US sanctions targeting Iran anger China

2012-08-01 09:01

Washington - President Barack Obama announced new US sanctions on Tuesday against foreign banks that help Iran sell its oil and said the measure would add pressure on Tehran for failing to meet its international nuclear obligations.

Obama's decision came ahead of congressional votes on new sanctions intended to further strip Iran of its oil-related revenues, and drew swift condemnation from China, home to one of the targeted banks and a major buyer of Iranian oil.

The sanctions followed criticism from Republican presidential challenger Mitt Romney that the White House is failing to act strongly enough to stop Iran's suspected pursuit of a nuclear weapons. Iran says its nuclear programme is for peaceful purposes.

The United States remains committed to finding a diplomatic resolution to the standoff with Tehran, but is also determined to step up the pressure, Obama said in a statement accompanying his executive order authorising the sanctions.

"If the Iranian government continues its defiance, there should be no doubt that the United States and our partners will continue to impose increasing consequences," he said.

Obama's new sanctions target foreign banks that handle transactions for Iranian oil or handle large transactions from the National Iranian Oil Company (NIOC) or Naftiran Intertrade Company (NICO), two key players in Iran's oil trade.

Swift, angry reaction

That builds on oil trade sanctions signed into law in December that prompted buyers in Japan, South Korea and India to significantly cut purchases to avoid penalties. China also cut purchases from Iran earlier this year due to a dispute over contract terms.

The new executive order has the same rules, providing "exceptions" to nations that have demonstrated significant cuts.

Obama's new order also targets China's Bank of Kunlun and Iraq's Elaf Islamic Bank for providing services to Iranian banks.

"We expect that today's action will have a significant chilling effect on the ability of Kunlun and Elaf to operate anywhere in the world," David Cohen, the Treasury Department's undersecretary for terrorism and financial intelligence told reporters.

China's swift and angry reaction to the US sanctions highlighted its insistence that its extensive trade and energy deals with Iran should not be hurt by the nuclear stand-off.

"The US has invoked domestic law to impose sanctions on a Chinese financial institution, and this is a serious violation of international rules that harms Chinese interests," Chinese Foreign Ministry spokesperson Qin Gang said in a statement.

Call for military threat

The sanctions "will have a negative effect on bilateral Sino-US co-operation" Qin said, without giving details. Calls to Kulun's administrative office in Beijing were not answered.

Israeli Prime Minister Benjamin Netanyahu said this week that sanctions have not set back Iran's nuclear programme "one iota" and that "a strong military threat" was also needed.

But US officials argue that the sanctions are inflicting significant pain on Iran and further isolating the country.

Iran's currency has plunged since the United States and European Union first targeted its oil revenues this year, making it harder for Tehran to spend money on its nuclear programme, and ramping up internal political pressures within the country, said Ben Rhodes, a national security adviser to Obama.

Iran's oil exports have also been halved due to the US sanctions and an EU oil embargo that also bans most of the world's insurances firms from covering Iranian oil shipments.

Mark Dubowitz, head of the non-profit group Foundation for Defence of Democracies, which pushes for tough sanctions on Iran, welcomed the new measures.

Oil for gold

But like other sanctions advocates, he said more steps are needed to blacklist Iran's energy sector and require countries to further cut oil imports.

The US Congress has pushed for more oil-linked sanctions, and on Tuesday negotiators agreed to a final package that will require the Obama administration to crack down on those who ship or insure Iranian oil cargoes, or who pay for oil using gold.

Lawmakers said they are prepared to go further if needed.

The House is expected to vote on the bill on Wednesday. A Senate vote on the sanctions is expected to happen before Congress breaks at the end of the week for an extended recess.

  • fidel.mgoqi - 2012-08-01 10:13

    It was about time that new financial systems which operate outside the Bank of International Settlement (BIS) was established to avoid such dictatorship by these stupid Americans.

  • Emmanuel Mpya - 2012-08-01 11:31

    Thank God there is a USA in the world,otherwise we would all convert to islam or die,in thier zeal to do this allah's so called will,this maniacs are not afraid of mutual anihilation which a nuclear amagedon may bring,i say stop them before they succeed or else we're all doomed,and yes screw the chinese for thier selfish neutrality.

      fidel.mgoqi - 2012-08-01 11:42

      Don't people like you get tired of propagating the same nonsense year after year? There isn't going to be a "nuclear holocaust". Iraq had no WMD and neither does Iran. You Sir is befallen with US exceptionalism. You have watched too many Hollywood films of US pilots saving the world from invading aliens.

      zaid.personal - 2012-08-16 21:50

      @Emmanuel...try getting a real education before sprouting your Hollywood infused stupidity.

  • mkyounus - 2012-08-19 10:24

    usa!!! the biggest modern day pharoah and userper of mineral wealth of other countries!! you will soon meet your doom and destruction,just as the other arrogant nations before you!!!!!

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