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US imposes new sanctions on Iranian banks

Text by News Wires

Latest update : 2012-02-07

US President Barack Obama signed an order Monday for new sanctions on all Iranian financial institutions, including its central bank. The measure allows US institutions to freeze Iranian state assets instead of simply rejecting the funds.

AFP - President Barack Obama on Monday ordered new sanctions into force on Iran, including its central bank, seeking to tighten a choke hold on Tehran's economy as a nuclear showdown deepens.

Obama signed an executive order implementing parts of a new sanctions regime passed by Congress late last year at a time of high tensions with Iran and rampant speculation about a possible Israeli strike against its nuclear sites.

US wants increased pressure on Iran

 The U.S. State Department said on Thursday that it supports increasing pressure on Iran over its nuclear program, including carefully designed, targeted and timed sanctions on its central bank.

“The Obama administration strongly supports increasing the pressure on Iran, and that includes properly designed and targeted sanctions against the central bank of Iran, appropriately timed as part of a part of a carefully phased and sustainable policy towards bringing about Iranian compliance with its obligations,” U.S. Under Secretary of State Wendy Sherman said in testimony before a congressional panel. (Reuters)
 

The measures block all property and interests of the Iranian government, the Central Bank of Iran (CBI) and all Iranian financial institutions that come within US jurisdiction.

Previously, US institutions were required to reject, rather than block, such Iranian transactions.

The measures, passed with wide majorities in Congress last year, also included a requirement for Obama to impose sanctions on foreign financial institutions that do business with the CBI or other Iranian finance firms.

That move was designed to strangle Iran's access to foreign finance and commerce and to cripple its lucrative oil and energy industry by effectively barring foreign firms that do business with Tehran from the US financial system.

Obama's action on Monday however does not implement those sanctions, but the Treasury Department warned that firms doing business with Iran "remain at risk" of US punishments.

The president has the power to issue waivers to halt the impact of such sanctions, once they come into force, every 120 days.

Senior White House officials are currently studying the measures passed by Congress to find a way to implement them that maximizes pain for Iran, but does not cause a huge spike in oil prices, for instance, that could harm the fragile US economic recovery.

Date created : 2012-02-06

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