US imposes sweeping new sanctions on Iran's financial sector

The United States on Thursday slapped fresh sanctions on Iran’s financial sector, targeting 18 banks in an effort to further choke off Iranian revenues as Washington ramps up pressure on Tehran weeks ahead of the US election.

The move freezes any US assets of those blacklisted and generally bars Americans from dealing with them, while extending secondary sanctions to those who do business with them. This means foreign banks risk losing access to the US market and financial system.

The Treasury Department said in a statement the prohibitions did not apply to transactions to sell agricultural commodities, food, medicine or medical devices to Iran, saying it understood the need for humanitarian goods.

In a press release, the Treasury Department said it sanctioned 16 banks "for operating in Iran's financial sector," one bank "for being owned or controlled by a sanctioned Iranian bank," and another bank affiliated with the Iranian military.

Under the new sanctions, "all property and interests in property of designated targets that are in the United States or in the possession or control of US persons must be blocked and reported to" the Office of Foreign Assets Control.

"In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities after a 45-day wind-down period may expose themselves to secondary sanctions or be subject to an enforcement action," the Treasury Department said.

"Today's action to identify the financial sector and sanction eighteen major Iranian banks reflects our commitment to stop illicit access to US dollars," Treasury Secretary Steven Mnuchin said in a statement. "Our sanctions programs will continue until Iran stops its support of terrorist activities and ends its nuclear programs.

Secretary of State Mike Pompeo said the sanctions "are directed at the regime and its corrupt officials that have used the wealth of the Iranian people to fuel a radical, revolutionary cause that has brought untold suffering across the Middle East and beyond."

"The United States continues to stand with the Iranian people, the longest-suffering victims of the regime's predations," he said in a statement Thursday.

However, Iranian Foreign Minister Mohammad Javad Zarif accused the United States of targeting Iran’s ability to pay for basic necessities during the COVID-19 pandemic.

“US regime wants to blow up our remaining channels to pay for food & medicine,” Zarif said on Twitter. “Conspiring to starve a population is a crime against humanity.”

Iranian Central Bank governor Abdolnaser Hemmati dismissed the sanctions as political propaganda and played down their practical impact.

“Rather than having any economic effect, the American move is for US domestic propaganda and political purposes, and shows the falsity of the human rights and humanitarian claims of US leaders,” Hemmati said in a statement.

Analysts said the secondary sanctions may further deter European and other foreign banks from working with Iran, even for permitted humanitarian transactions.

“It’s like a punch in the face to the Europeans, who have gone out of their way to indicate to the Americans that they view it as being extremely threatening to humanitarian assistance or humanitarian trade going to Iran,” said Elizabeth Rosenberg of the Center for a New American Security think tank. “They also want ... to make it very difficult for any future president to be able to unwind these measures and engage in nuclear diplomacy,” Rosenberg added, alluding to the possibility that Democratic candidate Joe Biden could defeat Republican President Donald Trump in the 3 November US election.

Biden, who was vice president when the Obama administration negotiated the nuclear accord, has said he would rejoin the deal if Iran first resumed compliance with it.

Washington’s latest move targeted what the Treasury described as 18 major Iranian banks, which were designated under authorities including US Executive Order 13902, which allows the Treasury Department to target entire sectors of the Iranian economy.

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