Congress expected to press efforts to update US sanctions policy

This year's presidential and congressional elections may slow down but are unlikely to stop growing efforts by policymakers to update US sanctions policy, especially as it applies to strategic oil producing countries.

The aftermath of the Sept. 11, 2001, terrorist attacks on the US and the ongoing war on terror has led both the White House and US Congress to redefine who the US's allies and enemies are now.

Libya is a good example of an oil-rich country that stands to richly benefit if Washington, DC, changes a nearly 2 decade trade freeze.

Tripoli late last year took decisive steps to facilitate changes in US policy when it pledged to disclose and destroy weapons of mass destruction. And earlier in 2003, Libya aggressively sought to settle a dark chapter in its history when it offered a settlement to compensate families of victims of the 1998 terrorist bombing of a Pan Am flight over Lockerbie, Scotland.

The White House, under a recurring executive order, blocks US companies from maintaining or expanding investments in the country.

And under a 1996 law renewed in 2001, non-US companies that invest more than $20 million in either Libya or Iran may be subject to economic sanctions.

That 2001 law, the Iran Libya Sanctions Act (ILSA,) is due to expire in 2006; the White House this March is scheduled to deliver a report to Congress detailing how effective the law has been to discourage rogue behavior by either country (OGJ, Jan. 5, 2004, p. 27).

As yet, President George W. Bush has not given any indication the White House will lift sanctions on either country.

But the executive branch traditionally has been less likely to encourage sanctions than Capitol Hill, so industry analysts see Congress more than the administration as the biggest obstacle to a policy change.

Congress, not the administration of George W. Bush or his predecessor Bill Clinton, actively supported ILSA, for example.

But in an encouraging sign for industry, a US congressional delegation recently visited Libya; similarly, a group of US lawmakers are slated to go to Iran this month.

Of the two countries, it's far more likely Libya will see sanctions come off sooner, analysts predicted. That's because Libyan President Muammar

Shifting power struggles remain between reform-minded moderates who want more dialogue with the US and conservatives who are deeply suspicious of what any diplomatic thaw might mean for their country.

Congressional action

Sen. Richard Lugar (R-Ind.), chairman of the Senate Foreign Relations Committee, is expected to use his leadership position to facilitate change.

As an important first step, he introduced last November the Sanctions Policy Reform Act (S.1861). It would provide "a framework for consideration by the legislative and executive branches of proposed unilateral economic sanctions in order to ensure coordination of United States policy with respect to trade, security, and human rights."

Congress first would have to weigh what the economic and humanitarian cost of a proposed sanction would have on a targeted country before taking action.

Sources for lawmakers who have supported sanctions legislation such as ILSA say they are always mindful of the policy trade-offs that must be considered.

But in some circumstances, the behavior of a country is so egregious that trade embargoes and similar measures must always be readily available, congressional staff said.

Nevertheless, industry groups are lobbying Congress hard that sanctions should be used less rather than more in the foreign policy arena.

"While sanctions, even unilateral ones, may be appropriate at times, we need to recognize that engagement can be a powerful force for positive change when pursued at all levels—political, diplomatic, economic, charitable, religious, educational, and cultural. In contrast, a unilateral sanction can isolate America, taking away the influence and credibility we gain by being involved," Bill Reinsch, president of the National Foreign Trade Council and cochairman of USA*Engage said.