United States and Its Allies Expand Sanctions on Iran

NYTimes.com

WASHINGTON — The United States and its allies are rolling out a new set of sanctions against Iran on Monday, with the country’s central bank and petrochemical industry as targets. The move tightened the vise on Tehran after a United Nations report on its nuclear activities, but demonstrated the continued limitations to international pressure.

The Treasury Department will name the Central Bank of Iran as a “primary money laundering concern” on Monday, an administration official said — a symbolically important step, but one that is short of formal sanctions, which would probably be resisted by China and other Asian countries that import oil from Iran.

The United States will also impose sanctions on a range of companies that are involved in supporting Iran’s nuclear industry, as well as on its petrochemical industry — expanding existing measures that aim to weaken the Iranian regime by depriving it of its ability to refine gasoline and export crude oil.

Earlier on Monday, Britain announced that it would cut all ties with Iran’s financial sector, declaring that Iranian banks play a role in financing its nuclear and ballistic-missile programs. Leaders of the European Union will meet on Thursday and are expected to approve similar measures then, diplomats said.

“We have consistently made clear that until Iran engages meaningfully, it will find itself under increasing pressure,” said the British foreign secretary, William Hague. “The swift and decisive action today, coordinated with key international partners, is a strong signal of determination to intensify this pressure.”

Taken together, the steps deepen the isolation of Iran, which has been under pressure since the International Atomic Energy Agency published evidence on Nov. 8 that Iran has continued to work on a nuclear weapon and delivery system.

But the Obama administration’s decision not to sanction the central bank reveals the obstacles Washington faces in applying draconian measures that could cripple Iran’s economy. Under American law, a formal designation would require the United States to cut off access to any foreign institution that continued to do business with the bank.

China, Japan, and other countries use the central bank to process transactions from their purchases of Iranian oil, in part because most of Iran’s major commercial banks are already subject to sanctions. They would be likely to resist an order to stop dealing with the central bank, which would put the Obama administration in an untenable position, since the United States could not sever its ties with Chinese or Japanese banks.

Mr. Obama could request a waiver to exempt such institutions from the ban, but experts on sanctions said that such a waiver would undermine the credibility of the United States. The White House has been under pressure from Republicans to designate the central bank, and has worked to forestall such legislation.

The administration has telegraphed its intention to seek further sanctions on Iran since the publication of the nuclear agency’s report. The White House pushed the agency to be as detailed as possible in its evidence of Iran’s nuclear activities, as a way of building international support for sanctions. But Russia and China both pushed back, with Russia arguing that diplomacy is still the best course.

For its part, Iran reacted angrily to the agency’s report, and renewed its display of displeasure on Monday by staying away from a gathering of 97 countries at the Vienna headquarters of the atomic energy agency, which was called to discuss nuclear issues related to the Middle East. Tehran says its nuclear program is solely for peaceful, civilian purposes.

Yukiya Amano, the agency’s director general, said he hoped the two-day meeting, which unusually includes both Israel and Arab states, would “promote dialogue on a nuclear weapon-free zone” in the region. While there is a widespread assumption that Israel is now the only Middle Eastern country with nuclear arms, Israel has never confirmed that suspicion.

Iran has accused Mr. Amano of pro-Western bias and of failing to address Israel’s presumed atomic arsenal. While no clear result is expected from the Middle Eastern discussion, it was billed as having potential symbolic importance, and Iran had accepted an invitation to attend.

“It is my earnest hope that your discussion will be creative and constructive, moving beyond simply re-stating long-established positions,” Mr. Amano told participants on Monday. “I hope it will nurture fresh thinking, creative thinking, on the possible relevance of the experience of the five existing nuclear weapon-free zones to the Middle East.”

But Syrian representatives reached for more traditional arguments, saying Israel’s undeclared and unconfirmed nuclear capability posed a “grave and serious threat,” The Associated Press reported. Along with Iran, Syria ranks among Israel’s most virulent regional adversaries. Other Arab states at the meeting were more measured in the tone of their speeches.

Administration officials have said that Iran’s economy is suffering badly because of existing sanctions against it over the nuclear issue, and that its oil industry is unable to refine enough gasoline to spare having to import any.

Analysts said the latest measures would intensify that pressure, but warned that changing Iran’s behavior would require patience.

“We’re trying to do two things: Stress the Iranian economy as a means of impacting the Iranian decision-makers’ attitude, and using sanctions and other tools to slow the nuclear program,” said Ray Takeyh, an expert on Iran at the Council on Foreign Relations. “It’s a long-term proposition.”

Alan Cowell contributed reporting from London.