WASHINGTON, May 21 (UPI) -- For the last decade the U.S. administration has brandished the 1996 Iran-Libya Sanctions Act to isolate Iran and punish naughty Western companies seeking a foothold in Iran's hydrocarbon sector. Since the 1979 Iranian Revolution overthrew Shah Mohammad Reza Pahlavi, it has been a core tenet of U.S. foreign policy to contain the Islamic Republic of Iran, and ILSA is the most formidable weapon in Washington's arsenal.

Now Iran is proposing to construct a massive port facility in Bandar-e Anzali ("Anzali port") on its northern Caspian shore, a development that may provide a mortal blow to the ILSA sanctions regime, at least for the former Soviet republics of the Caucasus region and Central Asia. Those with a sense of historical irony might note that prior to the Islamic Revolution, Bandar-e Anzali was known as Bandar-e Pahlavi ("Pahlavi port").

The first U.S. sanctions against Iran followed the 1979 hostage crisis, when Washington froze about $12 billion in Iranian assets. Extending Washington's reach, 17 years later ILSA threatened foreign nations and companies with sanctions if they invested more than $20 million in developing Iran's energy resources, provoking protests in particular from the European Union. Some EU members note Washington's "double standard" as U.S. foreign policy persistently strives to undercut the Arab League's boycott of Israel while promoting ILSA.

Tehran in turn has sought to escape ILSA's clutches by wooing foreign companies with enticing investment opportunities, but, playing on its geography, is now reaching out to Kazakhstan and Turkmenistan in particular by offering its territory as a duty-free transit corridor for their exports, a siren song that undoubtedly will prove as alluring in Almaty and Ashgabat as it is discordant in Washington. As an added incentive, Tehran will make Bandar-e Anzali a free trade and industrial zone, which Kazakhstan and Turkmenistan, long subjected to punitive energy and goods transit tariffs by Russia, will find an additional incentive.

The development project is squarely aimed at Iran's Caspian neighbors; in telling journalists that Tehran intends to construct the Bandar-e Anzali Port Free Trade and Industrial Zone, the project's managing director, Kamal Firouzabadi said: "Countries try various social, political and economic methods to reach economic development. One of these ways is enriching free trade zones," adding, "Among our other projects, I can refer to studies for constructing roads and transport routes to this zone. This port is to be constructed through investing approximately $435 million." Construction is slated to begin early next year.