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Enforcement of the Iran–Libya Sanctions Act and Increasing Security Threats from Iran

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Enforcement of the Iran–Libya Sanctions Act and Increasing Security Threats from Iran ENFORCEMENT OF THE IRAN–LIBYA SANCTIONS ACT AND INCREASING SECURITY THREATS FROM IRAN HEARING BEFORE THE SUBCOMMITTEE ON THE MIDDLE EAST AND CENTRAL ASIA OF THE COMMITTEE ON INTERNATIONAL RELATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS FIRST SESSION JUNE 25, 2003 Serial No. 108–59 Printed for the use of the Committee on International Relations ( Available via the World Wide Web: http://www.house.gov/international—relations U.S. GOVERNMENT PRINTING OFFICE 87–998PDF WASHINGTON : 2003 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 COMMITTEE ON INTERNATIONAL RELATIONS HENRY J. HYDE, Illinois, Chairman JAMES A. LEACH, Iowa TOM LANTOS, California DOUG BEREUTER, Nebraska HOWARD L. BERMAN, California CHRISTOPHER H. SMITH, New Jersey, GARY L. ACKERMAN, New York Vice Chairman ENI F.H. FALEOMAVAEGA, American DAN BURTON, Indiana Samoa ELTON GALLEGLY, California DONALD M. PAYNE, New Jersey ILEANA ROS-LEHTINEN, Florida ROBERT MENENDEZ, New Jersey CASS BALLENGER, North Carolina SHERROD BROWN, Ohio DANA ROHRABACHER, California BRAD SHERMAN, California EDWARD R. ROYCE, California ROBERT WEXLER, Florida PETER T. KING, New York ELIOT L. ENGEL, New York STEVE CHABOT, Ohio WILLIAM D. DELAHUNT, Massachusetts AMO HOUGHTON, New York GREGORY W. MEEKS, New York JOHN M. MCHUGH, New York BARBARA LEE, California THOMAS G. TANCREDO, Colorado JOSEPH CROWLEY, New York RON PAUL, Texas JOSEPH M. HOEFFEL, Pennsylvania NICK SMITH, Michigan EARL BLUMENAUER, Oregon JOSEPH R. PITTS, Pennsylvania SHELLEY BERKLEY, Nevada JEFF FLAKE, Arizona GRACE F. NAPOLITANO, California JO ANN DAVIS, Virginia ADAM B. SCHIFF, California MARK GREEN, Wisconsin DIANE E. WATSON, California JERRY WELLER, Illinois ADAM SMITH, Washington MIKE PENCE, Indiana BETTY MCCOLLUM, Minnesota THADDEUS G. MCCOTTER, Michigan CHRIS BELL, Texas WILLIAM J. JANKLOW, South Dakota KATHERINE HARRIS, Florida THOMAS E. MOONEY, SR., Staff Director/General Counsel ROBERT R. KING, Democratic Staff Director SUBCOMMITTEE ON THE MIDDLE EAST AND CENTRAL ASIA ILEANA ROS-LEHTINEN, Florida, Chairwoman STEVE CHABOT, Ohio GARY L. ACKERMAN, New York JOHN M. MCHUGH, New York HOWARD L. BERMAN, California NICK SMITH, Michigan ELIOT L. ENGEL, New York JO ANN DAVIS, Virginia JOSEPH CROWLEY, New York MIKE PENCE, Indiana JOSEPH M. HOEFFEL, Pennsylvania THADDEUS G. MCCOTTER, Michigan SHELLEY BERKLEY, Nevada WILLIAM J. JANKLOW, South Dakota ADAM B. SCHIFF, California JOSEPH R. PITTS, Pennsylvania CHRIS BELL, Texas KATHERINE HARRIS, Florida YLEEM POBLETE, Subcommittee Staff Director & Counsel GREGG RICKMAN, Professional Staff Member DAVID ADAMS, Democratic Professional Staff Member MATT ZWEIG, Staff Associate (II) C O N T E N T S Page WITNESSES Anna Borg, Deputy Assistant Secretary, Bureau of Economic and Business Affairs, U.S. Department of State ...................................................................... 8 Philo Dibble, Deputy Assistant Secretary, Bureau of Near Eastern Affairs, U.S. Department of State .................................................................................... 11 Charles English, Acting Deputy Assistant Secretary for European and Eur- asian Affairs, U.S. Department of State, testifying for Charles Ries, Acting Assistant Secretary, Bureau of European and Eurasian Affairs ..................... 14 Patrick Clawson, Ph.D., Deputy Director, The Washington Institute for Near East Policy ............................................................................................................ 23 Roger W. Robinson, CEO and President, Conflict Securities Advisory Group, Inc. ......................................................................................................................... 28 LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING The Honorable Ileana Ros-Lehtinen, a Representative in Congress from the State of Florida, and Chairwoman, Subcommittee on the Middle East and Central Asia: Prepared statement ...................................................................... 5 Anna Borg: Prepared statement ............................................................................. 9 Philo Dibble: Prepared statement .......................................................................... 13 Charles Ries: Prepared statement .......................................................................... 16 Patrick Clawson: Prepared statement ................................................................... 24 Roger W. Robinson: Prepared statement ............................................................... 30 APPENDIX The Honorable Nick Smith, a Representative in Congress from the State of Michigan: Prepared statement ........................................................................ 39 The Honorable Joseph R. Pitts, a Representative in Congress from the State of Pennsylvania: Prepared statement ................................................................. 40 Questions submitted for the record to Anna Borg, Deputy Assistant Secretary, Bureau of Economic and Business Affairs, U.S. Department of State, Philo Dibble, Deputy Assistant Secretary, Bureau of Near Eastern Affairs, U.S. Department of State, and Charles Ries, Acting Assistant Secretary, Bureau of European and Eurasian Affairs, by the Members of the Subcommittee on the Middle East and Central Asia, along with the responses ..................... 41 Question submitted for the record to Roger W. Robinson by the Honorable Ileana Ros-Lehtinen and Mr. Robinson’s response ........................................... 50 (III) ENFORCEMENT OF THE IRAN–LIBYA SANCTIONS ACT AND INCREASING SECURITY THREATS FROM IRAN WEDNESDAY, JUNE 25, 2003 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON THE MIDDLE EAST AND CENTRAL ASIA, COMMITTEE ON INTERNATIONAL RELATIONS, Washington, DC. The Subcommittee met, pursuant to call, at 2:40 p.m. in Room 2172, Rayburn House Office Building, Hon. Ileana Ros-Lehtinen [Chairwoman of the Subcommittee] presiding. Ms. ROS-LEHTINEN. The Subcommittee will come to order. I deep- ly, truly and sincerely apologize for being so late. I had to handle a bill on the Floor dealing with Israel and suicide bombings, and had it not been for the seriousness of the subject, I would have definitely allowed someone else to handle the bill for me. I thank the witnesses for your patience. I know that our time will be limited with you, but I will make some opening remarks and ask the other Members to also participate, and then we will hear from you and open it up for questions. I want to thank the Members of the Subcommittee for your pa- tience and for attending this first in a series of hearings that we will be holding on the implementation of the Iran-Libya Sanctions Act, otherwise known as ILSA. Today’s session will focus on Iran. As many of you know, ILSA was first passed by Congress in Au- gust 1996, and it was reauthorized on October 3, 2001. The bill places a ceiling of $20 million in investments in the oil sectors of both Iran and Libya before United States sanctions become pos- sible. The catalyst for the legislation was the mounting concern that investment in these countries’ oil fields would provide them with the funds necessary to expedite their development of weapons of mass destruction and expand their ability to fund, to train and to supply terrorist organizations around the world. Six years after the passage of ILSA, Iran, according to the State Department’s terrorism report, remained the most active state- sponsor of terrorism. The report continues describing how, ‘‘Iran provided Lebanese, Hezbollah and Palestinian rejection- ist groups, notably Hamas, the Palestine Islamic Jihad and the Popular Front for the Liberation of Palestine general com- mand, with funding, safe haven, training and weapons. Tehran also encouraged Hezbollah and the Palestine rejectionist (1) 2 groups to coordinate their planning and to escalate their ter- rorist activities against Israel.’’ The report continues, ‘‘Iran also provided support to extremist groups in Central Asia, Afghanistan and Iraq with ties to al-Qaeda, though less than that provided to the groups opposed to Israel.’’ This description is certainly proof of why Iran is deserving of being included in President Bush’s ‘‘axis of evil.’’ Iran’s terrorism must be paid for, and that could not be done without the sale of oil and natural gas that is abundant in that country. As such, we are reminded of the statement of former Under Secretary of State Peter Tarnoff, who declared at an October 11, 1995, hearing in the Senate Banking Committee regarding oil investment in Iran that, ‘‘A straight line links Iran’s oil income and its ability to spon- sor terrorism and build weapons of mass destruction, and any private company that helps Iran to expand its oil sector must accept that it is indirectly contributing to this menace.’’ It is precisely because of this connection that we have called this hearing today. In the aftermath of the deplorable attacks on Sep- tember 11, 2001, when we are focused on starving terrorists of funding, to quote President Bush, ‘‘We must not lose sight of the crucial need to vigorously pur- sue this same policy with respect to state-sponsors.’’ However, it appears that the use of ILSA as a vague and unfulfilled threat is seen by some as more important than the ac- tual application of it. As a result, the deterrent effect has been lost. It is not taken seriously by those
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