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US steps up sanctions on Iran

By Agencies in Washington and Teheran | China Daily | Updated: 2013-06-05 08:02

Action imposed ahead of June 14 national elections

The United States unveiled aggressive new sanctions against Iran on Monday, directly targeting its currency for the first time along with the country's auto sector, a key source of jobs and revenue.

The measures, which could mean more economic deprivation for Iran, came days before a presidential election in the country and followed Teheran's refusal to cede ground in stalled international talks on its nuclear power program.

They were accompanied by new US warnings of a "painful" and "powerful" escalation of the sanctions, as US President Barack Obama seeks to convince the Islamic Republic that the price of uranium enrichment is too high.

"Even as we intensify our pressure on the Iranian government, we hold the door open to a diplomatic solution that allows Iran to rejoin the community of nations if they meet their obligations. However, Iran must understand that time is not unlimited," said White House spokesman Jay Carney, adding that more sanctions would come if the country does not change course.

Obama signed an executive order authorizing sanctions on foreign banks and financial institutions that make transactions or keep overseas accounts denominated in Iran's currency, the rial.

The ninth set of sanctions Obama has approved against Iran will also penalize anyone involved in the significant sale of goods and services to Iran's auto industry - a move that could hit foreign car giants in Europe and Asia.

Another official said the strategy represented a significant escalation of the sanctions as, for the first time, Washington was attacking the rial, which has lost two-thirds of its value over the past two years.

"This promises to make Iran's weak currency even weaker and more volatile," the official said. "The idea here is to make the rial essentially unusable outside of Iran."

The United States and Western powers have imposed a series of economic sanctions aimed at pressuring Iran into halting what they say is a drive to build a nuclear weapon. Teheran says its nuclear program is purely for generating power and for medical devices.

"It's a serious escalation of sanctions because the administration is blacklisting the auto sector which is the second largest employer in Iran after the energy sector," said Mark Dubowitz, of the Foundation for Defense of Democracies.

Dubowitz also said that the move against the auto sector was a sign the administration was concerned it could be used to procure "dual use" technologies that could be used in centrifuges for enriching uranium.

The announcement of new sanctions came ahead of June 14 elections to succeed outgoing President Mahmoud Ahmadinejad.

While there has been debate on the economic pain exerted by the US and international sanctions, the election is unlikely to alter Iranian nuclear policy, which is controlled by Supreme Leader Ayatollah Ali Khamenei.

Khamenei warned on Tuesday that the country's next president should avoid making "concessions" to the West, saying this would not ease tensions over Teheran's nuclear drive.

"Some (candidates) have the wrong analysis that by giving concessions to enemies, their anger towards Iran will be reduced," Khamenei said in a live televised speech. "This is a mistake."

AP-Reuters-AFP

(China Daily 06/05/2013 page12)

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