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U.S. allies, Iran blast sanctions bill

August 5, 1996
Web posted at: 3:45 p.m. EDT (1945 GMT)

LONDON (CNN) -- President Clinton drew fire Monday from both Iran and U.S. allies over his signing of a bill that slaps sanctions on companies investing in Iranian and Libyan energy resources.

Clinton signs the bill

The Iran-Libya Sanctions Act of 1996 is designed to punish companies that help support the two countries the U.S. believes are the strongest supporters of international terrorism.

The Iranians scoffed at the bill, questioning the motives behind it and saying the U.S. lacked the international support to make the sanctions work.

"The world community is aware of Clinton's intentions to create a monopoly in dominance over energy resources and in world markets and does not believe in the White House's propaganda in combating terrorism," said Iranian Foreign Ministry spokesman Mahmoud Mahammadi.

Tensions between Iran and the United States had already risen over the weekend, after Defense Secretary William Perry speculated that a Saudi probe into a June truck bombing that killed 19 U.S. airmen could reveal an Iranian connection.

Members of the European union

European Union members roundly criticized the unilateral action of the U.S., lending credence to the Iranian claims that the U.S. did not have international support. Yves Doutriaux, a French Foreign Ministry spokesman, said his country opposed any action that affected European trade.

"We will consult our European partners in order to discuss about appropriate measures to be taken in response," said Yves Doutriaux, a French Foreign Ministry spokesman.

France warned that the European Union would retaliate if the measure is implemented, and analysts said Europe may take a hard look at U.S. companies seeking contracts in Europe.

But Michael Hodges of the London School of Economics said such retaliation could backfire on the Europeans, who are taking a strong position on principle.

"The Europeans are fighting on a very important point of principle," he said, "which is the U.S. shouldn't make rules for the entire international community." (234K AIFF or WAV sound)icon

The Europeans agree there is a need to combat terrorism, but say the sanctions are not the way to do it. Europe says a better approach would for the U.S. to work through already-existing bodies, such as the United Nations, NATO, and the G-7 group of industrialized nations.

Hodges

"Ultimately it will not have an impact," Hodges said. "(The sanctions) will be counterproductive because (they) will degrade the bonds of cooperation that exist between the U.S, Europeans, Japanese and other major trading and investing countries around world."

Iran and Libya do not constitute major markets for Europe as a whole, but some Mediterranean countries have a substantial oil trade with them.

Correspondent Margaret Lowrie and Reuters contributed to this report.

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