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'Deceptive practices': US levies new sanctions on Iran

In a wide-ranging interview at the White House, President Barack Obama talks to TODAY's Matt Lauer about Iran's nuclear ambitions, the presidential race, the economy and more.

WASHINGTON -- President Barack Obama ordered new U.S. sanctions on the government of Iran, including the Central Bank, on Monday.

In a statement accompanying his order, Obama said the sanctions were warranted because of the "deceptive practices" of the Central Bank and the "unacceptable risk" posed to the international financial system by Iran's activities.

The order came amid new tensions in the Middle East and around the world over the potential of a unilateral strike by Israel on Iran's nuclear program.

"Among other things, the (executive order) freezes all property of the Central Bank of Iran and all other Iranian financial institutions, as well as all property of the Government of Iran, further tightening the already broad-based and stringent U.S. sanctions on Iran," according to a statement from the White House.

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Obama says it is still possible to resolve the standoff over Iran's nuclear program through diplomatic efforts. His administration has sought to use sanctions as one way to pressure Iran to halt its nuclear program.

The executive order "reemphasizes this Administration's message to the Government of Iran -- it will face ever-increasing economic and diplomatic pressure until it addresses the international community's well-founded and well-documented concerns regarding the nature of its nuclear program."

According to a letter accompanying the executive order, the additional measures were needed because of "deceptive" practices by Iran's central bank.

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"I have determined that additional sanctions are warranted, particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks to conceal transactions of sanctioned parties, the deficiencies in Iran's anti-money laundering regime and the weaknesses in its implementation, and the continuing and unacceptable risk posed to the international financial system by Iran's activities," the letter provided by the White House read.

Will sanctions work?
Tightening international sanctions against Iran look set to shrink its economy, push up inflation and further erode its currency, but they may fail to deliver a knock-out blow that forces Tehran to compromise on its nuclear ambitions, according to a Reuters report.

Few areas of Iran's economy now remain untouched by the sanctions. Because of payments difficulties, Iranian ships have in recent days stopped loading imports of Ukrainian grain. The United Arab Emirates has told its banks to stop financing Iran's trade with Dubai. Iranians are finding it more difficult to obtain hard currency to travel abroad.

But the history of sanctions against other countries, and the strengths of Iran's diverse and relatively self-reliant economy, suggest that as long as Tehran can find buyers for a large proportion of its oil, it will be able to limp along.

The pain will be felt throughout the country and could increase discontent with the government, but if President Mahmoud Ahmadinejad can cope with that political threat, there may be no overriding economic reason for him to back down.

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"Iran can still scrape by," said Gary Hufbauer, a fellow at the Peterson Institute for International Economics in the United States and a former U.S. Treasury official who has written extensively about the history of sanctions.

He ranks the measures against Iran - taken to stop what the West sees as Tehran's nuclear ambitions - as among the toughest international sanctions of the past 50 years, but not as harsh as those once imposed on Iraq, North Korea and Cuba - countries which defied economic pressure.

NBC News, msnbc.com staff , The Associated Press and Reuters contributed to this report.

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