Russia says U.S. sanctions on Iran ‘unacceptable’ amid Tehran’s condemnation

Russia’s Foreign Ministry denounced new U.S. sanctions against Iran on Tuesday as “unacceptable and contradictory to international law,” as Iranian lawmakers were expected to review cooperation with the U.N. atomic energy watchdog following the sanctions.

“Russia sees such measures as unacceptable and against international law,” Interfax news agency reported citing a statement by the foreign ministry. “This practice seriously complicates moves for constructive dialogue with Tehran.”

“Strengthening sanctions pressure -- which for some of our partners is also almost becoming an end in itself -- will not assist in increasing the readiness of Iran to sit down at the negotiating table,” the foreign ministry said.

“We believe that the constant strengthening of sanctions has long ago gone beyond the bounds of decisions on non-proliferation tasks surrounding the Iranian nuclear program.”

Iran dismissed on Tuesday new sanctions announced by western countries as more a propaganda exercise than something that will hit the economy.

“Such measures are condemned by our people and will have no impact and be in vain,” Foreign Ministry spokesman Ramin Mehmanparast told a news conference, according to Reuters.

An area of “primary money laundering concern”

The United States, worried by Tehran’s nuclear program, named Iran late on Monday as an area of “primary money laundering concern” in a step designed to dissuade non-U.S. banks from dealing with it, according to Reuters.

It also blacklisted 11 entities suspected of aiding its nuclear programs and expanded sanctions to target companies that aid its oil and petrochemical industries.

“As long as Iran continues down this dangerous path, the United States will continue to find ways, both in concert with our partners and through our own actions, to isolate and increase the pressure upon the Iranian regime,” President Barack Obama said in a written statement, according to AFP.

Iran can “fulfill its international obligations... or it can continue to defy its responsibilities and face even more pressure and isolation,” he said.

U.S. Secretary of State Hillary Clinton, unveiling what she called a “significant ratcheting up of pressure on Iran,” said the United States was targeting Iran’s energy sector directly for the first time.

Detailing sanctions against goods, services and technologies for the petrochemical sector, Clinton said “there have to be consequences of such behavior.”

In tandem, Treasury Secretary Timothy Geithner issued a warning that any firms doing business with Iran’s banking sector could run the risk of funding illicit activities.

But, Geithner warned, “financial institutions around the world should think hard about the risks of doing business with Iran.”

Tehran to review cooperation with IAEA

Iranian lawmakers were scheduled Tuesday to review cooperation with the U.N. atomic energy watchdog following Monday’s sanctions.

The meeting of parliament’s national security and foreign policy commission was to follow a regular weekly briefing of foreign ministry spokesman Ramin Mehmanparast expected to address the fresh sanctions.

New U.S. sanctions will not stop Iran exporting petrochemicals to the European Union, a deputy oil minister said on Tuesday, the semi-official Mehr news agency reported.

“The export of Iran’s various petrochemical products to Europe will continue under any circumstances,” Abdolhossein Bayat was quoted as saying. Mehr said Iran had an 11 percent share of the EU market.

Britain and Canada joined the U.S. on Monday and announced they were taking moves to further isolate Iran’s central bank and other financial institutions in order to add pressure on Tehran on its atomic activities.

France said it, too, was “in favor of new unprecedented sanctions.”

The coordinated, unilateral sanctions were being imposed on the basis of a Nov. 8 report by the U.N.’s International Atomic Energy Agency that said there was “credible” evidence Iran appeared to be pursuing nuclear weapons research.

Iran has slammed the report as “baseless” and accused IAEA chief Yukiya Amano of pro-U.S. bias. It has reiterated that its nuclear program is exclusively for peaceful, civilian uses.

Tightening the noose on Iran

While some Iranian lawmakers have called for cooperation with the IAEA to be cut, and Iran boycotted an IAEA forum Monday focused on creating a nuclear weapons-free Middle East, officials have said Iran would maintain its obligations under the agency.

Foreign Minister Ali Akbar Salehi said on Sunday his country would even cooperate “further” with the U.N. atomic energy agency if it “balances its approach” to the Islamic republic.

Trade and commerce minister, Mehdi Ghazanfari, admitted Monday ahead of the new sanctions -- which had been signaled days ahead in the U.S. press -- that Iran would “suffer” under the measures.

But he asserted that Iran would survive by becoming more self-reliant, and by doing business with other countries.

Ghazanfari also said countries shying away from Iran because of the sanctions would be hurt by losing access to Iran's oil and gas exports.

“It is they (who face) not having enough energy (supplies). Because if they do not come here and invest, then they should think of alternatives,” he said.

“If they do not invest in our oil projects, they will lose a good market for contracts as well as the market for installing equipment. Companies making this equipment would be shut down,” he said.

Iran’s economy, worth an estimated $480 billion according to the International Monetary Fund, is highly dependent on oil sales, which make up around 70 percent of government revenues.

The sanctions announced Monday aim to tighten the noose on Iran’s financial sector, making it more difficult for the country to be paid for its oil.

They stopped short, however, of hitting the central bank with more draconian measures, which Western officials and analysts feared could cause a spike in oil prices, worsening the global economic malaise and providing Iran with a revenue windfall.

Oil prices in New York and London were pushed lower by fears about debt levels in the United States and Europe, although gasoline and gas prices in New York were higher.

Some experts have cautioned that targeting the Central Bank could have a profound impact on Iran's economy and push up global energy prices at a time when Western economies are already struggling.

A recent report by the Congressional Research Service outlined the stakes in choking Iran's oil revenue, which could cause a shortage of currency reserves that would force Iran's currency lower and make imports prohibitively expensive.