Useless Rial Is U.S. Goal in New Iran Sanctions, Treasury Says

[jakeXT]

The U.S. wants to make Iran’s currency useless in global commerce through an executive order that gives financial institutions a July 1 deadline to stop dealing in rials or face sanctions, Treasury official David Cohen said.

President Barack Obama issued the order June 3, and “the purpose of the one-month phase-in period is to give financial institutions currently holding rials the opportunity to dump them,” said Cohen, the Treasury Department’s undersecretary for terrorism and financial intelligence, in an interview today in Washington.

“The idea is to cause depreciation of the rial and make it unusable in international commerce,” he said. “On July 1 we will have the ability to impose sanctions on any foreign bank that exchanges rial to any other currency or that holds rial-denominated accounts.”

The move is intended to toughen sanctions that so far failed to press the Islamic republic to halt its nuclear program. According to the Treasury, the rial has lost more than two-thirds of its value in the past two years, trading at 36,000 per U.S. dollar as of April 30, compared with 16,000 at the start of 2012. That’s deprived Iran, the source of the world’s No. 4 proven oil reserves, of a large portion of energy revenue.

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http://www.bloomberg.com/news/2013-06-06/useless-rial-is-u-s-goal-in-new-iran-sanctions-treasury-says.html

[dipsydoodle]

1. Given that Iran is in OPEC

they're hardly likely to have been paid in rials for their oil anyway. Fact of the matter is that Iran barters oil with China and India. The US can only impose sanctions against financial institutions with interests within the US and even they use an exclusion list.

Beijing Gets a Pass on Iran Sanctions.

WASHINGTON—The State Department on Wednesday exempted several countries, including China and India, from financial sanctions targeting Iranian oil sales because those countries have continued to reduce their purchases of Iranian crude oil.

U.S. officials said U.S. pressure on Iran is steadily bearing fruit, 18 months after the U.S. targeted Iran's oil sales as a way to strangle the regime's finances and forestall the development of a nuclear weapon.

But half a dozen countries, particularly China, continue buying large volumes of Iranian crude, having received repeated exemptions from sanctions. China imported about 375,000 barrels per day of Iranian oil in April, which is less than it imported before the U.S. began targeting Iranian exports but is more than China imported in the early part of last year.

State Department officials said President Barack Obama would raise the issue of Chinese purchases of Iranian oil at this week's summit in California with Chinese President Xi Jinping.

http://online.wsj.com/article/SB10001424127887324069104578527803679519748.html

What the situation in Iran is actually achieving is helping speed the demise of the petrodollars recycling scam..