By Emily Cadei, CQ Staff

The lead sponsors of Iran sanctions bills in the House and the Senate are in intense negotiations to draft consensus legislation that could be introduced as early as this week, Hill sources confirm.

The goal, which all parties say is within reach, is to get a new, stifling package of sanctions to the president’s desk before Congress departs for its August recess.

Senate Banking Chairman Tim Johnson, D-S.D., and House Foreign Affairs Chairwoman Ileana Ros-Lehtinen, R-Fla., have been tapped by their respective chambers to hash out a compromise between the sanctions legislation that the Senate passed in May (S 2101) and a more stringent House bill passed last December (HR 1905).

In addition, sanctions hawks from both chambers and both parties are pushing to include additional provisions to crack down on Iran’s energy sector, financial institutions and shipping lines that were not in either original bill. Backers of those provisions, many of which have been introduced as stand-alone bills over the past year, include Sens. Robert Menendez, D-N.J.; Mark Steven Kirk, R-Ill.; Jon Kyl, R-Ariz.; and Joseph I. Lieberman, I-Conn.; as well as Reps. Robert Dold, R-Ill.; Brad Sherman, D-Calif.; Howard L. Berman, D-Calif.; and Ted Deutch, D-Fla.

The focus of negotiations has largely been on these additional measures, which would have the collective impact of almost totally cutting Iran off from the world economy, something the West has already begun to do through sanctions on Iranian oil sales that went into force at the beginning of the month.

“What Congress is trying to do now is send a clear message that the U.S. government has declared economic war on the regime” in Tehran, said Mark Dubowitz, the executive director of the pro-sanctions think tank Foundation for Defense of Democracies.

With the collapse of another round of multilateral negotiations aimed at convincing Iran’s mullahs to halt their nuclear program, many in and out of Congress believe this is the West’s last chance to force a change in Tehran’s calculations. As Dubowitz noted, Iran has managed to continue developing its nuclear program — albeit more slowly — despite intensified Western pressure and a sophisticated sabotage campaign.

Energy Sector Targeted

Among the provisions that stand a good chance of being added to the final bill are ones that would essentially blacklist Iran’s entire energy sector, declaring it a “zone of primary proliferation concern,” as proposed in a bill (HR 4317) Deutch and Dold introduced in March.

While existing sanctions target companies doing business with various elements of the energy sector, these provisions would prohibit all dealings with the state-run National Iranian Oil Company (NIOC) and its subsidiaries, as well as other companies involved in energy production, transport, insurance, trade and financing, closing loopholes in existing sanctions along the way.

Separately, Menendez is pushing for provisions that would target Iran’s shipping industry and the National Iranian Tanker Co. (NITC), in particular. The White House designated the state-run oil company and shipping line as a sanctioned entity in an executive order earlier this month, barring U.S. companies from doing business with them. The proposed legislative measures would expand the NIOC and NITC sanctions to third-party companies based anywhere in the world, which would be punished for any business they do with Iran’s main oil and shipping companies.

Others are looking to increase pressure on Iranian financial institutions, extending to other banks existing sanctions barring transactions with Iran’s central bank. While hawks are pushing for a wholesale prohibition on Iran’s banking sector, it’s more likely that the final bill will instead list additional sanctioned institutions, including, for example, other state-owned banks.

Human rights legislation included in both original bills is likely to be strengthened in the final bill, with a particular focus on Iranian technology and telecommunications companies that have been used to suppress dissent within the country. Also under consideration is a provision on satellites to deter Tehran from jamming the signals of Persian-language media aired by other countries.