The New York Times, Washington, 6 Feb 2012 — The White House announced tightened sanctions against Iran on Monday because of its suspect nuclear program, freezing all property of the Central Bank of Iran, other Iranian financial institutions and the Iranian government in this country.
The tightening also raised the warning to financial institutions in other nations that they could face big penalties in the United States if they do business with the Iran’s central bank.
The actions, which are allowed under a new sanctions measure that became law this year, were ordered by President Obama in an executive order he signed on Sunday, the White House said.
Mr. Obama’s action came against the backdrop of rising tensions between Iran and the West over its nuclear energy program, which Iran says is peaceful and Iran’s critics say is a cover for efforts to build the capacity to make a nuclear weapon.
Last week an International Atomic Energy Agency inspection team left Iran after the Iranian government refused to allow it to scrutinize elements of the Iranian nuclear program that an the agency has cited as a cause for concern because of its military nature. Although the team is returning to Iran later this month, Western diplomats have concluded Iran appears intent on stonewalling.
In a statement, the White House said the executive order “reemphasizes this administration’s message to the government of Iran — it will face ever-increasing economic and diplomatic pressure until it addresses the international community’s well-founded and well-documented concerns regarding the nature of its nuclear program.”
The timing, a Treasury Department official said, was driven by the need for the administration to reach out to allies and other countries to explain how the sanctions will work. Many of these countries buy oil from Iran through its central bank, and face potential sanctions in the United States if they continue to do.
The administration has been working to convince Iran’s oil customers to shift to other suppliers, and countries like Saudi Arabia have pledged to boost production to make up for any shortages. Some of Iran’s biggest customers however, notably China and India, have signaled they intend to keep purchasing Iranian oil.
With his exeutive order, the president took a first step toward implementing the sanctions against Iran’s central bank, and potentially the banks of other nations that do business with it, which the Senate by a unanimous vote attached recently to an annual defense bill over the administration’s objections. Mr. Obama agreed to the far-reaching penalties after the White House negotiated language that would allow him to waive them against foreign financial institutions.
In documents accompanying the executive order, the White House said foreign financial institutions are at risk of American sanctions “if they engage in certain significant financial transactions” with Iran’s central bank, rather than “arms-length” transactions.