The US government on Monday declared the entire banking sector of Iran, including the Central Bank of Iran (CBI) as a threat to other governments and institutions by designating Iran as an area of “primary money laundering concern.” The designation will require monitoring by US banks to make sure that they and their foreign affiliates are avoiding all contact with Iranian financial institutions. Britain and Canada joined the US in this action.
Pressure has been mounting on Iran since the IAEA revealed in its report last week the “possible military dimensions” to Iran’s nuclear activities, citing evidence indicating that Iran has carried out activities “relevant to the development of a nuclear explosive device.”
“Any and every financial transaction with Iran poses grave risk of supporting those activities, so financial institutions around the world should think hard about the risks of doing business with Iran,” said US Treasury Secretary Timothy Geithner in a joint press conference with Secretary of State Hillary Clinton.
The US also imposed sanctions on Iran's petrochemical industry, prohibiting US companies from providing goods, services and technology to support Iran's production of petrochemicals.
The sanctions would not directly target trade in Iranian oil. They could, however, make it increasingly difficult for oil companies and traders to obtain bank financing to trade Iranian crude.