Argentina asks U.S. court for rehearing in fight with bondholders

By Nate Raymond

NEW YORK | Fri Sep 6, 2013 11:34pm EDT

NEW YORK (Reuters) - Argentina urged a U.S. appeals court Friday to reconsider an order last month requiring it to pay $1.33 billion in favor of hedge funds that have refused to participate in two debt restructurings that sprang from Argentina's 2002 default.

In a court filing, Argentina asked the 2nd U.S. Circuit Court of Appeals in New York for a rehearing either by the three-judge panel that issued the August 23 decision or by a larger group of 14 judges on the court.

"The decision makes grave legal errors that magnify the error of the panel's previous unprecedented holdings," Argentina's lawyers wrote.

The petition for a so-called en banc hearing sets the stage for a final attempt by Argentina to reverse a ruling that has created concerns of a potential new debt crisis in South America's third-largest economy.

The case, which could ultimately find itself at the U.S. Supreme Court, stems from Argentina's $100 billion default on its sovereign debt in 2002.

In two restructurings in 2005 and 2010, creditors holding around 93 percent of Argentina's debt agreed to participate in debt swaps that gave them 25 cents to 29 cents on the dollar.

But bondholders led by the hedge funds NML Capital Ltd, which is a unit of Paul Singer's Elliott Management Corp, and Aurelius Capital Management went to court, seeking payment in full.

The case was filed in New York under the terms of the language in the bond documents.

After years of litigation, the holdout bondholders won a major coup in October 2012, when the 2nd Circuit upheld a ruling from earlier in the year by U.S. District Judge Thomas Griesa, who found that Argentina violated a clause in the bond documents requiring the equal treatment of creditors.

The court sent the case back to Griesa to determine how the payment mechanism would function and how injunctions he issued would apply to third parties and intermediary banks.

Griesa in November 2012 ordered Argentina to pay $1.33 billion into a court-controlled escrow account for the dissident bondholders. The appellate court last month affirmed that holding.

Argentina has refused to pay the holdouts in full. If it continues to refuse, U.S. courts could enforce injunctions blocking payment overseas to bondholders who participated in past restructurings, setting the stage for a possible new default.

Implementation of the 2nd Circuit's August ruling has been put on hold while the United State's highest court decides whether to hear the case. Argentina's next debt payment at the end of September is for $164 million, according to Friday's brief.

At a hearing Tuesday, Griesa said "the plaintiffs here are still faced with a Republic who will not pay what is required of the Republic."

He added: "Hopefully, when the 2nd Circuit decision becomes final, if the Supreme Court turns that down, that defiant attitude will change."

But in its brief Friday, Argentina's U.S. lawyers said the reaction by the country's officials wasn't defiance but "the reaction any state would have to such a prospect" about the possible impact on its debt being paid.

Argentina's Senate, at the urging of President Cristina Fernandez, voted Wednesday to indefinitely open a bond swap that would offer holdouts the same terms as a prior swap in 2010.

Argentina is meanwhile pursuing an appeal of the earlier 2nd Circuit ruling in October 2012 to the U.S. Supreme Court, whose next term starts in October.

In seeking rehearing at the 2nd Circuit, Argentina's lawyers argued that the three-judge panel had incorrectly interpreted the equal-treatment clause in the bond documents.

It also contended the decision contravened the Foreign Sovereign Immunities Act, which limits when foreign countries can be sued in U.S. courts.

The three-judge panel exceeded its powers, Argentina argued, by finding the limited remedies open to the holdouts under FSIA were inadequate and justified court orders to coerce it to giving holdouts relief intended to force the country to paying damages.

"Courts cannot use their remedial powers to override the intent of Congress," Argentina argued.

Hours before Argentina sought rehearing by the full 2nd Circuit, a group of creditors who participated in the debt swaps and hold more than $1.5 billion in exchange bonds made the same request.

The bondholders, which include Gramercy Financial Group LLC, warned that the injunction if upheld would likely trigger a default on $65 billion worth of exchange bonds, creating "devastating consequences" for the global economy and sovereign debt restructurings.

Hearings en banc by the full appeals court are rare. From 2001 to 2010, the 2nd Circuit granted such petitions just 0.03 percent of the time, according to a study by the Federal Bar Council.

The case is NML Capital Ltd et al v. Republic of Argentina, 2nd U.S. Circuit Court of Appeals, No. 12-105.

(Reporting by Nate Raymond; Editing by Lisa Shumaker)

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U.S. moves to ease employers' Obama health-law burden

A Tea Party member reaches for a pamphlet titled ''The Impact of Obamacare'', at a ''Food for Free Minds Tea Party Rally'' in Littleton, New Hampshire in this October 27, 2012 file photo.

Credit: Reuters/Jessica Rinaldi//Files

By Kim Dixon

WASHINGTON | Thu Sep 5, 2013 6:46pm EDT

WASHINGTON (Reuters) - The U.S. Treasury Department on Thursday issued proposed rules aimed at easing the requirements for companies and insurers when they report employees' health coverage information to comply with President Barack Obama's signature healthcare law.

The proposed regulations are a key element of the employer mandate portion of the law. Implementation of the rules had been delayed while the Treasury Department attempted to simplify them to address concerns of employers.

"We will continue to consider ways, consistent with the law, to simply the new information reporting process," said Mark Mazur, assistant treasury secretary for tax policy.

The law, widely known as Obamacare, requires employers with 50 or more workers to offer their full-time employees a minimum level of health insurance coverage or be subject to a fee.

If companies do not offer coverage and have at least one full-time worker receiving government tax credits to buy insurance, employers are assessed a fee of $2,000 per full-time employee, excluding the first 30 workers.

The administration caused a stir in July when it unexpectedly delayed the effective date for the reporting and for the employer mandate itself to 2015 from 2014.

Retailers in particular had complained about the law's detailed reporting requirements. A trade group commended the Obama administration for taking action to lighten the burden of the law. But the group's lobbyist said the administration did not go far enough.

"One thing retailers and other employers hate more than anything else is sending the same information to different agencies," said Neil Trautwein with the National Retail Federation, which represents Wal-Mart, Macy's Inc. and others.

The group wants the Internal Revenue Service to work with the Health and Human Services Administration to simplify the rules further.

Although the employer mandate has been delayed, the separate requirement that all individuals carry health insurance or pay a fee, goes into effect on January 1, 2014.

Thursday's proposal would, among other things, eliminate the need for employers to determine whether particular employees are full-time where adequate coverage is offered to all "potentially full-time employees." It also would let employers report specific costs for health plans only if the cost is above a certain threshold dollar amount.

The proposed rules would also allow, in certain instances, the reporting of healthcare information on W-2 tax forms that employers issue to workers, rather than a separate statement.

When the government delayed the effective dates of the mandate and reporting, they requested that companies voluntarily report starting in 2014.

Cathy Livingston, who worked on the health care rules as an IRS attorney, said it is likely that "a very limited number of entities would voluntarily choose to report."

"Employers and insurers will likely take a pass," said Livingston, now in private practice at Jones Day.

(Additional reporting by Patrick Temple-West; Editing by Kevin Drawbaugh, Eric Beech, Cynthia Osterman and David Gregorio)

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Obama's plan on Syria hinges on undecided U.S. lawmakers

U.S. President Barack Obama speaks about Syria during a joint news conference with Swedish Prime Minister Fredrik Reinfeldt at the Prime Minister's office in Stockholm, Sweden September 4, 2013.

Credit: Reuters/Kevin Lamarque

By Thomas Ferraro and Richard Cowan

WASHINGTON | Thu Sep 5, 2013 8:07pm EDT

WASHINGTON (Reuters) - The fate of a congressional resolution to authorize President Barack Obama's planned military strikes on Syria hinged on Thursday on scores of undecided U.S. lawmakers, with party loyalty appearing increasingly irrelevant.

Even after congressional hearings featuring Obama's secretaries of state and defense, a half dozen closed-door briefings and phone calls from Obama himself, it was too close to call on whether Congress will authorize military force.

Obama asked Congress to back his plan for limited strikes in response to a chemical weapons attack on civilians that the United States blames on Syrian President Bashar al-Assad's forces.

First-term Democratic Senator Joe Manchin, who had been seen as a possible swing vote, dealt the president a setback when he announced on Thursday he would oppose the resolution to authorize military strikes.

"Given the case that has been presented to me, I believe that a military strike against Syria at this time is the wrong course of action," Manchin said.

Republican Representative Michael Grimm, who initially backed Obama's call last month for military strikes, withdrew his support on Thursday. "Unfortunately, the time to act was then and the moment to show our strength has passed," said Grimm, a Marine combat veteran.

If Obama fails to win congressional support, he would face two undesirable options. One would be to go ahead with military strikes anyway, which could provoke an angry showdown with Congress over their respective powers.

The other would be to do nothing, which White House officials privately acknowledge would damage the credibility of any future Obama ultimatum to other countries.

Twenty-four of the Senate's 100 members oppose or lean toward opposing authorizing military strikes, according to estimates by several news organizations, with an equal number favoring military action and roughly 50 undecided.

Every vote will count in the Senate, where a super-majority of 60 will likely be needed because of possible procedural hurdles for a final vote on approving military action.

A count by the Washington Post listed 103 members of the House of Representatives as undecided, of whom 62 are Democrats. There are 433 members currently sitting in the House.

Party loyalty, which drives most issues in a Congress known for its partisan gridlock, was becoming increasingly irrelevant, particularly among Obama's fellow Democrats. Some Democratic liberals who usually line up behind Obama's policies have expressed reluctance to back an attack on Syria.

'I'M AN ADULT'

"I support the president," said Democratic Representative Bill Pascrell, who remained undecided.

"I want him to succeed. But he isn't asking me to be - nor will I be - a lap dog. So I will make my own decision. I'm an adult," Pascrell said.

Republicans have opposed Obama on a host of issues in Congress - and those aligned with the conservative Tea Party movement appear likely to do so on this matter. But other Republicans who favor strong American engagement internationally are lining up behind the Syria military strike authorization.

Most House Republicans are expected to vote "no," even though their top two leaders, Speaker John Boehner and Majority Leader Eric Cantor, have endorsed the military strikes.

While Obama administration officials continued to express confidence about ultimately winning congressional support, it was clear on Thursday that their blitz of briefings was not having the desired impact, especially with many lawmakers reporting opposition to strikes among their constituents.

Manchin said he listened to the concerns of thousands of people in his home state of West Virginia, attended hearings and briefings, and spoke with former and current military leaders.

In a statement, he said that "in good conscience, I cannot support" the resolution authorizing force and that he will work to develop other options. "I believe that we must exhaust all diplomatic options and have a comprehensive plan for international involvement before we act," Manchin added.

Democratic Senator Barbara Mikulski told reporters, "I have more questions than I have answers, and I hope to get them over the course of today and tomorrow."

She spoke as she entered the latest closed-door session on Thursday with Obama's national security team, only to emerge two hours later saying she still had "more questions."

"What we heard today made a compelling forensic case that, one, nerve gas was used, and number two, that it was used" by Assad's forces, Mikulski said. "The next step, then, has to be ... what is the way to both deter and degrade his ability to ever do it again? ... Does a military strike do that?"

FIRST HURDLE CLEARED

The Democratic-controlled Senate and Republican-controlled House both must approve the measure. It cleared its first hurdle on Wednesday when the Senate Foreign Relations Committee approved the resolution by a 10-7 vote - with Democrats and Republicans voting on both sides of the issue.

The full Senate is likely to begin voting next Wednesday, a Senate aide said. It will start with a vote on an anticipated legislative roadblock by Republicans, and then move on to a vote on the resolution to authorize the use of force, the aide added.

The timing of a vote in the House remained unclear.

Memories of the protracted wars in Iraq and Afghanistan are still fresh in the minds of members of Congress, leaving many in both parties worried that a military strike could lead to a longer and larger U.S. engagement in Syria.

If Obama is going to win passage of the measure in the House, he must convince fellow Democrats like Representative Zoe Lofgren and Pascrell.

The two liberals have been reliable Obama allies on a crush of issues since Obama entered office, but now voice plenty of questions and concerns about his bid to attack Syria.

Lofgren joined a conference call for House Democrats on Monday given by Obama administration officials. Lofgren complained that the briefing did not provide nearly as much information as she had sought and disliked at least a portion of Secretary of State John Kerry's presentation.

Kerry invoked memories of Nazi Germany when he told the House Democrats that the United States faces "a Munich moment" in deciding whether to wage military strikes against Syria.

"I thought it was a very unfortunate comment. We need facts, not overheated emotional rhetoric," Lofgren said.

(Additional reporting by Susan Cornwell, Susan Heavey and Rachelle Younglai; Editing by Fred Barbash and Will Dunham)

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Obama plans 'full-court press' to sway Congress on Syria

U.S. President Barack Obama speaks to the media during a news conference at the G20 summit in St.Petersburg September 6, 2013.

Credit: Reuters/Sergei Karpukhin

By John Whitesides and Richard Cowan

WASHINGTON | Fri Sep 6, 2013 5:33pm EDT

WASHINGTON (Reuters) - President Barack Obama will take his case for military action in Syria directly to the American people next week, stepping up his campaign to convince a deeply skeptical Congress to back strikes against Syrian President Bashar al-Assad's forces.

Obama's address to the nation from the White House on Tuesday will be part of a rejuvenated lobbying effort on Syria as Congress returns to Washington next week. A Democratic congressional aide said the administration is planning "a full-court press" aimed at undecided lawmakers.

Speaking in Russia at the conclusion of the G20 summit, Obama acknowledged on Friday he faces an uphill fight to build public and congressional support for a military response to the Syrian government's alleged use of chemical weapons.

Early vote counts in Congress do not look encouraging for Obama, with scores of lawmakers still undecided about whether to authorize a military strike after the president said last week he would seek their approval. Opinion polls show a war-weary public strongly opposes U.S. action in Syria.

"In terms of the votes and the process in Congress, I knew this was going to be a heavy lift," Obama told reporters in St. Petersburg.

"I understand the skepticism. I think it is very important, therefore, for us to work through, systematically, making the case to every senator and every member of Congress. And that's what we're doing," he said.

Administration officials have given public testimony and daily closed-door briefings on Syria this week to members of Congress, who remain concerned that even limited strikes could draw the United States into a prolonged war and spark broader hostilities in the region.

The briefings will resume on Monday, and the White House hopes support will grow as more members of Congress get classified briefings.

Democratic House Leader Nancy Pelosi, known for her ability to gather votes in her caucus, told Democrats in a letter on Friday there would be two meetings next week of Democratic members with White House Chief of Staff Denis McDonough.

"There will be a full-court press from the administration and those undecided Democratic members in particular are going to be getting multiple calls from administration officials, including the president," a Democratic Senate aide said.

"Every undecided vote is going to get a lot of attention from both the leader (Senate Majority Leader Harry Reid) and from the White House," the aide said.

According to a Washington Post count, only 23 senators have been willing to go on record in favor of military force, while 17 are against. It will likely take 60 of the Senate's 100 members to advance the measure to the House of Representatives.

In the House, where 218 votes will be required to pass the resolution, only 25 members are on record in support of military action so far, according to the Post, with 106 opposed.

Democratic aides who support strikes have dismissed the numbers as meaningless, saying many lawmakers have not attended any classified briefings. Others noted lawmakers often wait until the last minute to decide, in part because they want to see what others are going to do.

SENATE DEBATE NEXT WEEK

The Democratic-led Senate convened for slightly more than four minutes on Friday, ending the month-long summer break, in a procedural move that will help speed consideration next week of the measure authorizing military action against Syria.

A Senate debate will begin next week, with a first full Senate vote possible on Wednesday.

The Senate Foreign Relations Committee narrowly approved on Wednesday an authorization that prohibits the use of U.S. combat troops on the ground in Syria and limits the duration of the action to 60 days, with one possible 30-day extension.

Obama said he is striving to convince lawmakers the response in Syria will be limited "both in time and in scope" but still meaningful enough to degrade Assad's capacity to deliver chemical weapons and deter their use.

"What we're describing here would be limited and proportionate and designed to address this problem of chemical weapons use," Obama said. "And that is going to be the case that I try to make, not just to Congress, but to the American people over the coming days."

Obama also has had trouble rallying international support for a military response to the August 21 chemical weapons attack on Syrian civilians. The British Parliament voted last week against Britain's participation in the action.

Obama said that most leaders of the G20 countries agreed that Assad was responsible for using poison gas on civilians, although there was disagreement about whether force could be used without going through the United Nations.

He said he did not believe U.N. Security Council support was required.

"Given Security Council paralysis on this issue, if we are serious about upholding a ban on chemical weapons use, then an international response is required, and that will not come through Security Council action," he said.

U.S. Ambassador to the United Nations Samantha Power said on Friday that Assad had barely dented his stockpile of chemical weapons in last month's attack near Damascus, and that Assad knew Russia would back him in the controversy over chemical weapons.

"We have exhausted the alternatives" to military action, she said at the Center for American Progress think tank in Washington.

Obama declined to say whether he will proceed with military action against Syria if U.S. lawmakers vote against his plan, despite earlier comments from a top aide suggesting he would not use such force without congressional support.

"The president of course has the authority to act, but it's neither his desire nor his intention to use that authority absent Congress backing him," deputy national security adviser Tony Blinken told National Public Radio on Friday.

Obama rejected criticism that he was playing politics by asking Congress for authorization, and acknowledged that Syria's use of chemical weapons was not a direct threat to the United States.

"I did not put this before Congress, you know, just as a political ploy or as symbolism. I put it before Congress because I could not honestly claim that the threat posed by Assad's use of chemical weapons on innocent civilians and women and children posed an imminent, direct threat to the United States," Obama told reporters.

"In that situation, obviously, I don't worry about Congress; we do what we have to do to keep the American people safe," he said.

(Additional reporting by Susan Heavey, Patricia Zengerle, Roberta Rampton and Mark Felsenthal; Editing by Karey Van Hall, Jim Loney and Claudia Parsons)

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Cost of a U.S. strike against Syria could top Hagel's estimate

Men inspect a site hit by what activists said was shelling by forces loyal to Syria's President Bashar al-Assad, in the Duma neighbourhood of Damascus September 4, 2013.

Credit: Reuters/Bassam Khabieh

By David Alexander

WASHINGTON | Thu Sep 5, 2013 6:44pm EDT

WASHINGTON (Reuters) - Defense Secretary Chuck Hagel told lawmakers a limited military strike to deter Syria from using chemical weapons would likely cost tens of millions of dollars, but if past experience is a guide, the number could be substantially higher than that.

It is not uncommon for U.S. forces to open an assault by launching scores of Tomahawk missiles costing over $1 million apiece and dropping bombs from radar-evading B-2 planes that fly 18 hours each way from their base at a cost of $60,000 an hour.

"I was surprised when I heard him (Hagel) say tens of millions of dollars. That's low-balling it," said Todd Harrison, a defense budget analyst at the Center for Strategic and Budgetary Assessments.

He said the defense secretary might have been thinking of what the Pentagon would have to spend during the remainder of the 2013 fiscal year, which ends on September 30.

Most of the cost of an action against Syria would be for replacing munitions that were used, funds that would not be required until after the 2014 fiscal year begins on October 1.

The Pentagon probably would pay for the munitions with a supplemental war-funding request to Congress, which would not be subject to current budget spending caps, Harrison said.

"If you include the replacement costs of munitions, it (an operation against Syria) could cost half a billion, up to a billion dollars depending on the number of targets they go after," he said.

Tomahawk cruise missiles, which have a thousand-mile (1,600-km) range, can loiter on station and change their targets in flight, are expected to be the main weapon if President Barack Obama orders a limited strike to punish Syria over its suspected use of chemical weapons.

The missiles cost $1.2 million to $1.5 million apiece.

The U.S. Navy fired 221 Tomahawks in operations against Libyan leader Muammar Gaddafi in 2011, nearly half of them - 110 - in an opening salvo against 22 Libyan military targets, including air defenses, communications and command structures.

If U.S. forces used a similar number of missiles to hit Syrian targets related to chemical weapons use by President Bashar al-Assad's forces, the cost would top $100 million.

Admiral Jonathan Greenert, the top U.S. Navy officer, said on Thursday that operations so far haven't required unexpected spending.

U.S. warships in the region were all overseas as part of regular operations. The Navy has four guided missile destroyers in the eastern Mediterranean and the aircraft carrier USS Nimitz with its supporting vessels in the Red Sea.

"The ships ... were all forward deployed, so we haven't surged anybody over for this ... specifically," Greenert told the American Enterprise Institute think tank.

But the Nimitz was scheduled to rotate home after being replaced in the Arabian Sea by the USS Harry S Truman, so if it is held much longer in the region it could result in an unplanned hit to the budget, he said. A supplemental budget request might be needed to pay for an operation, he said.

Greenert said it costs about $25 million a week for a carrier strike group in routine operations. If the carrier was used in military operations, the cost would rise to $40 million a week as a result of longer flight hours for its planes.

While Hagel estimated the cost of a Syrian operation at tens of millions of dollars at a House of Representatives hearing on Wednesday, Pentagon officials have declined to elaborate on his remarks or discuss costs further.

"I'm not going to get into specific numbers because I don't want to suggest that we have a precise picture of the military operation that would be conducted," Pentagon spokesman George Little told a briefing on Thursday.

He also declined to speculate on how the Pentagon would pay for such an operation at a time of tight budgets.

"This is in the national security interests of the United States," Little said. "When something is that important, we'll find a way to pay for it."

(Additional reporting by Phil Stewart; Editing by Eric Walsh)

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Obama says values France's strong support for U.S. action on Syria

U.S. President Barack Obama meets with French President Francois Hollande at the G20 Summit in St. Petersburg, Russia September 6, 2013.

Credit: Reuters/Kevin Lamarque

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U.S. gives up on U.N. Security Council in Syria crisis, blames Russia

People walk along a damaged street filled with debris in Deir al-Zor September 4, 2013. Picture taken September 4, 2013.

Credit: Reuters/Khalil Ashawi

By Louis Charbonneau

UNITED NATIONS | Thu Sep 5, 2013 4:30pm EDT

UNITED NATIONS (Reuters) - The United States declared on Thursday that it has given up trying to work with the U.N. Security Council on Syria, accusing Russia of holding the council hostage and allowing Moscow's allies in Syria to deploy poison gas against innocent children.

U.S. Ambassador to the United Nations Samantha Power's remarks left no doubt that Washington would not seek U.N. approval for a military strike on Syria in response to an August 21 chemical attack near Damascus. She said a draft resolution Britain submitted to the five permanent council members last week calling for a response to that attack was effectively dead.

"I was present in the meeting where the UK laid down the resolution, and everything in that meeting, in word and in body language, suggests that that resolution has no prospect of being adopted, by Russia in particular," Power told reporters.

"Our considered view, after months of efforts on chemical weapons and after 2-1/2 years of efforts on Geneva (peace talks), the humanitarian situation is that there is no viable path forward in this Security Council," she said.

After Britain submitted the draft resolution to fellow Security Council veto powers China, France, Russia and the United States, its parliament voted against British participation in planned U.S. military strikes to punish Syria's government for the chemical attack.

Washington, which is seeking U.S. congressional approval for military action, blames the latest poison gas attack on forces loyal to Assad. The United States says that sarin gas attack killed over 1,400 people, many of them children.

Power said the 15-nation council failed to live up to its role as the guardian of international peace and security.

"Unfortunately for the past 2-1/2 years, the system devised in 1945 precisely to deal with threats of this nature did not work as it is supposed to," Power said. "It did not protect peace and security for the hundreds of Syrian children who were gassed to death on August 21."

"The system has protected the prerogatives of Russia, the patron of a regime that would brazenly stage the world's largest chemical weapons attack in a quarter century while chemical weapons inspectors sent by the United Nations were just across town," she said.

SECURITY COUNCIL HELD 'HOSTAGE'

The U.N. chemical investigation team, led by Sweden's Ake Sellstrom, took samples from the site of the August 21 attack in the suburbs of Damascus. The results of their analysis will not be ready for weeks, U.N. diplomats say. The U.N. experts will only say whether toxic chemicals were used, not who deployed them.

Russia, backed by China, has used its veto power three times to block council resolutions condemning Assad's government and threatening it with sanctions. Assad's government, like Russia, blames the rebels for the August 21 attack.

"In the wake of the flagrant shattering of the international norm against chemical weapons use, Russia continues to hold the council hostage and shirk its international responsibilities, including as a party to the chemical weapons convention," Power said.

Power was asked about Russian President Vladimir Putin, who on Wednesday declined to rule out Russian backing for military action against Syria if he was presented with proof of Syrian government involvement in the August 21 attack.

"There is nothing in the pattern of our interactions ... with our Russian colleagues, that would give us any reason to be optimistic," Power said. "Indeed, we have seen nothing in President Putin's comments that suggest that there is an available path forward at the Security Council."

Nevertheless, Power said the U.S. mission briefed U.N. member states on Thursday on Washington's assessments of August 21, "which overwhelmingly point to one stark conclusion - the Assad regime perpetrated a large-scale and indiscriminate attack against its own people using chemical weapons."

Washington also suggested it has shared its intelligence on the use of sarin gas on August 21 with Sellstrom's team.

"As we routinely do, the U.S. is sharing critical information related to this attack with the U.N. and our partners and allies," Power's spokeswoman Erin Pelton.

Earlier this week, U.N. Secretary-General Ban Ki-moon cast doubt on the legality of any military action against Syria that is not in self-defense or lacks Security Council backing.

Power said that sometimes it is necessary to go outside the Security Council when it is deadlocked. She cited the case of the Kosovo war in 1999.

At that time, Washington relied on NATO authorization for its bombing campaign, which forced Serbian troops and militia to pull out of Kosovo.

The United Nations has received at least 14 reports of possible chemical weapons use in Syria. After months of diplomatic wrangling, Sellstrom's team arrived in Syria on August 18 with a 14-day mandate to look for evidence.

The U.N. team was initially going to look into three incidents, but its priority became the August 21 attack. It plans to return to Syria soon to continue its investigation.

(Reporting by Louis Charbonneau; Editing by Stacey Joyce)

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