Department of Offense

By Eli Lake

The Obama administration is pressing Congress to provide an exemption from Iran sanctions to companies based in “cooperating countries,” a move that likely would exempt Chinese and Russian concerns from penalties meant to discourage investment in Iran.

The Comprehensive Iran Sanctions, Accountability, and Divestment Act is in a House-Senate conference committee and is expected to reach President Obama’s desk by Memorial Day.

“It’s incredible the administration is asking for exemptions, under the table and winking and nodding, before the legislation is signed into law,” Rep. Ileana Ros-Lehtinen, Florida Republican and a conference committee member, said in an interview. A White House official confirmed Wednesday that the administration was pushing the conference committee to adopt the exemption of “cooperating countries” in the legislation.

Neither the House nor Senate version of the bill includes a “cooperating countries” provision even though the administration asked the leading sponsors of the Senate version of the bill nearly six months ago to include one.

The legislation, aimed at companies that sell Iran gasoline or equipment to refine petroleum, would impose penalties on such companies, up to the potentially crippling act of cutting off the company entirely from the American economy. It also would close a loophole in earlier Iran sanctions by barring foreign-owned subsidiaries of U.S. companies from doing business in Iran’s energy sector.

Although Iran is one of the world’s leading oil exporters, it lacks the capacity to refine as much oil into gasoline as its domestic economy uses. Three years ago, the Iranian government imposed gasoline rations on the population.

“We’re pushing for a ‘cooperating-countries’ exemption,” the White House official said. “It is not targeted to any country in particular, but would be based on objective criteria and made in full consultation with the Congress.”

Mrs. Ros-Lehtinen, however, said the exemption “is aimed at China and Russia specifically.”

“The administration wants to give a pass to countries for merely supporting a watered-down, almost do-nothing U.N. resolution,” she said.

All past sanctions against Iran have included a waiver that lets the president refrain from penalizing foreign companies that are doing business with Iran.