On July 31, the Obama administration provided a briefing on the new U.S. sanctions on Iran. In this conference call, three government officials discussed President Obama’s new sanctions and the impact of existing sanctions on Iran’s government and economy. The following are excerpts from the conference call.

 

Ben Rhodes, Deputy National Security Advisor for Strategic Communications

 

We have taken the view that Iran has an opportunity, through diplomacy, to come in line with their international obligations with respect to their nuclear program.  However, we’ve also made it clear that if Iran fails to meet its obligations, we will steadily ratchet up the pressure… 

 

We’ve been working to fully isolate and cut off Iran from the international financial system so that they feel a deeper isolation.  And what we’ve also done, however, is continually update our tools, and the steps that we’re taking today certainly increase those efforts…

 

One or two years ago, I don't think people would have anticipated that we would be able to get at the banking sector, the petroleum sector, the petrochemical sector in the way that we have. 

 

That's a testament, by the way, not just of the sanctions regime, but to the diplomacy accompanying it.  This would not be nearly as effective if there wasn’t an international coalition and a multilateral effort. 

 

Unilateral U.S. actions alone can have an impact, but the ability to go around the world and to see Iranian — importers of Iranian oil significantly reducing their purchases is what allows us to really see sanctions bite…

 

We have seen Iranian leaders acknowledge the significant impacts of the sanctions, which, frankly, are a direct consequence of their own decisions.  Their decisions to continue to be outside of their obligations is the reason why they find themselves in such dire straits.

 

We see, interestingly, divisions in the Iranian leadership…Several years ago, it was the international community that was divided that had to deal with Iran, whereas the Iranian leadership was very united. 

 

Bob Einhorn, Special Advisor for Nonproliferation and Arms Control at the Department of State

 

The combined impact of the administration’s aggressive implementation of the National Defense Authorization Act sanctions, and the European Union’s oil embargo and ban on insuring oil shipments, has already been dramatic. 

 

According to the International Energy Agency, Iran’s crude oil exports in 2011 were approximately 2.5 million barrels per day, and have dropped to below 1.5 million barrels per day in June of this year, which is a decline of about 40 to 50 percent.  And that amounts to roughly $9 billion in lost revenues for Iran in every quarter. 

 

And it’s important to recognize that the NDAA sanctions and EU oil embargo did not take full legal effect until a month ago.  The sanctions are not yet impacting with full force.  We would expect the effects to become even more severe in coming weeks and months.  And the actions we’re taking today will strengthen those efforts.

 

We’re currently seeing attempts by Iran to circumvent current oil sanctions.  The new executive order is aimed at closing loopholes and preventing circumvention…

 

Rather than just targeting transactions with the Central Bank of Iran or other designated Iranian banks, this executive order sanctions purchases from any private or public Iranian individual or entity, including the National Iranian Oil Company, or NIOC, and the Naftiran Intertrade Company, or NICO, which is a trading arm of NIOC. 

 

Rather than just sanction banks, this executive order would sanction the refiners and any other purchasers of Iranian petroleum and petroleum products. 

 

David Cohen, Under Secretary for Terrorism and Financial Intelligence at the Department of Treasury

 

As financial institutions around the world have cut ties with designated Iranian banks to avoid the risk of involvement in Iran’s illicit activities, Bank of Kunlun and Elaf Islamic Bank have done just the opposite. 

 

Today’s action exposes these banks’ continued business with designated Iranian banks, and effectively cuts them off from the U.S. financial system…

 

The message to banks worldwide should be clear:  If you provide financial services to designated Iranian banks, if you process significant financial transactions for those banks, you will face U.S. sanctions no matter where you are located…

 

We have communicated with more than 120 foreign financial institutions and more than 60 governments to explain the risks of doing businesses with designated Iranian banks…

 

In addition to the actions against Kunlun and Elaf… the President signed an executive order imposing new sanctions on Iran's energy sector and preventing Iran from using workarounds to circumvent existing sanctions. 

 

One of the collateral benefits of the financial sanctions that we’ve imposed is that it is increasingly difficult for Iran today to make payments in the international financial system. 

That makes it difficult for Iran to procure material for its nuclear program because they have difficulty paying for what it is they're trying to purchase.

 

 

To view the full transcript of this briefing, click here.
To view the timeline of U.S. sanctions on Iran, click here.