Tuesday, Jan 24, 2012


 
   By Jay Solomon 
   Of THE WALL STREET JOURNAL

WASHINGTON (Dow Jones)--The Obama administration sanctioned Iran's third-largest bank, Bank Tejarat, closing off one of Tehran's only remaining conduits for trade with the Western world.

The U.S. Treasury Department's action follows U.S. President Barack Obama's move last month to ban any American dealings with Iran's central bank. And it follows an agreement by the European Union earlier Monday to ban all purchases of Iranian oil.

Treasury's sanctioning of Bank Tejarat marks the 23rd Iranian-linked financial institution blacklisted by the U.S. since 2006. The list includes all of Iran's largest state-owned banks.

(This story and related background material will be available on The Wall Street Journal website, WSJ.com.)

Treasury officials said they sanctioned Bank Tejarat for its alleged role in financing Iran's nuclear program and for assisting other designated Iranian banks and companies in evading international sanctions.

Treasury specifically charged Bank Tejarat with assisting Iran's Atomic Energy Organization with trying to procure uranium from the international market last year.

"Today's action against Bank Tejarat strikes at one of Iran's few remaining access points to the international financial system," Treasury Undersecretary for Terrorism and Financial Intelligence, David Cohen, said in a statement.

Treasury also sanctioned Bank Tejarat's subsidiary, Trade Capital Bank, which is based in Minsk, Belarus.

The international sanctions on Iran are increasingly threatening the Iranian financial system, U.S. officials said Friday.

Iran's currency, the rial, has lost over 70% of its value against the dollar since September, they said. And on Monday, it reached an all-time low of nearly 21,000 rial to the dollar.

"You can see quite graphically how the efforts we have been engaged in over the last several years have intensified over the last several months...are really starting to have a very palpable impact," said a senior U.S. official.

The Obama administration has also been working to assist the EU in implementing its oil embargo against Iran.

U.S. diplomats have been conducting extensive negotiations with countries like Saudi Arabia, the United Arab Emirates and Kuwait to increase their oil production in the coming months to allow European countries like Greece, Italy and Spain to wean themselves off their Iranian supplies.

The U.S has also been seeking to help emerging oil producers, such as Iraq, Libya and Ghana, get more production into the market.

The unilateral sanctions on Iran's central bank and Bank Tejarat will also reinforce the EU oil embargo, U.S. officials said. Most of Iran's oil sales are believed to be cleared through Iran's central bank, called Bank Markazi. And new U.S. legislation would ban any foreign companies that conduct financial dealings with Bank Markazi.

(END) Dow Jones Newswires

24-01-12 0401GMT