The US, Britain and Canada hammered out a new set of best-available sanctions against Iran in a bid to force Tehran to halt its suspected nuclear weapons programme.
The American sanctions target Iran’s oil and petrochemicals industries and Iranian companies involved in nuclear procurement or enrichment activity.
The US also declared Iran’s banking system a centre for money laundering, designed as a stern warning to financial institutions around the world to think twice before doing business with Tehran.
Britain’s new restrictions included an order that its financial institutions cease doing business with all Iranian banks, including the central bank and extending to all branches and subsidiaries. It amounted to what was termed an unprecedented British attempt to cut off an entire country’s banking industry from the UK financial sector.
The sanctions were aimed at “preventing the Iranian regime from acquiring nuclear weapons”, British chancellor George Osborne said. Canada took similar actions to the US, while France urged fellow European countries and Japan to stop buying Iranian oil and to freeze any assets belonging to Iran’s central bank.
US president Barack Obama said Iran had a choice: come clean on its nuclear programme and reap the benefits of closer economic co-operation with the world, or face even more pressure.
“Iran has chosen the path of international isolation,” Mr Obama said. “As long as Iran continues down this dangerous path, the United States will continue to find ways, both in concert with our partners and through our own actions to isolate and increase the pressure upon the Iranian regime.”
The new restrictions essentially amount to a piecemeal addition to dozens of American measures already in place to isolate Iran’s economy, partly reflecting the need for a quick response to a United Nations nuclear agency report suggesting Iranian work towards the development of atomic weapons.
Release of the report two weeks ago sparked frenzied international diplomacy over how to halt the Iranian threat, including speculation in the US, Europe and Israel on the merits of military intervention.
The larger American dilemma is twofold. After three decades of economic estrangement and escalating pressure on Tehran for its dismal human rights record and alleged support for terrorism, the United States has few tools left to coerce or penalise the Iranian regime. And Washington is unlikely to authorise a military strike any time soon, conscious that an attack may delay, but not stop, Iran from developing the bomb and fearful of the political fallout at a time when the US is flailing in debt and trying to transition from conflicts in Iraq and Afghanistan.
The United Nations has passed four rounds of global sanctions against Iran since 2006, but veto-holding nations Russia and China stand in the way of any further action. And even unilaterally, American officials have held back from blanketing all of Iran’s fuel-related exports and its central bank with sanctions, for fear of spiking world oil prices and hampering the American economic recovery.
A little more than a week ago, US president Obama pressed Russian president Dmitry Medvedev and Chinese president Hu Jintao to join the US and its partners in taking action, to no avail.
US secretary of state Hillary Clinton and treasury secretary Timothy Geithner announced the new American sanctions, which tighten restrictions on individuals and companies doing business in the Iranian oil and gas industries, and update an already lengthy list of blacklisted Iranian firms.
Mr Geithner stressed the value of the co-ordinated action by the US and its two close allies and urged more countries to cut off Iran from their financial sectors.
“If you are a financial institution and you engage in any transaction involving Iran’s central bank or any other Iranian bank operating inside or outside Iran, 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 evade sanctions,” he said.
Russia, China, India and other nations maintain larger-scale trade with Iran, whose energy exports have helped it shrug off serious harm from the UN sanctions and other penalties applied by individual countries or the European Union.
The recent report by the International Atomic Energy Agency alleges Iran has been seeking to acquire equipment and weapons design information, testing high explosives and detonators and developing computer models of a warhead’s core. It is the strongest evidence yet that the Iranian programme ranges far beyond enriching uranium for use in energy and medical research, as Iran’s government insists.
The Obama administration has sought to use the evidence as leverage in making its case to other countries that sanctions against Iran should be expanded and tightened.
AP