US urges firms to step away from Iran

The US government urged private companies to go beyond official sanctions and trim back questionable ties with Iran today, as Washington eyed additional sanctions against the Islamic republic.

A senior Treasury official said firms that decided not to trade with government-linked Iranian companies had played an "extremely important" role in building pressure against Tehran, which is suspected of trying to build a nuclear bomb.

"Voluntary actions of the private sector amplify the effectiveness of government-imposed measures," said Stuart Levey, the top Treasury official dealing with sanctions, in prepared testimony for Congress.

Top US lawmakers are currently crafting Iran sanctions aimed at piling pressure on Tehran, measures that could be adopted as soon as this week.

The bill would target non-US firms that sell goods, services or know-how to Iran that help the Islamic republic develop its energy sector, including insurance, financing and shipping companies.

It would also enable US states and local governments to divest from foreign firms engaged in Iran's energy sector, and would tighten the existing US trade embargo on Iranian goods by curbing the number of exempted products.

Levey continued to emphasize the role played by private companies in ramping up pressure on Iran.

"Once some of the private sector decide to cut off ties to Iran, it becomes an even greater reputational risk for others not to follow, and so often they do.

"Such voluntary reductions in ties to Iran, beyond the requirements of the UN and US sanctions programs, in turn makes it even more palatable for foreign governments to impose restrictive measures because their countries' commercial interests are reduced."