US sanctions 18 Iranian banks

The Trump administration has imposed sanctions on 18 Iranian banks, expanding its economic pressure campaign against Tehran ahead of US elections next month.

“Our sanctions programmes will continue until Iran stops its support of terrorist activities and ends its nuclear programmes,” Steven Mnuchin, US Treasury secretary, said in a statement, adding the administration wanted to cut off Iran’s “illicit access to US dollars”.

The Office of Foreign Assets Control at US Treasury sanctioned the banks in consultation with the US Department of State, saying the move was taken to deny the Iranian government financial resources that could support its nuclear and other weapons programmes or regional foreign policy.

As with past US sanctions actions, the move exempted humanitarian transactions, but one of the entities sanctioned, Middle East Bank, handles imports of food and medicine. The actions were likely to make everyday life including humanitarian trade more difficult in Iran, weakening an economy that is already suffering under the burden of US sanctions and the impact of the coronavirus pandemic.

Other banks on the sanctions list include Bank Pasargad, Karafarin Bank and Bank Maskan, which specialise in mortgages and housing loans, as well as Bank Keshavarzi Iran for agricultural projects.

Javad Zarif, Iran’s foreign minister, said the country would survive “this latest of cruelties” but denounced the effort as a crime against humanity.

“Amid Covid19 pandemic, US regime wants to blow up our remaining channels to pay for food & medicine,” he tweeted, saying the US was conspiring to starve the population.

Iran’s central bank governor, Abdolnaser Hemmati, said the US move was “propaganda” for domestic purposes and that it would have little impact on imports of essential commodities. He said some of the sanctioned banks were handling imports of food and medicine and worked with foreign banks which still hold all the necessary waivers from the US government.

The threat of secondary sanctions — imposing punitive measures on any foreign entities that transact with the banks — was likely to deter what little international financial interactions continued.

Barbara Slavin, an Iran expert at the Atlantic Council, a US think-tank, described the actions as “sadistic, counterproductive and ultimately rather sad and desperate”.

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“The Iranian government will not capitulate, but instead will turn even more decisively toward China and western leverage will be even further eroded,” she said.

President Donald Trump pulled the US out of an international accord designed to curb Iran’s nuclear ambitions and offered to hold talks with Tehran’s leaders, claiming he could secure a new, better deal.

Iranian and European officials who work on the issue assess a Biden administration would yield more fruit, however, according to several people close to the matter. Joe Biden, Mr Trump’s Democratic rival in the presidential election next month, has promised to rejoin the nuclear pact if Iran were to return to compliance.

The Trump administration is largely isolated in its position against Iran, and recently failed to secure the extension of a UN arms embargo against the country after irritating even its allies on the UN Security Council.

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