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Sanctions on Iran

Secretary of State Hillary Rodham Clinton speaks Monday as Treasury Secretary Timothy Geithner listens during a news conference about new sanctions the U.S. is taking to increase pressure on Iran. (Associated Press)
Secretary of State Hillary Rodham Clinton speaks Monday as Treasury Secretary Timothy Geithner listens during a news conference about new sanctions the U.S. is taking to increase pressure on Iran. (Associated Press)

Punishments stop short of central bank

WASHINGTON – The Obama administration slapped Iran with a new round of sanctions for its alleged nuclear and terrorist activities, but it stopped short of the tough economic punishments favored by many in Congress.

In an announcement coordinated with Britain and Canada, U.S. officials said they are imposing new punishments aimed at Iran’s petrochemical sector and organizations involved in the country’s nuclear program or terrorism, such as the Iranian Revolutionary Guard Corps and its elite Quds Force. U.S. officials say the Quds Force has a long history of sponsoring terrorist acts abroad, supplies arms and training to insurgents who have killed American troops in Iraq, and carries out covert operations, including assassinations.

The most damaging new step will be to identify Iran as a source of “primary money-laundering concern.” Officials hope the designation will prompt many international companies to break off business with Iran for fear of damaging their own reputations.

Yet while the administration added another layer to the many existing punishments aimed at isolating Tehran’s economy from the world, officials stopped short of imposing full sanctions on the Iranian central bank.

Officials fear that such a step, by making it hard for countries to buy oil from Iran, could constrict world oil supply, drive up oil prices and threaten the fragile world economy.

Rep. Ileana Ros Lehtinen, R-Fla., chairwoman of the House Foreign Affairs Committee, said the sanctions did not go far enough.

“The U.S. and our allies should be imposing stronger sanctions from every possible angle in order to make the pressure crippling, including additional, more effective sanctions against the Central Bank of Iran,” she said in a written statement.

The money-laundering designation is likely to make companies that want to remain in good standing with the U.S. authorities and economic system stop doing business with Iran. But some analysts believe it may not be enough to persuade Iranian trading partners that care less about their ties to the U.S. economy – including many in Russia, China, Turkey and Kuwait.

Mark Dubowitz, executive director of the Foundation for Defense of Democracies, noted that the money-laundering designation does not call for specific penalties for companies that continue to do business with Iran.

The administration’s hesitation on the banking front showed the limitations to how far it can go to try to stop Iran’s nuclear program. Administration officials have also signaled their reluctance to use force against Iran as they try to wind down wars in Afghanistan and Iraq.

The new sanctions were in reaction to two developments: a recent report from the United Nations’ nuclear watchdog showing that the suspected nuclear weapons program is advancing, and the disclosure of an alleged Iranian plot to kill Saudi Arabia’s ambassador to the United States.

“There have to be consequences for such behavior,” Secretary of State Hillary Rodham Clinton said in announcing the new sanctions at the State Department.

She said Iran has been unwilling to negotiate over its nuclear program, despite broad international disapproval, or to stop what U.S. officials maintain is the most active state-supported terrorist program in the world.

“The message is clear: If Iran’s intransigence continues, it will face increasing pressure and isolation,” Clinton said.

The United Kingdom announced it was barring all contacts between British companies and Iran’s central bank, while Canada said it was also taking steps to halt its companies from transactions with Tehran.

The United Nations has already imposed four rounds of sanctions on Iran, and the United States and many other countries have imposed sanctions.