Exclusive: State Department letter to Kerry outlines “serious substantive concerns” with Iran sanctions bill

Exclusive: State Department letter to Kerry outlines “serious substantive concerns” with Iran sanctions bill

Next week is going to be a big week for Iran sanctions, particularly on Capitol Hill. As administration officials change their tone and talk more about a "pressure track" in public, behind the scenes negotiations about how to proceed are heating up.

In a previously unreported development, the State Department sent a letter to Congress Friday, obtained by The Cable, asking lawmakers to hold off moving on Connecticut Sen. Chris Dodd‘s Iran sanctions bill until the new year.

"We are entering a critical period of intense diplomacy to impose significant international pressure on Iran. This requires that we keep the focus on Iran," Deputy Secretary of State James Steinberg wrote to Senate Foreign Relations Chairman John Kerry, D-MA, "At this juncture, I am concerned that this legislation, in its current form, might weaken rather than strengthen international unity and support for our efforts."

"In addition to the timing, we have serious substantive concerns, including the lack of flexibility, inefficient monetary thresholds and penalty levels, and blacklisting that could cause unintended foreign policy consequences," the letter reads.

The bill had been "hotlined" on Tuesday but then Senate leaders were waiting for the administration to weigh in with its concerns.

According to one Hill source, the Dodd bill isn’t stalled, really. It’s more that the bill is now the subject of negotiations between the administration and key senators over the language of the sanctions. One issue, the source said, is whether the bill’s sanctions on third-party countries who are involved in selling refined petroleum products to Iran could be exempted if they are part of efforts to combat Iran’s nuclear ambitions.

Under the current language, the president could waive sanctions on particular countries if he chooses, but the administration would prefer that the exemption be given to cooperating countries up front, according to the source.

There is a strong sense that it is in the interest of all parties involved to work out a deal, and that the bill is therefore likely to pass sometime early in early 2010, the source said. Key players in the negotiations are said to be Kerry, Dodd, Evan Bayh, D-IN, Joseph Lieberman, I-CT, and Jon Kyl, R-AZ.

Meanwhile, the House is expected to vote on House Foreign Affairs Chairman Howard Berman‘s Iran sanctions bill next week, a House leadership aide said. That bill is also focused on refined petroleum sales to Iran. It’s expected to pass by a wide margin.