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* New banking, oil sanctions have long been in the works
* Lawmakers hope to approve final deal by Aug. 3
* Some lawmakers complain provisions aren’t tough enough
By Roberta Rampton
WASHINGTON, July 27 (Reuters) - U.S. congressional negotiators are trying to finish work on new sanctions aimed at further restricting Iran’s oil revenues, a package they hope to approve by the end of next week before lawmakers leave Washington for an extended recess.
The sanctions, which have been in the works for more than seven months, are designed to crack down on transactions with Iran’s national oil and tanker companies, and to hamper the ability of Iranian banks to transfer funds electronically.
“I’ve been clear I expect the negotiations to conclude soon so we can further tighten these sanctions against Iran,” Senate Majority Leader Harry Reid said on Wednesday.
“It’s a critical tool to help stop Iran’s nuclear weapons program and ensuring the security of our ally, the state of Israel,” Reid said.
The package builds on harsh U.S. penalties for banks that deal with Iran and measures that helped slash Iran’s oil sales - sanctions signed into law by President Barack Obama on Dec. 31.
The Republican-controlled House of Representatives passed its version of the new sanctions back in December, while the Senate passed its version in May.
Since then, key lawmakers and their staff members have been trying to iron out differences in the bills, and to address loopholes on money transfers and insurance for oil cargoes.
“We are working to find an agreement that can pass both the House and Senate before the August recess,” a Senate aide said. Three other congressional sources confirmed a deal was expected to be cinched before next Friday.
Lawmakers from both parties in both the House and Senate have sought to crack down on Iran, and have easily passed previous sanctions bills.
But there could still be last-minute partisan wrangling that could stall a deal - the kind of sniping that held up Senate approval of the bill for a week in May.
There are some complaints that draft language is too weak. An advocacy group that has pushed for stricter sanctions on Tehran said provisions to force financial messaging service providers to block Iranian banks from making electronic banking transfers had been watered down.
The group, United Against Nuclear Iran, wrote to Senator Tim Johnson, head of the Senate Banking Committee, on Wednesday, saying it was “concerned that the banking lobby has gutted these important provisions.”
The measure had initially been aimed at the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, but revised language was less specific.
The Belgium-based firm, owned by the world’s largest banks, announced in February it would expel certain Iranian banks from its system after pressure from U.S. lawmakers.
One congressional source said loopholes could derail a final sanctions deal.
“If the bill is perceived (by lawmakers) to be overly watered down by the Obama administration and fails to close key sanctions loopholes, this legislation could wipe out on the House floor,” the source said. (Additional reporting by Richard Cowan and Rachelle Younglai; Editing by David Brunnstrom)