Clinton Administration Weighs Sanctions Against Total S.A. Over Iran Deal

Strategic Insights -

In a carefully calibrated diplomatic move, U.S. Undersecretary of State for Political Affairs Thomas Pickering is understood to have briefed French officials that the Clinton administration is likely to impose sanctions on Total S.A., a French energy company, over its involvement in the development of Iran's South Pars gas and condensate field. The decision is being closely watched, as it could have significant implications for U.S. relations with its European allies. The State Department is moving cautiously, aware that imposing sanctions could lead to disagreements among key policy-makers and potentially harm the administration's efforts to improve relations with Iran.

Key Takeaways:

  • The Clinton administration is likely to impose sanctions on Total S.A. under the Iran/Libya Sanctions Act (ILSA) due to its involvement in the development of Iran's South Pars gas and condensate field.
  • The administration has until January 26 to decide on imposing sanctions, as they have two 90-day periods in which to enter into discussions with the company to cancel their commitments or take measures against Tehran to qualify for waivers.
  • Significant disagreements exist within the administration over the merit of imposing a secondary economic boycott on non-U.S. companies, with officials weighing the potential impact on U.S. relations with its European allies.
  • Undersecretary of State for Economic Affairs Stuart Eisenstat has taken the party line in supporting sanctions, despite his reported personal objection to ILSA sanctions.
  • One expert on Iran sees no contradiction in Washington's implementing sanctions under ILSA while pursuing a new relationship with Tehran, stating that "dialogue simultaneously with sanctions is perfectly conceivable."

Statistics:

  • The Iran/Libya Sanctions Act (ILSA) provides the U.S. secretary of state with two 90-day periods to enter into discussions with companies deemed sanctionable to persuade them to cancel their commitments or take measures against Tehran to qualify for waivers.
  • According to one administration source, the report determining whether the South Pars deal is sanctionable is expected to be finalized by early January.
  • The Clinton administration has until January 26 to decide on imposing sanctions on Total S.A.
  • The ILSA sanctions debate is complicated by significant disagreements among key policy-makers within the administration over the merit of imposing a secondary economic boycott on non-U.S. companies.

Sources:

  • TOD (12-12-97, p.1)
  • State Department officials
  • Undersecretary of State for Economic Affairs Stuart Eisenstat