“We see all kinds of deceptive practices by Iranian banks, so we have been quite aggressive in terms of singling out different Iranian banks for sanctions,” he told a House of Representatives Appropriations subcommittee.
The United Nations imposed new sanctions on Iran on Monday for refusing to suspend uranium enrichment, which Washington and its allies claim is a step toward building a nuclear bomb.
“They use Iranian, state-owned banks to engage in their weapons proliferation, acquisition of missile systems, they’re continuing to enrich nuclear fuel,” Paulson said.
The latest U.N. sanctions increase the number of individuals and firms on a travel and asset-freeze blacklist, and call for vigilance over Iranian bank and shipping firms. These include several of Iran’s top state-owned banks, including its largest, Bank Melli.
Paulson said the Treasury was “all over this” in terms of policing the U.N. rules.
“We’re continuing to work in every country where there are banks that have business. But remember, all business with Iran is not illegal under these sanctions. It is business with the sanctioned entities, so we’re pointing out the risks.”
Later on Wednesday, 26 Democratic senators made public a letter to President George W. Bush urging that the United States designate Iran’s central bank, Bank Markazi, a supporter of terrorism and a weapons proliferator to clear the way for imposing sanctions against it.
“The nature and threat of the Iranian regime demands the U.S. take more forceful actions,” said the letter signed by New York Senator Charles Schumer and 25 other Democrats.
Under questioning whether Bank Markazi was aiding efforts by Iranian banks to skirt U.N. and Treasury sanctions, Paulson said only that he was “focused on the issue.”
But he said the U.S. Treasury was actively warning international banks about the risks of doing business with Iran and running afoul of the sanctions.
(Editing by Neil Stempleman)
