US
Senate for Sanctions on Iran to Continue, White House Not Happy
The U.S. Senate approved new economic sanctions on Iran, overriding objections from the
White House that the legislation could undercut existing efforts to rein in
Iran’s nuclear ambitions.
The Senate voted 94-0 on 29 November to impose
additional U.S. financial penalties on foreign businesses and banks involved in
Iran’s energy, ports, shipping and shipbuilding sectors, and impose sanctions
on metals trade with Iran.
Senators Bob Menendez, a New Jersey Democrat, and Mark Kirk,
an Illinois Republican, the architects of a year-old law that has curtailed
Iran’s oil exports and revenues, said the new measure would go further toward
squeezing Iran’s economy and increase the pressure on the Islamic Republic to
negotiate on its disputed nuclear program.
White House officials told Senate Democratic
leaders in a late-night e-mail on Nov. 29 that the administration didn’t think
more sanctions are needed yet and asked them to hold off until next year. The
new provisions were confusing and inconsistent in applying sanctions, according
to the e-mail, and the ambiguities “would hamper implementation” of sanctions.
The new package is an amendment to the annual defense authorization bill that awaits a vote that may come
as soon as Dec 3. The measure would still have to be reconciled with a House of
Representatives’ version, and already faces a potential veto by Obama over
provisions unrelated to Iran sanctions.
While almost all trade with Iran by any U.S.
business or individual has long been banned, the amendment approved on 29
November would impose penalties on other nations’ trade with the nation, a step
closer to a trade embargo on Iran.
The existing sanctions have weakened Iran’s
currency, curtailed its oil exports and forced Iran back to nuclear talks.
Still, Iran hasn’t slowed its enrichment efforts, making new measures
essential, Menendez said in an e-mail.
The U.S., European Union and Israel
say Iran is secretly pursuing a nuclear weapons capability. Iran says its
nuclear program is strictly for civilian energy and medical research.
USA*Engage, a coalition of U.S. business,
agriculture and trade associations, expressed disappointment at the proposed
additional sanctions, calling them “at odds with the U.S. government’s official
position of pursuing a dual track of multilateral sanctions and diplomatic
engagement.”
The Senate-approved amendment would continue to
allow purchases of Iranian crude as long as the buyer nation is able to show
it’s significantly reducing its oil imports from Iran.
Publicly available oil-trading figures indicate
that seven nations, including India,
Turkey
and South Korea, have continued to significantly reduce their Iranian oil imports over
the last six months, two U.S. officials said. The nations appear to be on track
to earn a second round of exceptions from sanctions next week, the officials
said, speaking on condition of anonymity because no final decision has been
made by Secretary of State Hillary Clinton.
The new Menendez-Kirk amendment would allow
purchases of Iranian natural gas if payments are made in local currency into an account that Iran could
use only for approved trade. That provision, according to advisers who helped
craft the legislation, is especially important for Turkey, a U.S. ally and NATO
member that is a major buyer of Iranian natural gas.
While the U.S. and EU say the current sanctions
forced Iran back to the negotiating table this year, talks stalled and no
agreement has been reached despite the steady tightening of economic penalties.
Iran’s oil exports were down 1 million barrels a day last month, or 40 percent, compared with October 2011, U.S. Energy Department
figures show.
Oil capped its first monthly increase since August
on signals that economic expansion in the U.S. is accelerating. Crude oil for
January delivery advanced 84 cents to $88.91 a barrel on the New York
Mercantile Exchange on 29 November, the highest settlement since Nov. 19.
Futures increased 0.7 percent this week and gained 3.1
percent this month. Prices are down 10 percent this year.
The new sanctions would include energy, ports,
shipping and shipbuilding as parts of Iran’s economy that support its nuclear
program and weapons proliferation. The legislation also would make it illegal
to do business or provide insurance or reinsurance to any Iranian business in
those areas or to any Iranian individual sanctioned by the U.S. government.
The White House said in its e-mail to Senate Democrats that reporting requirements about vessels docking
at Iranian ports and landings of Iranian planes would “impose serious time
burdens” on the U.S. intelligence community and sanctions officers.
The expanded sanctions would require the president
to issue a special exemption from sanctions, in addition to a national interest
waiver, if an oil-importing country is facing“exceptional
circumstances” that make it impossible to reduce Iranian oil imports further.
The Senate measure is also aimed at blocking trade
in commodities used in Iran’s shipbuilding and nuclear sectors, such as
graphite, aluminum, steel, metallurgical coal and
software for integrating industrial processes.
The measure also seeks to stop Iran from
circumventing sanctions by receiving payment in precious metals such as gold,
or using oil payments in local currencies to buy gold. Obama issued an
executive order several months ago to impose sanctions on any precious metal
sales to Iran’s government.
The Senate defense bill
is S 3254.