U.S. Punishes Firms for Helping Tehran Import Gas

Eli Lake writes

The Obama administration on Tuesday imposed new economic sanctions on seven companies that helped Iran import gasoline, but a senator said the action did not go far enough.

The State Department announced the sanctions imposed under a law passed last year called the Comprehensive Iran Sanctions, Accountability and Divestment Act (CISADA).

The companies include Venezuela’s state-owned oil concern, a small Israeli company, two companies based in the United Arab Emirates and one Iranian firm.

The energy-related sanctions followed the imposition of weapons transfer-related sanctions on Monday against 16 companies and people under the Iran, North Korea and Syria Nonproliferation Act. The entities include three Chinese companies and a Chinese national.

It was the first time CISADA sanctions were imposed on companies for aiding Iran’s import of gasoline. They are part of efforts to pressure Tehran over its refusal to abide by international controls on its nuclear program.

“All of these companies have engaged in activities related to the supply of refined petroleum products to Iran, including the direct supply of gasoline and related products,” said Deputy Secretary of State James Steinberg.

Iran is a leading exporter of crude oil, but lacks the refining capacity for its domestic gasoline needs.

The sanctions place the companies on a financial blacklist, which affects their ability to use the global banking system by threatening to block any bank that works with the companies from access to the U.S. banking system.

The action did little to assuage concerns of some in Congress who said President Obama is not doing enough to pressure Iran.

Sen. Mark Kirk, Illinois Republican, said in an interview that he placed a Senate hold on the administration’s nomination of David Cohen to be Treasury undersecretary for terrorism and financial crimes. The office is the key unit behind the U.S.-led financial war against Iran’s nuclear program and terrorist funding.

“He seems to be a dedicated servant and one who has qualifications,” Mr. Kirk said of Mr. Cohen. “The only question I have: Does he have a mandate to do anything, or is this a mandate to look like he is doing something without accomplishing much?”

Mr. Kirk said the nomination hold is aimed at pressuring the Obama administration into penalizing Iran’s central bank, a move that would effectively shut out international financial institutions from the U.S. banking systems if they do business with Iran.

An administration official said in March that punishing the Iranian central bank could have the unintended effect of spiking oil prices.

Mr. Kirk, however, said that concern was misplaced, and he predicted Saudi Arabia would increase its output to stabilize oil prices. “It may be possible. It’s clear that the Saudi leadership is extremely willing to do almost anything to hurt Iran, but only if this is part of a coordinated plan where they can see the desired outcomes,” he said.

The Venezuelan state-owned petroleum giant PDVSA was penalized for shipping a chemical used to refine petroleum to Iran. PDVSA is the parent company of Citgo, which owns gas stations throughout the United States. Citgo was exempted from the sanctions.

The new sanctions also target an Israeli concern, the Ofer Brothers Group, for providing an oil tanker valued at $8.65 million to an Iranian shipping company, according to the Jewish Telegraphic Agency.

Mr. Kirk said he has met with senior Obama administration officials in recent weeks to press his case for tougher sanctions against Iran. In these meetings, Mr. Kirk said, he asks three questions: “Is the Iranian economy growing faster or slower than America’s? Is the uranium-enrichment facility at Natanz producing more or less enriched uranium? Is Iran importing more or less gasoline?”