because it has enough loopholes and so will not be vetoed by President Obama.
The final version of the sanctions law has now passed both houses and is awaiting Obama’s signature.
The final version of the legislation forbids American banks from handling accounts for foreign banks that have any “significant” financial transactions with the Central Bank of Iran. The term “significant” is not defined.
It says the president “may” impose sanctions, but does not require that.
And it says that the president should not impose sanctions on a foreign bank if it is in a country that has “significantly” reduced its volume of crude oil purchases from Iran.
The legislation is fashioned to sound as tough as possible while providing the president a lot of wiggle room. As rewritten, the goal appears to be to give the president a stick he can shake at other countries and say, “Congress is breathing down my back; you have to cut oil purchases from Iran or I will have to punish your banks.”
This is how administrations have used the sanctions laws passed since 1996, showing them to other countries and saying they reflect American citizen anger that the president cannot ignore.
The EU will decide in January what it will do. Diplomats say there is wide support for Europe to stop buying all Iranian oil, but only after alternative suppliers have been lined up for Greece, Italy and Spain, the main buyers of Iranian oil in Europe.
Will that be difficult? Most analysts say no. Repsol of Spain, a major buyer of Iranian crude, say shifting to another buyer is no problem at all. Its chairman, Antonio Brufau, said companies shift all the time in normal times. He pointed out that the Libyan civil war halted Libyan crude supplies for many months this year and Syria oil has been shut out by UN sanctions the past few months. He said, “Every week, we decide the quality of crude we import from other countries, then, depending on the market, the spreads, et cetera, we decide on buying from one place to another.”
Japan is another major buyer. Its foreign minister, Koichiro Gemba, went to Washington this week and announced there that Japan had decided not to stop buying Iranian crude. “I conveyed my view that there is a danger of causing damage to the entire global economy if the imports of Iranian crude oil stop,” he said at a news conference.
South Korea imposed new sanctions. While it banned any new investment in Iran’s oil and gas sectors, it placed no restrictions on crude oil purchases.
Elsewhere on the sanctions front, the United States sanctioned a whole new batch of front companies for the Islamic Republic of Iran Shipping Lines (IRISL). In a game of whack-a-mole, IRISL keeps creating new front companies to evade sanctions and the United States keeps sanctioning the new companies.
The United States also sanctioned two more Iranian officials for human rights violations—Gen. Hassan Firuzabadi, chairman of the Joint Staff of the armed forces and highest ranking military officer in Iran, and Gen. Abdollah Araqi, deputy commander of the Pasdar Ground Forces, who was the Pasdar commander in Tehran in 2009 when the post-election disorders were suppressed.