We have called this hearing today to explore the status and effectiveness of President Clinton's trade embargo against Iran; to understand the effects of international compliance with the Administration's effort to restrict trade with Iran; and S.1228, "The Iran Foreign Sanctions Act," a bill that I, along with Senators Inouye, Pressler, Faircloth, and Kohl have introduced several weeks ago.

I feel that the President made a good first step in banning U.S. trade with Iran, but I must say that more must be done. We need to have the cooperation of our allies in stopping all trade with Iran. Before the President's Executive Order our allies complained that as long as the U.S. was trading with Iran, they would also. Well, today the U.S. has in place an embargo on Iran and I would like to know where our allies stand on this issue now? Why do our allies still trade with Iran?

I would also like to know what the Administration is doing to stop this. We must convince our allies that their companies' help to Iran in developing its oil fields is unacceptable. My legislation will help to do that by placing sanctions on any foreign company that supplies Iran with equipment to extract petroleum and natural gas enabling Iran to obtain hard currency to fund the acquisition of a nuclear bomb and to continue its support for terrorism.

Our allies must understand that oil is Iran's lifeline. If we are going to persuade the Iranian regime that its behavior is unacceptable, the world must cut this lifeline.

Apparently, our allies have yet to join us in our embargo. In fact they seem to be playing along with the Iranian regime's plans to flaunt the embargo by agreeing to attend an international investment conference in November in Teheran. Hoping to sign contracts worth $6.5 billion, the Iranian regime hopes to take advantage of disagreement with the U.S. sanctions and 'thumb its nose' at the U.S. showing that Iran can survive and even thrive despite the trade ban. This is even more reason to pass my legislation.

I would like to put into the Record a letter to the Committee regarding this hearing from Lisa and Ilsa Klinghoffer, the daughters of Leon Klinghoffer, who was killed by terrorists aboard the Achille Lauro.

I look forward to hearing the testimony by our witnesses and I would ask Undersecretary Tarnoff to speak first.