The US today imposed sanctions against Bank Tejarat of Iran (“Commerce Bank of Iran”) and its affiliate, Belarus-based Trade Capital Bank. The US sanctions against financial institutions choke off their access to global banking system. Iran needs the access to get paid for its oil exports.
Meanwhile, US President Barack Obama today praised the EU’s move to impose embargo on Iranian oil and sanctions against the Central Bank of Iran.
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.
Britain’s Chancellor of the Exchequer George Osborne said today that all UK financial institutions cease business relationships and transactions with all Iranian banks, including the Central Bank of Iran effective 3 p.m. GMT (10 a.m. EST) Monday. The ban extends to all branches and subsidiaries of Iranian banks, AP reported.
This is the first time the British government has cut an entire country's banking sector off from the UK's financial sector. Britain said it took the action in response to IAEA’s report on possible military dimensions of Iran's nuclear program.
“Iran's nuclear activities pose a significant risk to the national interests of the UK and countries across the region,” Osborne said. “This measure will protect the U.K. financial sector from being unknowingly used by Iranian banks for proliferation related transactions,” he added. [AP, 21 November].
