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Intro: "US President Barack Obama Saturday signed into law tough new sanctions targeting Iran's central bank and financial sector, in a move that could intensify a brewing Gulf showdown."

Iranian 500,000-rial are displayed in Tehran. (photo: AFP)
Iranian 500,000-rial are displayed in Tehran. (photo: AFP)



Obama Signs New Iran Sanctions Into Law

By Stephen Collinson, Agence France Presse

02 January 12

 

S President Barack Obama Saturday signed into law tough new sanctions targeting Iran's central bank and financial sector, in a move that could intensify a brewing Gulf showdown.

The measures, meant to punish Iran for its nuclear program, were contained in a mammoth $662 billion defense bill, which Obama signed despite having reservations that it ties his hands on setting foreign policy.

The sanctions are meant to hit Iran's crucial oil sector and require foreign firms to make a choice between doing business with Tehran's financial sector and central bank or the mighty US economy and financial sector.

Foreign central banks which deal with the Iranian central bank on oil transactions could also face restrictions, sparking fears of damage to US ties with key nations such as Russia and China which trade with Iran.

Obama signed the bill in Hawaii where he is on vacation, at a time of rising tension with Tehran, which has threatened to block the Strait of Hormuz - through which more than a third of the world's tanker-borne oil passes.

The United States has warned it will "not tolerate" such an interruption.

In comments reported Saturday, Tehran's top nuclear negotiator Saeed Jalili warned that Iran would "give a resounding and many-pronged response to any threat" made against it.

But Jalili also said Iran was ready to rejoin EU-led talks with major powers on assuaging Western concerns over its nuclear program.

The White House held intense negotiations with Congress on the terms of the law's implementation, given concern that sanctions on Iran's central bank could spark chaos in the global financial system and hike the price of oil.

Obama said in a statement issued as he signed the bill that he was concerned the measure would interfere with his constitutional authority to conduct foreign relations by tying his hands in dealings with foreign governments.

The bill, which passed with wide majorities in Congress, did reserve some wiggle room for Obama, granting him the power to grant 120-day waivers if he judges it to be in the national security interests of the United States.

Earlier this month, Treasury Secretary Timothy Geithner wrote to Congress to express concern against an earlier, tougher sanctions measure along the same lines saying it could harm the US push with its partners to isolate Iran.

Geithner argued that foreign allies could resent the new US measures and make it less likely they would cooperate and the sanctions would have the "opposite effect" of their intended purpose of isolating Iran.

Senior US officials said Saturday that they would try to implement the new sanctions guidelines in a way that protected the global economy and US foreign policy priorities, in a way which would still inflict pain on Iran.

There are fears that increased sanctions on Iran's central bank could force the global price of oil to suddenly soar, and actually give Tehran a financial windfall on its existing oil sales.

Rising oil prices could also crimp the fragile economic recovery in the United States and inflict pain on American voters in gas stations - at a time when Obama is running for reelection next year.

The Obama administration argues that it has imposed the toughest-ever sanctions on Iran by the United States and its allies and says the measures are now having a punishing impact on the Iranian economy and petroleum sector.

The West alleges Tehran is seeking to acquire a weapons capability under the guise of its nuclear research program. Iran denies any such ambition and says its work is only for civil energy and medical purposes.

In recent weeks, Iranian officials have insisted the country was ready to face new sanctions against the oil sector and central bank.

The Wall Street Journal reported this month that US and European officials were seeking assurances from major oil producers, such as Saudi Arabia, Kuwait and the United Arab Emirates, that they would increase exports to the West and Asian nations if tighter sanctions on Tehran's energy exports are enforced.

 

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+16 # Activista 2012-01-02 08:49
Obama/Neocons repeat the Iraq DISASTER!
US Iraq sanction caused DEATH "The Iraq sanctions were a near-total financial and trade embargo imposed by the United ... Estimates of excess civilian deaths during the sanctions vary widely, but range from 170000 to over 1.5 million. ......"?
In Iran the sanction caused death will exceed Iraq. Iran has right to defend themselves.
" Senate has actully declared war (100-0 vote)" - there is NO hope for USA ...
AIPAC controls USA foreign policy, USA does NOT have any interest/busine ss in the middle East. Russia and Saudi Arabia are happy - less oil on the World market - HIGHER PROFITS.
 
 
+21 # reiverpacific 2012-01-02 09:59
Oh boy! The Straits of Hormuz = another Suez Canal (for those of you old enough or historically aware of that time) in 1956 where after a UK, French/Israeli attack on Nasser's Egyptian forces, initially defeating them but after Egypt sinking 40 ships in the canal and blocking it, the aggressors were forced to back down partially urged by the UN (I still remember the hysterical Empire-loving vomit against Nasser issuing from the radio and TV as a kid).
This finally put the cap on the dying British Empire and caused the world to shun the UK and France (and eventually perhaps began Israel's march to the current right-wing US-armed puppet state).
Lesson; you might have more firepower but when an "enemy" nation controls the geographical and strategic flow of goods to the larger world, sanctioning and attacking that nation is practically ensuring prolonged conflict and defeat with heavy socio-economic consequences to all involved, especially the aggressors.
I'm no lover of the current Iranian theocracy (nor the current LIKUD Israeli crowd) but this could be the final nail in the coffin of the US Empire, biggest Embassy in the world in Baghdad notwithstanding.
And I can't help but marvel at the hypocrisy of how heavily armed, nuclear-destruc tive nations can sanction one which is only "allegedly" arming itself in imitations of it's perceived oppressors.
And it only hurts the people of both sides, not the leaders.
 
 
+12 # RMDC 2012-01-02 10:37
Obama's move is really an attack on the central banks of every nation on earth. If they deal with Iran, the US will punish them. I'm pretty sure that no one will like this move by Obama. Why would China, India, France, and Iran's other big customers submit to this sort of intimidation by Obama?

This move will also make obvious to all just how much the US surveils and controls international commerce and banking. This makes Geithner's comment above the most likely -- the sanctions will only isolate the US. Who will want to do business with the US when it threatens others like this?

The BRICS nations are working on a banking and funds transfer system outside of the US controlled Bank of International Settlements. This move by Obama may just push forward their plans. This would mean the end of the dollar hegemony, unless the US acting on instructions from Netanyahoo opens the hot war very quickly and the economic embargo which is easy to break is replaced by a military embargo which would be impossible to break.

I think most Americans would be very strongly against a war against Iran. Other than the republican presidental candidates (Paul excepted), I don't see anyone supporting it. Obama will drive the last nail in the coffin of his presidency, just because he lacks the balls to tell Netanyahoo to go to hell.
 
 
+7 # John Locke 2012-01-02 11:41
Sanctions don't count for those close to the Government ask Halliburton, or Brown and Root...they contract with any country they want irrespective of sanctions imposed... its all show and tell and we are the kindergarteners playing the game
 
 
+6 # Byronator 2012-01-02 11:58
This is the Bill Hicks' analogy to Shane, where the bully tosses a gun to the little guy and orders him to "pick it up". When he does, the bully shoots him. Another analogy might be that the we the masses are cattle and the Oil and Banking affiliated oligarchs are the cowboys leading us to slaughter. This is a game with no winners.
 
 
-3 # dorianb@fuse.net 2012-01-02 12:19
John locke: Are you a Professor in Con. Law and/or a journalist?
 
 
+5 # Activista 2012-01-02 11:48
By now Russia is providing most oil to China - closing Straits of Hormuz will increase cost of oil and finish US economy.
Of course US unemployed will not have $$ to buy China crap ...
 
 
-6 # dorianb@fuse.net 2012-01-02 12:23
Activista: Your comments would be better appreciated if you would cut the "crap" and other crude adjectives.
 
 
+10 # irvingwood 2012-01-02 12:43
"Crap" is hardly a crude adjective these days. You don't run this site so don't try to boss us around. Stupid Obama is pushing the ME towards a war that could easily turn nuclear. I'm heartily sick of seeing the USA trash this world I live on. Stay behind your own borders and mind your own business. Nobody asked you to intervene. Iran closed the Straits of Hormuz for 5 hours on Saturday. Big bully USA did nothing, despite it's carriers and thug ally Israel. I can honestly say that in the past 10 years I have learned to hate the USA.
 
 
0 # jerryball 2012-01-04 21:27
Oh? Just as we stayed behind our own borders early in the Nazi Regime early years of attacking all of Europe? Unsavory advice at the least, and not a very smart move historically. Ach Tung Irvingwood!
 
 
+2 # Activista 2012-01-02 17:11
By crap I mean materialism/stu ff - our Money Culture. There are other measures of happiness - happyplanetindex.org
Sorry - there is not one thing in Wall Mart I consider essential to my existence - mostly crap.
 
 
0 # jerryball 2012-01-04 21:22
I think this is feeding propaganda needed by American War Lords and Mongers who want more money and war, and also Financial Overlords who are investing heavily in Oil Futures salivating for more money. The truth that no media group is reporting is that Iran would shoot itself in their own foot. Oil from the Gulf states would simply be transported via the excellent motorway network that stretches across the Arabian peninsula to the four new and upgraded deep-water ports of Oman. From these ports, oil would subsequently be shipped through the Arabian Sea to their final destinations. Meanwhile Iran will no longer be able to ship their oil through the Strait of Hormuz. Not thinking that far ahead, Iran. If Iran attacks that new route, they will face 84 F-15s that were recently sold to the Saudis.
 

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