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From Monday, gold sales to Iran under US sanction

Rigid new US sanctions against Iran came into force banning the sale or barter of gold to the Islamic republic/AFP

Rigid new US sanctions against Iran came into force banning the sale or barter of gold to the Islamic republic/AFP

WASHINGTON, July 2 – Rigid new US sanctions against Iran came into force Monday including bans on the sale or barter of gold to the Islamic republic, as Washington ratchets up efforts to isolate the country over its nuclear program.

Iran’s foreign ministry denounced the sanctions as “the wrong step at the wrong time,” warning the move would only complicate efforts to resolve the standoff through dialogue.

Turkey is believed to conduct extensive business with Iran using gold, and US lawmakers suspect it of importing Iranian natural gas and paying for the energy with the metal to circumvent existing restrictions on financial transactions with Tehran.

For years, the US and the international community have imposed an arsenal of sanctions against Iran, accusing it of using its civilian nuclear energy program as a cover for attempts to build atomic weapons charges Tehran denies.

US President Barack Obama last July targeted Iran’s oil export sector, vowing punishment against firms that circumvented restrictions on the financial dealings.

Lawmakers saw the enforcement measures as lagging, and last December passed the sanctions that went into effect Monday.

Tehran was critical of the implementation.

“The move by the Americans was the wrong step at the wrong time,” said Iranian foreign ministry spokesman Abbas Araqchi, alluding to the June 14 election of moderate Hassan Rowhani to succeed President Mahmoud Ahmadinejad.

Rowhani has promised to engage constructively with the world and ease tensions raised by Tehran’s nuclear ambitions and sanctions.

“Definitely, the more they add to the sanctions, the more difficult and complicated but not impossible the path of negotiation becomes,” Araqchi said in remarks made on Monday ahead of the implementation of the new sanctions.

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He was referring to years of ongoing but fruitless talks between Iran and world powers aimed at forcing Tehran to cut back on its sensitive part of its nuclear drive in exchange for incentives, including the lifting of sanctions.

Iran’s economy is struggling to cope with the sanctions, which have cost billions in vital oil revenues, leaving Tehran struggling with raging inflation, high unemployment and a depreciated currency.

“Congress is going to definitely hold the administration’s feet to the fire on enforcement,” Mark Dubowitz, executive director of the Foundation for Defense of Democracies, told AFP.

In practice, gold sales by any person or group to an Iranian government entity or private citizen can now trigger sanctions against the seller.

In May, Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen suggested to Congress that Turkey did not provide gold in direct exchange for Iranian natural gas, but reserved his details on the matter for a closed door hearing with lawmakers.

He also stressed the sanctions would be carried out “without fear or favor.”

“We have been clear that that July 1st date is a real date and that after July 1st, any sale of gold to Iran is something that we will pursue vigorously,” he said.

The legislation also imposes penalties on any person or organization that conducts business related to Iran’s energy, shipping and shipbuilding sectors, industries which the United States links to Iran’s nuclear program.

And it also includes the lucrative automobile sector, after Obama signed an executive order on June 3 adding the industry to the sanctions regime.

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Many Iranian firms linked to the leadership and its Revolutionary Guards were already subject to US, European or UN sanctions.

The new measures extend to the totality of the Iran sectors, punishing groups that do business with any Iranian firm in the named industries, rather than just with specific companies identified by Washington.

“By really blacklisting the Iranian economy and targeting gold, they’re really sending a message out to the international business community; there are very few areas of the Iranian economy where you can legally do business,” Dubowitz said.

Meanwhile Treasury Secretary Jacob Lew said the sanctions are not aimed at hurting the Iranian people but to “change their decision” about pursuing a nuclear program.

Lew hoped the sanctions would work, he said Sunday at a conference in Aspen, Colorado, because “the alternatives are worse.”

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