President Barack Obama signed into law on Saturday a defense funding bill that imposes sanctions on financial institutions dealing with Iran's central bank, while allowing for exemptions to avoid upsetting energy markets.
The sanctions target both private and government-controlled banks - including central banks - and would take hold after a two- to six-month warning period, depending on the transactions, a senior Obama administration official said.
Under the law, the president can move to exempt institutions in a country that has significantly reduced its dealings with Iran and in situations where a waiver is in the U.S. national security interest or otherwise necessary for energy market stability. He would need to notify Congress and waivers would be temporary, but could be extended.
Sanctioned institutions would be frozen out of U.S. financial markets.
"Our intent is to implement this law in a timed and phased approach so that we avoid repercussions to the oil market and ensure that this damages Iran and not the rest of the world," the senior U.S. official told Reuters.
Iran's central bank is the main conduit for Tehran's oil revenues.
Now, this is a major ratcheting up of international financial pressure on Iran. Unless the President issues a waiver to the country/central bank or commercial bank in question, they are frozen out of the US financial system. And it's pretty clear that in order to earn a waiver, these countries and banks have to significantly reduce their financial transactions with Iran's central bank. Oil is exempt, so far, but Iran imports and exports plenty of other things, and two of Iran's biggest trading partners are Russia and China.
You see now where the trouble is starting. Iran has already responded.
Iran announced a nuclear fuel breakthrough and test-fired a new radar-evading medium-range missile in the Gulf on Sunday, moves that could further antagonize the West at a time when Tehran is trying to avert harsh new sanctions on its oil industry.
That's the bad news. The good news:
At the same time, it signaled on Saturday that it was ready to resume stalled international talks on its nuclear programme.
It says the programme is completely peaceful and, in what Iranian media described as an engineering breakthrough, state television said Iran had successfully produced and tested its own uranium fuel rods for use in its nuclear power plants.
The rods were made in Iran and inserted into the core of Tehran's nuclear research reactor, the television reported.
So Iran is now willing to come to the table, even as it fires off a test missile and claims it can make nuclear fuel rods. And if you're thinking the folks running against President Obama have any intent of talk rather than war, you'd be mistaken.
Republican Rick Santorum says that if he’s elected president, he would bomb Iran’s nuclear facilities unless they were opened for international arms inspectors.
Santorum says President Barack Obama hasn’t done enough to prevent the Iranian government from building a nuclear weapon and has risked turning the U.S. into a “paper tiger.”
Santorum tells NBC’s “Meet the Press” that he would tell Iranian leaders that either they open up those facilities, begin to dismantle them and make them available to inspectors — or the U.S. would attack them.
In the hands of President Obama, these sanctions are a tough weapon, more "smart power". In the hands of someone like Rick Santorum, we'll be at war before the end of 2013. Also note that it was President Obama who fought for and received the waiver changes to the Iran sanctions. Again, if you think there's zero difference between the GOP and POTUS, judge their actions.
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