Saturday, August 11, 2007

US and Israel to Push for Iran’s Financial Isolation

US Treasury official Stuart Levy met with Israeli foreign minister Tzipi Livini in Tel Aviv this week to review their joint efforts in financially isolatate of Iran. Some of the world’s major financial institutions have already severed ties with Iran. The German banking powerhouse, Deutche Bank, was the latest among major European banks to stop doing business with Iran last week.

Levy, who carries the hefty title of Under Secretary of Treasury for Terrorism and Financial Intelligence, was in Berlin in late July for meetings with German officials on the country’s business ties to Iran. Germany will also be suspending its export insurance coverage for Iran. Without such coverage, German manufacturers will be forced to give up all future contracts with Iran.

Levy’s work is conducted outside the framework of the UN Security Council sanctions against Iran and is intended to bypass China’s growing reluctance to support further sanctions against Iran over its nuclear program. China is growing its already-huge volume of trade with Iran and seems not willing to support a third round of UN sanctions against Iran.

There are, however, strong signs that the powerful bazaaris and businessmen in Iran are extremely concerned about Levy’s efforts which have practically cut them off from the world’s financial markets. Their personal wealth has also been affected. The European banks are increasingly asking their major Iranian accountholders to close their accounts in their banks. Dubai banks are reportedly considering to do same. The wealthy Iranians who do not possess any dual citizenship are facing a difficult time to find a secure place to invest or park their cash.

Israeli foreign minister spokesman Mark Regev said before Levy/Livini meeting got underway that Iran must understand that business as usual cannot continue while it is pursuing its nuclear program.

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