Iran: Oil for gold deals bypass sanctions, US unveils new penalties

New punitive measures build on the sanctions on Tehran's oil industry that lawmakers have shepherded through Congress in the past year.

Senators pressed ahead Thursday on a new set of tough sanctions against Iran'sdomestic industries as they seek to cripple the Islamic republic's economy and thwart its nuclear ambitions.

Sens. Bob Menendez, D-N.J., and Mark Kirk, R-Ill., unveiled a package of penalties that would designate Iran'senergy, port, shipping and ship-building sectors as entities of proliferation and sanction transactions with these areas. The legislation also would penalize individuals selling or supplying commodities such as graphite, aluminum and steel to Iran.

The punitive measures build on the sanctions on Tehran's oil industry that the two lawmakers have shepherded through Congress in the past year.

"Yes, our sanctions are having a significant impact, but Iran continues their work to develop nuclear weapons," Menendez said in a statement, adding that with the new penalties, "We will send a message to Iran that they can't just try to wait us out."

Kirk said the measure "will greatly increase the economic pressure on the Iranian regime and send a clear message of support to the Iranian people."

The sanctions are contained in an amendment the two lawmakers hope to add to a far-reaching defense policy bill that the Senate was debating and could wrap up by week's end. Congress has overwhelmingly backed previous efforts by Menendez and Kirk.

The legislation also would designate the Islamic Republic of Iran Broadcasting and its president as human rights abusers for broadcasting forced televised confessions and show trials.

The United States and European Union have imposed tough sanctions on Iran that have weakened its economy. But Tehran has found ways to bypass the penalties, such as Turkey's use of gold to pay for Iranian natural gas imports.

The Menendez-Kirk measure would allow the president to impose sanctions in cases of the sale or transfer of precious metals, targeting efforts by Iran to circumvent the penalties.

Iran maintains that its nuclear program is for peaceful purposes only.

Mark Dubowitz, a sanctions expert and executive director of the Foundation for Defense of Democracies, said there is strong bipartisan support for intense sanctions, with the goal of pushing the Iranian economy to the brink of economic collapse.

Only then "can the central thesis of the administration's sanctions policy be fairly tested: That crippling economic pressure will break the nuclear will of Iran's supreme leader and his Revolutionary Guards and lead them to meet their obligations under international law," Dubowitz said.

The president has 90 days from the legislation's enactment to act. The bill does include the authority to waive the sanctions based on national security.