The Cable

Obama administration implements congressional Iran sanctions

The implementation deadline for new Iran sanctions passed by Congress late last year was Wednesday, and the Obama administration announced it had complied with the law and increased the pressure on Tehran.

"Today marks a significant turning of the screw as Section 504 of the Iran Threat Reduction and Syria Human Rights Act of 2012 goes into effect," a senior administration official told reporters today. "This provision expands the scope of sanctionable transactions with the Central Bank of Iran and Iran's petroleum industry by restricting Iran's ability to access oil revenue held in foreign financial institutions as well as preventing Iran from repatriating those funds."

Countries that have received waivers on buying fuel from Iran because they have "significantly reduced" their imports of Iranian oil will only be permitted to conduct transactions that are strictly bilateral in nature, the official said. All money paid as part of those transactions now has to be held in an account in the country paying, not Iran.

"This provision will significantly increase the economic pressure on Iran, as it will effectively lock up Iran's oil revenues in accounts abroad, restricting use of oil-related revenue to the purchase of goods from the country in which the funds are confined and precluding Iran's ability to move funds across jurisdictions," the official said.

The Treasury Department has also designated for sanctions several Iranian entities that are responsible for human rights abuses, including Iran's state-run media and its cyber police organization. The senior administration official emphasized that none of those sanctions apply to humanitarian or medical goods. The Treasury and State Department also completed a series of reports related to sanctions implementation that Congress mandated under the new law, another senior administration official said.

"The Iranian regime uses its broadcast services as an instrument of repression. It's not free media. It's a tool in the hands of the regime and our steps also encompass individuals and institutions engaged in gross violations of human rights in Iran," the second official said.

The official touted the administration's actions on sanctions, claiming that they were having a severe impact on Iran's economy. For example, the Iranian rial has lost more than 50 percent of its value against the U.S. dollar, the official noted.

The Obama White House has in some case opposed certain provisions of congressional Iran sanctions bills, often angering Democrats and Republicans alike. When the latest Iran sanctions legislation was under consideration on Capitol Hill, for instance, the White House told lawmakers most of the new sanctions were not necessary and said the bill was "duplicative and threatens to confuse and undermine" previously imposed Iran sanctions. Section 504 of the law, locking up the money from oil sales, originally came from the Treasuery Department.

Now, however, the Obama administration seems to be on board with the entire package.

"We signed the law. We are working to see it implemented. We will see it done. And whatever issues may have existed in the past, we are right there advancing it and its objectives," the second senior administration official said.

Wednesday's sanctions announcement wasn't joined by any corresponding statements from other countries, but the second senior administration official said that all of America's allies on the Iran issue were on the same page.

"It's fair to say that our national steps taken today are consistent with national steps being taken by other countries and multilateral steps called for under U.N. sanctions as well as the EU's own steps," the official said.

Senate Foreign Relations Committee Chairman Robert Menendez (D-NJ), one of the original sponsors of the sanctions legislation, praised the administration's announcement in a statement today.

"The actions taken by the Administration today to implement the Iran Threat Reduction and Syria Human Rights Act of 2012 (TRA), will require nations to continue to reduce their purchases of Iranian petroleum, but additionally will restrict Iran's ability to repatriate revenue and require Iran to instead use these resources for bilateral trade," he said. "This measure will greatly limit Iran's ability to finance its nuclear weapons program, while also ensuring that Iran uses its resources to purchase sufficient food, medicine and other necessary supplies for the Iranian people."

Some on Capitol Hill are working on a new round of Iran sanctions legislative measures and they are watching to see what the administration does next.

"We're always happy to see the administration comply with the laws we pass -- the question is whether there will be more proactive steps taken to get ahead of the next Iranian sidestep or whether we'll have to legislate again," a senior GOP Senate aide said.

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