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July 8, 1997

H.R. 748 - Prohibition on Financial Transactions with Countries
Supporting Terrorism Act
(McCollum (R) Florida and two cosponsors)

The Administration opposes House passage of H.R. 748. The bill would deny the Executive branch the discretion to determine, on a case-by-case basis, the most appropriate and effective sanctions to impose against governments that support terrorism.

H.R. 748 would seriously infringe on the President's ability to conduct foreign policy. It would seriously impede the Executive branch's ability to use sanctions to respond quickly and flexibly to unforeseeable developments and international events. The loss of flexibility to tailor sanctions to unique circumstances and situations would undermine the usefulness of sanctions as a U.S. foreign policy tool needed to defend U.S. national security and economic interests. No list can adequately address the circumstances that could arise in U.S. relations with terrorist regimes.

Current sanctions programs reflect foreign policies crafted over extended periods in response to unique developments in each target country. H.R. 748 would make it impossible for the Administration to respond to changing foreign policy conditions. The bill would interfere with the United States' ability to implement mandatory United Nations Security Council Resolutions that impose sanctions. The ramifications of this bill have not been adequately considered, particularly with respect to its impact on other provisions of law, on binding international obligations, and on the overall interests of the United States. For example, H.R. 748 would eliminate mandated exceptions to sanctions as contained in existing laws, including the Cuban Democracy Act, the Cuban Liberty and Democratic Solidarity Act, the Trading with the Enemy Act, and the International Emergency Economic Powers Act. These Acts authorize or exempt, when appropriate, various financial transactions from sanctions. In addition, H.R. 748 could undermine the Administration's ability to serve as an effective intermediary in the Middle East peace process, and would hinder efforts to gain Syria's cooperation on specific terrorism-related problems.

The Administration currently has sufficient statutory authority to administer an effective sanctions program against terrorist countries. Comprehensive embargoes are already being applied to Cuba, Iran, Iraq, North Korea, and Libya, and further measures against Sudan pursuant to existing statutory authorities are being considered at this time.

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