Banking industry and regulatory officials are warning of severe disruptions in international credit markets if a proposed anti- terrorism bill becomes law.

The legislation, pending in the House of Representatives, would bar U.S. banks from lending more than $10 million a year to foreign businesses that invest in the development of petroleum or natural gas facilities in Iran or Libya.

Critics say that besides handcuffing U.S. lenders the bill could leave foreign banks unable to settle their daily obligations in the United States.

The proposal also would prohibit violators from dealing in U.S. government securities.

"Interbank credit is in the billions of dollars a day," said Jill M. Considine, president of the New York Clearing House Association, which represents the major money-center banks and operates the Chips international funds transfer system.

"The restrictions could effectively cripple the ability of foreign banks to operate in the United States," Ms. Considine said.

Penalties under the law would be imposed not only on banks that lend directly to Iran and Libya but also on institutions doing business with nonbank companies, such as oil and construction firms.

Fearing the label of "soft on terrorism," major U.S. and foreign banks have been reluctant to oppose the provisions openly. However, because so many foreign businesses involved in Iranian and Libyan energy projects are customers of foreign banks, the sanctions would bar U.S. banks from doing business with most international institutions, sources said.

Clinton administration officials opposed the legislation at a May 22 hearing by the House Ways and Means Committee.

"Sanctions against foreign financial institutions would be costly to U.S. firms, could be disruptive to financial markets, would reduce the attractiveness of the U.S. as a financial center, and could invite retaliation against U.S. financial firms," said David Welch, assistant secretary of state for Near East affairs.

F. William Hawley, president of the Bankers' Association for Foreign Trade and director of government relations at Citicorp, argued that the provision would be unlikely to hurt Iran or Libya.

"The ultimate effect of the proposed sanctions will not be to stop investment," Mr. Hawley wrote May 20 to Rep. Bill Archer, R-Tex., chairman of the Ways and Means Committee.

House Banking Committee Chairman Jim Leach, R-Iowa, said the provision could jeopardize the U.S. position as the world's "preeminent financial operations center."

Industry officials were heartened by the stands of the White House and lawmakers. "My guess is, with the administration and Rep. Leach weighing in, the situation will get fixed," said a Washington lawyer representing foreign banks.

The provision is part of a bill sponsored by House International Relations Committee Chairman Benjamin Gilman and passed by that panel March 21. An aide to the New York Republican said lawmakers are likely to make "considerable" changes before the bill is taken to the House floor. A similar bill in the Senate does not include the investment penalties.

Both bills give the president several ways to penalize foreign countries and businesses that assist Iranian or Libyan energy development. These include barring the U.S. government from buying goods from violators or from exporting to them, allowing the president to bar sanctioned companies from investing in the United States, and banning imports from violators.

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