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Russia: U.S. Leans Away From Sanctions On Iran Deals

Washington, 15 May 1998 (RFE/RL) -- U.S. officials are giving strong signals that Russia's Gazprom and other companies involved in an international consortium to develop Iran's energy sector will not be penalized by Washington.

U.S. Assistant Secretary of State for Near Eastern Affairs Martin Indyk told a congressional committee Thursday that after months of deliberation, the Administration is on the verge of reaching a decision about the sanctions. It could come within days, he said.

The dilemma for the U.S. arose last September when the group of French, Russian and Malaysian oil companies, led by France's Total, signed a deal with Iran worth $2 billion to develop large gas reserves in the Persian Gulf.

A 1996 U.S. law calls for sanctions on foreign companies making major investments in Iran's energy sector because of that country's support for international terrorism and nuclear weapons program. But the law can be waived.

Indyk emphasized that the purpose of the legislation is to encourage international cooperation against states sponsoring terrorism. He said this will be a factor in the sanctions decision, emphasizing that the U.S. cannot fight terrorism alone and needs the cooperation of other countries.

He also noted that many European governments are vigorously opposed to the sanctions law,

Indyk commented in testimony before a U.S. Senate Foreign Relations subcommittee. inquiring into U.S. policy towards Iran.

Committee chairman Senator Sam Brownback (R-Kansas) said the sanctions should be imposed. In view of Iran's terrorist activities, "it cannot possibly be in U.S. interests to grant a waiver," he said.

Brownback and 11 other U.S. Senators, including Majority Speaker Trent Lott (R-Mississippi) and Jesse Helms (R- North Carolina), chairman of the Senate Foreign Relations Committee, last week sent a letter to President Bill Clinton urging him to impose the sanctions. The measures would prohibit the consortium companies from exporting to the U.S. and from getting major loans from American banks.

Brownback brought a map to the hearing to demonstrate that Iran is pursuing what he called "expansionist desires" in more than 21 countries.

He said he is particularly disturbed by Iran's growing economic and ideological influence in some of the former Soviet republics.

Brownback said he has been to the Caucasus and last month visited Uzbekistan and other places in the region. "I am very concerned about the expansion of groups supported by Iran in Central Asia and the South Caucasus in these weak, weak countries," he said.

Indyk agreed that Iran is still the leading supporter of terrorism in the world. But he said there has been some improvement since President Mohammad Khatami came to power a year ago.

As Indyk put it "the government of Iran has made an effort to reach out, particularly to its neighbors ...and to try to turn a new page in their relations."

He said the U.S. is hearing from the region that Iran's activity in support of subversive groups in neighboring countries appears to be declining.

Indyk said Iran's relationship with the U.S. could also improve. "We believe the prospects for change are there," he said.

But Indyk stressed that Khatami would have to reform Iran's domestic as well as foreign policies and it is not yet clear how far he can go against the conservative clergy that occupies key positions of power in the military, police, security and intelligence forces.

Indyk said the U.S. remains deeply concerned about three basic areas -- Iran's human rights record, its continuing effort to train and equip terrorist groups, and most of all Teheran's pursuit of long-range ballistic missiles. He said one of the highest U.S. priorities is to block Iran's ability to acquire the technology and materials necessary to develop weapons of mass destruction and missile systems.

Indyk said in this regard the U.S. has made real progress with China and Ukraine in restricting their nuclear cooperation with Iran.

He also praised Russia for taking some steps "to shut down the cooperation Iran has received from Russian companies for its Shehab long-range missile program."

Indyk said President Boris Yeltsin has made what he called "strong, helpful comments" on the need to enforce export controls to deter Russian companies from selling missile technology to Iran.

Indyk said however, that the U.S. feels more needs to be done and will continue to pursue this issue "with the greatest vigor" with the new Russian government.

The White House has said President Bill Clinton will discuss Russia's missile technology sales to Iran at a bilateral meeting with Yeltsin scheduled for Sunday after a summit of leading industrial nations in the English town of Birmingham.

At the hearing Thursday, Indyk summarized U.S. policy towards Iran, saying : "our basic purpose is to persuade Iran that it cannot have it both ways: it cannot benefit from participation in the international community while at the same time going around threatening the interests of other states. It cannot improve its relations and standing in the West and in the Middle East while at the same time pursuing policies that threaten the peace and stability of a vital region."

He said the U.S. will continue to press for strengthened international cooperation to counter the threat of Iranian weapons of mass destruction, terrorism and to address the human rights situation in Iran. These are issues of fundamental import to the United States," Indyk said.