U.S. rolls out new sanctions against Iran in effort to plug leaks

By Glenn Kessler
Washington Post Staff Writer
Thursday, June 17, 2010; A12

The ship named the Iran Matin was renamed the Abba, the Iran Madani was rechristened the Adventist, and the Iran Lucky Man was relabeled the Garland.

While the United States sought to engage with Iran during the past 18 months, the government in Tehran maneuvered and schemed to evade existing sanctions imposed because of its nuclear program, Treasury officials said Wednesday.

A bank that had done most of its business internally started doing transactions overseas, stepping into the shoes of a bank that had been blacklisted. An Iranian shipping company set up five front companies, reflagged ships and renamed 71 of them. And petroleum and petrochemical companies with bland names such as Petrochemical Commercial Company International -- but actually owned by the Iranian government -- engaged in business deals with Western companies.

The Obama administration rolled out new sanctions Wednesday, attempting to plug these leaks and asserting, as Treasury Secretary Timothy F. Geithner did at the White House, that they were the "first steps to implement and build on" a resolution passed by the U.N. Security Council last week. But Treasury and State Department officials acknowledged at a later briefing that all of the actions announced Wednesday did not require the latest U.N. resolution for action and could have been imposed months earlier.

To keep up a sense of momentum, European Union governments are also poised to announce Thursday that they will pursue sanctions that go beyond the U.N. resolution, including prohibiting new investments and technical assistance in some parts of the oil and gas industry. The announcement will set broad guidelines for sanctions that will be written and shaped by E.U. officials in the coming weeks.

U.S. officials say the sanctions -- and others imposed by other governments -- are not intended to punish the Iranian people but to force the Iranian government to return to the negotiating table.

"We want Iran to address the legitimate concerns of the international community about its nuclear program and its nuclear intentions," said Robert Einhorn, the State Department official charged with implementing the U.N. sanctions.

Treasury Undersecretary Stuart Levey said that he expected Iran to "scramble to identify work-arounds -- hiding behind front companies, doctoring wire transfers, falsifying shipping documents" -- but that "when Iran engages in evasive conduct and deceptive conduct, as they undoubtedly will, we use that to our advantage by exposing the evasive conduct." He predicted that private companies will avoid doing business with Iran because of the risk of being dragged into illicit activity.

Post Bank of Iran, for instance, facilitated millions of dollars of business for a company called Hong Kong Electronics and other firms on behalf of a previously blacklisted financial institution, Bank Sepah. Post Bank became the 16th Iranian bank to be sanctioned by Treasury; Hong Kong Electronics had been previously cited for supporting a North Korean bank and a weapons dealer.

Among other actions, Treasury added 22 insurance, petroleum and petrochemical companies to a regulatory list of those owned by the Iranian government, thus prohibiting transactions between them and U.S. citizens but, more important, warning overseas businesses of the Iranian links.

Time.com reported Wednesday that BP has significant joint-venture projects with some of the companies on the Treasury list, such as a 50-50 joint partnership in a North Sea natural gas field that produces 1 percent of the United Kingdom's daily consumption.

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