Stuart Levey, the Treasury’s undersecretary for terrorism and financial intelligence, said in testimony before the Senate Finance Committee that he hopes work by the inter-governmental Financial Action Task Force will result in new international standards for anti-proliferation activities.
“In reaction to U.S. and multilateral actions, the world’s leading financial institutions have largely stopped dealing with Iran, and especially Iranian banks, in any currency,” Levey said in prepared remarks to the panel.
“Foreign-based branches and subsidiaries of Iran’s state-owned banks are becoming financial pariahs — threatening thir viability — as banks and companies around the world resist dealing with them,” Levey said.
The Treasury has blacklisted several Iranian state banks, including its largest, Bank Melli, accusing them of supporting Tehran’s alleged efforts to develop nuclear weapons systems and fund terrorist activities.
The United Nations in March imposed new sanctions on Iran that called for “increased vigilance” over Iranian financial institutions.
The U.S. sanctions against Iranian banks prohibit Americans from doing business with them and seek to freeze any assets they may have under U.S. jurisdiction. While other countries have not taken such measures, international banks have largely shunned Iranian transactions to avoid running afoul of U.S. authorities and business risks associated with such transactions.
Levey said Iranaian banks, including the central bank, known as Bank Markazi, have requested anonymity in international transactions.
“This practice is intende to evade the controls put in place by responsible financial institutions and has the effect of threatening to involve them in the transactions they would never engage in if they knew who, or what was really involved,” he said.
NORTH KOREA
Turning to North Korea, Levey said the U.S. Secret Service was continuing to investigate counterfeiting activities by Pyongyang. He said high-quality counterfeit $100 bills produced by North Kora, known as the “Supernote”, were continuing to surface.
The counterfeit bills were among deceptive North Korean financial activities that led the Treasury in 2005 to blacklist Banco Delta Asia, a small bank in Macau, cutting off North Korea from the international financial system. The move stalled multilateral talks aimed at halting North Korea’s nuclear weapons program.
