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Economic Impact of Iranian Sanctions Unclear, U.S. Government Audit Says
By Brian Orsak
printEconomic sanctions targeting Iran for its pursuit of nuclear weapons might not be achieving U.S. objectives and should be reconsidered, the U.S. Government Accountability Office said in an audit report. The impact of the sanctions has been diminished by Iran's dealings with foreign firms and a shift by targeted Iranian banks away from transactions in U.S. currency, said the report issued Wednesday. The findings raise questions about a program that has required U.S. companies to dedicate increasing resources to complying with prohibitions. The GAO, which reviewed trade and sanction data as well as surveyed U.S. officials and Iran experts, assessed...
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China and other U.S. trading partners continue to provide Iran with energy and banking services five months after the passage of new comprehensive sanctions against the country, lawmakers said Wednesday.
Additional banking and trade restrictions that target the finance and supply of Iran's nuclear and ballistic missile programs were passed by the U.N. Security Council Wednesday.
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The U.N. Security Council voted a third round of sanctions against Iran over its alleged ambitions to develop nuclear weapons. Fourteen of the 15 members of the Security Council supported a measure calling for tighter monitoring of Iranian financial institutions, travel bans, and cargo inspections.
The designations require U.S. institutions to turn down business and freeze the assets of an Iranian military leader, two Shia extremist leaders and a former Iraqi Parliament member believed to be secretly operating a television station in Syria.
Economic sanctions against Iran have become particularly burdensome to American and European financial institutions because they require freezing, or blocking transactions for large, government controlled entities, compliance professionals say.
The sanctions are part of a "comprehensive" drive by the U.S. to increase pressure on Iran, said Secretary of State Condoleeza Rice. That effort has been frustrated by the hesitation of the United Nations and international community in following the U.S.
The designation would officially block all or part of Iran's 125,000-strong Revolutionary Guard Corps, the country's elite military unit, from dealing with U.S. financial institutions.
Two of the most stringent of several federal bills meant to increase pressure on Iran would forbid banks from processing transactions indirectly tied to Iranian entities. The bills, H.R.1400 and S.970, jointly called the Iran Counter-Proliferation Act of 2007, would prohibit u-turn transactions.
Over the past nine months U.S. officials have met with more than 40 banks to push for stronger international sanctions against Iran.
The measure, which names Bank Sepah a financial supporter of illicit weapons proliferation, has the added force of following a U.N. resolution against Iran. That elevates the pressure U.S. allies to follow suit.
The sanctions put pressure on U.S. banks to conduct greater due diligence on correspondent accounts to determine if they are linked to the Middle Eastern nation. That will likely continue a trend of foreign institutions dropping business dealings with the country.