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Thursday, November 03, 2011

House Foreign Affairs Committee passes sanctions against Iranian Central Bank

The US House Foreign Affairs Committee has passed sanctions against the Iranian central bank. While the bill must still pass the full House and be reconciled with a similar bill working its way through the Senate, it is likely that some version of the bill will pass.
"I hope we can ... have these bills on the president's desk in time to hand the Iranian regime a nice holiday present," said Representative Ileana Ros-Lehtinen, the Republican chairman of the House Foreign Affairs Committee and a sponsor of the House bill.

The legislation requires the US president to impose sanctions on Iran's central bank if he determines it is facilitating terrorism or the development of nuclear weapons, or supporting Iran's elite military force, the Islamic Revolutionary Guard Corps.

"I believe the central bank of Iran is not only engaging in those activities; I believe it is the ultimate engine of those activities," said the author of the central bank provision, Representative Howard Berman, a Democrat.

The sanctions would effectively block from the US economy any foreign bank involved in significant transactions with Iran's central bank. The legislation was approved by the House panel on a voice vote.

It would extend and tighten existing US sanctions on Iran's energy and banking sectors that were approved by Congress last year as part of Washington's efforts to deter Iran from developing nuclear weapons.
I discussed some of the implications of sanctions against Iran's Central Bank here.

Because even the House version of the bill requires a Presidential determination that Iran is using the Central Bank to promote its nuclear program, President Obama is unlikely to veto the bill.

But at this point, a sanctions bill is becoming irrelevant. As we have seen in earlier posts, events seem to be taking on a life of their own. They're not going to wait for sanctions to take effect.

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