The Mr Obama administration announced new sanctions on the Iranian oil industry and on a Chinese and an Iraqi bank saying defiance by the Iranian government would lead to increasing consequences.
The new measures come as Congress is also getting close to approving a new sanctions law and after Republican presidential candidate Mr Mitt Romney claimed the White House was not doing enough to prevent Iran from acquiring a nuclear weapon.
The new sanctions will aim to penalize foreign banks that handle transactions for National Iranian Oil Company or its trading subsidiary Naftiran Intertrade Company. Separately, the Treasury department said it was placing sanctions on China's Bank of Kunlun and Iraq's Elaf Islamic Bank because they had been doing business with Iranian banks which were covered by sanctions.
The new sanctions are part of a broader US and international effort to put pressure on Iran to abandon its efforts to build a nuclear weapon. They follow a European ban on oil imports and US legislation passed at the end of last year placing sanctions on Iran's central bank which led Iran's main customers in Asia to sharply reduce their imports in the H1 of the year.
While Israeli PM Mr Benjamin Netanyahu said at the weekend that sanctions were not changing Iran's behavior, US officials said that the existing sanctions were already having a crippling effect on the Iranian economy.
Mr Robert Einhorn senior state department official for non proliferation and arms control said that Iranian exports of oil this year had been cut by around 1m barrels a day equivalent to a decline of 40% to 50%. The new measures were a clear sign that the Obama administration is determined to increase the pressure on Iran until it is willing to negotiate seriously.
He said that the sanctions were announced hours after a draft text of a new sanctions bill was agreed by negotiators from the Senate and the House of Representatives. The US Congress is now racing to try to pass the bill before the summer recess starts at the end of the week. The bill has strong support in both political parties but is considerably weaker than some leading Republican members of Congress had wanted which could still lead to it being held up.
Mr Ben Rhodes National Security Council official said the bill was complimentary to the new sanctions. The new bill aims to impose new penalties on companies that insure or ship Iranian oil and to reduce the scope for Iranian companies to reflag their vessels or turn off their tracking systems.
The new text also includes penalties for Swift, a telecommunications network used by many financial institutions if it helps Iranian banks transfer funds electronically. It also seeks to punish companies that sell riot-control equipment such as tear gas to Iran.
Mr Mahmoud Bahmani governor of the Central Bank of Iran said that the bank had begun a guerrilla economic war" to offset the impact of international sanctions which he described as like "military war" against the country. Mr Bahmani did not give details of what Iran's banking system was doing to deal with the sanctions.
Source - The Financial Times
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