Lawmakers reach compromise on Iran sanctions

House and Senate negotiators have reached a compromise on a new set of Iran sanctions to be brought to the floor of both chambers this week, but some conservative critics say the compromise isn’t strong enough to convince the Iranians to change their nuclear calculations.

The Cable has obtained the latest version of the bill, which has not yet been introduced in the House. The bill could be introduced as early as tonight and could come to the House floor as early as Wednesday.

The Senate could take it up and try to pass it Thursday or Friday, before senators leave town for August recess. This version was negotiated behind closed doors between the staffs of Senate Banking Committee Chairman Tim Johnson (D-SD) and House Foreign Affairs Committee Chairwoman Ileana Ros-Lehtinen (R-FL).

The bill would sanction anyone who provides Iran with equipment or technology that facilitates censorship or the suppression of human rights, including weapons, rubber bullets, tear gas, and other riot-control equipment — as well as jamming, monitoring, and surveillance equipment. It also calls on the administration to develop a more robust Internet freedom strategy for Iran and speed related assistance to pro-democracy activists in the country.

The legislation would also formally establish that U.S. policy is intended to prevent Iran from obtaining a nuclear weapon, and would require the administration to report extensively and repeatedly on its efforts to increase diplomatic and financial pressure on the Iranian regime.

The bill does not contain proposed language offered by Sen. Mark Kirk (R-IL) in the Senate and Reps. Ted Deutch (D-FL) and Robert Dold (R-FL) in the House that would expand energy-sector sanctions on Iran by declaring the country a "zone of proliferation concern," thus barring any businesses or service providers from dealing with the Iranian petroleum sector in any way. Instead the bill includes a non-binding "sense of Congress" that Iran is a zone of proliferation concern.

The bill also does not provide for penalties on the board of directors of the international financial transaction clearinghouse SWIFT, penalties that would have punished those directors if SWIFT allowed any banks from any countries to aid Iran in evading international sanctions, as the Wall Street Journal editorial board advocated for today.

"We hear the administration opposes this move for fear that it might prompt such banks to create their own versions of Swift. Yet there aren’t many banks that would want to be cut off from the international financial system, much less place themselves in a basket of outlaw or shady banks," the Journal editorial said.

The legislation also does not expand existing sanctions on the Central Bank of Iran to apply to all Iranian financial institutions and entities that do business with them, like exchange houses and gold suppliers. Kirk and some House members had been advocating for those provisions.

Senate Majority Leader Harry Reid (D-NV) has been saying that he wants to get the bill passed this month and there’s little chance the legislation could be opened up again for changes. The last time Reid brought the bill to the floor, he refused to allow amendments or floor debate and he is expected to try to go for a unanimous consent vote this time as well. AIPAC, the pro-Israel lobbying group, also has been lobbying in support of the new version to various Hill offices.

For experts that follow Iran sanctions, the bill is a good step toward tightening the noose on Iran’s economy but not enough to bring the Iranian economy to its knees in a way that would compel Iran’s leaders to abandon their nuclear ambitions.

"This bill is a major step towards economic warfare against the Iranian regime. It closes significant loopholes and tightens U.S. sanctions in key areas including shipping. But Iranian nuclear physics is beating Western economic pressure," said Mark Dubowitz, executive director of the Foundation for Defense of Democracies. "We need to skip intermediate steps and go to comprehensive economic warfare. Everything must be prohibited unless permitted, and the only transactions that should be permitted are small purchases of Iranian oil and the sale of humanitarian goods. Destroying the regime’s energy wealth is the best way to avoid a military confrontation."

"What exactly is this going to do to get the Iranians to the table? This is the time for the mallet, not fine-needle surgery," said Danielle Pletka, vice president of the American Enterprise Institute. "We see this as a do-or-die moment. Our purpose is not to have effective sanctions; our purpose is to bring them to the table to give up their nuclear ambitions."

The House Republican leadership has signed on to the compromise, although the question remains whether all of the Senate GOP caucus will go along. One congressional aide knowledgeable about Iran sanctions defended the compromise.

"We’ll inevitably hear voices this week who say this could have gone further on x, y, or z. But it’s important not to make the perfect into the enemy of the good, and this sanctions bill is good — very good, in fact — and by passing it, Congress can make a real difference," the aide said.

Defense Secretary Leon Panetta defended the administration’s action on Iran sanctions today during a stop in Tunisia. "I think what we all need to do is to continue the pressure on Iran economically and diplomatically, to take the right steps here to negotiate," he said. 

UPDATE: Late Monday evening, Johnson and Ros-Lehtinen each issued statements announcing the compromise. Johnson said he will work to ensure the senate passes the legislation this week.

"I am pleased we could come together and find agreement on this bipartisan and bicameral bill," Johnson said in his statement. "These new sanctions will send a clear signal to Iran’s military and political leaders, that unless they come clean on their nuclear program, end the suppression of their people, and stop supporting terrorist activities, they will face deepening international isolation and even greater economic and diplomatic pressure."

Ros-Lehtinen also presented the compromise as bipartisan and bicameral and emphasized that many members of both chambers had input into the process. She also defended the strength and impact of the law’s provisions.

"If properly implemented, this bill will impose crippling economic pressure on the Iranian regime in order to force Tehran to abandon its nuclear program and other dangerous policies," she said in her statement. "The House and Senate will be taking up the bill this week, and I urge President Obama to quickly sign it and vigorously enforce its provisions."