Members of the House and Senate are moving forward with new legislation that would allow state and local governments to deny business licenses to any company that invests in Iran’s energy sector, the Washington Free Beacon has learned.
The soon-to-be-announced legislation would "prohibit the investment of assets of the state or local government in a person that engages in investment activities in the energy sector of Iran," according to a copy of the bill obtained by WFB.
Current law only provides federal authority to divest public funds from businesses that deal with Iran.
The new legislation, however, would go further, "permitting states like California to block insurance companies licenses to operate if they continue such investments," said a senior congressional aide with knowledge of the legislation. "The measure, pushed by Senator Mark Kirk (R., Ill.) and Rep. Brad Sherman (D., Calif.), could be offered as an amendment to the Senate Iran sanctions bill as early as next week."
"This is an important provision because it will allow us to enlist greater efforts from states and municipalities in the efforts to economically isolate Iran," said a source in Sherman’s office, which played a principle role in crafting the legislation.
Previously, state and local governments could only divest public funds from companies that invest in Iran’s energy sector. The bill would authorize the states to deny business licenses to such companies, as well.
An aide for Kirk confirmed that such legislation is in the works, but declined to provide further details.
The expanded effort would effectively cover all Iranian financial institutions, some of which were immune from previous rounds of sanctions. All foreign financial institutions would be required to disclose their dealings with the Iranian financial sector.
"It is at the state and local level where Iranian sanctions rubber meets the road," explained Mark Dubowitz, executive director of the Foundation for Defense of Democracies. "This bill gives state and local authorities the federal protection to" fully divest entities from Iran. "Only the possibility of losing access to the US market will change the business calculus of Iran's business partners."
The new bill comes on the heels of another Iran sanctions measure that aims to further cripple Iran’s financial sector. Dubbed the SWIFT sanctions, the measure aims to expand "current efforts to sanction the Society for Worldwide Interbank Financial Telecommunication (SWIFT) unless it discontinue the practice of allowing Iranian banks to utilize its communications services," according to a statement released by Rep. Brad Sherman, the legislation’s lead sponsor.