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Banking chief in Iran placed on terror list; new U.S. sanctions target access to financial network

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Photographs by AP/Vahid Salemi

In this Aug. 20, 2017 photo, Iran's Central Bank Governor, Valiollah Seif, sits in an open session of parliament, in Tehran, Iran.

WASHINGTON -- President Donald Trump's administration on Tuesday accused the head of Iran's central bank of funneling money to Hezbollah and designated him a global terrorist, placing further financial constraints on Tehran a week after Trump called for reimposing sanctions that were lifted as part of a 2015 nuclear deal.

The new designation is separate from the nuclear sanctions that were reinstated last week against Iran. But after Trump announced his decision to back out of the nuclear deal, reached under former President Barack Obama, he promised to sanction any companies -- including banks -- that do business with Iran.

Last week, the U.S. Treasury Department, in coordination with the United Arab Emirates, sought to disrupt an Iranian currency exchange network that transferred money to the Islamic Revolutionary Guard Corps to help fund the terrorist group Hezbollah. The exchange system worked with Iran's central bank, and the Treasury Department said Tuesday's actions were a continuation of attempts to disrupt it.

It is rare to place a governor of a central bank on the global terrorist list. The Treasury Department said the governor of Iran's central bank, Valiollah Seif, "covertly funneled millions of dollars" to support Hezbollah from the Islamic Revolutionary Guard Corps through Iraq's al-Bilad Islamic Bank.

Also newly included on the United States' global terror list was Ali Tarzali, another senior official at Iran's central bank, as well as the al-Bilad Islamic Bank and its chairman, Aras Habib. Habib recently won a seat in the Iraqi parliament under the coalition headed by Prime Minister Haider al-Abadi.

"The United States will not permit Iran's increasingly brazen abuse of the international financial system," Treasury Secretary Steve Mnuchin said in a statement Tuesday. "The global community must remain vigilant against Iran's deceptive efforts to provide financial support to its terrorist proxies."

The new sanctions cut off Iran's access to a "critical banking network," the Treasury Department said in a statement, adding that it seeks to "stifle Iran's ability to abuse the U.S. and regional financial system."

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Typically, when the U.S. punishes individuals with sanctions, it prohibits Americans or U.S. companies from doing business with them. In this case, the U.S. chose to also impose "secondary sanctions," which also apply to non-Americans and non-U.S. companies. That means that anyone in any country who does business with Seif or Tarzali could be punished.

The designations are part of the Trump administration's efforts to disrupt Hezbollah's financial network. In February, the Treasury Department targeted six people and seven businesses in Africa and the Middle East for acting as front companies for the terrorist group.

The U.S. sanctions imposed Tuesday were expected to be followed by additional ones in coming weeks.

"This will make it near impossible" for Iran to do business with other foreign banks, Farhad Alavi, a partner at Akrivis Law Group in Washington and an expert in U.S. sanctions, said of Tuesday's move. "I would question whether any foreign banks would want to engage directly with the central bank of Iran at this point."

Cliff Kupchan, chairman of Eurasia Group, said Tuesday's actions come at a time when Europe and other nations are scrambling to address the fallout from the United States' reinstatement of its sanctions on Iran.

In making these designations, Kupchan said, "Trump today sent a shot across their bows with this show of resolve."

Britain, France and Germany are working to salvage the nuclear deal. Their top diplomats met Tuesday in Brussels with Iranian Foreign Minister Mohammad Javad Zarif in a bid to keep Iran from bailing.

Seif, a career banker, became the head of Iran's central bank in 2013 under President Hassan Rouhani, who shepherded the nuclear deal. Seif frequently visits Washington to attend meetings of the International Monetary Fund.

He has helped guide Iran's economy through the web of previous sanctions placed on that country. In the aftermath of the 2015 international accord, in which nuclear sanctions on Iran were lifted, Seif was a prominent voice complaining that Iran was still being kept out of the global financial system and not receiving the economic benefits it was promised in exchange for curtailing its nuclear program.

In a 2016 meeting of the Council on Foreign Relations in Washington, Seif said Iran achieved "almost nothing" from the deal.

Yet Seif is also under attack inside Iran. Half of Iran's lawmakers have written to Rouhani demanding the removal of the central bank chief, accusing him of mismanaging the banking industry and currency markets as the rial weakened.

Lebanon's Hezbollah, the Shiite guerrilla force, has long helped carry out Iran's foreign-policy objectives in the Arabic-speaking world. Most recently, the U.S. has been concerned about the role that Hezbollah fighters are playing in Syria to help prop up President Bashar Assad. Hezbollah fought a war with Israel in 2006, and Israeli officials have been deeply concerned about the prospect of another confrontation.

Information for this article was contributed by Eileen Sullivan of The New York Times; by Josh Lederman and Nasser Karimi of The Associated Press; and by Saleha Mohsin of Bloomberg News.

A Section on 05/16/2018

Comments

TimberTopper says...

Dictator Trump will find out he cannot rule to whole world. The money will continue to go where they want it to go. He has drove a wedge between the USA and our European Allies, thereby helping his bud Putin.

Posted 16 May 2018, 8:29 a.m. Suggest removal

GeneralMac says...

All that money $$$$$$$$$$$$$$$$$$$$$$$$ Barack HUSSEIN Obama released back to Iran via that 2 bit " deal "is ending up financing operations in Syria and other countries .

Follow the money trail !

Posted 16 May 2018, 9:45 a.m. Suggest removal

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