The legislation does not directly address the nuclear pact. But some say the restrictions in the bill go against the spirit of the agreement, under which Tehran curbed its nuclear program in exchange for sanctions relief from the United States and other nations. Senate Democrats Dianne Feinstein and Tim Kaine, who both backed the Joint Comprehensive Plan of Action with Iran, said that while the president is currently waiving some sanctions as part of the agreement, "sanctions legislation must remain in place to allow an immediate 'snap-back' should Iran violate the JCPOA."
The extension signals congressional commitment to vigorously enforce the pact, and would "make clear that there will be immediate consequences should Iran break the terms of the agreement, including the re-imposition of sanctions," they said. The bill includes penalties against Iran's banking sector, as well as its energy and defense industries.
Last month Iran's supreme leader Ayatollah Ali Khamenei warned that the Islamic republic would "react against" the new sanctions extension if it becomes law. US President-elect Donald Trump heavily criticised the pact as he campaigned for the White House over the past year. Several fellow Republicans remain vehemently opposed to the nuclear deal and have called for its termination.
Extending the sanctions "ensures President-elect Trump and his administration have the tools necessary to push back against the regime's hostile actions," said Senate Foreign Relations Committee chairman Bob Corker, who Trump has been considering as a possible pick for secretary of state.
Meanwhile, Iran threatened to retaliate against a US Senate vote to extend the Iran Sanctions Act (ISA) for 10 years, saying it violated last year's deal with six major powers that curbed its nuclear programme. The ISA was first adopted in 1996 to punish investments in Iran's energy industry and deter its alleged pursuit of nuclear weapons. The extension was passed unanimously on Thursday.
US officials said the ISA's renewal would not infringe on the nuclear agreement, under which Iran agreed to limit its sensitive atomic activity in return for the lifting of international financial sanctions that harmed its oil-based economy. But senior Iranian officials took odds with that view. Iran's nuclear energy chief, Ali Akbar Salehi, who played a central role in reaching the nuclear deal, described the extension as a "clear violation" if implemented.
"We are closely monitoring developments," state TV quoted Salehi as saying. "If they implement the ISA, Iran will take action accordingly." The diplomatic thaw in swing between Washington and Tehran over the past two years looks in jeopardy with US President-elect Donald Trump taking office next month. He said during his election campaign that he would scrap the nuclear agreement.
Iran's most powerful authority, Supreme Leader Ayatollah Ali Khamenei, had already warned in November that an extension of US sanction would be viewed in Tehran as a violation of the nuclear accord. "Iran has shown its commitment to its international agreements, but we are also prepared for any possible scenario. We are ready to firmly protect the nation's rights under any circumstances," Foreign Ministry spokesman Bahram Ghasemi said in comments reported by state news agency IRNA.
RETALIATION The US Senate vote was a blow to pragmatist Iranian President Hassan Rouhani, who engineered the diplomatic opening to the West that led to the nuclear deal, and may embolden his hardline rivals ahead of presidential election next year. Khamenei and his hardline loyalists, drawn from among Shia Muslim clerics and Revolutionary Guards, have criticised the deal and blamed Rouhani for its failure to deliver swift improvements in living standards since the lifting of international sanctions in January.
It was not immediately clear what form any eventual retaliation for the US Senate vote might take. Lawmaker Akbar Ranjbarzadeh said Iran's parliament would convene on Sunday to discuss a bill obliging the government to "immediately halt implementation of the nuclear deal" if Obama approves the ISA, the Students News Agency ISNA reported.
Another lawmaker quoted by the semi-official Tasnim news agency said Iran's parliament planned to discuss a bill that would prevent the government purchasing "American products". Such a bill could endanger deals such as US planemaker Boeing's tentative accord to sell passenger jets to Iran, upgrading a fleet long deteriorating due to sanctions.
The White House had not pushed for an extension of the sanctions act, but had not raised serious objections. Some congressional aides said they expected President Barack Obama to sign the extension. The ISA had been due to expire on December 31. Lawmakers said the extension would make it easier for sanctions to be reimposed if Iran violated the nuclear settlement.
Influential Friday prayer leaders, appointed by Khamenei, strongly denounced the ISA extension and called on the government to take action, according to IRNA. Trump described Iran in campaign speeches as the world's biggest state sponsor of terrorism and dismissed the nuclear accord as "one of the worst deals I've ever seen negotiated."