US Senate approves tough new sanctions on Iran

The US plans to target companies facilitating Iran's petroleum trade.

Christopher Dodd, a Connecticut Democrat, speaks to reporters in Washington, DC.
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WASHINGTON // The US Senate passed legislation this week authorising Barack Obama to implement broad new sanctions against Iran, including a mandate to cut ties with foreign companies that supply Iran with petrol or technology to increase its domestic refining capacity. Legislators believe such sanctions will have a crippling effect on the Islamic republic, which, despite being a major oil producer, imports much of its petrol.

Christopher Dodd, a Connecticut Democrat who sponsored the legislation, said the new sanctions were necessary to curb Iran's sponsorship of terrorism, human rights abuses and secretive nuclear programme, which the US and other countries believe is designed to develop weapons. Iran says it is entirely for peaceful purposes. "With passage of this bill, we make it clear that there will be appropriate consequences if these actions continue," Mr Dodd, chairman of the Senate banking committee, said.

The US House of Representatives passed similar legislation in December. The two bills now will be reconciled and sent to Mr Obama's desk for his signature. The congressional action comes as western-backed diplomatic overtures appear to be falling flat. Last week, Iran rejected a compromise to send its low-enriched uranium abroad in exchange for fuel to power a peaceful medical research reactor. Such fuel could not be used for weapons.

The Obama administration, meanwhile, has sharpened its rhetoric. In his State of the Union speech on Wednesday, Mr Obama grouped Iran with North Korea, saying the behaviour of its leaders have led to increased isolation. "As Iran's leaders continue to ignore their obligations, there should be no doubt: They, too, will face growing consequences," Mr Obama said. "That is a promise." On the sidelines of the Afghanistan summit in London this week, Hillary Clinton, the US secretary of state, held meetings on Iran with members of the P5+1 - the five permanent members of the UN Security Council plus Germany. The United States hopes to bring those countries into agreement on a fourth round of UN sanctions against the Iran, although Russia and China, which have extensive economic ties to Iran, have resisted.

Previous UN sanctions have banned exports of dual-use technologies, limited travel of officials connected to Iran's nuclear programme and frozen some Iranian assets. "Iran's approach leaves us with little choice but to work with our partners to apply greater pressure in the hopes that it will cause Iran to reconsider its rejection of diplomatic efforts with respect to its nuclear ambitions," Mrs Clinton said in London, noting that such punitive measures were "not meant to punish the Iranian people".

The latest sanctions approved by Congress would target an array of companies that facilitate Iran's petrol trade, including shipping and insurance companies. If it becomes law, Mr Obama would be required to sanction such companies or else seek a waiver not to do so. The Obama administration has sought greater flexibility in choosing when to impose sanctions. Some analysts have also expressed concerns that the sanctions will alienate US allies that export petrol to Iran, including India, France, the Netherlands and several Gulf countries.

"We risk alienating the governments of countries whose co-operation we need to put pressure on Iran," said Kimberly Ann Elliott, a senior fellow at the Centre for Global Development, who studies the impact of sanctions. Mark Dubowitz, the executive director of the Foundation for Defense of Democracies, a conservative-leaning policy institute in Washington, said that targeted sanctions had a track record of "early success". He noted that the mere threat of such sanctions in the past had already caused some companies, such as British Petroleum, to stop doing business with Iran."We have already seen that just the threat of sanctions has had a measurable cost on Iran's ability to import gasoline," he said in a statement.

The new legislation also requires Mr Obama to freeze the assets of Iranians, including members of Iran's Revolutionary Guard Corps, who are active in weapons proliferation. Another provision targets the black market export of sensitive technology to Iran through third countries and requires Mr Obama to impose strict licensing requirements on those who refuse to co-operate. The US government will also be prohibited from doing business with firms that provide communications technology used to monitor, jam or otherwise disrupt communications among Iranians, or between the Iranian people and the outside world.