UPDATE 2-US Senate to soon move on new Iran sanctions-Reid

Tue Mar 27, 2012 6:16pm EDT

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* Package would build on banking, oil sanctions in place now

* Targets foreign banks that deal with Iran oil, tanker companies (Adds comment from Kirk's office)

By Roberta Rampton and Rachelle Younglai

WASHINGTON, March 27 (Reuters) - The U.S. Senate may soon consider a new package of sanctions targeting Iran's oil revenues, Democratic Majority Leader Harry Reid said on Tuesday.

The legislation would focus on foreign banks that handle transactions for Iran's national oil and tanker companies, and include a host of measures aimed to close loopholes in existing sanctions.

The Obama administration's latest set of penalties signed into law in December have made it increasingly difficult for Tehran to sell its oil and are aimed at slowing Iran's nuclear program, which Tehran has said is purely for civilian purposes. The West contends the program is for nuclear weapons.

"I have alerted the Republican Leader (Mitch McConnell) that I will soon ask consent to move forward on this measure," Reid said in the Senate on Tuesday.

"These sanctions are a key tool as we work to stop (Iran) from obtaining a nuclear weapon, threatening Israel and ultimately jeopardizing U.S. national security," Reid said.

The new proposed measures would build on efforts by the United States and other Western nations to implement oil and banking sanctions.

The Senate Banking Committee easily passed the new sanctions bill on Feb. 2 and the full House of Representatives passed its version in December.

Since then, several lawmakers have floated additional proposals to penalize underwriters that insure oil and gas trade with Iran, block foreign companies dealing with Iranian energy companies from U.S. financial markets, and ban foreign companies that buy Iranian oil from buying oil from U.S. emergency reserves.

The timing of the next step was not immediately clear.

Reid said Democratic senators have agreed to move forward on the bill without offering any amendments, which could speed a vote. But he said Republican senators may insist on amending the bill.

"New changes to the bill at this time will only slow down its passage," he said.

Republicans are pushing to include at least one amendment from Senator Mark Kirk, said Jon Kyl, the second-ranking Republican in the Senate.

Kirk, one of the architects behind the latest round of U.S. sanctions that President Barack Obama signed into law in December, has continued to work on Iran sanctions issues as he recovers from a stroke.

"We remain hopeful that Senators can find a bipartisan way forward to incorporate ideas from both sides of the aisle that would help strengthen sanctions against Iran," a spokesman from Kirk's office said.

Kyl told reporters that he did "feel some obligation to make sure that Senator Kirk is satisfied before we go forward" with the legislation.

Senator Joe Lieberman, an independent who caucuses with Democrats, said he wants to see the sanctions advance but would like to see some amendments allowed.

"I'd really prefer to have a bipartisan agreement with a limited number of amendments on both sides," Lieberman told reporters. (Editing by Bill Trott and Cynthia Osterman)

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