In a move aimed at isolating Iran for its suspected nuclear program, U.S. President Barack Obama imposed new sanctions on Monday on Iran’s currency and auto industry, which could render the already weak currency ineffective outside the country.
Obama’s executive order penalizes foreign financial institutions that “knowingly conduct or facilitate significant transactions for the purchase or sale of the Iranian rial, or that maintain significant accounts outside Iran denominated in the Iranian rial,” White House Press Secretary Jay Carney stated in a statement issued on Monday.
“While the rial has lost half of its value since the beginning of 2012 as a result of our comprehensive sanctions, this is the first time that trade in the rial has been targeted directly for sanctions,” the statement added.
A senior Obama administration official, who spoke on the condition of anonymity, said the new order was intended to make the Iranian rial “as unusable a currency as possible, which is all part and parcel of our efforts to apply significant financial pressure on the government of Iran,” Reuters reported.
In his ninth executive order against Iran, Obama authorized penalties for doing business with Iran’s auto sector, including manufacturing or assembly of vehicles including cars, buses, and motorcycles, as well as original equipment manufacturing and after-market parts manufacturing.
Several Western nations, including the United Nations, had initially said the sanctions were intended to pressure the Iranian government to give up its nuclear program and not hurt its people, but admitted last year that the sanctions had a wider impact.
The new sanctions came ahead of Iran’s presidential elections on June 14, an event which analysts say would have little effect on Iran’s nuclear or foreign policy, which is under the direct command of its supreme leader, Ayatollah Ali Khamenei.
The eight approved contenders, none of whom have appeared critical of Iran’s nuclear policy, include frontrunner Saeed Jalili, Iran’s chief nuclear negotiator and a vocal supporter of its nuclear program. The incumbent, Mahmoud Ahmadinejad, is expected to step down after completing the maximum of two terms in office.
The Obama administration said the sanctions bore no connection with the election, but were part of a broader effort to pressure the regime, the Wall Street Journal reported.
Meanwhile, North Korea, yet another target of U.S. sanctions over its nuclear ambitions, is making “important progress in activating key nuclear facilities” at its Yongbyon nuclear facility, 38 North website, which is a part of the U.S.-Korea Institute at Johns Hopkins University, stated on Monday, after analyzing new commercial satellite imagery.
North Korea is “nearing completion of work necessary to restart” the reactor used to produce the nation’s supply of weapons-grade plutonium, the new report said. “External activity suggests that work is continuing inside the reactor building.”
Pyongyang’s belligerent attitude after the U.N. sanctions were tightened following its nuclear test in February, led to a complete shutdown of cooperation between North and South Korea, including the jointly-run Kaesong industrial complex.
Later though, Pyongyang scaled down the threats and even sent an envoy last month for talks with its longstanding ally, China.
But, North Korea has shown little inclination for giving up its nuclear ambitions upon Beijing’s request, Reuters reported on Tuesday, citing a source familiar with knowledge of the talks.
The source added that China advised its ally to channel its resources to rebuild its economy instead of pursuing a weapons program.
Gayathri writes about geopolitics and business for International Business Times. She began her career at the Times of India as news coordinator, before moving on to IBTimes...