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New US sanctions target Iran's refined petroleum imports for first time

Analysts say the new US sanctions – seen as a move to weaken Iran's economy – are the Obama administration's response to critics in Congress who say the US has been slow to get tough.

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The measures announced Tuesday constitute the first substantial action by the Obama administration under legislation passed in Congress about a year ago. The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 sought among other things to target Iran’s importing of gasoline, which is seen as the Iranian economy’s Achilles’ Heel.

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Earlier this month, in what was interpreted as congressional frustration with the administration, new legislation was introduced to “close loopholes” and speed up the imposing of sanctions on Iran.

“US policy toward Iran has offered a lot of bark, but not enough bite,” said Rep. Ileana Ros-Lehtinen (R) of Florida, who chairs the House Foreign Affairs Committee, in a statement announcing the new bill.

Legislation announced in Senate

On Tuesday, similar legislation to strengthen existing sanctions was introduced on the Senate side. The Iran, North Korea, and Syria Sanctions Consolidation Act of 2011 was introduced by Sens. Robert Menendez (D) of New Jersey, Joseph Lieberman (I) of Connecticut, and Jon Kyl (R) of Arizona.

US officials concede that the new sanctions targeting petroleum imports are unlikely to have any immediate and severe impact on the firms cited, mainly because they largely are absent from the US economy. The sanctions bar the named companies from engaging in transactions in US currency or with US banks, or from receiving US government import-export financing.

But the State Department’s Steinberg said the measures put companies on notice about the repercussions of doing business with Iran. “By imposing these sanctions we’re sending a clear message to companies around the world,” he said. “Those who continue to irresponsibly support Iran’s energy sector or help facilitate Iran’s efforts to evade US sanctions will face significant consequences.”

In the case of Venezuela’s state-owned PDVSA, however, the measures do not affect the company’s US-based subsidiary, CITGO. Venezuela supplies about 10 percent of US oil imports, while the US consumes more than 40 percent of Venezuela oil exports.

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