U.S. Beefs Up Sanctions against Iran

August 1, 2012Iranby EW News Desk Team

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President Barack Obama has ordered new economic sanctions aimed at crippling Iran’s energy sector as well as penalising Chinese and Iraqi banks that have facilitated transactions on behalf of Iran.

According to Reuters, the increased pressure “followed criticism from Republican presidential challenger Mitt Romney that the White House is failing to act strongly enough to stop Iran’s suspected pursuit of nuclear weapons.”

Late last year, the United States had signed into law trade sanctions that prompted some of Iran’s biggest customers to significantly cut purchases to avoid penalties. Following that lead, the European Union also imposed similar oil sanctions which officially went into effect a month ago.

While the Obama’s new executive orders carry the same rules and penalties for nations that insist on purchasing Iranian crude, the new sanctions will aim to penalise foreign banks that handle transcations for the National Iranian Oil Company, or its trading subsidiary Naftiran Intertrade Company.

Additionally, the new sanctions targets China’s Bank of Kunlun and Iraq’s Elaf Islamic bank for providing services to Iranian banks, said Reuters. The Bank of Kunlun is owned by CNPC, China’s largest oil company and whose listed arm is PetroChina. The banks will now be cut off from the US financial system.

China responded swiftly with a foreign ministry spokesman Qin Gang saying:

The U.S. has invoked domestic law to impose sanctions on a Chinese financial institution, and this is a serious violation of international rules that harms Chinese interests.

Qin added that the sanctions “will have a negative effect on bilateral Sino-US cooperation.”

At the same time, the FT reports that a new bill “complimentary” to the new sanctions aims to “impose new penalties on companies that insure of ship Iranian oil and to reduce the scope for Iranian companies to reflag their vessels or turn off their tracking systems.”

Related News: Iranian Oil Tankers Put On Disguises As EU Ban Looms

Without giving details on how it plans to cope with the increased sanctions, Mahmoud Bahmani, governor of the Iranian central bank, described the sanctions as “no less than a military war”.

Iranian President Mahmoud Ahmadinejad called the international sanctions “ridiculous” and equivalent to “political warfare” that seeks to deny the global energy market of Iranian oil at a time when demand is swelling.

Obama said:

If the Iranian government continues its defiance, there should be no doubt that the United States and our partners will continue to impose increasing consequences.

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