WASHINGTON — The White House moved to enforce tightened sanctions against Iran on Monday because of the country’s suspect nuclear program, freezing all property of the Central Bank of Iran, other Iranian financial institutions and the Iranian government in the United States. The new restrictions also raised new warnings to financial institutions in other nations that they could face big penalties in the United States if they did business with Iran’s central bank.
The actions were announced in an executive order signed by President Obama that started the enforcement process for a tough measure he signed into law at the end of 2011. If fully carried out, that measure could isolate Iran’s central bank and effectively choke off the sale of Iranian oil by obstructing the means of payment. Most of the revenue for oil sales by Iran, one of the world’s biggest oil exporters, is processed by its central bank.
Tensions have been rising between Iran and the West over Tehran’s nuclear energy program, which Iran says is peaceful and Western nations say is a cover for efforts to achieve the ability to make a nuclear weapon.
Israeli leaders, who see Iran as their most serious security threat, have hinted they may order a pre-emptive military strike on suspected nuclear targets in Iran if they conclude the sanctions are ineffective. Mr. Obama and his aides have sought to restrain Israel, stressing in recent days that sanctions and diplomatic pressure are the preferred strategy for dissuading Iran.
“There has been a steady increase in our sanctions activity, and this is part of that escalation,” Jay Carney, the White House spokesman, said after the latest steps were announced.
Last week an inspection team from the International Atomic Energy Agency left Iran after the government refused to allow it to scrutinize elements of the nuclear program that the agency had said could be military in nature. Although the team is returning to Iran this month, Western diplomats have concluded that Iran appears intent on stonewalling.
In a statement, the White House said the executive order “re-emphasizes this administration’s message to the government of Iran — it will face ever-increasing economic and diplomatic pressure until it addresses the international community’s well-founded and well-documented concerns regarding the nature of its nuclear program.”
The timing, a Treasury Department official said, was driven by the need for the administration to lay the groundwork to effectively enforce the new sanctions law, in part by reaching out to allies and other countries to explain how the sanctions will work. Many of these countries buy oil from Iran through its central bank, and their financial institutions could be blocked from the American market if they continue to do so.
The administration has been trying to persuade Iran’s oil customers to shift to other suppliers, and countries like Saudi Arabia have promised to raise production to compensate for any shortages. But some of Iran’s biggest customers, notably China and India, have signaled their intention to keep buying Iranian oil.
The penalties against Iran’s central bank, and potentially the banks of other nations that do business with it, were unanimously passed by the Senate and attached to an annual defense bill over the administration’s objections. Mr. Obama agreed to the penalties after the White House negotiated language that would give him latitude to waive them for foreign financial institutions.
Documents accompanying the executive order said foreign financial institutions risked American sanctions “if they engage in certain significant financial transactions” with Iran’s central bank rather than “arms-length” transactions.
In a statement, the Treasury Department said the executive order “blocks all property and interests in property of the government of Iran, the Central Bank of Iran and all Iranian financial institutions (regardless of whether the financial institution is part of the government of Iran) that are in the United States, that come within the United States or that come within the possession or control of U.S. persons.” The statement did not further specify the exact properties that apply.
The Senate has proposed additional sanctions that could cripple Iran’s financial system by severing Iranian banks’ access to a global communications system that virtually all banks use to transmit data. A full vote has not yet been taken on that measure.
Advocates of stiff sanctions on Iran welcomed the administration’s announcement on Monday.
“Sanctions against Iran’s central bank, if properly implemented and enforced, will severely isolate the Iranian regime from world markets and limit the capital it has to pursue nuclear weapons and fund terrorism,” said Mark D. Wallace, president of United Against Nuclear Iran, a group in New York.
Iran’s government has denounced the sanctions as an effort to bully Iranians into surrendering their legal right to pursue nuclear energy peacefully. It has threatened to retaliate by closing the Strait of Hormuz, a vital oil route, and by cutting off European buyers of Iran’s oil before a planned European Union embargo of Iran’s oil to start on July 1.
Iran’s official Islamic Republic News Agency said people at an organized rally against the sanctions in Tehran on Monday chanted “Death to America” and “Death to the Zionist regime” and urged Parliament to halt oil exports to European countries.
