
In what seems like a calculated follow-on from Obama’s warnings to Iran in last night’s State of the Union, the U. S. Senate passed a broad sanctions bill (by unanimous voice vote) aimed at businesses that supply Iran with gasoline. The House has already passed similar legislation, and the two will have to be reconciled in conference before becoming law.
It is impossible to tell how biting the sanctions will actually be until the final text is in hand since very minor changes in wording can make a big difference. The administration has been seeking a greater degree of flexibility in how these sanctions are enforced and the procedures for granting exceptions to them.
The image above is from today’s Dunya-ye Eghtesad (World of Economics) with the main headline “American private sector against sanctions ” — a reference to the recent letter (PDF) signed by several American business and trade groups protesting that the sanctions are overly vague and:
could prohibit any U.S. company from transacting routine business with critical partners from around the globe even if these transactions have no bearing on business with Iran. These provisions could encompass a very large portion of the global trade community with consequences that in our view have not been adequately assessed. The proposals could have a large impact on the U.S. Export-Import Bank, precluding it from partnering with counterpart agencies abroad to co-finance U.S. exports that have no relation to Iran’s energy sector.
Meanwhile, the National Iranian-American Council has been making the case that gasoline sanctions would put undue pressure on the people of Iran (and less so on the intended target of the regime) and I’ve argued elsewhere that another overlooked drawback to the sanctions is the potentially destabilizing effects they could have on the region by encouraging smuggling of heavily subsidized gasoline from the GCC states.
At present its still too early to tell how “crippling” these sanctions will be, but it seems few of the bill’s opponents were prepared for it to sail through quite this fast. -WW

