nuclear-news

Obama govt doing a balancing act with sanctions on Iran

Sanctions against Iran a balancing act for U.S. FINANCIAL POST, Reuters  Jan 2, 2012 By Andrew Quinn WASHINGTON – The United States has armed itself with some of the toughest sanctions yet targeting Iran but must carefully assess how to avoid catching energy-importing allies such as Japan, South Korea and India in the crossfire.

President Barack Obama signed the law on Saturday imposing sanctions on financial institutions that deal with Iran’s central bank, the main clearinghouse through which OPEC’s No. 2 oil exporter deals with clients around the world.

The new U.S. sanctions were pushed through Congress despite misgivings
among administration officials, who now must consider how to implement
the law without roiling global energy markets or upsetting friendly
governments that depend in part on Iranian crude oil imports.

Political analysts said Washington hopes the new sanctions will spur
foreign banks to change their behavior before the United States is
required to begin freezing them out of U.S. financial markets.

“The sanctions will force a choice between buying Iranian oil or
engaging in the U.S. financial system, the largest in the world. That
is going to change the risk calculus for a lot of folks,” said Brian
Katulis, a security expert at the Center for American Progress.

“They are going to wait to see how this signal is received before they
take any further steps.”
MORE SCALPEL THAN AXE

The new U.S. measures 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.

U.S. officials acknowledge that allies such as Japan have concerns,
and have built in several provisions designed to make the new law more
of a scalpel than an axe.

The law allows Mr. Obama to exempt institutions in a country that has
significantly reduced its dealings with Iran. He may also grant
waivers deemed to be in the U.S. national security interest or
otherwise necessary for energy market stability.

Mr. Obama would need to notify Congress and waivers would be temporary
but they could be extended.
White House officials declined to say which countries have sought
waivers or how they expect the sanctions to impact U.S. relations with
Iran’s oil customers.

China, the No. 1 customer for Iran’s oil, and Russia have both
resisted additional sanctions on Tehran and are unlikely to be swayed
by the new U.S. law, analysts said…….
Tehran signalled during the weekend that it was ready to resume talks
on its nuclear program with the United States, Russia, China, Britain,
France and Germany that stalled in January.

Western officials have said repeatedly they still want to talk to
Tehran but only if it is ready to discuss the core concerns about its
nuclear program. Tehran says the nuclear program is purely for
peaceful purposes but the United States and others fear it is aimed at
producing atomic weapons.
George Lopez, a sanctions expert at the University of Notre Dame, said
the new U.S. sanctions could strengthen Washington’s hand going into
any new talks with Iran after a year of steadily increasing economic
pressure. http://business.financialpost.com/2012/01/02/sanctions-against-iran-a-balancing-act-for-u-s/

January 3, 2012 - Posted by Christina Macpherson | Iran, politics international, USA