1997 Congressional Hearings
Special Weapons
Nuclear, Chemical, Biological and Missile

Statement of William C. Ramsay

Deputy Assistant Secretary of State
for Energy, Sanctions and Commodities

Before the Senate Banking Committee

October 30, 1997

Mr. Chairman and Members of the Committee:

Thank you for your invitation to appear today before this Committee. On behalf of the State Department, I would like to make the following statement with regard to implementation of the Iran and Libya Sanctions Act (ILSA).

ILSA has a very clear objective: to change Iran's unacceptable international behavior. I think it is accurate to say that no nation's behavior poses a greater threat to U.S. political and security interests than that of Iran. Iran's support for terrorism, its efforts to obtain weapons of mass destruction and the means to deliver them, and its efforts to disrupt the peace process in the Middle East are intolerable. Despite the recent attention given to the election of a new Iranian government, we have seen no evidence of change in Iranian practices.

We take very seriously our responsibility to implement this law. As you know, we are actively investigating two ILSA cases involving reports of foreign investments in two Iranian energy projects: South Pars, involving the French company Total, the Russian company Gazprom, and the Malaysian company Petronas; and Balal, involving the Canadian company Bow Valley and the Indonesian company Bakrie. We have made no decisions yet whether these deals involve sanctionable activity. We are moving expeditiously to ensure that we have all the facts in both cases to enable us to make the right decisions and apply the law correctly. We will take appropriate action once our deliberations are complete. Sanctions are a very real option if we determine that sanctionable activity has occurred.

I regret that I cannot say more about the South Pars and Balal cases at this time. But I can assure you that we are vigorously pursuing our investigations. I have just returned from Paris and Moscow, where I had the opportunity to explain fully the Administration's determination to implement the law. I will soon travel to Kuala Lumpur, Jakarta, and Ottawa for similar conversations and to develop a better understanding of these deals. We will provide more detailed briefings to members of Congress as developments progress.

We are not prepared to carry on business as usual with the Iranian regime, and we feel very strongly that our friends and allies should not do so either. We have been working for years to develop a multilateral consensus on inhibiting Iran's support for international terrorism and acquisition of weapons of mass destruction. These efforts have met with some success. Examples include the Wassenaar Arrangement, the Missile Technology Control Regime, and the Nuclear Suppliers' Group. Furthermore, we have been successful in significantly narrowing Russia's nuclear cooperation with Iran, and are engaged in a serious, high-level effort to stop Russian cooperation with Iran's ballistic missile program.

But other countries have resisted trade and investment sanctions that impose economic pressure on Iran. And even in terms of weapons of mass destruction and terrorism we believe that more needs to be done. We therefore are committed to continue working with our European allies, with the Russians and with other countries to build an effective multilateral coalition that would increase our cooperation to inhibit Iran's objectionable behavior. This has been a long-standing policy of the United States, and it is a step ILSA encourages us to take.

Thank you.

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