Treasury Puts Additional Iran Entities Under US Sanctions

The US Treasury today added two additional Iranian banks – Bank Ansar and Bank Mehr – to its growing list of Iranian financial institutions under US sanctions. The Treasury accused the banks of financing IRGC and Islamic Republic of Iran Shipping Lines (IRISL) activities in support of Iran’s nuclear program. The designation would make it nearly impossible for the banks to link to the global financial markets to issue letters of credit and other financial instruments required in international transactions.

The Treasury also designated Pars Oil and Gas Company, a major subsidiary of the Iranian National Oil Company, as an entity supporting the country's nuclear and missile programs. Pars is the country's lead developer of Pars Gas Fields, which along the adjacent Qatari fields form the world's largest gas field.

On the insurance front, the Treasury added Moalem Insurance Co. to the list of entities under US sanctions. The action would prevent the company to issue internationally accepted insurance coverage for IRISL, further complicating the activities of the country's flag shipping lines.

Also designated were Bonyad Taavoni Sepah (“IRGC Cooperative”) as an entity handling IRGC investments and Liner Transport Kish, for among other things transporting arms from Iran to Hezbollah.

"It's clear that it's important for us to continue to impose pressure to highlight the fact that firms are looking for ways to help Iran evade international sanctions," said Treasury Undersecretary Stuart Levey [Reuters, 21 December].

Iran Sanctions: Private Sector - UPDATE

In a testimony today at Senate Foreign Relations Committee, Stuart Levey, the top US Treasury Department official overseeing financial sanctions against Iran, spoke of Iranian vulnerabilities against private sector initiatives.

"Virtually all major financial institutions have either completely cut off or dramatically reduced their ties with Iran," said Levey. “Voluntary actions of the private sector amplify the effectiveness of government-imposed measures.”

Levy told the Senate committee that firms in the insurance, consulting, energy and manufacturing sectors were making decisions similar to banking institutions cutting off their ties with Iran.

The Foreign Relations committee was discussing accompanying unilateral sanctions against Iran beyond those imposed by the UN. The Congress is moving toward targeting American and non-American firms that sell goods, services or know-how to Iran’s energy sector, including insurance, financing and shipping companies. The centerpiece of the proposed new legislation is an effort to choke off Iran’s import of refined oil products, including gasoline.

Levey warned the senators, however, not to see these sanctions as a cure-all, considering Iran had braced itself for such sanctions for the past year or so. Oil-rich Iran lacks extensive domestic refining capabilities which leaves it heavily dependant on imports of gasoline, jet oil and other refined products to meet domestic demands

“This is a vulnerability and we think it's one that could be exploited,” said Levey. “It's not a silver bullet.”

The US officials believe that Iran has already decreased its dependence on gasoline imports to 25 percent of domestic consumption, instead of 40 percent a few years ago. However, that figure is still too high for comfort on the part of the Iranian leadership.

"We do know that the Iranian leadership is quite concerned," said Levey.

Source: AFP

Stuart Levey is the US Undersecretary of Treasury for Terrorism and Financial Intelligence.

UPDATE: US Congress passed Iran sanctions on Thursday 24 June by a vote of 408-8. Earlier in the day, the US Senate had passed the same bill by a vote of 99-0. President Obama is expected to sign the bill into law.