* Oil exceptions to continue
* Aims to close Turkey-Iran 'gold for gas' loophole
* Administration has concerns, Senator Levin says
By Roberta Rampton and Timothy Gardner
WASHINGTON, Nov 30 The U.S. Senate resoundingly
approved on Friday expanded sanctions on global trade with
Iran's energy and shipping sectors, its latest effort to ratchet
up economic pressure on Tehran over its nuclear program.
The new package, which keeps in place exemptions for
countries that have made significant cuts to their purchases of
Iranian crude oil, would be the third round of sanctions in a
year if passed into law.
The existing sanctions have already hurt Iran's economy, but
it is uncertain whether the additional measures will stop or
slow Iran's nuclear program.
Washington says Tehran is enriching uranium to levels that
could be used in nuclear weapons. Iran says the program is for
Senators voted 94-0 to make the new sanctions part of an
annual defense policy bill.
"We must be clear to the Iranians that toughing it out and
waiting it out is not an option, that it will only get worse,"
Democratic Senator Robert Menendez said.
Menendez, of New Jersey, co-authored the package with
Republican Senator Mark Kirk of Illinois and Senator Joseph
Lieberman, an Independent from Connecticut.
The measures would also restrict trade with Iran in precious
metals, graphite, raw or semi-finished metals, such as aluminum
and steel, metallurgical coal and software for integrating
industrial processes in Iran's energy and shipping sectors.
Insurance or reinsurance providers would be restricted from
trade with Iran in energy, shipping and ship-building sectors.
Further, the new sanctions include measures aimed at
stopping the flow of gold from Turkey to Iran.
WHITE HOUSE CONCERNED
The Obama administration has not publicly commented on the
proposals, but has privately raised concerns that it does not
provide enough "waiver flexibility," said Carl Levin, chairman
of the Senate Armed Services Committee.
Levin said those concerns may be addressed when the Senate
and House of Representatives work out differences to finalize
the massive defense bill.
The House has approved its version of the bill, and both
bodies will need to approve a final version before it is sent to
President Barack Obama to sign into law.
The American Israel Public Affairs Committee, a powerful
pro-Israel lobby group, endorsed the measures, which it said
would close a loophole in existing laws.
"In an effort to circumvent international sanctions on the
Central Bank of Iran, some purchasers of Iranian oil and natural
gas have been using gold and other precious metals to pay for
petroleum products," AIPAC leaders said in a letter to senators
ahead of the vote, urging support for the bill.
Israel says international sanctions against Iran are not
working and is threatening to use military force to prevent Iran
from becoming a nuclear power. Washington says all options are
on the table in dealing with Iran, but sanctions and diplomacy
should be given more time.
Some experts expressed doubt on Friday that a fresh round of
sanctions will prompt Iran to make concessions on the nuclear
issue. Paul Pillar, a former CIA analyst, said sanctions will
not work without solid diplomacy to accompany them.
"It is a fallacy to believe there is some breaking point at
which the regime in Tehran cries 'uncle' and makes major changes
in policy even if it sees itself as getting nothing in return,"
Jeff Colgan, a professor at American University in
Washington who studies the geopolitics of oil, said the expanded
sanctions would represent a "continuation of a cat-and-mouse
"The sanctions get placed, Iran tries to find ways around
them, and the U.S. tries to close the loopholes. But so far, a
dent in the (Iranian) economy has not resulted in a change in
the nuclear program," Colgan said.
The United Nations' nuclear chief said on Thursday his
agency has made no progress in its year-long push to investigate
whether Iran has worked on developing an atomic bomb.