UPDATE 3-US Senate set to consider broader economic sanctions on Iran

Roberta Rampton
Reuters Middle East

* Tightens the noose around energy, shipping sectors

* Oil exceptions would continue

* Natural gas sales allowed only if revenues used for trade

* Sanctions aimed at ending Turkey-Iran "gold for gas"

WASHINGTON, Nov 29 (Reuters) - The U.S. Senate is set to

consider a broader set of economic sanctions on Iran's energy,

port, shipping and shipbuilding sectors, as lawmakers look for

new ways to pressure Tehran to stop efforts to enrich uranium to

levels that could be used in weapons.

The new package also includes measures to stop the flow of

gold from Turkey into Iran, Senate aides confirmed, trade that

has helped Tehran manage its economy in the face of Western

financial sanctions.

It is the third time in a year that U.S. lawmakers have

looked for new ways to cut off revenues they believe fund Iran's

nuclear program, which Tehran has said is strictly for civilian


The sanctions come as the United Nations' nuclear chief said

his agency has made no progress in its year-long push to

investigate whether Iran has worked on developing an atomic


Iran's economy has been badly damaged by sanctions by the

United States and European Union, but Iran has not slowed its

program, said Senator Robert Menendez, a New Jersey Democrat

who helped craft the new proposal.

"Our message is clear: the window is closing. The time for

the waiting game is over," Menendez said on the Senate floor.

The new sanctions were filed as an amendment to an annual

defense policy bill. Senators debated other parts of the massive

bill late into Thursday night and were expected to consider the

Iran sanctions measure on Friday morning.

If accepted, the proposal would become part of the annual

defense policy bill, which must be approved by the Senate and

House of Representatives before it would be given to President

Barack Obama to sign into law.

Republican Senator Mark Kirk of Illinois, who co-authored

the package, said in a statement the sanctions would turn up

pressure on Iran's government. Kirk and Menendez last year

championed new sanctions that curbed Iran's oil exports.

"We have a responsibility to do everything in our power to

put crippling pressure on the Iranian government, and passing

these new sanctions is absolutely critical to that effort," said

Senator Joseph Lieberman of Connecticut, an independent, who

co-sponsored the new bill.


The package includes measures designed to stop the flow of

gold from Turkey to Iran, said Mark Dubowitz, the head of the

Foundation for Defense of Democracies.

Ankara relies on natural gas from Iran and has been paying

for it using lira. Banking sanctions make it difficult for Iran

to transfer money.

Tehran has used the lira to buy Turkish gold. Couriers carry

the gold to Dubai and from there it is shipped to Iran.

Turkish Energy Minister Taner Yildiz said earlier on

Thursday he was not worried about a "clash with the USA" over

the trade. "We are talking with the USA," he said.

The new sanctions would allow purchases of natural gas from

Iran only if the buyer holds the payment in an account that Iran

can draw on to buy goods or services allowed under the law.

But the draft bill would also explicitly ban sales and

transfers of precious metals to Iran.

"After giving Turkey this flexibility, Congress will not be

sympathetic to a continuation of a 'gold for gas' scheme," said

Dubowitz, who has pushed for stronger sanctions on Iran.

Obama issued an executive order at the end of July

authorizing sanctions on anyone who helps the Iranian government

acquire U.S. dollars or precious metals, including gold.

"We can't comment on any investigations that may be

ongoing," an administration official said.

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