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October 25, 2007 

U.S. Expands Financial Sanctions Against Iran

The U.S. Government announced today the imposition of additional financial sanctions against Iran in its long-standing effort to combat terrorism and nuclear proliferation by that country. Because of the broad scope of existing U.S. sanctions on Iran, today's action was primarily designed to put pressure on non-U.S. banks and companies that do business with Iran.

The new sanctions designate as nuclear proliferators the Islamic Revolutionary Guard Corps and the Ministry of Defense and Armed Forces Logistics and identify certain financial institutions as supporters of Iran’s military. Although anti-terrorism sanctions against designated persons in Iran have been in place since 2002, and nuclear non-proliferation sanctions against Iran were later imposed in 2005, the sanctions imposed today mark the first time the U.S. has imposed sanctions against a foreign country’s military.

The Departments of State and Treasury named a number of entities as proliferators of weapons of mass destruction. These entities were designated pursuant to its authority under Executive Order 13382 issued by President on June 28, 2005 in an effort to block the property and assets of nuclear proliferators and their supporters. The new entities include the following military organizations and financial institutions known to support Iran’s military operations:

  • The Islamic Revolutionary Guard Corps (IRGC)
  • Ministry of Defense and Armed Forces Logistics (MODALF)
  • Bank Melli
  • Bank Mellat
  • Nine IRGC-controlled Companies

The Treasury Department also designated certain individuals under E.O. 13382 on the basis of their relationship to either the IRGC or Iran’s Aerospace Industries Organization:

  • General Hosein Salimi, Commander of the Air Force, IRGC
  • Brigadier General Morteza Rezaie, Deputy Commander of the IRGC
  • Vice Admiral Ali Akhbar Ahmadian, Chief of the IRGC Joint Staff
  • Brigadier Gen. Mohammad Hejazi, Commander of Bassij resistance force
  • Brigadier Gen. Qasem Soleimani, Commander of the Qods Force
  • Ahmad Vahid Dastjerdi, Head of the Aerospace Industry Organization
  • Reza-Gholi Esmaeli, Head of Trade and International Affairs Department
  • Bahmanyar Morteza Bahmanyar, Head of Finance and Budget Department

In addition to the above entities and individuals designated as supporters of Iran’s proliferation program, additional financial institutions have been designated by the Treasury Department for financing terrorism. These designations, which were made pursuant to the authority of E.O. 13224, include:

  • IRGC-Qods Force
  • Bank Saderat

The U.S. claims that the The Qods Force, a branch of the IRGC, provides material support to the Taliban, Lebanese Hizballah, Hamas, Palestinian Islamic Jihad and the Popular Front for the Liberation of Palestine-General Command.

As a result of the sanctions imposed today, U.S. persons are prohibited from engaging in transactions involving any of the listed designees. In addition, the assets and property of any named designees that are subject to U.S. jurisdiction will be frozen.

In a statement released today, Treasury Secretary Paulson called on "responsible banks and companies around the world to terminate any business with Bank Melli, Bank Mellat, Bank Saderat, and all companies and entities of the IRGC."

Because the scope of existing U.S. sanctions on Iran is very broad and because many of these entities, including the banks named today , are already included on OFAC's Specially Designated Nationals List (OFAC prohibited all transactions involving Bank Saderat on September 12, 2006), today's action will have a limited impact on U.S. companies and financial institutions and was intended to put pressure on non-U.S. banks and companies that do business with Iran.

USA*Engage Co-Chair and National Foreign Trade Council President William Reinsch said today that “these sanctions are extraterritorial, and as such are likely to worsen relations with our allies. Given their sweeping nature, they may ultimately end up targeting hundreds of foreign companies that are doing business legally under their national laws. Their reach is so broad that they pose real challenges when it comes to connecting the dots with other companies and entities both inside and outside Iran."

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