US Senate works on new package of sanctions

US Senate works on new package of sanctions

November 28, 2012 2:11 by Reuters

New sanctions aimed at reducing global trade with Iran in the energy, shipping and metals sectors may soon be considered by the U.S. Senate as part of an annual defense policy bill, senators and aides said on Tuesday.

The sanctions legislation, which has not yet been unveiled, comes during a crowded calendar as the Senate races to deal with deficit reduction, the defense bill and other pressing issues by the end of the year.

The package would build on current U.S. sanctions, passed almost a year ago, that have slashed Iran’s oil revenues. The goal is to pressure Tehran to stop efforts to enrich uranium to levels that could be used in weapons.

Tehran has said its nuclear program is strictly for civilian purposes.

Democratic Senator Robert Menendez and Republican Mark Kirk have crafted new sanctions that would punish foreign banks that handle transactions for a broad sector of industries, including shipping, ports, ship building and more types of energy.

“Our significant effort right now is in pursuing areas of the economy that can lead to proliferation – energy, shipping, to mention a few,” Menendez said in a brief hallway interview.

U.S. persons and companies have long been barred from doing business with Iranian entities. These new sanctions apply to foreign banks, threatening to ban them from the U.S. financial system unless they cut their dealings with Iran.

Senator Carl Levin, the Democratic chairman of the Armed Services Committee, said he was reviewing a draft version of the sanctions and was amenable to the measures being added to the defense bill.

“It’s fine with me,” Levin said. “Going in, I favor strengthening any way we can the sanctions against Iran.”

The package seeks to ban financial transactions with any person or organization blacklisted for their association with the Iranian government, as well as sales of metallurgical coal and precious metals, a congressional aide said, speaking on condition of anonymity.

The sanctions would end “Turkey’s game of gold for natural gas,” a senior Senate aide said, referring to reports that Turkey has been paying for natural gas with gold due to sanctions rules.

The legislation “would bring economic sanctions on Iran near de facto trade embargo levels with the hope of speeding up the date by which Iran’s economy will collapse,” the aide said.

The legislation will also impose new bans on insurance and re-insurance for shipments of a broader range of goods, aides said.