US President Barack Obama has signed tough new sanctions into law targeting Iran's central bank and financial sector. The measures were contained in a mammoth US$ 662 billion defense bill, which Obama signed despite having reservations about its provisions on Iran. The sanctions require foreign firms to make a choice between doing business with Tehran's oil and financial sectors or central bank, or the US economy and financial sector. Foreign central banks which deal with the Iranian central bank on oil transactions could also face similar restrictions under the new law. The White House held intense negotiations with Congress on the terms of the law's implementation, given concerns that sanctions on Iran's central bank could spark chaos in the global financial system and hike the price of oil.

Obama, who signed the bill during his vacation in Hawaii, said in a statement that he was concerned the measure would interfere with his constitutional authority to conduct foreign relations by tying his hands in dealings with foreign governments. Should application of the provisions interfere with his authorities under the Constitution, Obama said in his statement, “I will treat the provisions as non-binding.”

The bill, which passed with wide majorities in Congress, did reserve some leeway for Obama, giving him the power to grant 120-day waivers if he judges it to be in the national security interests of the United States. Certain sanctions will begin to take effect in 60 days, including purchases not related to petroleum and the sale of petroleum products to Iran through private banks. The toughest measures will not take effect for at least six months, including transactions from foreign governments purchasing Iranian oil and selling petroleum products.

The US administration has said it had imposed the toughest-ever sanctions on Iran by the United States and its allies, and added that the measures were now having a punishing impact on the Iranian economy and the petroleum sector. The European Union is also expected to consider at the end of this month whether to impose an oil embargo.

Iran tests missiles, offers talks on nuclear program

Meanwhile, Tehran conducted a series of missile tests in the Strait of Hormuz. Iranian state television showed footage of Ghader, a ground-to-sea missile, being test-fired on Monday and hitting its supposed targets. The missile is said to have a reach of 200 kilometers and is considered by Iran to be long range.

Iran also offered to resume talks with Western countries about its nuclear program. Iran’s top nuclear negotiator, Saeed Jalili, said he had formally called on the United States, Russia, China, Britain, France and Germany to return to negotiations. The last round of negotiations between Iran and the five permanent members of the UN Security Council plus Germany was held a year ago in Turkey but ended in failure.