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U.S., U.K., Canada Hit Iran With New Economic Sanctions


Britain's finance minister, George Osborne (right), said it was the first time the British government had cut an entire country's banking sector off from Britain's financial sector.
WASHINGTON -- The United States, the United Kingdom, and Canada have unveiled tough new sanctions targeting Iran over its nuclear program.

U.S. Secretary of State Hillary Clinton said the measures represent "a significant ratcheting up of pressure on Iran, its sources of income, and its illegal activities."

U.S. President Barack Obama has signed an executive order expanding sanctions against Iran’s oil and natural gas industries, which account for 70 percent of Tehran's budget revenues.

Washington also added 11 names to a list of individuals and companies whose assets will be frozen and with whom transactions are prohibited for allegedly aiding Tehran’s nuclear ambitions.

Clinton said Iran increasingly uses its petrochemical industry to refine petroleum, making that industry open to new sanctions.

"President Obama signed an executive order that for the first time specifically targets Iran's petrochemical industry, a significant source of export revenues and a cover for imports for sanctioned activities," she said.

'Think Hard'

U.S. Treasury Secretary Timothy Geithner said Washington has designated Iran's financial sector as a "primary money-laundering concern," a move that allows it to take steps to further isolate the country monetarily.

Geithner said companies and banks around the world should "think hard about the risks of doing business" with Iran.

'If you are a financial institution anywhere in the world and you engage in any transactions involving Iran's central bank or any other Iranian bank operating inside or outside Iran," Geithner said, "then you are at risk of supporting Iran's illicit activities: its pursuit of nuclear weapons, its support for terrorism, and its efforts to deceive responsible financial institutions and to evade sanctions."

Iranian President Mahmud Ahmadinejad
Iranian President Mahmud Ahmadinejad
The United States did not cut off the Iranian banking system entirely due to concerns that such a move could send oil prices soaring and harm the U.S. economic recovery.

But Geithner did not rule out measures to target Iran’s central bank, which collects revenue from the country’s lucrative state-owned oil fields.

Clinton also warned there could be further punitive actions against Iran.

"The impact [of international pressure] will only grow unless Iran's leaders decide to change course and meet their international obligations," she said. "And let me be clear. Today's actions do not exhaust our opportunities to sanction Iran. We continue actively to consider a range of increasingly aggressive measures."

'Credible' Evidence

The new sanctions follow a November 8 report from the UN's nuclear watchdog that directly tied Iran's nuclear program to weapons production.

International Atomic Energy Agency (IAEA) chief Yukia Amano said there is "credible" evidence Iran has tried to develop a nuclear warhead and that some efforts may be continuing.

Tehran dismissed the report as baseless and insisted again that its nuclear program is for peaceful, civilian purposes.

In Tehran, Iranian Foreign Ministry spokesman Ramin Mehmanparast said the sanctions amount to little more than "propaganda and psychological warfare" and would have no impact.

Russia denounced the new sanctions against Iran as unacceptable and illegal. In a statement, Russia's Foreign Ministry said the sanctions could impede the chance of dialogue with Iran.

Four rounds of UN sanctions, including the toughest in June 2010, have so far been unsuccessful in making Iran come clean on its suspect nuclear activities.

Western governments, however, have pledged to bring further pressure on Iran without Moscow and Beijing's backing.

In London, the British government took even more restrictive steps on November 21, severing ties between its financial sector and all Iranian banks. The restrictions, which take effect immediately, include a ban on dealings with Iran's central bank.

'Ceasing All Contact'

Britain's finance minister, George Osborne, said the move was the first time the United Kingdom had cut off relations with an entire country's banking sector, including all of its banks' subsidiaries.

Osborne later told the BBC that cutting off Iranian banks will hinder what the international community believes is Tehran's push to develop nuclear weapons, and therefore make the world safer.

"We are ceasing all contact between the U.K. financial system and the Iranian banking system," he said. "We're doing this because of international evidence that Iran's banks are involved in the development of Iran's weaponized military nuclear weapons program. We're doing this to improve the security not just of the whole world but the national security of the United Kingdom."

Canada also announced that it will "block virtually all transactions with Iran, including those with the central bank."

The Canadian government also said it will immediately ban the export to Iran of all goods used in the petrochemical, oil, and natural gas industries and add names to its list of sanctioned Iranians.

Meanwhile, France has called for new sanctions on an "unprecedented scale" to force Tehran to negotiate over its nuclear program. It proposed that purchases of Iranian oil be halted and assets of the Iranian central bank be frozen.

Diplomats said new EU-wide measures will likely be formalized at a ministerial-level meeting on December 1.

written by Richard Solash, with agency reports

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