Obama tightens sanctions on Iran over ‘concealed bank transactions’

U.S. President Barack Obama signed an executive order imposing stricter sanctions on Iran and its central bank, saying new powers to freeze assets were needed because Iranian banks were concealing transactions, the White House said on Monday.

The measures block all property and interests of the Iranian government, the Central Bank of Iran (CBI) and all Iranian financial institutions that come within U.S. jurisdiction.

Previously, U.S. institutions were required to reject, rather than block, such Iranian transactions. The new executive order gives American institutions new powers to seize assets they encounter instead of just turning them back.

“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 said in a letter to Congress.

He said the new powers over Iranian assets deemed to be in U.S. control - including foreign branches of American banks - were necessary because of “deficiencies in Iran’s anti-money laundering regime” as well as “the continuing and unacceptable risk posed to the international financial system by Iran’s activities.”

The U.S. Treasury Department said the expanded sanctions would affect assets of all Iranian ministries and state-owned entities, including the CBI that processes Iran’s oil revenues.

“These actions underscore the administration’s resolve to hold the Iranian regime accountable for its failure to meet its international obligations,” it said in a statement.

The measures, passed with wide majorities in Congress last year, also included a requirement for Obama to impose sanctions on foreign financial institutions that do business with the CBI or other Iranian finance firms.

That move was designed to strangle Iran’s access to foreign finance and commerce and to cripple its lucrative oil and energy industry by effectively barring foreign firms that do business with Tehran from the U.S. financial system.

Obama’s action on Monday however does not implement those sanctions, but the Treasury Department warned that firms doing business with Iran “remain at risk” of U.S. punishments.

The president has the power to issue waivers to halt the impact of such sanctions, once they come into force, every 120 days.

Senior White House officials are currently studying the measures passed by Congress to find a way to implement them that maximizes pain for Iran, but does not cause a huge spike in oil prices, for instance, that could harm the fragile U.S. economic recovery.