U.S. congressional negotiators reach deal on new Iran sanctions

WASHINGTON Tue Jul 31, 2012 9:48am IST

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WASHINGTON (Reuters) - U.S. lawmakers moved a step closer to finalizing new sanctions aimed at further restricting Iran's oil revenues after negotiators from the Senate and House of Representatives agreed on a compromise bill on Monday.

The bill includes several new provisions seeking to crack down on those who ship or insure Iranian oil cargoes, or who pay for oil using gold. It also seeks to curtail efforts to evade sanctions by reflagging ships or turning off tracking systems.

It aims as well to stop Iran from repatriating revenues from oil sales, which would further squeeze government funds.

If passed, the sanctions would add further pressure on top of penalties imposed by the United States and European Union earlier this year on countries that fail to slash purchases of Iranian oil - sanctions the West hopes will prevent Tehran from building nuclear weapons.

"The expanded energy sanctions contained in this critical legislation effectively blacklist the Iranian energy sector and anyone doing business with it," Ileana Ros-Lehtinen, the Republican chairman of the House Foreign Affairs Committee, said in a statement.

Iran has maintained its nuclear program is for civilian purposes. Its economy has been damaged by existing sanctions and its oil production has slipped to the lowest level since 1988.

"Unless (Iranian leaders) 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," Tim Johnson, Democratic chairman of the Senate Banking Committee, said in a statement.

TIMING OF VOTE STILL UNCLEAR

Senate and House leaders have said they would like to pass the sanctions by the end of the week, when lawmakers are set to leave for an extended recess.

The draft text of the compromise bill was released by the House late on Monday and a Republican aide confirmed members would vote on the floor this week, although the date had not been set.

It was not immediately clear whether a vote would be held in the U.S. Senate, where an earlier version of the bill was held up in May by Republicans who sought tougher measures.

One senior congressional source characterized the bill as "incremental" and said the new measures would not be enough to force Tehran to abandon its nuclear program, or prevent Israel from taking military action.

President Barack Obama would need to sign the bill for the measures to take effect. The White House did not publicly comment on the legislation as it was being developed, and has not yet commented on the compromise bill.

The compromise scaled back proposals to sanction satellite service providers to Iran's government, replacing that with non-binding measures urging companies to stop providing the services until Tehran stops jamming certain satellite signals.

Some groups pushing for stricter measures against Iran have said they are worried the compromise weakens sanctions on companies that help Iranian banks transfer money.

The compromise bill includes more provisions aimed at shippers that transport Iran's oil around the globe, as well as on the National Iranian Oil Company, or NIOC, and National Iranian Tanker Company, or NITC.

(Editing by Peter Cooney)

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