Obama Orders Tighter Sanctions on Iran

President Barack Obama has ordered tougher sanctions on Iran, including its central bank, in a move meant to enforce a law he signed in December to discourage the Islamic republic from continuing its nuclear program.

Hot Feature: Chrysler’s ‘Halftime in America’ Spot Touches a Chord

The new sanctions are warranted “particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks,” Obama said in a letter to Congress on Monday.

The transactions of sanctioned parties have been hidden by Iranian banks, Obama said, while the deficiencies of Iran’s anti-money laundering regime and the risk posed by Iran’s activities to the entire international financial system were also among the president’s reasons for the new sanctions.

Obama included the central bank sanctions as an amendment in the defense bill he signed into law at the end of 2011. Obama signed the executive order approving the sanctions on Sunday, though he was afforded six months to do so by the bill.

The sanctions are meant to pressure Iran to abandon its nuclear program, but also to dissuade Israel from launching a unilateral strike on Iran, a move that would have repercussions throughout the global economy.

Iran has insisted that its nuclear program is for peaceful purposes, but the West believes Iran to be developing nuclear weapon technology. U.S. Defense Secretary Leon Panetta would not dispute a report last week that he believes Israel may attack Iran this spring in an attempt to set back the nation’s nuclear program.

The U.S. Treasury Department said foreign financial institutions engaged in “arms-length transactions” with Iran’s central bank will not be impacted by the new sanctions, but may be penalized if they undertake significant transactions with the central bank or other Iranian financial institutions. Under the law, Obama has the option to waive penalties for national security reasons.

The Senate Banking Committee also approved more penalties on Tehran last week. Though not yet signed into law, the measures would target Iran’s Revolutionary Guard Corps., require companies trading on U.S. stock exchanges to disclose any Iran-related business to the Securities and Exchange Commission, and expand penalties for energy and uranium mining joint ventures with Tehran.

Don’t Miss: IMF Halves Growth Forecast for China in 2012

To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com