BICOM

Leaders of a US House and Senate negotiating panel yesterday said they had agreed to compromise legislation imposing new sanctions that target Iran’s central bank, despite the Obama administrations misgivings over the measure. The panel said that they hoped to pass the legislation this week.

US lawmakers, the leaders of armed services committees from both political parties, said they had made some changes sought by the administration. Democratic Senator Carl Levin said that these changes added some flexibility in the treatment of foreign institutions that trade with Iran’s central bank. Levin told reporters that the bill was probably still “96 per cent” the same as legislation that passed the Senate last week, and that It would penalise foreign financial institutions that do business with Iran’s central bank, the main conduit for its oil revenues.

A waiver provision was changed in the bill as to make it easier for the administration to allow exceptions for countries that have sought to cooperate with the US in pressuring Iran, without cutting them off entirely from the US financial system. Nevertheless, Levin added, “we have written this language so it’s tough. We want it to be tough” in an attempt to pressure Iran to give up its nuclear programme.

The US and its Western allies are supporting multiple rounds of sanctions in order to persuade Iran to halt its nuclear development programme. The US already bars its own banks from dealing with the Iranian central bank, so new US sanctions would operate by dissuading foreign banks from doing so.

In a separate development, a mysterious explosion took place in a steel mill plant on Sunday night in the central Iranian province of Yazd, which is said to be processing North Korean steel used for uranium enrichment centrifuges. Eight people were killed in the blast. Iran has been rocked over the last month by a series of blasts at suspected sites linked to Iran’s nuclear programme. While several news outlets report that this latest blast is linked to a series of similar explosions in Iran that indicate sabotage, Tehran’s ILNA news agency reported on Monday night that the explosion was caused by a gas leak.