Israel Matzav: US, UK and Canada implementing new, coordinated sanctions against Iran

Monday, November 21, 2011

US, UK and Canada implementing new, coordinated sanctions against Iran

ABC News is reporting that the United States, the United Kingdom and Canada will implement new, coordinated sanctions against Iran on Monday.

U.S. officials familiar with the plans say they target Iran’s nuclear sector as well as plugging key gaps that have allowed Iran to work around existing sanctions on its energy and financial sectors. The United Kingdom and Canada are both expected to announce unilateral measures to limit Iran’s access to their economies, with the UK essentially cutting off Iran’s access to its financial sector.

European Union ministers are expected to meet on December 1 to consider their own sanctions.

Two U.S. officials, who spoke on the condition of anonymity given the diplomatic sensitivities involved, say the State Department will sanction Iran’s petrochemical industry, which is normally used to produce products like plastic and styrofoam but is increasingly used to refine petroleum, as international sanctions have constrained the capacity of Iran’s energy sector. The new measure aims to discourage foreign companies from investing in that industry because it could inadvertently aid Iran’s energy sector and undermine previous sanctions.

The State Department is also expected to target both foreign and Iranian entities, many controlled by the Revolutionary Guard Corps, that have begun to help out with critical tasks in Iran’s oil and gas sector, picking up the slack as foreign companies pull out for fear of running afoul of sanctions.

A State Department spokesman declined to comment for this story.

The Treasury Department, meanwhile, is expected to issue a finding that the Iranian financial system is a “jurisdiction of primary money laundering concern.”

The finding, made under section 311 of the USA Patriot Act, enables the Secretary of the Treasury to require American banks to conduct additional reporting to ensure their corresponding foreign accounts are not indirectly dealing with Iran. That extra vigilance, officials say, will have a cascade effect where foreign financial institutions are more reluctant to do business with Iran.

The State Department and Treasury Department are also expected to designate additional Iranian entities for their role in Iran’s nuclear program.

A Treasury Department spokeswoman also declined to comment for this story.

But as long as Europe continues to trade with Iran, how effective are these sanctions going to be? If the US really wanted to shut Iran down, all it has to do is bar any bank that deals with the Iranian Central Bank from doing business in the US banking system. YNet refers to sanctioning the Central Bank as 'truly disabling sanctions.' Unfortunately, that's not happening right now. Iran's economy will be spared yet again.

Despite the renewed pressure, sanctions on the Iranian Central Bank and bans on Iran’s oil and gas sector will not be included in this latest round, according to one U.S. official, citing fears that such measures could lead to a spike in oil prices that would harm America’s own economic recovery.

Yes, of course, where have we heard that before?

While I have yet to see an official reaction from the Israeli government, JPost reports that the new sanctions are "not expected to satisfy those in the West and in Israel, who had hoped IAEA document would trigger concrete international action, such as an IAEA referral of its case to the UN Security Council."

Pick your poison. If the 'international community' refuses to stop Iran, I can name one country in the Middle East that will do everything it can to stop them.

Labels: Iran sanctions regime, Iranian central bank, Iranian nuclear threat