“Iran exploits its global financial ties to pursue nuclear capabilities, develop ballistic missiles and fund terrorism,” Treasury Secretary Henry Paulson said.
“We are taking additional steps to combat Iran’s dangerous conduct and to engage financial institutions worldwide to make the most informed decisions about those with whom they choose to do business,” he said.
The sanctions announced by Paulson and Secretary of State Condoleezza Rice targeted three state-owned banks: Bank Melli, Iran’s largest bank, and Bank Mellat, for their alleged support of Iran’s nuclear program.
A third bank, Bank Saderat, was designated “a terrorist financier.” The US had imposed other sanctions against the bank in September 2006.
The stepped-up pressure comes as the United States is pushing for a third United Nations resolution imposing wider economic sanctions against Tehran for failing to halt its nuclear program, which Washington alleges is aimed at making an atomic weapon but which Iran insists is peaceful.
The new sanctions also target the Islamic Revolutionary Guard Corps (IRGC), which was accused of proliferating weapons of mass destruction, and the IRGC’s elite Quds Force, which was designated as a supporter of terrorism.
The sanctions forbid any financial transactions between a US citizen or private organization, and all assets under US jurisdiction of those targeted were immediately frozen.
The US move follows a call earlier this month from an international anti-money laundering watchdog, the 34-country Financial Action Task Force, for Iran to close loopholes in its financial system and take steps to limit terrorist financing “on an urgent basis.”
Bank Melli, Iran’s largest bank, provides banking services to the government’s nuclear and ballistic missile programs, as well as banking services to the entities controlled by the IRGC or the Quds force, the US government said.
Most active in the Gulf countries, it also has branches in Paris, Hong Kong and Hamburg, Germany, as well as Baghdad.
Bank Melli has several subsidiaries: Bank Kargoshaee, in Tehran; Bank Melli Iran Zao, in Moscow; Melli Bank, in London; and Arian Bank, a joint venture with Bank Saderat in Kabul, Rice said.
The second bank accused of financing weapons proliferation, Bank Mellat, has branches in Armenia, Britain, South Korea and Turkey.
Bank Saderat, which allegedly finances US designated terrorist organizations Hezbollah and Hamas, specializes in the financing of Iranian’s foreign trade balance. Its international businesses are mainly concentrated in the Gulf countries and Lebanon, but it is also active in France, Germany and Greece.
The United States already has a unilateral trade embargo in place against Tehran, and has pressured European banks to sever their ties with Iran.
European giants HSBC, Deutsche Bank and Credit Suisse have pulled out of Iran while BNP Paribas, Commerzbank and Dresdner Bank have severely curtailed their business with the Islamic republic.
“As awareness of Iran’s deceptive behavior has grown, many banks around the world have decided as a matter of prudence and integrity that Iran’s business is simply not worth the risk,” Paulson said.
“It is plain and simple: reputable institutions do not want to be the bankers for this dangerous regime.”
