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New U.S. sanctions target Iran’s currency, auto industry

Published: Updated:

The United States announced additional sanctions on Iran Monday targeting its currency and automobile industry, stepping up pressure over Tehran’s nuclear program.

An executive order by President Barack Obama authorizes sanctions on foreign financial institutions that make transactions in the rial currency or keep accounts denominated in the rial outside the country.

The new rules also penalize the sale of goods and services to Iran’s auto industry.

“The steps taken today are part of President Obama’s commitment to prevent Iran from acquiring a nuclear weapon, by raising the cost of Iran’s defiance of the international community,” White House spokesman Jay Carney said.

This comes after the United States blacklisted on Friday eight companies in Iran’s petrochemical industry, sending a warning to the Islamic Republic’s global customers as Washington strives to cut off funds to the country’s nuclear program, Reuters reported.

Petrochemical companies owned or controlled by the Iranian government that are on the Treasury Department list include Bandar Imam Petrochemical Co, Bou Ali Sina Petrochemical Co and Mobin Petrochemical Co.

This was the first time Washington sanctioned the petrochemical industry, which an administration official said was the largest source of foreign earnings for Iran’s nuclear program after oil sales.

“Companies should end immediately their purchases of Iranian petrochemical products,” the official, who spoke on condition of anonymity, said on a call with reporters.

He said U.S. officials over the last several months had been engaged in a “strong diplomatic campaign” with governments and companies around the world to make clear that sanctions could be imposed on purchases of Iran’s petrochemicals.

In a related action, the U.S. State Department imposed sanctions on Niksima Food and Beverage JLT, a frozen yogurt company based in the UAE, for “knowingly engaging” in a transaction for the purchase of petrochemical products from Iran. It also sanctioned Jam, an Iranian manufacturer and seller of petrochemicals. The sanctions effectively cut them off from the U.S. financial system.

Niksima did not immediately reply to a request for comment, Reuters said.

In response to sanctions imposed on the Islamic republic, Iran said its oil exports are down by 20 percent but asserts it is still producing the same amount of crude - and finding markets for it as gasoline and other products.

Iranian oil minister Rostam Ghasemi spoke Friday as he and other OPEC ministers went into a meeting expected to keep the 12-nation cartel’s output target at 30 million barrels a day, AFP said.

The U.S.-led embargo on oil and other punitive measures were imposed in an attempt to force Iran to curb its nuclear program. Production is now an estimated 2.5 million barrels a day - about 1.5 million barrels less than before the sanctions.

But Ghasemi told reporters that “production has not changed.” He said that Iran, which used to import gasoline, now exports it.