Senate OKs New Penalties Against Iran 99-0

The U.S. Senate has unanimously approved tough new sanctions against foreign companies that do business with Iran's Revolutionary Guard or contribute to its energy industry. The sanctions are the latest effort to punish the Tehran government over its suspected nuclear weapons program.

Across the Capitol Building, the House was also winding up debate on the bill, putting it on an accelerated path for President Barack Obama to sign into law.

Congressional action to further disable the Iranian economy and force the government to abandon its nuclear ambitions comes after a year in which the Obama administration made little headway with direct diplomacy to get Iran to change its behavior.

U.S. Steps Up Sanctions Against Iran

The House passed its version of the bill in October, and the Senate acted in January. Democratic leaders delayed final action so diplomatic efforts could play out.

Two weeks ago, the U.N. Security Council approved a fourth round of sanctions against Iran that took aim at the powerful Revolutionary Guard and Iran's investments in ballistic missiles and nuclear materials.

Last week the Treasury Department added three dozen more companies and individuals to its list of those subject to penalties because of their ties to Iran's nuclear program or role in helping Iran evade existing sanctions.

"First and foremost, we must stop Iran from continuing its illicit nuclear program," said the bill's chief negotiators, Democratic Sen. Christopher Dodd and Rep. Howard Berman, also a Democrat. "Our legislation will provide the administration with powerful new tools to press Iran to change course."

The White House praised the compromise and said it would strengthen "a multilateral strategy to isolate and pressure Iran."

The legislation would:

-expand the scope of the 1996 Iran Sanctions Act by penalizing foreign companies that assist Iran's energy sector. While Iran is a major exporter of oil, it relies heavily on imports for its refined products such as gasoline.

-ban U.S. banks from dealing with foreign banks doing business with the Revolutionary Guard or aiding Iran's nuclear program.

-ban foreign companies from U.S. government procurement contracts if they had provided Iran with technology used to restrict the free flow of information.

-provide a legal framework for U.S. states, local governments and other investors to divest their portfolios of foreign companies involved in Iran's energy sector.

The Tehran government has shrugged off the latest U.N. penalties and says its nuclear program is for peaceful purposes. Critics of the sanctions have said previous penalties have not worked because there has not been international cooperation behind them or because Washington has been reluctant to punish companies from countries with close ties to the United States.

"We continue to believe the legislation is ill-advised," said Richard Sawaya, director of USA Engage, a business and trade group that opposes the penalties. "Unilateral sanctions fail to produce their intended effects upon sovereign states, and the scope of these sanctions is worrisome."

As with past measures, the White House asked for flexibility in applying sanctions so as to protect national security interests.

"Whether the United States and our allies can stop Iran from acquiring a nuclear capability is a matter of political will," said House Republican leader John Boehner. "Congress will closely monitor whether the Obama administration effectively implements the sanctions authorized."

Administration officials told the Senate Foreign Relations Committee this week that sanctions would be enforced and could be effective. "Iran is not 10-feet tall," said Undersecretary of State William Burns. "Sanctions create real problems for them."