Feb. 1 (Bloomberg) -- Iran’s national oil company and its oil-tanker fleet are the target of sanctions measures that two U.S. lawmakers introduced in Congress aimed at blocking Iran’s ability to sell its crude internationally.
Representative Howard Berman, a California Democrat, and Senator Bob Menendez, a New Jersey Democrat, filed similar proposals yesterday to force the U.S. Treasury Department to investigate whether the National Iranian Oil Co. and the National Iranian Tanker Co. are owned or controlled by the Islamic Revolutionary Guard Corps.
If the Treasury established a strong link between Iran’s crude oil chain and the Revolutionary Guards, that would let the U.S. president impose sanctions on foreign financial institutions that facilitate transactions for NIOC or NITC anywhere in the world by shutting down or imposing strict conditions on the institutions’ U.S. bank accounts, according to the text of the legislation.
The proposed designation of Iran’s oil and tanker companies would add to an array of additional financial and energy-related penalties imposed on Iran by the U.S. and the European Union over the past three months. Last week, the EU imposed an embargo on Iranian oil imports to the 27-nation bloc, effective July 1.
The Islamic Revolutionary Guard Corps, an elite military unit that the Obama administration says has taken significant control of important sectors of the Iranian economy, has been the target of numerous international sanctions imposed by the U.S., the United Nations and others for involvement in illicit nuclear and missile activities and sponsorship of terrorism.
Cutting Iran’s Revenue
Menendez and Berman have been leading proponents of sanctions to deprive Iran’s government of revenue needed to finance any illicit nuclear activities and to cripple Iran’s economy through sanctions in an effort to force its leaders to return to nuclear negotiations.
Berman, the senior Democrat on the House Foreign Affairs Committee, submitted his measure targeting NIOC and NITC as a bill amending Iran sanctions legislation that passed in 2010.
Menendez introduced his proposal as an amendment to an Iran sanctions bill circulated Jan. 30 by Senate Banking Committee Chairman Tim Johnson, a South Dakota Democrat, and senior Republican Richard Shelby of Alabama. Their bill, due to be taken up by the committee tomorrow, would require any companies traded on U.S. stock exchanges to reveal Iran-related business to the Securities and Exchange Commission.
Menendez, a member of the Senate Banking Committee and the Foreign Relations Committee, was the chief sponsor along with Senator Mark Kirk, an Illinois Republican, of sanctions on the Central Bank of Iran intended to complicate the purchase of oil from Iran. The central bank sanctions passed Congress overwhelmingly and were signed into law by President Barack Obama on Dec. 31.
The Johnson-Shelby draft legislation also would extend U.S. sanctions to firms involved in joint ventures with Iran anywhere in the world involving uranium mining or new energy projects. It would penalize U.S. parent firms for certain Iran-related activities of their foreign subsidiaries, expand sanctions on Iran’s energy and petrochemical sectors and mandate sanctions on those who supply Iran with weapons and other technology used to commit human rights abuses.
Oil is Iran’s main source of income, supplying more than 50 percent of the national budget, according to International Monetary Fund figures. Oil provided the Persian Gulf nation $56 billion in the first seven months of 2011, according to the U.S. Energy Department.
Oil for March delivery declined 30 cents, or 0.3 percent, to $98.48 a barrel on the New York Mercantile Exchange yesterday, the lowest settlement since Jan. 20.
Iran, the second-largest oil producer in the Organization of Petroleum Exporting Countries after Saudi Arabia, pumped about 3.545 million barrels of oil a day last month, a Bloomberg survey showed, and exported an average 2.58 million barrels a day in 2010, according to OPEC statistics.
The House bill is H.R. 3843.
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