Iran and its powerful ally Russia have denounced new Western sanctions on Tehran's financial, petrochemical and energy sectors, calling them illegal and futile.
The U.S., Canada, and Britain each announced new steps Monday to increase economic pressure against Iran in response to international concerns that Tehran is developing nuclear weapons.
Iranian Foreign Ministry spokesman Ramin Mehmanparast said Tuesday the unilateral measures by the the three countries amounted merely to "propaganda and psychological warfare." He predicted they would prove ineffective, saying Iran's trade and economic ties with the U.S. and Britain are small anyway.
Separately, Russia's foreign ministry called the sanctions "unacceptable and contradictory to international law." Moscow, together with Beijing, has blocked further punitive measures against Tehran from reaching the United Nations Security Council for approval. Four rounds of U.N. sanctions against Iran have already been passed.
Washington said Monday it is imposing sanctions on goods and services used by Iran's oil and gas industry to discourage foreign companies from investing in the sector. The U.S. also announced a worldwide diplomatic campaign to encourage countries to buy petrochemicals from other suppliers.
Iranian petrochemical companies have become increasingly involved in refining gasoline as other Iranian energy firms face international sanctions.
Treasury Secretary Tim Geithner said the U.S. has also now designated Iran a territory of "primary money laundering concern." He said this will send a warning that any transaction with Iranian banks could be supporting Iran's illegal activities. U.S. companies and individuals already are barred from doing business with Iran.
Meanwhile, Britain said it will stop business transactions with all banks in Iran, including Iran's Central Bank, the first time Britain has cut ties with the entire banking sector of a country. And Canada announced it would block "virtually all transactions" with Iran, including those with its Central Bank. Canada said it will also ban the export to Iran of any goods used by Iran's petrochemical industry.
The U.S. also said it has expanded the number of Iranian companies and organizations facing sanctions for suspected involvement in the Iranian nuclear program.
The International Atomic Energy Agency released a report earlier this month citing intelligence about Iranian efforts to develop the technology needed to build nuclear weapons. Iran has said the report is based on fabrications and insists its nuclear program is peaceful.
Since the release of the report, U.S. lawmakers have urged the Obama administration to impose tighter sanctions, including penalties against the Iranian central bank. U.S. officials say Obama is reluctant to take that step because it could block the oil-producing nation's access to international commerce and export markets, leading to a potential rise in oil prices that could hurt global economic growth.
Some information for this report was provided by AP, AFP and Reuters.