U.S. Designates Iranian Bank As Weapons Proliferator

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January 09, 2007 6:09 PM

The Treasury Department today designated Bank Sepah, Iran's fifth largest state-owned bank, a "supporter of WMD proliferation."

The move is aimed at crippling Iran's ability to finance its illicit weapons programs and to hamper its cooperation with North Korea's main missile exporter.

"Sepah provides direct and extensive financial services to Iranian entities responsible for developing missiles capable of carrying weapons of mass destruction," Treasury Undersecretary for Terrorism and Financial Intelligence Stuart Levy told reporters.

The designation prohibits all U.S. citizens and entities, such as other banks and financial institutions, from dealing with Bank Sepah. According to Levy, any of the bank's assets under U.S. jurisdiction will also be frozen.

The U.S. is also pushing European allies to put pressure on Iran's banks. Most of the transactions at issue took place in Sepah's Rome branch, Levy added.

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This action was taken pursuant to a June 2005 Executive Order and is in accordance with the United States' obligations under the recent U.N. sanctions resolution against Iran for its non-compliance in halting its WMD and missile programs. That resolution requires countries to block entities involved in Iran's nuclear and missile programs as well as entities that support those groups, under which Bank Sepah allegedly falls.

This is the second Iranian state-owned bank to be designated by the United States in recent months. In September, the Treasury cut another large state-owned bank, Bank Saderat, from dealing with the U.S. financial system for allegedly financing terrorist organizations like Hezbollah and Hamas.

Levy would not say more designations were on the horizon, but he did not rule it out either.

According to Levy, Bank Sepah was a "key provider of financial services" to the Shahid Hemmat Industries Group (SHIG) and the Shahid Bakeri Industries Group (SBIG), two Iranian missile firms. Sepah also provided financial services to SHIG and SBIG's parent entity, Iran's Aerospace Industries Organization (AIO), "which has been designated as a proliferator of WMD by the United States for its role in overseeing all of Iran's missile industries," Levy said.

SHIG, SBIG and AIO's director are listed in the annex of U.N. resolution 1737 as entities directly involved with Iran's elicit weapons programs.

Bank Sepah has facilitated business between AIO and North Korea's missile exporter KOMID, the Treasury Department said. "The financial relationship between Iran and North Korea, as represented by the business handled by Bank Sepah, is of great concern to the United States," Levy said.

Iran's chief nuclear negotiator, Ali Larijani, remained defiant in the face of today's announcement. "This is not the first time that such measures of America take place, and the bank harassments of America have happened in some cases, however these are not issues that can affect Iran's will," he told Iran's Student News Agency ISNA.