U.S. sanctions threat hangs over Iran talks in Geneva

By Patricia Zengerle WASHINGTON (Reuters) - A threat by the U.S. Congress to slap tough new sanctions on Iran hung over negotiations on Tehran's nuclear program on Thursday, even as diplomats at talks in Geneva voiced optimism an agreement was close. A package of tighter sanctions on Iran has been making its way through Congress but was held up after President Barack Obama's administration asked for a delay to let the delicate diplomatic talks over Tehran's nuclear program unfold. But Congress tends to take a harder line on Iran than the administration. Many lawmakers, including several of Obama's fellow Democrats, believe that tough sanctions brought Tehran to the negotiating table and insist that more are needed to discourage it from developing a nuclear bomb. Iran says its nuclear program is for civilian purposes. "I think Iran has in its power to decide whether or not it faces any more sanctions or whether or not it gets any relief from existing sanctions," Senate Foreign Relations Committee Chairman Robert Menendez told Reuters. Menendez and several other lawmakers said they were open to easing sanctions, but only if Tehran made significant, verifiable concessions like suspending uranium enrichment and allowing more invasive inspections. Otherwise, Menendez said he felt the sanctions should go ahead. "I just don't understand a negotiating posture that suggests that we should stop pursuing a course of action that at least brought Iran to the table while they continue to enrich," he said. Sanctions imposed last year by Washington and the European Union have combined to slash Iran's oil exports by roughly 1 million barrels a day, depriving Tehran of billions of dollars of income and driving up inflation and unemployment. Diplomats said the talks in Geneva between Iran and six world powers appeared on Thursday to be edging toward a preliminary deal on its nuclear activity, citing progress in talks capitalizing on a diplomatic opening from Tehran, although negotiations were "tough. WHAT WILL BANKING COMMITTEE DO? The U.S. Senate Banking Committee, which has jurisdiction over the sanctions, has not decided whether to move ahead, the panel's chairman said. "I don't know the outcome of negotiations now under way in Geneva, and I plan to wait to hear any results of those talks from our negotiators before making a final decision," Democratic Senator Tim Johnson, the panel's chairman, said in a statement on Thursday. The current round of talks in Geneva ends on Friday. Johnson told Reuters earlier in the day that he had decided to go ahead with the mark-up - or consideration - of the bill, a step toward bringing it to the full Senate for a vote after consulting with Senate Majority Leader Harry Reid. Johnson said the date of the mark-up, during which senators present amendments to the legislation and vote whether to send it to the full Senate, had not been determined. The Republican-led House of Representatives passed its version of a stiffer sanctions bill in July. But the Senate, where Democrats control a majority of the seats, put off moving ahead with its bill after the administration asked for more time to pursue the talks. The House bill among other things seeks to slash Iran's oil exports to nearly zero. The Senate bill has been widely expected to be less stringent. The timing issue became more complicated after a handful of senators, including Republican Mark Kirk, a banking panel member, said they might go ahead with a sanctions package even if the banking committee held off. Kirk and a few other Republicans said they were considering introducing a stiffer package of Iran sanctions as an amendment to a defence authorization bill that is expected to be debated in the Senate during the week of November 18. Menendez, who is also a member of the Banking Committee, said he thought debating the stand-alone sanctions bill was a better course of action. "It will be more thought out and more reasoned and balanced," he said. (Additional reporting by Timothy Gardner; Editing by Alistair Bell and Peter Cooney)