January 28, 2010 | Press Release

Senate Approves Gasoline Sanctions as Part of Broad Legislation Targeting Iranian Regime

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Press Release January 28, 2010 CONTACT: Judy Mayka 202-621-3948
[email protected]
Senate Approves Gasoline Sanctions as Part of Broad Legislation Targeting Iranian Regime

FDD Urges Congress, Administration to Press for Enactment to Keep Pressure on Regime

Washington, D.C. (January 28, 2010) – The Foundation for Defense of Democracies (FDD) praised the Senate for approving by unanimous consent the Comprehensive Iran Sanctions, Accountability, and Divestment Act (S.2799) and encouraged Congress to quickly send a broad-based sanctions bill, including gasoline sanctions, to President Obama for his signature.

The Senate bill authorizes the president to sanction any person or entity that sells gasoline and other refined petroleum products to Iran or helps to expand Iran's refinery capacity. It also applies to the insurance, reinsurance, and shipping companies that facilitate this trade. The House passed legislation by a vote of 412-12 authorizing similar sanctions, the Iran Refined Petroleum Sanctions Act.

S. 2799 also tightens the current export and import ban on Iran, requires the freezing of assets of certain Iranian persons involved in providing support for terrorism or weapons proliferation, including Iran's Revolutionary Guard Corps, imposes a ban on U.S. Government contracts for entities found to be subject to sanctions under the Iran Sanctions Act, imposes tighter restrictions on countries involved in illegally transshipping items to Iran, and provides protections for State and local governments and private asset fund managers to divest from companies supporting Iran's energy sector.

FDD has provided leading research and analysis in support of strong, broad-based sanctions, in particular gasoline sanctions, as part of a comprehensive strategy to end the Iranian regime's pursuit of nuclear weapons.

“Gasoline sanctions have been characterized by some as a silver bullet which would cripple the Iranian economy and inflict a mortal wound on the regime, while others have deplored the sanctions as an ineffective pinprick,” said FDD Executive Director Mark Dubowitz. “Both views are wrong: These sanctions — which have already shown early success — are an extension of a comprehensive economic warfare strategy designed to weaken the regime and feed the flames of Iranian public discontent.”

“Whether through denying the Iranian regime much needed capital and technology for its energy sector, or curtailing Iran's access to the world's banks, this strategy has already worked: the regime is despised by the Iranian people not only for its human rights abuses but also because of the disastrous state of the Iranian economy,” Dubowitz said.

“It's precisely because of the possibility that gasoline sanctions could be so consequential that they're worth pursuing. Senior Iranian officials have been so loud in mocking the effectiveness of these sanctions because the regime knows it still does not have the requisite reserve capacity — despite its much ballyhooed efforts — to stop such sanctions from fomenting even more distaste for the regime on the Iranian street,” said Dubowitz.

“We have already seen that just the threat of sanctions has had a measurable cost on Iran's ability to import gasoline, causing some of Iran's gasoline suppliers to withdraw from the Iranian market, banks to stop providing financing for these gasoline trades, and forcing the regime to cut popular gasoline subsidies,” added Dubowitz. “Iran's gasoline partners will resume their trading if they don't believe that the threat of sanctions is imminent. It is imperative that Congress and the President work together as expeditiously as possible to enact this legislation and keep the pressure on the regime.”

The Swiss-Dutch energy trader Glencore ended its shipments to Iran in June of 2009. British Petroleum exited the market in 2008 as a result of concerns over the political risk of continuing to do business with the Iranian regime. The Indian energy company Reliance Industries Ltd. had announced that it withdrew from the Iranian market in April, but it has since been reported that Reliance sold gasoline to a Kuwaiti company, Independent Petroleum Group, which emerged in October as Iran's largest gasoline supplier.

For more information on FDD's Iran Energy Project, the companies involved in supplying Iran with gasoline, and ways to significantly reduce Iran's gasoline imports, please visit IranEnergyProject.org or contact Judy Mayka at [email protected].

The Foundation for Defense of Democracies is a non-profit, non-partisan policy institute dedicated exclusively to promoting pluralism, defending democratic values, and fighting the ideologies that drive terrorism. Founded shortly after the attacks of 9/11, FDD combines policy research, democracy and counterterrorism education, strategic communications, and investigative journalism in support of its mission. For more information, please visit www.defenddemocracy.org.



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