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. Last Updated: 07/27/2016

Russian Arms Firms Face U.S. Sanctions




The sanctions would be the first imposed on Russian firms


for helping Iran.


WASHINGTON -- U.S. President Bill Clinton's administration has pledged to impose trade sanctions on nine Russian companies and institutions that have been accused of helping Iran with its missile program.


The U.S. action taken Wednesday coincided with the announcement by a Russian commission, headed by Economics Minister Yakov Urinson, of an investigation into the nine enterprises which are suspected of violating new export control laws worked out in cooperation with the United States. Nikolai Kovalyov, the head of the Russian Federal Security Service, also held talks Thursday in Israel on stopping the spread of technology to Iran.


The U.S. trade sanctions would be the first imposed by the Clinton administration on Russian companies helping Iran, though American assistance to seven of the nine companies had already been suspended.


The Russian assistance to Iran was largely in the form of research grants and scientific partnership programs originally designed to keep former Soviet scientists working after the collapse of the Soviet Union and to make sure they would not emigrate to help states like Iran with their weapons programs.


The administration's announcement was timed to head off a congressional effort to override Clinton's veto of a bill that would impose sanctions on any company believed -- but not proven -- to be aiding Iran's missile, nuclear or chemical weapons programs.


The House put off its vote on overriding the Clinton veto, which was scheduled for Wednesday. While the House is expected to vote to override, administration officials say they are working to sustain the veto in the Senate.


The bill, the Iran Missile Proliferation Sanctions Act, was passed overwhelmingly by both houses and would affect Russian and Chinese companies the hardest. It was strongly supported by the pro-Israel lobby, the American Israel Public Affairs Committee.


Clinton vetoed the bill for numerous reasons, officials say. First, they feared it would create a nationalist backlash in Russia and make it harder to win Moscow's cooperation on halting these exports. Second, the bill calls for sanctions on the basis of "credible evidence," a low threshold of proof, and allows the president to waive the sanctions only for reasons of national security, a high threshold for waiver.


James Rubin, the State Department spokesman, said: "The standard of evidence is far too low. We constantly see evidence that is credible but just turns out to be wrong. That's not a serious way to do business in the international community."


Vice President Al Gore, who is about to travel to Moscow, on Wednesday praised the Russian decision to investigate the companies.


Gore, who has been promoting U.S.-Russian scientific and space cooperation, called the Russian move on Wednesday "an encouraging step forward."


The trade restrictions will include bans on exports and imports and financial transactions, the officials said, which are more sweeping penalties than those called for under the bill Clinton vetoed.


"This is designed to send a strong message to other Russian companies that want to deal with Iran that the U.S. is prepared to inflict economic pain," an official said.


But officials said they did not believe the new restrictions, announced in an apparent hurry, would affect U.S.-Russian cooperation on the International Space Station or plans to launch American satellites on Russian rockets. One of the entities sanctioned Wednesday is Glavkosmos, which is the Russian equivalent of the National Aeronautics and Space Administration.


Officials could not provide a figure on the amount of trade the nine enterprises have with the United States.


Asked if the United States was satisfied with the actions of the Russian government, Clinton's spokesman, Mike McCurry, said: "We believe that those steps indicate the seriousness to which the Russian Federation has taken the expression of concern we've made on certain technology transfers. They involve a lot of the premier Russian enterprises that have been involved in technology transfers and they could be very significant."