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Bill Targeting Iran, Libya Sent to White House

July 24, 1996|NORMAN KEMPSTER | TIMES STAFF WRITER

WASHINGTON — The House of Representatives on Tuesday unanimously passed and sent to the White House legislation to punish foreign firms doing business with Iran and Libya, despite warnings that the measure could touch off a trade war with economic powers in Europe and Japan.

The bill, already approved by the Senate, would require President Clinton to impose sanctions on foreign companies that invest $40 million or more in the energy industry of either country or engage in substantial export sales to Libya.

Although the White House has expressed concern about the effect of the bill on U.S. trade relations in Europe and Japan, officials indicated that Clinton probably will sign it, just as he approved a similar measure earlier this summer intended to punish companies doing business with Cuba.

The European Union already has threatened to retaliate if Washington imposes sanctions on companies based in any of the bloc's 15 member nations. Japan--joined by Canada, Mexico and other U.S. trading partners--also protested the legislation.

Passage of the bill has been certain for weeks, but the crash of TWA Flight 800 swept aside all opposition. Although there is no proof the plane was destroyed by a bomb, the disaster recalled a deadly attack on a Pan Am flight in 1988, a crime for which the United States blames Libya.

"We should try to put in place any and all measures to try to bring Libya in compliance" with United Nations resolutions demanding that Moammar Kadafi's regime turn over for prosecution two Libyans accused of involvement in the Pan Am bombing, said Rep. Benjamin A. Gilman (R-N.Y.), chairman of the House Foreign Relations Committee.

Rep. Lee H. Hamilton of Indiana, senior Democrat on the committee, voted for the bill but he warned it could do more damage to the U.S. than to Libya or Iran: "It could have the effect of seeing our allies ganging up on us rather than them."

Britain, France, Germany and other U.S. allies have complained that the bill imposes a "secondary boycott" on their firms. They have argued that the United States worked for years to prevent compliance with such a boycott imposed by Arabs against companies doing business with Israel. For that reason, administration officials were concerned about the Iran-Libya bill and the similar measure on Cuba. But Clinton signed the Cuba bill after Cuban warplanes downed two unarmed private aircraft.

The latest bill requires the president to impose two sanctions--from a menu of six--on firms investing in Libya or Iran or exporting to Libya. Possible sanctions include bans on U.S. Export-Import Bank loans, licenses to import goods from the U.S., authority to export goods to the U.S. and loans of more than $10 million in any one year from U.S. financial institutions. Other options include bans on dealing in U.S. bonds and bidding on U.S. government contracts.

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