Congress, Administration Discuss Next Steps on Iran

The U.S. government appears committed to tackling broader Iranian problems in aftermath of terror plot.

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Americans are rightfully praising U.S. law enforcement officials for stopping an alleged Iranian terror plot to assassinate the Saudi ambassador in a Washington eatery—an act of war, some argue—on U.S. soil. Thanks to them, no harm was done to either the main target, Ambassador Adel Al-Jubei, or bystanders in Washington.

So, without having to struggle with collateral damage, lawmakers and the Obama administration can now focus on ratcheting up the pressure on Iran.

[Read: Terror Plot's Mystery Link to Iran]

On Thursday, members of the Obama administration appeared before the Senate Banking Committee to assess already implemented sanctions on Iran. The hearing, which had been planned weeks before the plot was made public showed that lawmakers and the administration are looking toward the bigger problems posed by Iran, from its domestic human rights violations to its developing nuclear threat.

"Although sanctions have helped to limit Iran's military capabilities, the events of this week demonstrate that Iran remains determined to find new avenues to carry out acts of terrorism," said Alabama Republican Sen. Richard Shelby, the committee's ranking member. "Moreover, because Iran continues its efforts to develop nuclear weapons, failure to effectively enforce sanctions against Iran could have catastrophic results in just a few years. We cannot afford to be one step behind Iran."

Almost immediately after Attorney General Eric Holder announced the charges against Iranians Manssor Arbabsiar, the naturalized U.S. citizen who had been orchestrating the terror plot, and his alleged accomplice in the Iranian Islamic Revolutionary Guards Corps' Qods Force, Gholam Shakuri, the Treasury Department responded with sanctions of its own. Treasury placed additional sanctions on both accused men, as well as three other top Qods officials. On Wednesday, they also issued sanctions against Iranian airline Mahan Air, which has been linked with the Qods Force.

[Read: Iran Has Much to Lose if Syria's Assad Falls]

In addition to continued sanctions imposed on Iran over the years, senators are floating a number of potential ways that the United States can better enforce its sanctions against Iran and push allies to do the same.

Illinois Republican Sen. Mark Kirk says he has bipartisan support in the Senate for calling on the United States to work toward disabling the Iranian central bank, a measure that would cut off funding for the revolutionary guard corps. So far, according to the Treasury Department's Under Secretary for Terrorism and Financial Intelligence David Cohen, U.S. officials have been encouraging banks around the world to stop doing business with Iran's central bank and financial industry. Additional sanctions under the Comprehensive Iran Sanctions, Accountability, and Divestment Act, which went into effect last year, gave the Treasury the power to issue other nations' banks an ultimatum. Cohen said it allows U.S. officials to tell the banks, "You have a choice to make. You can continue to do business with the United States, or you can continue to do business with designated Iranian banks, but you can't do both." "It has been tremendously effective," Cohen testified.

New Jersey Democratic Sen. Robert Menendez has also proposed legislation that would close a loophole in current sanctions that allows European refiners to use Iranian crude oil in gasoline exported to the United States. And Montana Democratic Sen. Jon Tester pushed the administration to reconsider the enforcement of sanctions on foreign subsidies of U.S. companies, in response to reports earlier this month that said an American company, Koch Industries, of bypassing sanctions laws.

The Obama administration has been considering other measures, officials said, including working harder to persuade countries like China, Spain, Japan, South Korea, and Turkey to limit their business with Iran's energy sector, on which its economy and military forces rely. Undersecretary of State for Political Affairs Wendy Sherman said American diplomats have been trying to persuade foreign governments to increase the pressure on Iran since news of the proposed attack broke. Senators, like Kirk, are also pushing the administration to designate the Iranian Islamic Revolutionary Guard Corps a terrorist organization.