U.S. wants to ‘close down the Central Bank of Iran’ over nuclear concerns

[Jos]

The latest round of American sanctions are aimed at shutting down Iran’s central bank, a senior U.S. official said Thursday, spelling out that intention directly for the first time.

“We do need to close down the Central Bank of Iran (CBI),” the official told reporters on condition of anonymity, while adding that the United States is moving quickly to implement the sanctions, signed into law last month.

The sanctions, broadly aimed at forcing Tehran to shift course on its nuclear program, targeted Iran’s crucial oil sector and required foreign firms to make a choice between doing business with Iran or the United States.

Foreign central banks that deal with the Iranian central bank on oil transactions could also face similar restrictions under the new law, which has sparked fears of damage to U.S. ties with nations like Russia and China.
Iran's central bank targeted by U.S. over nuclear concerns | News | National Post

 

[toomuchtime_]

The latest round of American sanctions are aimed at shutting down Iran’s central bank, a senior U.S. official said Thursday, spelling out that intention directly for the first time.

“We do need to close down the Central Bank of Iran (CBI),” the official told reporters on condition of anonymity, while adding that the United States is moving quickly to implement the sanctions, signed into law last month.

The sanctions, broadly aimed at forcing Tehran to shift course on its nuclear program, targeted Iran’s crucial oil sector and required foreign firms to make a choice between doing business with Iran or the United States.

Foreign central banks that deal with the Iranian central bank on oil transactions could also face similar restrictions under the new law, which has sparked fears of damage to U.S. ties with nations like Russia and China.
Iran's central bank targeted by U.S. over nuclear concerns | News | National Post

Not a very good article. The aim of the bill is to damage the Iranian economy badly enough to make the cost of pursuing a nuclear weapons program unsustainably high. Central banks have many functions, setting interest rates and banking regulations, etc., in addition to facilitating foreign trade and this bill aims to damage only the foreign trade function, not to shut down the central bank.

The bill allows the President to make exceptions if he informs Congress it is for national security reasons, so nations that are heavily dependent on Iranian oil are unlikely to be harmed and nations like China and Russia are likely to experience these new sanctions as bargaining chips for which they will be able to trade concessions in other areas. Indeed, when Obama signed the bill he stipulated that he considered parts of it unconstitutional because they infringed on his constitutional authority to run foreign policy and he didn't intend to be bound by them, and given his generally wishy washy foreign policy, it is not clear the implementation of this bill will have any teeth in it at all - it all depends on Obama's poll ratings.

Concerns that Iran might benefit from rising oil prices as the result of these sanctions are unfounded. Previous sanctions and fears of new sanctions have already limited the number of states that depend on Iranian oil, and as a result, China has pressed Iran to discount its prices; when Iran refused, China cut its oil imports from Iran in half. Even more ominous for the Iranian economy is that previous sanctions have made it difficult for Iran to find investors to help maintain and develop its oil and gas fields, so that oil production in 2011 fell from 2010 levels and if the new sanctions are firmly implemented, Iran will continue to see its oil production fall and its exports prices more and more deeply discounted.

Everything depends on Obama's poll ratings.

 

[Paulie]

I'm sure this has NOTHING to do with the petrodollar.