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U.S., UK and Canada Hit Iran With New Economic Sanctions


Source: RFE/RL

In a coordinated push, the United States and allies Great Britain and Canada today unveiled tough new sanctions targeting Iran over its rogue nuclear program.

Bushehr Nuclear Power Plant, Iran
View of Bushehr Nuclear Power Plant in Southern Iran
Iran says its nuclear program is strictly for peaceful purposes

In Washington, U.S. Secretary of State Hillary Clinton said that taken together, the measures represent “a significant ratcheting of up of pressure on Iran, its sources of income, and its illegal activities.”

She said President Barack Obama had signed an executive order to expand sanctions targeting Iran’s core oil and gas industries, which accounts for some 70 percent of Tehran's budget.

The United States also expanded by 11 the list of individuals and companies whose assets will be frozen and with whom transactions are prohibited for allegedly aiding Tehran’s nuclear ambitions.

Clinton said that in an effort to get around existing sanctions, Iran was increasingly using its petrochemical industry to refine petroleum, making that industry open to new sanctions.

"President Obama signed an executive order that for the first time specifically targets Iran's petrochemical industry, a significant source of export revenues and a cover for imports for sanctioned activities," she said.

Speaking alongside Clinton, U.S. Treasury Secretary Timothy Geithner announced that Washington had designated Iran's financial sector as "of primary money laundering concern," a move that allows it to take steps to further isolate the country monetarily.

The department has previously applied to the designation to only three countries -- Burma, Nauru, and Ukraine.

Geithner said companies and banks around the world should “think hard about the risks of doing business with Iran. 'If you are a financial institution anywhere in the world and you engage in any transactions involving Iran's Central Bank or any other Iranian bank operating inside or outside Iran, then you are at risk of supporting Iran's illicit activities: its pursuit of nuclear weapons, its support for terrorism, and its efforts to deceive responsible financial institutions and to evade sanctions," he said.

Central Bank of Iran
Central Bank of Iran

As expected, the United States did not cut off the Iranian banking system entirely, amid concerns that such a move could send oil prices soaring and harm the U.S. economic recovery.

​But Geithner said that measures to target Iran’s Central Bank, which collects revenue from the country’s lucrative state-owned oil fields, were not out of the question.

A growing chorus of U.S. lawmakers are insisting that the administration consider that option, which would inflict serious damage to the Islamic Republic’s economy, but could also potentially antagonize importers of Iranian oil, like China and India, as well.

Clinton also issued a warning to Tehran. "The impact [of international pressure] will only grow unless Iran's leaders decide to change course and meet their international obligations -- and let me be clear: Today's actions do not exhaust our opportunities to sanction Iran. We continue actively to consider a range of increasingly aggressive measures," she said.

These latest measures comes in the wake of a November 8 report from the UN's nuclear watchdog that for the first time directly tied Iran's nuclear program to weapons production.

International Atomic Energy Agency (IAEA) chief Yukia Amano said there was "credible" evidence Iran has carried out activities that normally would only be done for the purpose of developing a nuclear warhead. He said that some of those activities may still be ongoing.

Tehran dismissed the report as baseless and insisted again that its nuclear program is for peaceful, civilian purposes.

On November 18, the IAEA backed a resolution agreed by the P5+1 group - permanent members of the UN Security Council and Germany - that expressed "deep and increasing concern" about "unresolved" issues regarding Iran's nuclear program. It stopped short of recommending a new sanctions regime, which Russia and China oppose.

Four rounds of UN sanctions, including the toughest in June 2010, have so far been unsuccessful in making Iran come clean on its suspect nuclear activities.

Western governments, however, have pledged to bring further pressure on Iran without Moscow and Beijing's backing.

The British government took even bolder steps, announcing that it is completely severing ties between its financial sector and all Iranian banks. The restriction, which takes effect immediately, includes a ban on dealings with the Central Bank.

In a statement, British Chancellor of the Exchequer George Osborne said the move was the first time the United Kingdom has cut off relations with an entire country's banking sector, including all of its banks' subsidiaries.

He later told the BBC that cutting off Iranian banks will hinder what the international community believes is Tehran's push to develop nuclear weapons, and therefore make the world safer.

"We are ceasing all contact between the U.K. financial system and the Iranian banking system. We're doing this because of international evidence that Iran's banks are involved in the development of Iran's weaponized military nuclear weapon program. We're doing this to improve the security not just of the whole world but the national security of the United Kingdom," Osborne said.

UK firms with existing business relationships with Iranian banks can apply for a license to do business, but these only cover humanitarian activities, personal remittances, and provision of some insurance.

Canada also announced that it will “block virtually all transactions with Iran, including those with the Central Bank.”

It will make an exception for Iranian-Canadians to send money back home.

Ottawa also said it will immediately ban the export to Iran of all goods used in the petrochemical, oil, and gas industries and add names to its list of sanctioned Iranian individuals.

In a statement, Foreign Minister John Baird said the new measures are a direct result of the IAEA’s latest findings, which provide “yet more proof that the current regime in Tehran poses the most significant threats to global peace and security today.

France also called for new sanctions on an "unprecedented scale" to force Tehran to negotiate over its nuclear program, proposing that purchases of Iranian oil be halted and that the Iranian Central Bank's assets be frozen.

In a statement, President Nicolas Sarkozy directed the proposal to the European Union and its member states, the United States, Japan and Canada and other willing countries to enact the measures "immediately."

Diplomats said new EU-wide measures will likely be formalized at a minister-level meeting on December 1.

Copyright (c) 2011 RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.

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