UK Cuts Ties With Iranian Banks, US Set for More Sanctions

Posted November 21st, 2011 at 12:55 pm (UTC-5)
Leave a comment

Western nations are increasing economic pressures against Iran in response to international concerns that Tehran is developing nuclear weapons.

British Treasury chief George Osborne announced Monday Britain will stop business transactions with all banks in Iran, including Iran's Central Bank. He said it is the first time Britain has cut ties with the entire banking sector of a country.

The announcement comes as the Obama administration is set to announce new sanctions against Iran later Monday.

Media reports say the U.S. will impose sanctions on goods and services used by Iran's petrochemical industry to discourage foreign companies from investing in it. Iranian petrochemical companies have become increasingly involved in refining gasoline as other Iranian energy firms face international sanctions.

U.S. officials say the Treasury Department also will designate Iran as a territory of “primary money laundering concern.” They say the designation will serve as a warning to foreign governments and businesses to scale back their relations with Iranian financial institutions. U.S. companies and individuals already are barred from doing business with Iran.

Reuters news agency quotes Iran's trade minister as saying sanctions are a “lose-lose” game for Western nations and Iran because the West will not be able to invest in Iran's oil projects.

U.S. officials also say the State and Treasury Departments will expand the number of Iranian companies and organizations facing sanctions for suspected involvement in the Iranian nuclear program.

The International Atomic Energy Agency released a report earlier this month citing intelligence about Iranian efforts to develop the technology needed to build nuclear weapons. Iran has said the report is based on fabrications and insists its nuclear program is peaceful.

Since the release of the report, U.S. lawmakers have urged the Obama administration to impose tighter sanctions, including penalties against the Iranian central bank.

U.S. officials say President Barack Obama is reluctant to take that step because it could block the oil-producing nation's access to international commerce and export markets, leading to a potential rise in oil prices that could hurt global economic growth.

Meanwhile, the IAEA began a two-day meeting of Middle Eastern nations in Vienna Monday to discuss creating a nuclear-weapon-free zone in the Middle East. Iran is boycotting the meeting.

Delegates from Syria and Lebanon criticized Israel for not letting the U.N. inspect its nuclear facilities. Many countries believe Israel has nuclear weapons, but Israel has never confirmed this.

Officials say other Arab delegations speaking at the closed-door meeting acted less confrontational toward Israel than usual. Israel says it will not discuss a nuclear-free zone without peace in the Middle East.