The United States has slapped yet another round of sanctions on Iran, this time targeting the country’s already-devalued currency and its automotive sector in a new bid to force Tehran to abandon its nuclear programme.
The Iranian rial has already lost half of its value since the beginning of 2012 and the US move clearly aims at undermining it further. This is the first time that the US has sought to target trade in the rial directly.
An executive order issued by President Barack Obama, in response to growing demands in Congress to economically paralyse Iran, will target foreign financial institutions that knowingly conduct or facilitate “significant transactions” for the purchase or sale of the Iranian rial or maintain rial accounts outside Iran.
The White House expects the new move to tighten the sanctions regime and “isolate the Iranian Government for its continued failure to meet its international obligations”.
The order will come into force from July 1. “As of July 1, significant transactions in the rial will expose anyone to sanctions. It should cause banks and exchanges to dump their rial holdings,” an administration official told reporters.
Obama also slapped sanctions on Iran’s automotive sector, regarded as a major revenue generator for Tehran. It will cover the sale, supply, or transfer to Iran of significant goods or services used in connection with the manufacturing or assembling in Iran of light and heavy vehicles including passenger cars, trucks, buses, minibuses, pick-up trucks, and motorcycles, as well as original equipment manufacturing and after-market parts manufacturing relating to such vehicles.
The steps announced will target those who knowingly engage in significant financial or other transactions for the sale, supply, or transfer to Iran of significant goods or services used in the Iranian automotive sector. This move is seen as an extension of earlier moves directed at Iran’s shipping, shipbuilding and energy sectors.
White House spokesman Jay Carney said the latest steps are “part of President Obama’s commitment to prevent Iran from acquiring a nuclear weapon, by raising the cost of Iran’s defiance of the international community”.
The new action comes on top of last week’s announcement blacklisting companies in Iran’s petrochemical industry and announcing sanctions against more than 50 Iranian officials for their reported bid to
stifle political dissent in Iran.
“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,” Carney said, adding, “However, Iran must understand that
time is not unlimited. If the Iranian Government continues down its current path, there should be no doubt that the United States and our partners will continue to impose increasing consequences.”