US senate bill may hit Reliance over ties with Iran

In an 'us or them' ultimatum, as many as 25 US senators cutting across party lines have moved a bill to penalise companies doing business with Iran, including India's Reliance Industries Ltd. The bill, introduced in the Senate on Tuesday, seeks to authorise president Obama to impose stronger penalties on such firms, including a ban on conducting business in the US.

Aimed at curbing Iran's nuclear ambitions, which have long disturbed the US political establishment, the bill backed by one-fourth of the Senate particularly targets companies selling petrol or other refined petroleum products to Iran. Although Iran is rich in oil, its capacity to turn the resource into the gasoline and diesel fuel is limited, and the lawmakers estimate that up to 40 per cent of Iran's petrol is imported.  

"We know who these companies are - Shell, Vitol, BP and Reliance - and we need to give them a choice: you can do business with Iran's $250 billion economy or our $13 trillion economy, but not both," said senator Jon Kyl, who was a part of the coalition of 25 senators that introduced the bill.

"The new sanctions include everything up to and including prohibiting these entities from doing business in the United States," Democratic senator Evan Bayh of Indiana, another of the bill's co-sponsors, told reporters.

The proposed legislation comes within days of another resolution introduced in the House of Representatives on 21 April to enhance the Obama administration's diplomatic efforts with respect to Iran by expanding economic sanctions against the country.

Last week, secretary of state Hillary Clinton threatened "crippling" sanctions against Iran if it did not end its nuclear programme. However, Iran has consistently denied that its programme is aimed at making nuclear weapons, but said it will not bow to pressure.

During last year's campaign Obama expressed interest in using Iran's dependence on imports of refined petroleum products as leverage in the nuclear standoff. But lawmakers say that under current law his powers to do that are limited.

"There are already sanctions that can be applied to companies that do business with Iran in different circumstances. This is stronger and more precise," Kyl said.