These target both private and government-controlled banks.
US President Barack Obama signed into law on Saturday a defence funding bill that imposes sanctions on financial institutions dealing with Iran’s central bank, while allowing for exemptions to avoid upsetting energy markets.
The sanctions target both private and government-controlled banks — including central banks — and would take hold after a two- to six-month warning period, depending on the transactions, a senior Obama administration official said.
Under the law, the president can move to exempt institutions in a country that has significantly reduced its dealings with Iran and in situations where a waiver is in the US national security interest or otherwise necessary for energy market stability. He would need to notify Congress and waivers would be temporary, but could be extended.
Sanctioned institutions would be frozen out of US financial markets.
"Our intent is to implement this law in a timed and phased approach so that we avoid repercussions to the oil market and ensure that this damages Iran and not the rest of the world," the senior US official told Reuters.
Iran's central bank is the main conduit for Tehran's oil revenues.
Obama signed the bill during his vacation in Hawaii, just hours after Tehran said it had delayed planned long-range missile tests in the Gulf and signalled it was ready for fresh talks on its disputed nuclear program.
Senior US officials said Washington was consulting with its foreign partners to ensure the new sanctions can work without harming global energy markets. They stressed the US strategy of both isolating and remaining open to engagement with Iran was unchanged.
Obama did not single out Iran sanctions in his statement released by the White House, but did express concern about a number of provisions in the defense bill that relate to the treatment and transfer of detainees.
"The fact that I support this bill as a whole does not mean I agree with everything in it," Obama said, suggesting limits on the ability to move terrorism suspects from the US military prison at Guantanamo Cuba to the United States for trial or to a foreign country were ill-conceived.
"The executive branch must have the flexibility to act swiftly in conducting negotiations with foreign countries regarding the circumstances of detainee transfers," he said, also calling federal courts "legitimate, effective and powerful" means by which to prosecute some militants.
Reuters reported this week that the Obama administration is considering transferring to Afghan custody a Taliban official suspected of major human rights abuses as part of a long-shot bid to improve the prospects for a peace deal in Afghanistan, a move that has set off alarm bells on Capitol Hill.
Obama also raised concerns in the statement about a requirement that he must notify Congress before sharing any classified US ballistic defense missile information with Russia.
In his statement, he said he intended to keep Congress informed of US-Russia cooperation on ballistic missile defence, he would interpret the rule in a way that does not limit his ability to conduct foreign affairs "and avoids the undue disclosure of sensitive diplomatic communications."
"Should any application of these provisions conflict with my constitutional authorities, I will treat the provisions as non-binding," he said, referring to a number of sections of the defense bill, which is more than 500 pages long.
The legislation authorised US defence programs from war fighting to weapons building. That included $662 billion for defense in fiscal 2012, including the Pentagon's base budget and the war in Afghanistan, although appropriators must still approve the numbers before money is spent.
Obama said he signed the bill because he wanted to ensure key services and defense programs get the financing they need. But he followed in the footsteps of previous presidents in using a "signing statement" to indicate he disagreed with or planned to sidestep certain statues within a broad piece of legislation he did not want to veto.
His predecessor, George W Bush, was criticized for using signing statements to expand executive power, including against the ban on torture. Obama, who taught constitutional law at the University of Chicago, has issued 20 signing statements since his presidency began in 2009 compared with 36 in the final three years of Bush's White House.
In a 2009 memo, Obama stipulated he would limit deployment of the tool to circumstances where he had a "well-founded constitutional objection" to a provision in a bill. But he also defended signing statements as a legitimate way to ensure laws are faithfully executed, while promoting "dialogue" between the executive branch of government and Congress.
