U.S. Senate Adopts Economic Sanctions on Iran; U.S. Big Business Sides with Iran; Iran Says EU Will Not Impose Oil Sanctions

In Tehran, state television quoted a military source as saying that Iran's military had shot down a U.S. reconnaissance drone aircraft in eastern Iran. However, a U.S. official said on Sunday that Washington had no indication that a drone that had crashed in Iran had actually been shot down.- No indication drone in Iran was shot down: U.S. official, Reuters, December 4, 2011

Iran Says Oil Would Go Over $250 If Exports Banned

Reuters
December 4, 2011

Iran warned the West on Sunday any move to block its oil exports would more than double crude prices with devastating consequences on a fragile global economy.

"As soon as such an issue is raised seriously the oil price would soar to above $250 a barrel," Foreign Ministry spokesman Ramin Mehmanparast said in a newspaper interview.

The comments come as Iran strives to contain international reaction to the storming of the British embassy last week, a move which drew immediate condemnation from around the world and may galvanize support for tougher action against Tehran.

Washington and EU countries were already discussing measures to restrict oil exports after the United Nations nuclear watchdog issued a report in November with what it said was evidence that Tehran had worked on designing an atom bomb.

Iran says its nuclear program is entirely peaceful.

The U.S. Senate voted on Thursday to penalize foreign financial institutions that do business with Iran's central bank -- which takes payment for the 2.6 million barrels Iran exports a day. The European Union is considering a ban -- already in place in the United States -- on Iranian oil imports.

So far neither Washington nor Brussels has finalized its move against the oil trade or the central bank amid fears of the possible impact on the global economy of restricting oil flows from the world's fifth biggest exporter.

But the British embassy attack dragged relations with Europe to a long-time low and Iran is now facing rising rhetoric about a direct hit on its main source of foreign earnings.

Until recently, Iran had dismissed as ineffective mounting sanctions aimed at forcing it to halt its nuclear activities. Mehmanparast's comments show a more defensive stance.

"No one welcomes the sanctions, we know that sanctions create obstacles, but we want to say we will overcome these obstacles," Mehmanparast told Sharq daily.

"Imposing sanctions on oil and gas is among the sanctions that, if one wants to do that, the consequences should be fully considered before taking any action," Mehmanparast said.

"I do not think the situation in the world and especially in the West today is prepared enough to raise such discussions."

Britain's embassy in Tehran was ransacked on Tuesday after London announced unilateral sanctions on Iran's central bank. London evacuated staff, closed the embassy and the biggest EU states withdrew their ambassadors in protests.

Rising tensions were enough to push up crude prices with ICE Brent January crude up 95 cents on Friday to settle at $109.94 a barrel.

Mehmanparast warned the EU on Saturday to avoid tying itself to British interests.

U.S. Senate Adopts Tough Iran Sanctions

AFP
December 2, 2011

The US Senate unanimously adopted harsh new economic sanctions on Iran, dismissing US officials' fears they risked fracturing global unity on blocking Tehran's suspected nuclear weapons program.

Lawmakers voted 100-0 to include the measure, which aims to cut off Iran's central bank from the global financial system, in a must-pass annual military spending bill poised for final approval.

Senators rebuffed an 11th-hour campaign from top aides to President Barack Obama who warned the legislation could shatter a growing but fragile global consensus on confronting the defiant Islamic republic over its nuclear drive.

The measure, crafted by Democratic Senator Robert Menendez and Republican Senator Mark Kirk, calls for freezing the US-based assets of financial institutions that do business with the central bank.

It would apply to non-US central banks that do so for the purpose of buying or selling petroleum -- Iran's chief source of revenues -- or related goods, amid growing fears that time is running short to solve the standoff peacefully.

"This is the right amendment, at the right time, sending the right message in the face of a very irresponsible regime," Kirk said.

"This is the maximum opportunity to have a peaceful diplomacy tool to stop Iran's march to nuclear weapons," said Menendez.

US officials have warned that depriving global markets of Iranian exports could send oil prices sharply higher, handing Tehran a windfall at a time when it has struggled to cope with painful international economic sanctions.

To address that, Kirk and Menendez's measure says the sanctions would only apply if Obama determines that there is sufficient oil from other producers to avoid disrupting global markets, and enables him to delay them if he determines that to be vital to US national security interests.

And Kirk said this week that Saudi Arabia's ambassador had told him of the kingdom's "great willingness" to boost its output to meet any resulting shortfall in supply.

The sanctions would not apply to sales of food, medicine and medical devices.

Earlier, Undersecretary of State for Political Affairs Wendy Sherman and Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen warned the plan risked alienating key allies and inadvertently lining Iran's pockets.

"We all agree with the impulse, the sentiment, the objective, which is to really go at the jugular of Iran's economy," Sherman said in a frequently contentious hearing of the Senate Foreign Relations Committee.

"But there is absolutely a risk that, in fact, the price of oil would go up which would mean that Iran would, in fact, have more money to fuel its nuclear ambitions, not less," she said.

"Now, more than ever, it is imperative that we act in a way that does not threaten to fracture the international coalition of nations," Cohen said at a hearing just hours before lawmakers were to vote on the plan.

Sherman and Cohen's entreaties ran headlong into sharp criticisms from lawmakers impatient with the pace and scope of pressure on Iran and worried time was running short until the US nemesis joins the club of nuclear nations.

"You haven't shown us the robust effort, when the clock is ticking, to use that which we have given you," Menendez scolded, referring to past sanctions laws.

"We hear the words, we hear the talk, but we've wanted action for some time and it just hasn't happened," said Republican Senator James Risch, who warned of an "urgency gap" between the White House and Congress.

Senator Richard Lugar, the committee's top Republican, scoffed at concerns that the measure could alienate China, saying "they're not taking this very seriously anyway."

And, with the specter of military force as a last option lurking over the debate, Lugar declared "we're going to have to either contend with diplomacy with the Chinese or potential warfare with the Iranians."

Republican Senator Bob Corker asked whether Washington was "making plans with our friends towards military action" and sending "signals to Iran that, if these sanctions do not work, we really are prepared to use that option."

"Iran understands, and they read the newspapers and see what's happening. They understand it is a serious possibility," replied Sherman.

The Senate and House of Representatives were to hold negotiations to blend their rival versions of the underlying bill and send the compromise to Obama to sign into law.

Factbox: Cyber Warfare Expert's Timeline for Iran Attack

Reuters
December 2, 2011

The code inside the cyber weapon to attack Iran's nuclear program traces back to 2006, according to cyber warfare expert John Bumgarner, who has spent more than a year studying samples of the malicious software and analyzing other data related to the unprecedented effort. His claims have not been independently confirmed.

Here are some key milestones he says he has uncovered related to the attack on a heavily secured underground uranium enrichment facility at Natanz, Iran.

• May 2006 - Engineers compile code for a component of Stuxnet that will allow them to attack programmable logic controllers, or PLCs, manufactured by Siemens of Germany. Iran's nuclear program uses Siemens PLCs to control the gas centrifuges in its uranium enrichment facilities.

• 2007 - Duqu, a data-stealing piece of malware, is deployed at targeted sites in Iran and some of its allies, including Sudan.

• Late 2007 - Engineers write the code for the "digital bomb" component of Stuxnet, allowing those behind the attack to force the gas centrifuges to rotate at faster-than-normal speeds, which is what damaged the sensitive equipment when the cyber weapon was eventually deployed.

• November 2008 - Conficker appears, starts to spread rapidly.

• December 2008 - Actors behind Stuxnet start running www.mypremierfutbol.com, a website appealing to soccer fans that will eventually be used to cloak traffic traveling between machines infected with Stuxnet and the server controlling them.

• January 2009 - They start running www.todaysfutbol.com, which will be used for the same purpose.

• January 2009 - Spread of Conficker peaks and engineers continue writing code for key components of Stuxnet.

• March 2009 - Conficker Variant C is deployed. This version will be used to deliver Stuxnet to Iran.

• April 1, 2009 - Attackers begin to deploy Stuxnet to Iran on the 30th anniversary of the declaration of an Islamic republic in Iran.

• January 2010 - Operators of Stuxnet accelerate program by adding new malware components that make it spread faster and also make it more dangerous.

• March 2010 - Stuxnet operators add additional components to the malware to make it even more powerful.

• June 2010 - Computer security firm VirusBlokAda identifies Stuxnet as a piece of malware after reviewing a sample that was found in Iran.

• July 2010 - Cyber security blogger Brian Krebs breaks news of Stuxnet on his website.

• November 2010 - Iran President Mahmoud Ahmadinejad discloses that a cyber weapon had damaged gas centrifuges at his nation's uranium enrichment facility. "They did a bad thing. Fortunately our experts discovered that," he said.

U.S. Big Business Sides with Iran

Weekly Standard
December 5, 2011

Earlier this week, on Monday, the advocacy group USA*Engage sent a letter to each of the 100 Senate offices. The organization’s intention was clear: to prevent the U.S. from imposing economic sanctions on Iran.

USA*Engage’s efforts, however, failed last night when every office to receive such a letter did the exact opposite. The sanctions amendment offered by Senator Bob Menendez (D, New Jersey) and Senator Mark Kirk (R, Illinois), which passed by a 100-0 vote in the Senate.

According to Kirk’s Senate office,

“The sanctions would prohibit financial institutions that do business with the bank of Iran from opening or maintaining correspondent banking accounts in the United States.”

The goal?

“The amendment seeks to deny Iran the resources for its nuclear weapons program.”

So why would USA*Engage actively seek to block a measure that would hopefully prevent Iran from acquiring a nuclear weapon?

In the letter, USA*Engage director Richard Sawaya states:

“Given that the reported announced intent of the sanctions amendments is to target Iran’s crude sales into the world oil market, the adverse effects on the world economy, and on vital U.S. interests, could be considerable. Such hasty, draconian, unilateral legislation would be ill advised at best.”

“If any Iran sanctions amendments do reach the floor, we urge you to vote no.”

In other words, USA*Engage is concerned that sanctioning Iran will hurt the economy—not at all about allowing a rogue regime to acquire nuclear weapons.

But who is USA*Engage anyway?

It’s a coalition of corporations, companies, and organizations, a subsidiary of the National Foreign Trade Council. Although USA*Engage does not reveal who their members are, here is the list of those who make up the National Foreign Trade Council’s board of directors:

• ABB Incorporated
• American International Group, Incorporated
• Applied Materials
• Baxter International, Incorporated
• Boeing Company
• Caterpillar Incorporated
• Chevron
• Chrysler, LLP
• CIGNA International
• Citigroup Inc.
• Deloitte & Touche, LLP
• Dewey & LeBoeuf LLP
• DHL North America
• E.I. du Pont de Nemours & Company
• Eastman Kodak Company
• Ernst & Young LLP
• ExxonMobil Corporation
• Fluor Corporation
• Ford Motor Company
• General Electric Company
• General Motors Corporation
• Google Inc.
• Halliburton Company
• Hanesbrands Inc.
• Hercules, USA
• Hewlett-Packard Company
• Ingersoll-Rand Company
• Johnson & Johnson
• JPMorganChase & Co
• KPMG, LLP
• Mars Incorporated
• Microsoft Corporation
• National Foreign Trade Council
• Occidental Petroleum Corporation
• Oracle Corporation
• PepsiCo, Inc.
• Pernod Ricard USA
• Pfizer Inc.
• PricewaterhouseCoopers LLP
• Procter & Gamble Company
• Prudential Insurance Company
• Ridgewood Group International
• Rockwell International Corporation
• Siemens Corporation
• Sullivan & Worcester LLP
• TE Connectivity
• Tyco Electronics
• United Technologies Corporation
• Wal-Mart Stores, Incorporated

Iran Says EU Will Not Impose Oil Sanctions

Reuters
December 11, 2011

The European Union "definitely" will not impose sanctions on OPEC member Iran's oil exports because such a measure would harm the global crude market, Iranian Oil Minister Rostam Qasemi said on Sunday.

EU leaders called on Friday for more sanctions against Iran by the end of January, in an effort to increase pressure on Tehran over its disputed nuclear program.

"Our policy is sustainable supply of oil to Europe ... Iran is a major oil producer and any sanctions on our oil export would harm the global market," Qasemi told a news conference.

Last week, EU foreign ministers agreed to develop new sanctions on Iran's energy, transport and banking sectors.

Iran has been hit by four rounds of U.N. sanctions and international sanctions for defying to halt its sensitive nuclear activities, which the United States and its allies say is aimed at building bombs.

In its latest report, the International Atomic Energy Agency (IAEA) released new evidence confirming international concerns that Iran is seeking nuclear weapons.

Tehran denies the allegation, saying it needs nuclear technology to generate electricity.

Iranian authorities say the sanctions have had no impact on Iran's economy, and have defied the U.N. Security Council's demands to halt the country's sensitive nuclear work.

"We (would) have no problem to find a replacement for the EU oil market," Qasemi said.

RIFT

International sanctions have kept foreign investors away from the Islamic state, OPEC's number two oil producer with 2.6 million barrels a day oil exports.

Iran's economy is 40 percent reliant on oil revenue.

The United States, Britain and Canada announced new measures against Iran's energy and financial sectors last month, and France proposed new sanctions, including freezing the assets of its central bank and suspending purchases of its oil.

France, backed by Germany and Britain, has led the push to ban its crude, but some states, notably Greece, have expressed reservations, because of their reliance on Iranian oil.

Iran's Foreign Minister Ali Akbar Salehi said attempts to impose a ban on Iran's oil exports due to a rift among the European Union members.

"When they (EU) have so many differences among themselves then they should know the unity they have is only superficial," Salehi said, Iran's semi-official Mehr news agency reported.

"Each member goes after its own maximal interests ... they have this profiteering approach and, with such a rift, such sanctions cannot be imposed."

Concerns over the OPEC producer's nuclear program have increased since a group of hardline students stormed the British embassy in Tehran last month, after Britain imposed new sanctions on the country.

Britain closed its embassy and expelled all Iranian diplomats from London. The fallout spread when several other countries including France, Germany, Italy, Spain and the Netherlands, recalled their envoys.

Beijing and Moscow, veto-wielding members of the U.N. Security Council, have appealed for cool heads over fresh sanctions which have made it more difficult for Iran to develop its massive gas reserves.

However, Qasemi said a new gas reservoir was discovered in Iran's Caspian Sea with its reserves standing at 50 trillion cubic feet.

"It is predicted that after examination of exploration, the gas in this field would be much more than this," Qasemi added.

Iran sits on the world's second-largest natural gas reserves after Russia, but international sanctions have frustrated plans to develop the sector for export, and booming domestic demand has made Iran the third-largest consumer and a top-30 importer.