US Embassy Warns Beijing on Iran Gas Deal

news410.jpgTEHRAN (Fars News Agency)- The Bush administration and Congress are warning that a proposed $16 billion deal between a Chinese company and Iran could trigger economic penalties under an American law aimed at starving Iran of funding for terrorism and nuclear weapons.

Officials at the American embassy in China delivered a demarche Saturday in Beijing. They demanded an explanation of the deal from Chinese government officials and warned them that it could trigger a 1996 law, the Iran Libya Sanctions Act. The law prohibits foreign firms that invest more than $10 million in Iran’s energy sector from raising capital in American financial markets.

The Democrat from California who will take over next week as chairman of the House International Relations Committee, Tom Lantos, said his panel will “closely examine” the deal next week to see if the sanctions would apply. The ranking Republican on that committee, Rep. Ileana Ros-Lehtinen, a Republican from Florida, said she will also be looking closely at the deal.

The Chinese company involved in the deal, the Chinese National Offshore Oil Corporation, or CNOOC, is state controlled but has some independent directors, including a former vice chairman of Goldman Sachs Asia. It is listed on the New York Stock Exchange. The company attracted American press attention in 2005, when it launched an $18.5 billion bid for the American oil company Unocal that it eventually withdrew amid congressional opposition.

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