New Iran Sanctions Encounter Senate Skepticism

WASHINGTON – A bipartisan group of senators remains unconvinced about the effectiveness of current sanctions against Iran, following a set of new restrictions unveiled by the Obama administration last week.

The Treasury Department announced Tuesday new sanctions on Iran, targeting a network of firms that U.S. officials said were front companies that earned billions of dollars in profits for Iran’s top leaders. This marks the fourth such measure in a week.

The Treasury Department identified 37 companies, including enterprises in South Africa, Croatia, Germany, and the United Arab Emirates, that it said operated ostensibly as private businesses directed by Iranian leaders to help evade existing U.S. and European sanctions.

These sanctions follow an executive order signed by President Obama on Monday authorizing further sanctions on foreign banks and financial institutions that make transactions in Iran’s currency, the rial, outside the country. The new rules, which will be effective July 1, also penalize the sale of goods and services to Iran’s auto industry, an important sector of the country’s economy.

“The steps taken today are part of President Obama's commitment to prevent Iran from acquiring a nuclear weapon, by raising the cost of Iran's defiance of the international community," White House spokesman Jay Carney said in a statement.

The Obama administration has introduced the series of new measures to step up the pressure on Iran over its nuclear program, which Iran insists is for peaceful purposes but Washington and other Western powers suspect is aimed at making weapons. The latest executive order is the ninth Obama has signed on Iran since the start of his presidency and the sixth in the last two years.

But the Obama administration’s efforts were not enough to convince lawmakers at a Senate Banking Committee hearing on Tuesday about the impact of sanctions on Iran’s nuclear program.

Banking committee members Sens. Bob Corker (R-Tenn.), Robert Menendez (D-N.J.), Mike Crapo (R-Idaho), and Joe Manchin (D-W.Va.) all expressed concern Tuesday that sanctions have yet to have an impact on Iran’s behavior.

“I know it's been noted...that we've been trying to hurt Iran's economy, but it hasn't stopped them. And it looks they're determined to move on which is something that we can't tolerate in any way, shape or form,” Manchin said.

David Cohen, Treasury’s top terrorism and financial intelligence official, said that while the U.S. has not achieved its goal of convincing Tehran to the change the course of its nuclear program, the financial sanctions are having some impact. For instance, Cohen said, Iran requested sanctions relief at a negotiating session in Kazakhstan in April.

“As we have repeatedly made clear, Tehran faces a choice: it can address the call of the international community to give up its nuclear ambitions and be permitted to reintegrate itself diplomatically, economically and financially into the world community, or it can continue down its current path and face ever-growing pressure and isolation,” Cohen said.

Wendy Sherman, the undersecretary of State for Political Affairs, said that of the more than 20 countries that imported oil when the sanctions went into full effect, only a handful continue to do so today.