Will New Iran Sanctions Have An Effect? Last week, the U.S. imposed its harshest sanctions to date on Iran, following the action of the U.N. Security Council, whose new Iran sanctions were much watered down. Banking has been the most important focus, with the U.S. prohibiting most dollar transactions with all state-owned Iranian banks. Still, Europe, Japan and China are resisting taking similar actions, and without them the new sanctions are unlikely to have the impact the U.S. wants.
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Will New Iran Sanctions Have An Effect?

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Will New Iran Sanctions Have An Effect?

Will New Iran Sanctions Have An Effect?

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ROBERT SIEGEL, Host:

Still, it's not clear yet whether these sanctions will actually change Iran's behavior, as NPR's Mike Shuster reports.

MIKE SHUSTER: President Obama put it bluntly when he signed the sanctions into law in June.

BARACK OBAMA: If you want to do business with us, you first have to certify that you're not doing prohibited business with Iran.

SHUSTER: There are 16 state-owned banks in Iran, and now all of them are the object of U.S. sanctions. In addition, if banks in Europe or Japan or the Middle East cooperate with these Iranian banks, the United States can impose stiff fines on them - hundreds of millions of dollars, possibly.

OBAMA: We're showing the Iranian government that its actions have consequences. And if it persists, the pressure will continue to mount, and its isolation will continue to deepen. There should be no doubt: the United States and the international community are determined to prevent Iran from acquiring nuclear weapons.

SHUSTER: Stuart Eisenstadt, former deputy secretary of the Treasury, who was responsible for implementing earlier sanctions against Iran, concedes that UN sanctions have been porous. The combined UN-U.S. sanctions are tougher, he insists.

STUART EISENSTADT: It certainly hasn't been a game changer, but it has raised the cost of their activity. And the hope is that the fourth and new round of UN sanctions, which target the financial sector for the first time, combined with the enhanced U.S. sanctions, and most particularly the hope for cooperation of the European Union and Japan, will make an even greater difference.

SHUSTER: Eisenstadt wants to see the European Union persuade all its banking institutions to forego operations with Iranian banks and Japan as well.

EISENSTADT: If we can do all of those things, there really is a chance that the price will be so steep that Iran will come back to the bargaining table.

HOSSEIN ASKARI: We do a little bit here. We do a little bit there. We hurt the wrong people. It is not a concerted effort.

SHUSTER: New UN sanctions also encourage states to withhold refined petroleum products like gasoline or fuel for airliners. But they hurt the middle- class and the poor more than the government, says Askari.

ASKARI: I don't think the government is feeling a direct pinch right now from the sanctions. But I think one thing that is actually clear is that the Iranian economic situation is getting worse by the day.

SHUSTER: Mike Shuster, NPR News.

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