June 3, 2013 | Quote

US Targets Iran with Currency, Auto-Sector Sanctions

The United States on Monday ratcheted up its efforts to isolate Iran for its suspected nuclear weapons program, targeting Tehran with currency and auto-sector sanctions.

President Barack Obama imposed sanctions on foreign financial institutions that conduct or facilitate significant transactions in the Iranian rial, meant to further weaken a currency that has already lost two-thirds of its dollar value since late 2011 as a result of Western sanctions.

A senior administration official said the low level of the rial was a key vulnerability for the Iranian government.

Critics of the sanctions say they only harden the resolve of the Iranian government to continue funding the nuclear program.

For sanctions to work, they need to be accompanied by more diplomacy, said Paul Pillar, a former CIA analyst.

“It's a fallacy to think that there is some point at which so many sanctions have been implemented that the Iranians will cry uncle,” Pillar said. “They have no incentive to make concessions unless they are led to believe that concessions will bring significant sanctions relief.”

Senior U.S. officials said there will be further sanctions announced in the future to pressure Iran to negotiate about its nuclear program.

Mark Dubowitz, the head of the Foundation for Defense of Democracies, which advocates tougher policies on Iran, said Washington will likely impose sanctions on the Islamic Republic's construction, engineering, and heavy machinery industries in coming weeks.

The U.S. Treasury Department in 2010 blacklisted the Khatam al Anbiya industrial conglomerate, which is involved in those industries and is controlled by the Islamic Revolutionary Guard Corps. Placing sanctions on the industries as a whole would target investments and financing for the industries by companies in foreign countries, Dubowitz said.

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