The latest round of penalties drew a sharp rebuke from Iranian officials who labeled the economic pressure "warfare" and promised to retool the country's oil-dependent economy.
House and Senate negotiators reached agreement late Monday on legislation that builds on the current penalties directed at financial institutions that do business with Iran's central bank. The new bill would impose sanctions on anyone who mines uranium with Iran; sells, leases or provides oil tankers to Tehran; or provides insurance to the National Iranian Tanker Co., the state-run shipping line.
Lawmakers hope to vote on the bill this week before their monthlong August recess, with a House vote as early as Wednesday. The measure has one crucial backer - the powerful American Israel Public Affairs Committee, the pro-Israel lobbying group - and extensive support from Republicans and Democrats.
"That will go a long way," Sen. Lindsey Graham, a Republican, said of the AIPAC support. Sen. Bob Menendez, a Democrat, who pushed for the shipping sanctions, called the bill a good move at a critical time.
The bill would penalize anyone who works in Iran's petroleum, petrochemical or natural gas sector, or helps Tehran's oil and gas industry by providing goods, services, technology or infrastructure.
Any entity that insures or reinsures investments in Iran's oil sector would be penalized. So would anyone who helps Iran avoid sanctions through reflagging of vessels.
"This bipartisan, bicameral Iran sanctions legislation strengthens current US law by leaps and bounds," said Rep. Ileana Ros-Lehtinen, the Republican chairwoman of the House Foreign Affairs Committee. "It updates and expands US sanctions, and counters Iran's efforts to evade them. The bill sends a clear message to the Iranian regime that the US is committed, through the use of sanctions, to preventing Iran from crossing the nuclear threshold."
The United States and Europe argue that depriving Iran of its oil income thwarts its suspected drive for nuclear weapons. Iran has exported 2.5 million barrels of oil a day to Europe, China, India, Japan and South Korea. US officials say the penalties have reduced Iran oil exports to less than 1.8 million barrels a day, costing Tehran about $63 million daily.
Unless Iranians "come clean on their nuclear program, end the suppression of their people and stop supporting terrorist activities, they will face deepening international isolation and even greater economic and diplomatic pressure," said Sen. Tim Johnson, a Democrat and chairman of the Senate Banking Committee.
Ros-Lehtinen and Johnson and their staffs worked for weeks behind closed doors reconciling a bill the House passed in December and one the Senate approved in May. Johnson said they incorporated a number of provisions sought by proponents of tough sanctions.
The bill would target the Iranian Revolutionary Guard Corps and anyone who assists the paramilitary group, including foreign government agencies.
The bill also would deny visas and freeze assets on individuals and companies that supply Iran with technology that could be used against its citizens, such as tear gas, rubber bullets and surveillance equipment. The bill extends those sanctions on human rights violators to Syria, where President Bashar Assad's regime is accused of a bloody crackdown against protesters.
The bill requires companies that trade on the US stock exchange to disclose any Iran-related business to the Securities and Exchange Commission.
Late last year, Congress overwhelmingly approved sanctions targeting foreign financial institutions that do business with Iran's central bank by barring them from opening or maintaining correspondent operations in the United States. Those sanctions applied to foreign central banks only for transactions that involve the sale or purchase of petroleum or petroleum products.
The new bill expands on those penalties.
The rare display of bipartisanship on the legislation came amid high-stakes talk about the effectiveness of sanctions, which by the numbers alone have reduced Iran's oil exports.
"All the sanctions and diplomacy so far have not set back the Iranian program by one iota," Israeli Prime Minister Benjamin Netanyahu said this past weekend.
Israeli leaders have contemplated a military strike on Iran to stop it from developing nuclear weapons. Iran insists that the uranium enrichment work is for peaceful purposes.
Traveling in the Mideast, Defense Secretary Leon Panetta acknowledged that stiff international sanctions have yet to compel Iran to give up its nuclear ambitions. He insisted that more pressure eventually would lead Iran to "do what's right."