US imposes new sanctions on Iranian energy, petrochemical sectors

01-Aug-12

President Obama has imposed new US sanctions on Iran designed to deter Iran or other countries from establishing payment mechanisms for the purchase of Iranian crude that circumvent already existing sanctions, as per Platts. The executive order also expands existing sanctions on Iran's petrochemical sector. In addition, the Treasury Department has imposed sanctions on the Bank of Kunlun in China and Elaf Islamic Bank in Iraq "for knowingly facilitating significant transactions or providing significant financial services to Iranian banks designated for their connection to Iran's support for terrorism or proliferation." "Sanctions are also authorized for those who may seek to avoid the impact of these sanctions, including against individuals and entities that provide material support to the National Iranian Oil Company, Naftiran Intertrade Company, or the Central Bank of Iran, or for the purchase or acquisition of US bank notes or precious metals by the government of Iran," Obama said in a statement. US sanctions, as well as multilateral sanctions and efforts such as the EU boycott of Iranian oil, are designed to pressure the Iranian regime to stop development of a nuclear weapons capability. Iran has said it is developing nuclear technology for peaceful purposes only. The new sanctions broaden the categories of sanctionable entities and transactions involved in Iran's energy sector and are designed to combat efforts to circumvent current sanctions, which have focused on specific transactions, US officials said. They include any payment mechanism used for the purchase of crude or products from Iran, including barter aimed at moving US gold or other precious metals to Iran. The crude and products sanctions will not apply to countries granted 180-day waivers from the US in return for their efforts to significantly reduce their purchases of Iranian crude oil, US officials said. The new sanctions also broadly prohibit any purchases of Iranian petrochemical products. Unlike other sanctions, the petrochemical sanctions announced Tuesday apply to all entities in all countries and will not be waived for countries that have taken steps to reduce crude purchases, Einhorn said.