New Iran sanctions go into effect; Obama administration touts efforts

On Wednesday a new set of sanctions on Iran that Congress passed in December went into effect. Obama administration officials said the tightening sanctions are having an effect, although Iran has not yet made significant concessions on its nuclear energy program.

Under the National Defense Authorization Act, any foreign private bank that does business with Iran’s Central Bank from now on, for any other reason than purchasing oil, will be cut off from doing buiness with the U.S. financial system. On June 28, oil purchases will also be covered by the law. Sens. Mark Kirk (R-Ill.) and Robert Menendez (D-N.J.) authored the sanctions.

David Cohen, Treasury undersecretary for terrorism and financial intelligence, told a banking conference Wedensday that Iran’s currency is plummeting, and this is a sign that increasing sanctions, which prompted Europe to cut off oil imports, are having an effect.

“Altogether since early September, the rial has lost about half of its value,” he said. “The Iranian government has tried to stem the decline of the rial, including by banning the sale of Western currency and reportedly restricting Iranian citizens’ ability to trade currency by blocking text messages containing the word ‘euro’ or ‘dollar.’

“The impact of the sanctions has attracted the attention of the highest levels of Iran’s leadership, with the Supreme Leader, Ayatollah Khamenei, recently referring to the sanctions in a speech broadcast to the nation as ‘painful and crippling.’ Likewise, President Ahmadinejad acknowledged a few weeks earlier that ‘our banks cannot make international transactions anymore.’

Secretary of State Hillary Clinton added Wednesday before the House Appropriations Committee: “At this point we believe we are making progress on the sanctions front.”

She said the United States is testing a round of international negotiations at this point and will, in conjunction with Israel, “take stock” of Iran. 

She added that Iran’s recent treatment of U.N. nuclear inspectors has raised questions about whether the nation is trying to hide a nuclear weapons program.

While Treasury received praise from GOP lawmakers for its sanctions effort, Rep. Frank Wolf (R-Va.) questioned Clinton at the hearing on why Treasury granted lawyer Bart Fisher a license to represent Sudan in the United States. He said Fisher has been justifying Sudanese atrocities.

Clinton said she was investigating the matter because there is no license allowing anyone to lobby on behalf of Sudan.

Treasury noted Wednesday that its Office of Foreign Assets Control granted Fisher the right only to represent Sudan legally, but did so after State recommended the action.

"As Secretary Clinton said, OFAC has not granted any license for any firm to participate in lobbying efforts on behalf of the government of Sudan.  OFAC did grant a license for a firm to be compensated strictly for authorized legal services to the Government of Sudan, after receiving a written recommendation from the Department of State to do so," a spokesman said.