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DEBKAfile Special Report January 1, 2012, 1:01 AM (GMT+02:00)

Obama signs toughest sanctions yet against Iran

On the last day of 2011, US President Barack Obama Saturday signed into law measures penalizing foreign financial institutions doing business with Iran’s central bank, Bank Markazi – the toughest sanctions imposed yet over Iran’s development of a nuclear weapon. In recent weeks Tehran has repeatedly warned that it would deem the signing of this measure an act of war and respond with drastic steps including the closure of the Strait of Hormuz.
The bill targeting anyone dealing with Iran’s central bank seeks to force other countries to choose between buying oil from Iran or being shut out of transactions with US financial institutions and banks.  The new sanctions will begin taking effect in 60 days – the toughest not for at least six months, giving Tehran some space to cooperate with international demands to call off its nuclear weapon program. The president will have some flexibility in applying the measure.

debkafile‘s Iranian sources report signs that rather than using this leeway to back down, Tehran appears bent on heading for a collision with the United States and its opponents in the Persian Gulf and Middle East.
Just this Saturday, Dec. 31, Gen. Masoud Jazayeri, one of the Revolutionary Guards heads, wrote on the Guards’ site: “Discourse about closing the Strait of Hormuz belongs to five years ago. Today’s debate in the Islamic Republic of Iran contains new layers and the time has not come to disclose them.”

This was published shortly after Iran announced the test firing of ballistic missiles targeting the strategic strait – and then, few hours later, contradicting itself by reporting that the missile test fire would only take place “in the coming days.”

Our sources report that Gen. Jazayeri’s comment was also made in answer to Israel’s chief of staff Lt. Gen. Benny Gantz, who said in an address to high school students in Beersheba Friday, Dec. 30, “A nuclear-armed Iran is a threat to the region and world no less than to Israel. I think that with the appropriate international and Israeli disposition, which I will not spell out here, we can beat that challenge.”

The Iranian general likewise declined to elaborate on Tehran’s next moves.

After Obama signed the new sanctions, senior US officials stressed the administration intends to move forward with implementing the law in a way that doesn’t damage the global economy. “We believe we can do this.” They added: “The president will consider his options, but our intent—our absolute intent—is to do it in a timed and phased way.”

Earlier Saturday, Dec. 31, debkafile reported Iran had managed by a media trick to close the Strait of Hormuz for at least five hours without firing a shot.

US imposes sanctions on banks de… JPost – Iranian Threat – News.

    HONOLULU  – US President Barack Obama signed a defense funding bill into law on Saturday that imposes sanctions on financial institutions dealing with Iran’s central bank, while allowing for exemptions to avoid upsetting energy markets.

The sanctions target both private and government-controlled banks – including central banks – and would take hold after a 60- to 180-day warning period, depending on the transactions, a senior Obama administration official said.
Under the law, the president can move to exempt institutions in a country that has significantly reduced its dealings with Iran and in situations where a waiver is in the US national security interest or otherwise necessary for energy market stability. He would need to notify Congress and waivers would be temporary, but could be extended.

Sanctioned institutions would be frozen out of US financial markets.

“Our intent is to implement this law in a timed and phased approach so that we avoid repercussions to the oil market and ensure that this damages Iran and not the rest of the world,” the senior US official told Reuters. “The idea here is to reduce Iran’s oil revenues.”

Obama signed the bill during his vacation in Hawaii, just hours after Tehran said it had delayed planned long-range missile tests in the Gulf and signaled it was ready for fresh talks on its disputed nuclear program.

Senior US officials said Washington was consulting with its foreign partners to ensure the new sanctions can work without harming global energy markets. They stressed the US strategy of both isolating and remaining open to engagement with Iran was unchanged.

Obama expresses concern over detainee provisions

Obama did not single out the Iran sanctions in a statement the White House released about his signature, but did point to his concerns about a number of provisions in the defense bill that relate to the treatment and transfer of detainees.

“The fact that I support this bill as a whole does not mean I agree with everything in it,” Obama said, suggesting limits on the ability to move terrorism suspects from the US military prison at Guantanamo Cuba to the United States for trial or to a foreign country were ill-conceived.

“The executive branch must have the flexibility to act swiftly in conducting negotiations with foreign countries regarding the circumstances of detainee transfers,” he said, also calling federal courts “legitimate, effective and powerful” means by which to prosecute some militants.

Reuters reported this week that the Obama administration is considering transferring to Afghan custody a Taliban official suspected of major human rights abuses as part of a long-shot bid to improve the prospects for a peace deal in Afghanistan, a move that has set off alarm bells on Capitol Hill.

Obama also raised concerns about a requirement that he must notify Congress before sharing any classified US ballistic defense missile information with Russia.

In his statement, he said he intended to keep Congress informed of US-Russia cooperation on ballistic missile defense, he would interpret the rule in a way that does not limit his ability to conduct foreign affairs “and avoids the undue disclosure of sensitive diplomatic communications.”

“Should any application of these provisions conflict with my constitutional authorities, I will treat the provisions as non-binding,” he said, referring to a number of sections of the defense bill, which is hundreds of pages long.