Clinton Vetoes Sanctions Bill; Sets, Imposes New Sanctions on Russia

Howard Diamond

HOPING TO avert an override of President Bill Clinton's June 23 veto of a bill to sanction entities aiding Iran's ballistic missile program, the White House announced on July 15 that it would impose new proliferation-related sanctions on seven Russian firms for transfers to Iran and other countries. The U.S. decision followed a Russian announcement earlier that day naming nine companies to be investigated (including the seven targeted for sanctions) by a new Export Control Commission for violations of Russian export control laws. Following the U.S. and Russian announcements, the House of Representatives postponed an override vote scheduled for July 17. Congress will reconsider a vote when it returns from summer recess the second week of September.

The Clinton administration has been seeking ways to cut off the flow of missile technology from Russian firms to Iran since January 1997. Russia's latest attempt to strengthen its export control system came on July 19, when President Boris Yeltsin signed into law new regulations on military-technical cooperation with foreign states. Under pressure from the United States, Moscow adopted a "catch-all" decree in January to regulate exports of all technology usable in weapons of mass destruction. Two additional presidential orders followed in May requiring Russian exporters to determine the end-use of their products, and to give overall regulatory authority for the Russian commercial space industry to the Russian Space Agency. Each of the Russian decrees occurred just ahead of scheduled congressional action on the Iran Missile Proliferation Sanctions Act, which administration officials repeatedly warned would be vetoed.

After several delays at the administration's request, the Senate approved the sanctions bill on May 22. (See ACT, May 1998.) On June 9, the House adopted the Senate's version of the bill, which also contained the implementing legislation for U.S. obligations under the Chemical Weapons Convention. Both chambers adopted the legislation by overwhelming—ostensibly veto-proof—margins (392-22 in the House and 90-4 in the Senate).

In his June 24 veto message to Congress, Clinton asserted that the bill set too low an evidentiary standard for imposing sanctions and could result in indiscriminate punishment, thus diminishing U.S. credibility in seeking cooperation on non-proliferation from other governments. The president pointed out that the automatic application of sanctions called for in the bill would hurt U.S. diplomatic efforts to work with supplier states, particularly Russia, on improving their own export-enforcement mechanisms. Clinton also cited steps that have been taken by Moscow as evidence of the success of the administration's approach that would be jeopardized by the proposed legislation.

On July 28, the administration announced the issuance of a new executive order (No. 13094) that broadens the range of both sanctionable activities and of sanctions. The new order, which amends a 1994 executive order (No. 12938) that authorized the imposition of sanctions for proliferation of chemical and biological weapons technology, now covers technology for nuclear weapons and ballistic missiles capable of delivering weapons of mass destruction. The amended order will no longer require a finding that a foreign person "knowingly and materially" contributed to sanctionable activity. Now, only a material contribution is necessary to invoke sanctions, dropping the standard that exporters have knowledge of the end-use of their products. In addition, the new order allows the imposition of sanctions in the event of an attempted transfer, instead of only when a transfer has occurred. The amended order also expands the list of possible sanctions by including a ban on U.S. government assistance to the entity.

In his July 28 message to Congress on the new order, Clinton said the amendment gives the United States "greater flexibility and discretion in deciding how and to what extent" to impose penalties. Under the new guidelines, the secretary of state will take into account "the likely effectiveness of such measures in furthering the interests of the United States and the costs and benefits of such measures" when deciding whether to impose sanctions.

Utilizing the authority of the new executive order (which became effective July 29), a July 29 revision of the Commerce Department's "Entity List" (naming foreign end-users involved in proliferation activities), and provisions of the Arms Export Control Act and the International Traffic in Arms Regulations, the Clinton administration imposed sanctions on Baltic State Technical University, Europalace 2000, Glavkosmos, Grafit, INOR Scientific Center, MOSO Company, and Polyus Scientific Production Association. Each is barred indefinitely from all exports to the United States; all U.S. government assistance, procurement and contracts (including termination of all existing contracts and assistance); and importation of all defense items or defense services. The firms have also been added to the Entity List, requiring them to obtain a license for all products (not just dual-use and Munitions List items) imported from the United States—with a presumption of denial for all licenses. The two firms that are under investigation by Moscow but have not been sanctioned by Washington are the Tikhomirov Institute and the Komintern plant in Novosibirsk.


Iran Tests Shahab-3

On July 22—only days after Clinton announced his new sanctions policy—Iran flight tested its 1,300-kilometer-range Shahab-3 missile. The Shahab-3 is a liquid-fueled road-mobile missile that, according to the State Department, is "largely derived" from North Korean technology. Based on Pyongyang's 1,000–1,300-kilometer-range Nodong missile, the Shahab-3's rapid development has been widely ascribed to illicit transfers of Russian technology, materials and expertise. Iranian Defense Minister Rear-Admiral Ali Shamkhani, however, was quoted by Agence France-Presse on July 25 asserting the Shahab-3 was produced "entirely by Iran" and "without assistance." Iran is also believed to be developing a 2,000-kilometer-range missile known as the Shahab-4, which is believed to incorporate technology from the Soviet SS-4.

If deployed, the Shahab-3 would give Tehran the ability to strike all of Israel and portions of Russia, Turkey and Saudi Arabia. Iran is already capable of producing Scud-B and -C missiles, which have ranges of 300 kilometers and 500 kilometers, respectively. Describing the test as a "worrisome development," Defense Department spokesman Kenneth Bacon said July 23 that "this was one test. It does not give them a capability." But coming on the heels of the Rumsfeld Commission report on the ballistic missile threat to the United States, the Iranian test is likely to energize missile defense advocates and undermine efforts to defend the president's veto.