U.S., Britain and Canada Target New Iran Sanctions

Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner are expected to announce new sanctions on Iran at 4:30p ET today, sources tell ABC News. The move comes as the Obama administration and its allies look to ratchet up the pressure on Tehran after a U.N. report found that Iran has been pursuing the elements needed for a nuclear weapon.

As ABC News reported exclusively on Sunday, the Obama administration is preparing to levy sanctions on Iran’s energy and financial sector, as well as its nuclear program. U.S. officials familiar with the plans revealed new details about American plans to plug key gaps that have allowed Iran to work around existing sanctions.

Earlier today the United Kingdom announced it was essentially cutting Iran off from its banking system. Canada is also expected to announce its own sanctions later today.

Two U.S. officials, who spoke on the condition of anonymity given the diplomatic sensitivities involved, say the State Department will sanction Iran’s petrochemical industry, which is normally used to produce products like plastic and styrofoam, but is increasingly used to refine petroleum as international sanctions have constrained the capacity of Iran’s energy sector. The new measure aims to discourage foreign companies from investing in that industry because it could inadvertently aid Iran’s energy sector and undermine previous sanctions.

The State Department is also expected to target both foreign and Iranian entities, many controlled by Iran’s Revolutionary Guard Corps, that have begun to help out with critical tasks in Iran’s oil and gas sector, picking up the slack as foreign companies pull out for fear of running afoul of sanctions.

A State Department spokesman declined to comment for this story.

The U.S. Treasury Department, meanwhile, is expected to issue a finding that the Iranian financial system is a “jurisdiction of primary money laundering concern.” The finding, made under section 311 of the USA Patriot Act, enables the Secretary of the Treasury to require American banks to conduct additional reporting to ensure their corresponding foreign accounts are not indirectly dealing with Iran. That extra vigilance, officials say, will have a cascade effect where foreign financial institutions are more reluctant to do business with Iran.

The State Department and Treasury Department are also expected to designate additional Iranian entities for their role in Iran’s nuclear program.

A Treasury Department spokeswoman also declined to comment for this story.

The United States and its allies have long feared that Iran has been pursuing a nuclear weapon under the guise of a civilian nuclear energy program. Those fears were reinforced by a new report by the Director General of the International Atomic Energy Association earlier this month, which for the first time sounded the alarm about “possible military dimensions to Iran’s nuclear program.”

The report detailed “credible” evidence that Iran has been covertly developing a nuclear weapon design and testing components. It said Iran has built computer models to study the explosion of a nuclear bomb and is working to develop detonation devices. The report said Tehran has also built a containment vessel in which it can conduct explosive experiments and is studying how to mount a nuclear warhead on its Shahab-3 long-range missiles.

Iranian officials have dismissed the report.  One senior Iranian official called it “laughable” last week.

The IAEA report reignited calls on Capitol Hill and from prominent Republicans like presidential candidate and Texas Gov. Rick Perry for the Obama administration to sanction the Iranian Central Bank, a move they say would cripple Iran’s economy and its ability to pursue a nuclear weapon. Last Thursday, House leaders including Speaker John Boehner and Minority Leader Nancy Pelosi sent a letter to President Obama urging him to sanction the Central Bank.

Despite the renewed pressure, sanctions on the Iranian Central Bank and bans on Iran’s oil and gas sector will not be included in this latest round, according to one U.S. official, citing fears that such measures could lead to a spike in oil prices that would harm America’s own economic recovery.

The United States and its allies have resorted to unilateral sanctions as other multilateral routes to pressure Tehran have been blocked. U.S. and European officials say they would like to pursue additional sanctions against Iran in the United Nations Security Council, something they have successfully done four times in recent years, however they have been met with resistance by veto-wielding Russia and China.

European countries are reportedly pursuing additional sanctions, though officials say none are expected to be part of Tuesday’s coordinated announcement. European Union ministers are expected to meet on Dec. 1 to discuss the matter.

A spokesman for the Canadian embassy in Washington declined to comment.