Congress aides: New US sanctions may hinge on Iran talks

Republican congressional aide says if nuke negotiations in Istanbul are a 'joke like last time,' Senate Majority Leader Reid will be pressed to advance new oil- and banking-related sanctions against Tehran

Reuters|Published: 04.13.12 , 21:38

The fate of a new package of sanctions on Iran proposed by US lawmakers may hinge on whether Iran and six major world powers can make any progress at high-level talks this weekend toward resolving a dispute over Tehran's nuclear ambitions.

There is broad support among Democrats and Republicans in the US Congress to add more oil- and banking-related sanctions aimed at pressuring Tehran to abandon its nuclear program.

But the proposed package of sanctions stalled in the gridlocked US Senate in late March, just before lawmakers left Washington for a two-week break.

Lawmakers, who return to Congress on Monday, will be watching to see what comes from the talks in Turkey for clues about where to take the proposed new sanctions.

"Maybe the talks actually increase the pressure when we're back in session next week," said one Senate aide, who spoke on condition of anonymity.

If the talks accomplish little, there will be renewed pressure on Senate Majority Leader Harry Reid to make a deal to advance the new sanctions, said a senior Republican congressional aide.

"If there's a real credible agreement there, then the need for further sanctions will be diminished. If it collapses, and is a joke like last time, then certainly the Reid position will weaken very rapidly," the Republican aide said.

The new proposals come as the Obama administration implements tough new sanctions passed by Congress last year aimed at Iran's central bank and at countries that fail to make "significant" cuts to oil purchases from Iran.

The new batch of measures seeks to close loopholes, focusing on foreign banks that handle transactions for Iran's national oil and tanker companies.

The Senate Banking Committee's version of the bill has already had an impact. The panel proposed that the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, shut out Iran's central bank and other financial institutions from the system used to move money between banks around the world.

European regulators ordered Belgium-based SWIFT to disconnect designated Iranian financial firms from its messaging system last month, the first time the electronic payment system had ever expelled banks.

Some lawmakers want to tweak the bill to extend sanctions to other financial services providers to Iranian banks.

"We wouldn't want to see any backfilling by current or new messaging companies," a Senate aide said.

Republican Senator Mark Kirk has a package of amendments he wants to propose, including one that would ban insurers from covering shipments of Iranian oil except for those importing nations, such as Japan, that have been granted exemptions by the US government.

Senators on both sides of the aisle have other proposals they would like to add to the banking committee's package.

"The administration has been willing to meet and discuss it," a Republican aide said.

But last month, when Senate Majority Leader Reid brought the bill to the floor, he said that to speed its passage, he would not allow any amendments. He sought unanimous consent for the bill, but Senator Rand Paul formally objected.

Reid has not commented since on whether there are current discussions about moving the bill forward again.

"Most of this is negotiable, most of this is not controversial, most of these ideas have pretty strong bipartisan support," the Republican aide said.

"If the Democratic leadership allowed it, it would probably take a day to negotiate compromise language on all of it, put it all into a manager's package, which could win unanimous consent on the floor, and go straight to conference."

The Republican-led House of Representatives passed its version of the new sanctions package last December.

That bill would ban ships that have recently visited Iranian ports from entering US ports, a measure that so far is not part of the Senate bill.

The West accuses Iran of seeking to develop a nuclear weapons capability, while Tehran denies this, saying its program is intended to produce only electricity and medical isotopes.

Israel, believed to be the only Middle East state with an atomic arsenal, has hinted at pre-emptive strikes to prevent its foe from obtaining such arms.