Trade, Insurance Sanctions Against Iran in U.S. Defense Bill

December 20, 2012

A final version of new U.S. economic sanctions against Iran would give the Obama administration more time to implement measures aimed at its energy, shipping and port sectors, but otherwise was little changed from an initial draft released last month.

The sanctions are part of a massive defense policy bill expected to go to the full Senate and House of Representatives for a final vote this week before being sent to President Barack Obama for his signature.

The package also includes measures to stop the flow of gold from Turkey into Iran.

Senator Carl Levin, the Michigan Democrat who is chairman of the Senate Armed Services Committee, said lawmakers rejected the White House’s requests to broaden the exceptions to the sanctions.

But the administration will have 180 days to implement the new measures, up from 90 days in the initial Senate plan, which was developed by Senators Robert Menendez, a Democrat from New Jersey, and Mark Kirk, a Republican from Illinois.

Here are the key elements of the final package:

  • Transactions for goods and services with Iran’s energy, oil, port, shipping and ship-building sectors could be sanctioned.
  • Exceptions: oil imports to countries that have obtained a formal “exception” for cutting oil purchases; natural gas purchases as long as importers hold payment for Iran in an account to be drawn on for permissible trade.
  • New exception for reconstruction aid or economic development for Afghanistan, if the administration deems it essential to U.S. national interests.
  • Waivers for up to 180 days only in cases shown to be vital to U.S. national security.
  • Food, agricultural commodities, medicine, medical devices, humanitarian aid are exempt.
  • Sanctions trade with Iran in precious metals, graphite, raw or semi-finished metals, like aluminum and steel, metallurgical coal and software for integrating industrial processes in Iran’s energy and shipping sectors.
  • Sanctions insurance or reinsurance providers for trade with Iran in energy, shipping and ship-building sectors, as well as with designated persons and entities.
  • Sanctions foreign banks that handle transactions for Iranians who have been designated by the United States.
  • Blacklists the Islamic Republic of Iran Broadcasting (IRIB) and its president, blocking assets and preventing others from doing business with the IRIB.
  • Requires the administration to report every 180 days on whether Iran is using any of the sanctioned materials, such a precious metals, graphite or steel, in barters or swaps.
  • Requires the administration to report within 180 days on vessels that have entered Iranian ports controlled by the Tidewater Middle East Company, and on airports where sanctioned Iranian aircraft have landed.

(Reporting by Roberta Rampton; editing by Philip Barbara)

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