The Cable

Kirk and Menendez join forces on new Iran sanctions proposal

Senate Democrats and Republicans have agreed on a way forward regarding new sanctions on the Central Bank of Iran (CBI) that would impose crippling sanctions on the Iranian economy, with an eye toward preventing a catastrophic consequence for the world oil markets.

Last night, Sens. Mark Kirk (R-IL) and Robert Menendez (D-NJ) filed a new amendment to the defense policy bill that represents a compromise of the two separate amendments each had filed last week. The new bipartisan language would build upon the administration's announcement last week that it was naming the CBI as a  "primary money laundering concern"  under the Patriot Act and go further than President Barack Obama's Nov. 19 executive order expanding sanctions on Iran's petroleum sector. The Senate amendment would add to that by barring any U.S. financial institution from doing business with any foreign financial institution that knowingly conducted any significant financial transaction with the CBI.

The Kirk-Menendez amendment got unanimous consent in the Senate on Monday for consideration on the defense bill, which is on the floor this week. It will get a vote, probably before Dec. 2, and is expected to pass overwhelmingly. The administration has resisted any congressional efforts to force the imposition of Iran sanctions ahead of its own schedule, but Obama will be hard pressed to veto the must-pass defense bill over the issue.

"The amendment is hard-hitting, responsible and, most importantly, completely bipartisan.  It'll have an enormous impact on the Iranian economy without hurting our own while providing the administration additional diplomatic leverage," a GOP Senate aide told The Cable today. "Last week the administration told the world that the Central Bank of Iran was a terrorist bank; I think they'd have to agree this amendment is an appropriate way of dealing with a terrorist bank."

The main concern with Kirk's original amendment was that it would have forced measures against central banks in other countries that do oil business with the CBI. The compromise language softens that requirement by giving a six-month grace period for petroleum-related sanctions to go into effect. And after six months, the penalties against central banks in other countries could be waived by the president for another six months if the Energy Information Agency reports there's not enough non-Iranian oil supply in the market, or if specific countries are showing strong efforts to move away from Iranian oil purchases.

The amendment would also require the president to initiate a "multilateral diplomacy initiative" aimed at convincing other countries to stop purchasing oil from Iran.

Read a best-guess timeline of the implementation of the Kirk-Menendez sanctions, compiled as a memo by Hill aides and given to The Cable, after the jump:

 

Estimated Timeline of Menendez-Kirk Central Bank of Iran Amendment

January 1, 2012: Estimated date of enactment of National Defense Authorization Act

March 1, 2012: Non-petroleum related transactions with the Central Bank of Iran subject to sanctions (national security waivers possible -- 120 day extension)

March 1, 2012: First report from Energy Information Agency on world supply of non-Iranian oil

April 1, 2012: Presidential determination on whether the price and supply of petroleum and petroleum products from non-Iranian suppliers is sufficient to allow purchasers to significantly reduce their purchases from Iran.

May 1, 2012: Report from Energy Information Agency on world supply of non-Iranian oil

July 1, 2012: Report from Energy Information Agency on world supply of non-Iranian oil

July 1, 2012: If waivers issued in March, non-petroleum related transactions with the Central Bank of Iran subject to sanctions (national security waivers possible -- 120 day extension)

July 1, 2012: Petroleum-related transactions with the Central Bank of Iran subject to sanctions only if the President determines that there is sufficient alternative supply on the world markets and the country of jurisdiction over the financial institution has not significantly reduced its purchases of Iranian oil.  (negative determination possible -- 180 day extension)

September 1, 2012: Report from Energy Information Agency on world supply of non-Iranian oil

October 1, 2012: Presidential determination on whether the price and supply of petroleum and petroleum products from non-Iranian suppliers is sufficient to allow purchasers to significantly reduce their purchases from Iran.

November 1, 2012: Report from Energy Information Agency on world supply of non-Iranian oil

November 1, 2012: If waivers issued in July, non-petroleum related transactions with the Central Bank of Iran subject to sanctions (national security waivers possible -- 120 day extension)

January 1, 2013: Report from Energy Information Agency on world supply of non-Iranian oil

January 1, 2013: If President's July determination exempted financial institutions engaged in petroleum-related transactions, President must again make determination that there is sufficient alternative supply on the world markets and the country of jurisdiction over the financial institution has not significantly reduced its purchases of Iranian oil for sanctions to be imposed.  (negative determination possible -- 180 day extension)

The Cable

Biden in Baghdad, then off to Turkey and Greece

Vice President Joe Biden is in Baghdad right now on a surprise visit before he travels this weekend to Turkey and Greece.

Biden landed on Tuesday afternoon in Baghdad and is expected to hold meetings with top Iraqi officials about the future of the U.S.-Iraqi partnership. He will stay for two days, multiple news outlets reported.

"Vice President Biden has arrived in Baghdad, Iraq," his office said in a release. "While there, the Vice President will co-chair a meeting of the U.S.-Iraq Higher Coordinating Committee. He will also meet with Prime Minister Nouri al-Maliki, President Jalal Talabani, Speaker Osama al-Nujaifi, and other political leaders. The Vice President will also participate in, and give remarks at, an event to commemorate the sacrifices and accomplishments of U.S. and Iraqi troops."

On Friday, Dec. 2, Biden will arrive in Ankara, where he'll have meetings with Turkish President Abdullah Gul and Prime Minister Recep Tayyip Erdogan and lay a wreath at the Ataturk Mausoleum before continuing on to Istanbul. In Istanbul, Biden will attend a global entrepreneurship summit hosted by Erdogan.

National Security Advisor to the Vice President Tony Blinken told reporters on Monday that he expects Biden to discuss U.S. assistance in fighting the Kurdistan Workers' Party (PKK), which has been attacking Turkish forces recently.

"The PKK is a common enemy of Turkey, the United States, and Iraq, and we expect to focus on that," Blinken said.

Blinken also said Biden hopes to discuss the situation in Syria, the upcoming meeting of Cypriot leaders in January, the war in Afghanistan, "and the prospects for progress in normalizing relations between Turkey and Armenia." He'll also meet with the Ecumenical Patriarch Bartholomew, the head of the Orthodox Christian Church.

Regarding Turkey's deteriorating relationship with Israel, Blinken said, "I suspect that that will come up."

"It pains us to see the two of them at odds because they're both such close partners of the United States," Blinken said. "And the bottom line is that improved relations between Turkey and Israel would be good for Turkey, good for Israel, and good for the United States and indeed good for the region and the world so that's something we will continue to encourage."

Biden will then travel to Athens on Monday, Dec. 5, where he will hold the administration's first meeting with new Prime Minister Lucas Papademos. He'll also meet with President Karolos Papoulias, as well as former Prime Minister George Papandreou, who heads the largest party in Parliament, and Antonio Samaras, who heads the second largest party.

But the Greeks shouldn't expect any direct financial assistance as they struggle with their fiscal crisis.

"I think the U.S. very much recognizes the sacrifices being made by the Greek people as they pursue this reform process and view the fiscal and structural reforms that have been agreed on with the European partners and with the IMF as critical," said Deputy National Security Advisor for International Economic Affairs Michael Froman. "On the economic situation, the Vice President will be supportive of the overall reform effort and the package of measures that have been put in place by the European partners and by the IMF."

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