x Abu Dhabi, UAEWednesday 17 January 2018

US officials says sanctions could bring real problems to Iran

Obama administration officials yesterday said the lengthening list of punitive measures against Iran could bring it to a turning point in its diplomatic standoff with the West.

WASHINGTON // Obama administration officials yesterday said the lengthening list of sanctions against Iran - including those imposed by the United Nations and follow-on measures from the United States, the European Union and other allies - could bring the Islamic republic to a turning point in its diplomatic standoff with the West over its secretive nuclear programme.

In an appearance before the Senate Foreign Relations Committee, two men who have played a key role in shaping Mr Obama's Iran policy - Stuart Levey, the Treasury Department's undersecretary for terrorism and financial intelligence, and William Burns, the State Department's undersecretary for political affairs - said the collective sanctions have left Iran increasingly isolated and vulnerable. "Iran is not 10 feet tall and its economy is badly mismanaged," Mr Burns said. "Beneath all their bluster and defiant rhetoric, its leaders understand that both the practical impact of [UN sanctions] and [their] broader message of isolation create real problems for them".

Mr Levey said that with the new sanctions, the administration's dual-track strategy, which couples economic pressure with diplomatic engagement, has now reached "inflection point". He also called on private companies to scale back business ties with Iran. "Voluntary actions of the private sector amplify the effectiveness of government-imposed measures," he said. The testimony comes a day after US legislators in the House and Senate announced an agreement on a new sanctions bill that would target companies connected to Iran's refined petroleum sector and Iranian banks.

The bill, which goes further than UN sanctions, would, among other things, cut off access to US financial markets for foreign banks doing business with blacklisted Iranian entities. It also would penalise US companies for the actions of their foreign subsidiaries, increase criminal penalties for sanctions violations, and impose new penalties and travel restrictions on Iran's human rights abusers. The US Treasury Department last week released a list of dozens of newly designated individuals and other entities that it said were involved in Iran's atomic or missile programmes, barring them from doing business with Americans and freezing their assets in the United States. The list includes members of Iran's Revolutionary Guard Corps and five front companies used by an Iranian shipping line to evade sanctions.

EU leaders meanwhile reached a deal on new sanctions that would ban investment, technical assistance and technology transfers to Iran's oil and gas industry. The EU sanctions also would bar Iran's shipping and air cargo companies from operating in EU territory. The Iranian leadership, for its part, has dismissed the impact of international sanctions. Mr Levey and Mr Burns said efforts by Iran's leaders to block the latest round of sanctions is a sign that they will have an impact.