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22 February 2024

Obama imposes new sanctions on Iran

An Iraqi money dealer counts Iranian rial banknotes at an exchange office in Baghdad. Iranian visitors have been finding difficulty in using the Iranian currency in Iraq due to a depreciation of the rial against the dollar (AFP)


US President Barack Obama unveiled new sanctions on Iran's central bank Monday, tightening an economic choke hold with speculation rampant over a possible Israeli strike on Tehran's nuclear program.

Obama's move came as he insists that the tough range of US and European sanctions is exerting "unprecedented" pain on Iran, but with anxiety growing in Israel that the punishments will not halt Tehran's nuclear drive in time.

"I have determined that additional sanctions are warranted, particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks to conceal transactions of sanctioned parties," Obama wrote in a message to Congress.

The President also decried Iran's anti-money laundering regime and what he said was the "continuing and unacceptable risk posed to the international financial system by Iran's activities."

In an interview with NBC, Obama tried to quell nervousness about the possibility of an Israeli strike on Iran, saying he did not think such a decision, that could trigger a new war in the Middle East, had been taken.

The sanctions, contained in an executive order signed by Obama on Sunday,  block all property and interests of the Iranian government, the Central Bank of Iran (CBI) and all Iranian financial institutions within US jurisdiction.

Previously, US institutions were required to reject, rather than block, such transactions.

The exact dollar figure of assets involved was not immediately clear, but was likely small, with the new sanctions serving as a symbolic sign of US intent towards Tehran after a decades-long feud.

Tough US and EU sanctions make it more difficult for Iran to pay for euro- and dollar-denominated goods, and for it to receive petro-dollars. But Tehran is now increasingly looking to Asia for commerce and trade opportunities.

European sanctions on Iran are expected to have particular impact. The EU for instance imported some 600,000 barrels per day of Iranian oil in the first 10 months of last year - equivalent to nearly 20 per cent of Iran's exports - making it the key market alongside India and China.

But Europe last month banned all new contracts for Iranian oil. Obama's move came amid a torrent of speculation about the possibility of a go-it-alone strike by Israel on underground Iranian nuclear installations it sees as a threat to its existence.

US observers are concerned that a unilateral Israeli attack on Iranian nuclear facilities could trigger a furious response from Tehran, including missile attacks and action by extremist groups allied to the Islamic republic, as well as damaging global economic turmoil after a likely steep hike in oil prices.

There is also anxiety that the United States could get drawn into the conflict to protect its Middle East ally, soon after managing to extricate itself from another damaging war in Iraq. Iran denies its nuclear program is intended to build an atomic arsenal.