House Financial Services Committee Passes Iran Sanctions Enabling Bill
The House Financial Services Committee today passed H.R. 1327, the Iran Sanctions Enabling Act of 2009, which would empower Americans to apply economic pressure on the Iranian regime.
The legislation enables state and local governments to divest their public pension funds from companies investing more than $20 million in Iran’s energy sector. It also removes legal barriers to allow mutual fund and corporate pension fund managers to cut ties with these companies. H.R. 1327 now moves to the House of Representatives for consideration.
“This bill gives Americans the power to speak out through their investment decisions against the unacceptable behavior of the Iranian government,” said Financial Services Committee Chairman Barney Frank. “There are evident signs of distress in Iran’s economy, and divestment has the potential to increase political pressure on the regime to give up its nuclear ambitions.”
Lawmakers have become increasingly concerned about Iran, and frustrations surrounding developments in the country have led to calls for increased economic pressure. Companies based in the U.S. are already barred from doing business with Iran, but these sanctions do not extend to foreign companies, which operate there legally. Iran needs substantial new foreign capital investment to modernize its petroleum infrastructure, meet growing domestic energy demands, and maintain its revenue-producing oil exports.
Patterned after legislation enacted last Congress to enable divestment from firms investing in certain sectors in Sudan, H.R. 1327 provides federal authority to state and local governments to divest their assets from, or prohibit investment of their assets in, any company that:
The legislation also includes a sunset provision which would terminate the Act 30 days after the President determines and certifies to Congress that Iran has ceased its support for terrorism and is no longer designated by the U.S. as a state sponsor of terrorism, or has ceased the pursuit of nuclear, biological and chemical weapons.