The first American sanctions on Iran since amoderate cleric won the presidential electionthere on June 14 went into effect on Monday, expanding the number of penalized industries and imposing rules that theoretically could halt all gold and currency trade by the country.Proponents of the latest round of sanctions said they could deprive the Iranians of billions of dollars of income that had evaded earlier rounds particularly with the new prohibition on gold trade. Bullion dealers in other countries who flout the prohibition risk severe American penalties, including expulsion from the United States precious metals market.
Iran has increasingly traded its oil and gas for gold with countries like Turkey because of earlier financial sanctions that have prevented the Iranians from using conventional bank payment methods. The Iranian authorities are then able to use the gold to buy dollars and euros needed to purchase other needed imports, or to support the faltering value of Irans own currency, the rial.
This shuts off a major workaround, saidMark Dubowitz, executive director of the Foundation for Defense of Democracies, a Washington group that advocates tougher sanctions on Iran. As of today, its prohibited for anyone to sell or transfer gold to Iran, at all.
Others agreed that the gold prohibition would at least create new problems for Iran, which has shown a resilient ability to defy efforts by the United States and the European Union to pressure it economically.
The prohibition on gold trading will make it more difficult for Iran to circumvent the financial sanctions, said Dariush Zahedi, a former businessman in Iran who is now a lecturer at the University of California, Berkeley.
Mr. Zahedi said Iran was likely to become even more dependent on bartering and would suffer higher inflation and more unemployment. In short further rises in transaction costs, cost of living and economic contraction, he said.
The new sanctions, which also penalize Irans automotive industry and any foreign bank that conducts significant transactions in the rial, are the result of a bill signed by President Obama in January and an executive order he decreed early last month, before the Iranian election.
Supporters of the sanctions contend that they close significant gaps in the effort to pressure Iran over its disputed nuclear program, which Western nations suspect is aimed at enabling Iran to build a nuclear weapon despite the countrys repeated assertions that its intentions are peaceful and lawful.
The sanctions are likely to intensify further under pending legislation in Congress, regardless of how Irans president-elect, Hassan Rouhani, who takes office next month, approaches Irans nuclear dispute.
Mr. Rouhani has signaled that he will seek relief from the sanctions and that he prefers a more pragmatic tone in negotiations than his predecessor, Mahmoud Ahmadinejad, which some American policy makers and sanctions supporters have interpreted as a vindication of the sanctions campaign.
But Mr. Rouhani is not likely to be able to determine nuclear policies; that power rests with Ayatollah Ali Khamenei, the supreme leader, who in his public statements strongly opposes any compromise.
Others say the election of Mr. Rouhani had far more to do with Iranian voter dissatisfaction with the overall policies of Irans conservative incumbents.
The Iranian people had plenty of reasons to vote against the conservatives, and didnt need sanctions to convince them to do so, the National Iranian American Council, a group that opposes sanctions, said Monday in anopinion articlepublished on the Web site of Al Jazeera. The authors, Trita Parsi, the groups president, and Reza Marashi, its director of research, said sanctions advocates suffered from what they called variable blindness leading to overreliance on sanctions as a catchall explanation of favorable developments in Iran.
By The New York Times
The Iran Project is not responsible for the content of quoted articles.
