Key US lawmaker mulls new penalties on Iran energy sector

Mon Mar 19, 2012 1:55pm EDT

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* Oil sanctions go into effect mid-year

* Senate has not set date to consider new Iran sanctions

WASHINGTON, March 19 (Reuters) - A key U.S. senator is close to unveiling legislation that would further isolate Iran by penalizing foreign companies that do any kind of business with an Iranian energy company, including providing services such as insurance and engineering, a congressional aide said on Monday.

In an attempt to prevent major Iranian energy firms, such as Pars Oil and Gas, from profiting from international commerce, Republican Senator Mark Kirk is drafting a measure that would block any company from U.S. financial markets if it continued to deal with Tehran's energy sector, the aide said.

Kirk, one of the architects behind the latest round of U.S. sanctions that President Barack Obama signed into law in December, and other U.S. lawmakers have been trying to force the administration to get tougher with Iran because of its nuclear program.

The latest measure being crafted by Kirk would state that the Iranian energy sector should be regarded as a "zone of proliferation concern with which no legitimate international business should be conducted," according to the congressional aide.

That would then subject a slew of non-U.S. companies to penalties if they were involved in the extraction, production or financing of Iran's refined petroleum products, natural gas or petrochemical products. Any company that provided technology or services, such as transportation and consulting, to an Iranian energy company also would be targeted by the United States, the aide said.

The legislation being crafted would grant exemptions for certain oil purchases so as not to disrupt volatile energy markets that have been surging on fears that the West will disrupt Iran's oil exports.

Lawmakers already have introduced legislation that would target Iran's tanker and shipping companies as well as requiring the world's biggest electronic payment network to squeeze all Iranian banks out of its system.

It was not clear when the full Senate will consider the new Iranian sanctions.

The sanctions that were enacted in December target the Central Bank of Iran, the country's main clearinghouse for oil revenues. If Iran's major trading partners such as India, Japan and China fail to reduce their Iranian oil imports by mid-year, their institutions could be barred from the U.S. financial system. (Reporting By Rachelle Younglai; Editing by Bill Trott)

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