The Iran and Libya Sanctions Act

The Iran and Libya Sanctions Act was signed into law on August 5, 1996. The United States already has a total trade embargo against Iran and Libya. The new law imposes sanctions on foreign companies that invest $40 million or more in these two countries' energy sectors. The Iran and Libya Sanctions Act is the latest U.S. response to these two countries' support for international terrorism, their efforts to acquire weapons of mass destruction, and their efforts to derail the peace process. The purpose of the law is to deny Iran and Libya the hard currency necessary to fund these destabilizing policies. Already, the law has denied Iran billions of dollars in foreign investments that would have been made if the law did not exist.

Key Provisions of the Iran and Libya Sanctions Act of 1996

The Act:

• Declares that the efforts of Iran and Libya to acquire weapons of mass destruction, their support of international terrorism, and Libya's failure to comply with UN Security Council Resolutions 731, 748, and 883 concerning the bombing of Pan Am 103 endanger U.S. and allied national security.

• Declares that it is U.S. policy to deny Iran the ability to support international terrorism and to fund its weapons of mass destruction program by limiting the development of its petroleum resources. Also declares that it is U.S. policy to seek full compliance by Libya with UN Resolutions, an end to its support of international terrorism, and an end to its efforts to obtain weapons of mass destruction.

• Urges the President to begin immediate negotiations to establish a multilateral sanctions regime against Iran, to include limitations on the development of its petroleum resources.

• Requires the President to impose two out of six sanctions on foreign entities that invest more than $40 million in any year in the petroleum sectors of Iran or Libya or that trade with Libya in violation of UN Security Council resolutions. The six sanctions from which the President may select are:

1. No extension of credit to a sanctioned entity from the U.S. Export­Import Bank.

2. No export licenses granted to a sanctioned entity seeking advanced U.S. dual­use technology.

3. No loans or credits in excess of $10 million to a sanctioned entity from U.S. financial institutions.