Senator Carl Levin, Democrat of Michigan, said the waiver provision, which allows the president to ignore much of the law, was increased to make it easier for the administration to allow blanket exceptions for firms in counties that cooperate with the United States in pressuring Iran.
Levin said the changes would also allow the administration to restrict foreign banks that deal with Iran’s Central Bank, rather than cutting them off entirely from the US financial system, a much more mild sanction.
The compromise was announced Tuesday. The actual text was not available before the Iran Times went to press.
The Senate passed the new sanctions language last week as an amendment to the National Defense Authorization Act. The amendment passed 100-0. The House had already passed the defense bill without any sanctions amendment.
This week negotiators from the two chambers met to iron out the differences between the two bills. The jointly agreed text is expected to be voted on in both the House and the Senate within days and sent to the White House for the president’s signature.
The EU, meanwhile, is still working on its own sanctions. Germany, Britain and France are pushing to end all purchases of Iranian oil by all 27 EU member states. But some members were fearful of disruptions, especially Greece, Italy and Spain, the only EU members with large purchases from Iran.
News reports in Iran are saying that the EU rejected the proposals to halt oil sales. But that is not true. EU officials said the foreign ministers decided not to act until arrangements had been made for alternative sources of crude. That is not expected to be very hard. The sanctions issue is due to come back to the foreign ministers when they next meet in the first week in January.
But that hasn’t stopped the Islamic Republic from asserting that there will be no crude cutoff by Europe. Oil Minister Rostam Qasemi said Sunday that the EU “definitely” will not stop buying Iranian crude because such a move would hurt the global market. He didn’t say how that would be true.
The market will just readjust with, say, Nigeria selling more crude to the EU and less to China. Then China would buy more from Iran and less from Nigeria. The expectation is that with fewer states buying Iranian crude, those states will pressure Iran for discounts. While the theory may hold true, the fact is that oil prices are now so high that Iran will still have immense revenues even if it grants discounts. (See chart on average annual oil prices on page five, bottom right.)
While most Iranian officials were publicly dismissing all talk of new sanctions, Central Bank Governor Mahmud Bahmani was not. The state news agency quoted him as saying Iran must come up with solutions to counter new punitive sanctions from the West. The country should be managed as if it were under siege for the next two years, he said.
But Foreign Ministry spokesman Ramin Mehman-Parast insisted otherwise. He said, “Europe is grappling with an acute crisis and the EU members have deep differences now. They will sustain more damage if they impose such an oil embargo.”
