The measure grants President Barack Obama the power to impose sanctions against any country or company that enters into a joint venture or offers technology to assist Iran's uranium or oil industries.
Both the White House and Congress are committed to preventing Iran from obtaining nuclear weapons capability, said Sen. Robert Menendez, D-N.J., the bill's chief architect, according to Agence-France Presse.
Iran can either come to Baghdad with a real plan...or we'll make our own plan -- through sanctions or other necessary measures -- to ensure that Iran fails to achieve its nuclear ambitions, he added.
The move is aimed at hurting Iran's national oil and tanker firms, and for the first time extends sanctions to punish those who work on a joint venture with Iranian companies anywhere in the world.
The legislation also calls for a travel ban and the freezing of U.S. assets for any individuals or firms who provide Tehran with a range of weapons or surveillance equipment used to repress its people.
The Senate has worked hard to improve our sanctions toward Iran, added Minority Leader Mitch McConnell, R-Ky., according to AFP.
And this effort, combined with the sanctions of the European Union, should strengthen the hand of our own negotiators.
The Senate bill must be reconciled with a similar House-passed measure before going to the president.
The European Union has enacted its own set of sanctions, including banning EU-based ship insurers and re-insurers -- who cover 90 percent of the world's tankers -- from covering vessels carrying Iranian crude.
The EU is also set to ban the import of Iranian oil from July 1.
On Wednesday, diplomats from the P5 + 1 group -- the U.S, Russia, China, Britain, France and Germany -- are to meet with the Iranians in Baghdad for talks about the country's suspected nuclear weapons and uranium enrichment programs.
It is hoped a successful outcome during the Baghdad talks will diffuse growing tensions in the region which has led to stiff economic sanctions on Iran and fears of a new Middle East war.