Top senators agree on expanding Iran sanctions

updated 2:23 p.m. ET July 15, 2008

WASHINGTON - Two influential senators sealed an agreement Tuesday to seek expansion of punishing economic pressure on Iran in an accelerating drive to change its international behavior through sanctions.

Sens. Christopher J. Dodd, D-Conn., chairman of the Senate Banking Committee and Richard Shelby, R-Ala., the panel's senior Republican, announced the accord.

Its two principal goals, Dodd said in a statement, are to authorize states and local governments to divest from companies that do business with Iran's oil and gas sectors and cut off shipment through other countries of sanctioned technology.

Shelby, in a statement, said "it is imperative that the United States avail itself of every possible measure to ensure that Iran changes its behavior."

The two senior senators called Iran a threat to U.S. interests and allies.

Iranian president Mahmoud Ahmadinejad has shrugged off past U.S. sanctions against Iran, saying the country would not succumb to pressure. "Americans are not able to harm us," he said last October.

Recent tests of long-range missiles, still being analyzed by the Pentagon and American intelligence, indicate Iran is going ahead with an improved capacity to strike at U.S. interests and at Israel.

American authorities agree, however, that Iran has not yet perfected enrichment of uranium to be able to build nuclear wapons and attach a nuclear warhead to its missiles.

Iran, for its part, says its nuclear programs are designed to expand civilian power.

The Senate Banking Committee is scheduled to take up the bipartisan sanctions bill on Thursday.

Among its provisions is to expand existing restrictions on doing business with Iran to include helping oil and liquified natural gas pipeline construction and maintenance and construction of tankers.

As in the past, deals worth more than $20 million would be targeted.

Also, operators of mutual funds and other investment programs would be shielded from litigation by investors who object to cutting off investments in Iran's industries.

The legislation also would ban U.S. procurment contracts with American and foreign firms that engage in sanctionable business with Iran.

The bill also increases funding for the Treasury Department's office of terrorism and financial intelligence.

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