put our country on the front lines of our fight to combat state-supported terrorism and that will help to induce our allies in Europe and Asia to join us in a multilateral sanctions regime against Iran.

This multilateral sanctions regime will allow the President to waive the application of sanctions against the nationals of a country that has put in place its own sanctions regime against Iran, but it will also require him to impose an enhanced sanction--in the form of a reduction in the trigger level for investment in Iran from $40 to $20 million--against the nationals of all other countries.

In short, the bill requires foreign companies to choose between investing in our market and those of Iran and Libya. In the process, it gives the President the policy tools he needs to begin fulfilling his pledges to increase diplomatic and economic pressure on the Iranian and Libyan Governments.

As approved by the Ways and Means Committee in close consultation with the House International Relations Committee, this bill imposes a sanction regime on companies helping to develop the oil and gas industries in Iran and Libya. Its enactment can sharply diminish the future revenues from oil and gas production of these rogue regimes and will put a halt to their campaigns of state-sponsored terrorism and their efforts to develop weapons of mass destruction.

Iran looms as the principal long-term threat to United States interests in the Persian Gulf and the Middle East. It continues its terrorist and subversive activities against its neighbors in the Gulf states and around the world, as far away as Argentina. Over the past year, Iran has actively supported efforts to destabilize Bahrain, promoting the Gulf Cooperation Council to issue a public statement admonishing Iran to put a halt to its subversive policies in the region.

Its leaders openly advocate the destruction of the state of Israel and its support for terrorist groups in Lebanon have led to renewed rounds of violence in that country and have set back the prospects for a peace accord in the Middle East.

Iran, like Iraq, has launched a clandestine program to build nuclear weapons and missile systems capable of delivering weapons of mass destruction payloads to targets up to 1,000 kilometers from its borders, thereby threatening key allies in the region including Jordan, Israel, and Turkey.

In his testimony before the House International Relations Committee on November 9, 1995, Peter Tarnoff, Under Secretary of State for Political Affairs, noted that any foreign investment to help increase offshore oil and gas production would inevitably lead to increase financial support by Iran for its weapons of mass destruction and terrorist activities.

An April 1996 report on proliferation issued by the Office of the Secretary of Defense came to the same conclusion in regard to Libya. It noted it particular, that and I quote:

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Libya probably dedicates several hundred million dollars annually to acquire nuclear, biological and chemical weapons and missiles made possible by its substantial income from oil and gas exports.

In the most recent State Department report on global terrorism, it was noted that the end of 1995 marked the 4th year of Libya's refusal to comply with the demands of U.N. Security Council Resolution 731. This measure was adopted following the indictments on November 1991 of two Libyan intelligence agents for the bombing in 1988 of Pan Am flight 103 which killed 189 Americans.

This resolution endorsed the demands of the United States, the United Kingdom, and France that Libya turn over the two suspects for trial in the United States or the United Kingdom, pay compensation to the victims and fully cooperate in the investigations into the bombings of Pan Am 103 and UTA flight 772.

U.N. Security Council Resolution 748 was adopted in April 1992 as a result of Libya's refusal to comply with UNSCR 731.

Resolution 748 imposed sanctions that embargoed Libya's civil aviation and military procurement efforts and required all states to reduce Libya's diplomatic presence.

Yet another resolution adopted in November 1993, UNSCR 883, imposed additional sanctions on Libya, including a freeze on limited assets and an oil technology ban. To date, none of these efforts have produced these two indicted officials for trial either in the U.S. or the U.K.

I have consistently argued for and urged the administration to increase the pressure to comply with all existing U.N. resolutions and should adopt policies that can begin to implement some of the campaign promises that Governor Bill Clinton made in September 1992 to the family of one of the Pan Am 103 victims to broaden oil sanctions on Libya.

Adoption of the provisions in this bill in regard to Libya will put teeth in these U.N. sanctions and give the President the authority he needs to begin imposing sanctions on companies making new investments in the oil and gas sector in this terrorist country.

By imposing a total embargo on Iran in March of last year, the administration took an important step in our efforts to isolate Iran. Together with the Junior Senator from New York, Mr. D'Amato, I have been pressing the administration to take additional steps to reduce Iran's funding sources for its worldwide subversive activities and for its programs supporting weapons of mass destruction.

If we want our deeds to match our words in this effort, enactment of this bill is the next and necessary step to contain the terrorist activities of both Iran and Libya. By asking foreign companies to make a simple choice between the American market and those of Iran and Libya, this bill will help the administration deliver an unmistakable message to our European and Asian allies that the era of critical bilateral dialog is over and the time for multilateral action has now begun.

The bipartisan bill before us today requires the President to impose sanctions on companies making investments of $40 million or more that would enhance the ability of Iran to develop its petroleum resources.

If he made such a determination, the President would have to pick two or more sanctions from a list of six sanctions including: A denial of Eximbank assistance; a denial of specific licenses for the export of controlled technology; a suspension of imports under the provisions of the International Emergency Economic Powers Act; a prohibition on a sanctioned financial institution from serving as a primary dealer in U.S. Government debt instruments; a prohibition on any U.S. financial institution from making any loan to a sanctioned person over $10 million a year; and a ban on any U.S. Government procurement of any goods or services from a sanctioned person.

The legislation allows the President to delay imposition of sanctions for 90 days to pursue consultations with the government of the sanctioned person to end the sanctionable activities. An additional 90 day delay is permitted if he determines that he is making progress toward this goal.

The President may also waive any of these sanctions if he determines that doing so is in the national interest.

This bill also includes a 5-year sunset provision.

Adoption of a companion Iran and Libya sanctions bill in the Senate on December 22, 1995, has already had a deterrent effect on potential investors and oil field suppliers to Iran and Libya. The enactment of this measure today will ensure that we can maintain this deterrent on further investments in these rogue regimes.

Mr. Speaker, I would like to pay tribute to the many members on the International Relations Committee and the Ways and Means Committee who worked long and hard to make the legislation possible. Subcommittee Chairman Dan Burton, Representative Peter King, the respective ranking members of the Asia and Pacific Subcommittee and the International Economic Policy and Trade Subcommittee, Representatives Howard Berman and Sam Gejdenson, as well as Chairman Bill Archer and Trade Subcommittee Chairman Phil Crane.

I urge the adoption of H.R. 3107.

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Mr. GILMAN. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I reserve the balance of my time.

Mr. HAMILTON. Mr. Speaker, I yield myself 3 minutes.

Mr. Speaker, I want to begin by commending the Members I think are most responsible for producing this compromise bill. The gentleman from New York, Chairman Gilman, the gentleman from Texas, Chairman Archer, and the gentleman from Iowa, Chairman Leach, all deserve credit for their willingness to look for creative solutions to their differences.

I also want to say a word of appreciation to the gentleman from Connecticut [Mr. Gejdenson] and the gentleman from California [Mr. Berman] and the other original cosponsors of the bill because of their willingness to advance the bill and to support the agreement that has been reached today.

Finally, may I say that the administration, which supports this bill, also deserves credit, I think, for helping Members understand the implications of the bill for U.S. diplomacy and U.S. economic interests.

There is very little disagreement between the United States and its allies about the challenges posed by the two countries that are the focus of this bill. Iran poses a serious threat to several shared security interests. It is a confirmed sponsor of terrorism. It is trying to develop weapons of mass destruction. It seeks to undermine the Middle East peace process. It is pursuing a military buildup that could enable it to threaten shipping traffic in the Persian Gulf. Libya continues to harbor terrorists responsible for the death of more than 300 Americans and others on Pan Am flight 103, and it is also developing weapons of mass destruction and threatening the security of its neighbors.

The premise of this bill, which I believe to be a correct one, 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.

This has been a principal goal of U.S. policy for several years. In our effort to squeeze the economies of Iran and Libya, the United States has cut off all of its trade with both countries. But the impact of unilateral sanctions is limited, so we also have urged Iran's and Libya's main trading partners to restrict or sever their economic ties.

Despite our efforts and despite the egregious conduct of Iran and Libya, many of our friends have maintained their ties with both countries. So the dilemma here for United States policy is to find ways to increase the economic isolation of Iran and Libya without, in the process, causing undue harm to our own economy or to our relations with our allies.

H.R. 3107 makes a very good start in responding to that policy dilemma. The ultimate goal of this bill is not to punish foreign firms but to persuade other governments to adopt measures that squeeze the economies of Iran and Libya.

We do not know whether we are going to achieve that goal for some time, but this bill does give to the President of the United States the tools to enable him to have the flexibility in implementing U.S. sanctions. For that and other reasons, I strongly urge the approval of this bill.

Mr. Speaker, I reserve the balance of my time.

Mr. GILMAN. Mr. Speaker, I yield 3 minutes to the gentleman from New York [Mr. Solomon], distinguished chairman of our Committee on Rules.

Mr. SOLOMON. Mr. Speaker, I thank the gentleman, the chairman of the Committee on International Relations, for yielding time to me.

I rise in very strong support of this measure which would tighten economic sanctions against two deadly enemies of the United States, the dictatorial Governments of Iran and Libya. I commend the distinguished chairman of the Committee on International Relations for his outstanding work in bringing this bill to the floor. This measure uses our best weapon against these regimes and other countries which support them, the power of the American purse. With 260 million American people and the highest standard of living on Earth, the United States represents a market that is just too lucrative for other countries to ignore when they want to trade with us.

That is why this bill makes so much sense, Mr. Speaker.

It would impose a range of economic sanctions against other countries that irresponsibly abet the terrorist activities of Iran and Libya by investing their oil sectors or supplying them with oil-related goods or technologies.

When these countries face the prospect of losing part of our vast American market, they will think twice about their investments in these two outlaw nations, and that is what they are.

Mr. Speaker, the terrorist threat is real. It is growing. Stiff measures like this are called for. We all know that Libya, under Colonel Qadhafi, and Iran, under fundamentalist dictatorship, are two of the world's major sponsors of terrorism. Their capabilities to conduct acts of terror are increasing at an alarming rate.

Let us take a look at Iran. As we speak, Iran is in a furious drive to acquire weapons of mass destruction aided and abetted by Communist China, which by the way is another nation we ought to be imposing sanctions on instead of giving them carte blanche favored-nation treatment. We will deal with that a little bit later this month.

In the past few months alone, we have seen reports that Communist China has been supplying Iran with cruise missiles, chemical weapons technology and plutonium processing technology. Couple this with nuclear reactor technology supplied by another great country, Russia, and we can clearly see what Iran is up to and what kind of threat we face.

Mr. Speaker, it is time to act now before it is too late. That is why Chairman Gilman and Chairman Archer deserve our highest praise for working so hard to bring this bill to the floor. Come over here and let us pass it. It is important.

Mr. HAMILTON. Mr. Speaker, I yield 3 minutes to the distinguished gentleman from Connecticut [Mr. Gejdenson] who is an original sponsor of the bill.

Mr. GEJDENSON. Mr. Speaker, Iranian profits are used to murder innocent civilians on the streets of Tel Aviv and Jerusalem and those who trade with Iran, like those who traded with the Nazis, irrespective of their murderous act, aid and abet them.

The debate we have here today is what action we can take following support of the chairman and the ranking member of the Committee on International Relations and the President of the United States in trying to isolate Iran and reduce its ability to assist the murder of innocent civilians.

Unfortunately, most of our democratic allies in Europe and Japan are not being helpful. They will pay a price as surely as the nations who ignored terrorism in the early 1960's and 1970's soon found that it existed not just isolated in Israel and the Middle East but across the globe.

There is a clear and direct link between Iran's ability to profit from its oil sales and assistance to terrorist Hezbollah and other causes. When Secretary of State Christoper was in Syria, it was reported that Iranian planes with arms landed there to aid Hezbollah attacks on the Israelis and the peace process.

Today it is Iranian rockets, grenades and bombs. But what happens if Iran, months or years from now, when they have the ability to deliver nuclear or chemical weapons. Today Iran threatens women and children and men on buses. An Iran which uses its profits to develop nuclear and chemical weapons will be an Iran that threatens the globe.

Corporate profits must be put aside here as the President has led us and in the so-called civilized world.

We must deny companies who profit from exports to Iran the opportunity to access our markets. We have begun that process with this legislation. I am writing to the banks and economic entities in the G-7 countries warning them that we will monitor their activity. And if they fail to join us, we will take further actions.

If the Baader Meinhof gang had territory, would the German Government have traded with them when they blew up innocent German civilians? I think not. The Iranians may have territory and a government, but they should not be allowed to continue to profit and murder innocent children.

Some of my European and Japanese friends have been offended that I point out their complicity. Well, if this offends them, it does not worry me in the least. It offends me to see the arms and legs and bodies of children and adults strewn on the streets of Israel.

Mr. Speaker, I include for the Record the following letter:

ONE HUNDRED FOURTH CONGRESS, CONGRESS OF THE UNITED STATES, COMMITTEE ON INTERNATIONAL RELATIONS, HOUSE OF REPRESENTATIVES,
Washington, DC, June 18, 1996.

Mr. Jochen Sanio,
Vice President, Federal Banking Supervisory Office, Gardschutzenweg 71-101, D-12203 Berlin, Germany.

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Dear Mr. Sanio: As you may be aware, many of my colleagues and I are concerned about the flow of foreign money into Iran's petroleum sector. The U.S. State Department has found that Iran's financial capability to build weapons of mass destruction and to support international terrorism depends on Iran's ability to explore for, extract, refine, or transport by pipeline its petroleum resources.

In legislation now proceeding through Congress, the President will be required to impose sanctions on foreign companies that invest in Iran's oil sector. To some extent, the legislation will stop short of imposing sanctions on foreign entities that finance such investments. However, financing of these projects remains a major concern.

I know that your government shares our concern over the threat posed by an Iran armed with nuclear weapons. I would hope that your government would therefore take action to preclude the financing of petroleum development by the financial institutions in your country. The U.S. Congress will be carefully monitoring foreign funding of Iran's oil development. Should foreign banks choose to ignore the threat posed by Iran, I have no doubt that the U.S. Congress will revisit this issue and pass legislation that would impose sanctions on foreign institutions that finance petroleum development in Iran.

I look forward to working with you on this issue of mutual concern.

Sincerely,

Sam Gejdenson,

Ranking Member, Subcommittee on International Economic Policy and Trade.