WASHINGTON (Reuters) - The United States on Tuesday imposed sanctions on Iran’s central bank governor, Valiollah Seif, and Iraq-based Al-Bilad Islamic Bank for “moving millions of dollars” for Iran’s elite Revolutionary Guard Corps, as Washington seeks to cut off funding for what it says is Iran’s malign activities in the Middle East.

U.S. Treasury Secretary Steven Mnuchin said Seif covertly funneled millions of dollars on behalf of the IRGC through Al-Bilad bank “to enrich and support the violent and radical agenda of Hezbollah.”

The United States classifies Lebanon’s Shi’ite Muslim movement Hezbollah, which is backed by Iran, as a terrorist group.

“It is appalling, but not surprising, that Iran’s senior-most banking official would conspire with the IRGC-QF to facilitate funding of terror groups like Hezbollah, and it undermines any credibility he could claim in protecting the integrity of the institution as a central bank governor,” Mnuchin said in a statement.

The U.S. Treasury also blacklisted Ali Tarzali, assistant director of the international department of Iran’s central bank, and the chairman of Al-Bilad Islamic Bank, Aras Habib.

The department said the sanctions against Seif and Tarzali would not immediately affect central bank transactions. It said, however, sanctions being reimposed under the nuclear deal would affect certain U.S. dollar transactions by the central bank starting on Aug. 7, 2018.

Last week, two days after U.S. President Donald Trump withdrew from the 2015 Iran nuclear deal, the U.S. Treasury imposed sanctions against six individuals and three companies it said were funneling millions of dollars to the IRGC-QF.

The IRGC is by far Iran’s most powerful security entity and has control over large stakes in Iran’s economy and huge influence in its political system. The Quds Force is an elite unit in charge of the IRGC’ overseas operations. </s> The Treasury Department named. Valiollah Seif, governor of Iran's central bank, and another senior bank official as ‘specially designated global terrorists’ for allegedly sending funds to Hezbollah.

The Treasury Department named. Valiollah Seif, governor of Iran's central bank, and another senior bank official as ‘specially designated global terrorists’ for allegedly sending funds to Hezbollah. Photo: Drew Angerer/Bloomberg News

WASHINGTON—The Treasury Department imposed sanctions Tuesday on the governor of Iran’s central bank and another senior bank official, accusing them of funneling millions of dollars to Hezbollah, the Lebanese militia designated as a terror group by the U.S.

The Treasury Department said that Valiollah Seif, the governor of the Central Bank of the Islamic Republic of Iran, sent the funds to Hezbollah through an Iraqi bank, the al-Bilad Islamic Bank. The funds were sent on behalf of Iran’s Quds Force, an Iranian paramilitary organization fighting in Syria along with Hezbollah to support President Bashar al-Assad.

The sanctions are part of a broader effort by the Trump administration to preclude the Quds Force from using the international banking system.

Iran has long been involved in the Syria conflict and has supplied missiles and other weapons to Hezbollah, which is widely regarded as its proxy in the region. The Trump administration is trying to pressure Iran to curtail that support. But it has stopped short of taking military action against Iranian forces and Iranian-backed militias in Syria while defending Israel’s military strikes there.

In the sanctions announced Tuesday, Mr. Seif and Ali Tarzali, the assistant director of the international department at the bank, were named as “specially designated global terrorists.” The Treasury Department also sanctioned the al-Bilad Islamic Bank and its chairman and chief executive, Aras Habib. Muhammad Qasir, a Hezbollah official Treasury said had disbursed the funds, was also sanctioned.

Iran had no immediate reaction to the announcement, which came after government offices had closed.

The Treasury pointed out that the sanctions announced Tuesday don’t extend to Iran’s central bank. But broader sanctions on certain transactions with the central bank will be reimposed in August as a result of President Donald Trump’s decision to withdraw from the Iran nuclear accord.

After the U.S. exited the accord, the Trump administration threatened to impose sanctions on European companies that continue do business with Iran. European leader say they want to preserve the Iran agreement. Iran’s foreign minister Javad Zarif met Tuesday with European Union foreign-policy chief Federica Mogherini to discuss ways to try to salvage the agreement. </s> The U.S. Treasury on Tuesday imposed sanctions on the governor and a senior official of the Central Bank of Iran, as well as an Iraq-based bank and its chairman, and a key Hezbollah official. Treasury Secretary Steven Mnuchin said Valiollah Seif, Iran's central bank chief, covertly funneled millions of dollars on behalf of the Islamic Revolutionary Guard Corps through the Iraqi bank to support Hezbollah. Treasury said the sanctions seek to stifle Iran's ability to abuse the U.S. and regional financial systems, but don't extend to the Central Bank of Iran itself. </s> The United States on Tuesday imposed sanctions on Iran's central bank governor and an Iraq-based bank for "moving millions of dollars" for Iran's elite Revolutionary Guard, as Washington seeks to cut off funding it says Tehran is using to fund militant activities overseas.

WASHINGTON: The United States on Tuesday imposed sanctions on Iran's central bank governor and an Iraq-based bank for "moving millions of dollars" for Iran's elite Revolutionary Guard, as Washington seeks to cut off funding it says Tehran is using to fund militant activities overseas.

U.S. Treasury Secretary Steven Mnuchin accused bank chief Valiollah Seif of covertly funnelling money on behalf of the revolutionary guard's external arm, Quds Force (IRGC-QF), through Al-Bilad Islamic Bank "to enrich and support the violent and radical agenda of Hezbollah."

The move cuts off Iran's use of a critical banking network, he said. The United States classifies Lebanon's Shi'ite Muslim movement Hezbollah, which is backed by Iran, as a terrorist organisation.

"It is appalling, but not surprising, that Iran's senior-most banking official would conspire with the IRGC-QF to facilitate funding of terror groups like Hezbollah, and it undermines any credibility he could claim in protecting the integrity of the institution as a central bank governor," Mnuchin said in a statement.

Speaking in Brussels, Iran's Foreign Minister Javad Zarif called the sanctions against Seif illegal.

The U.S. Treasury also blacklisted Ali Tarzali, assistant director of the international department of Iran's central bank, and the chairman of Al-Bilad Islamic Bank, Aras Habib.

It said Habib had a history of smuggling money to Iranian-backed Iraqi groups and "enabled the IRGC-QF's exploitation of Iraq's banking sector to move funds from Tehran to Hezbollah, jeopardizing the integrity of the Iraqi financial system."

The department said the sanctions would not immediately affect central bank transactions. It said, however, that sanctions being reimposed after the withdrawal of the United States from the Iran nuclear deal would affect certain U.S. dollar transactions by the central bank starting from Aug. 7, 2018.

Last week, two days after U.S. President Donald Trump withdrew from the 2015 Iran nuclear deal, the U.S. Treasury imposed sanctions against six individuals and three companies it said were funnelling millions of dollars to the IRGC-QF.

British, French and German foreign ministers met in Brussels on Tuesday to try to find a way to save the nuclear deal without the United States, but appeared hard-pressed over how their companies could continue doing business with Iran once Washington begins to reimpose sanctions.

The IRGC is by far Iran's most powerful security organisation and has control over large stakes in Iran's economy and huge influence in its political system. The Quds Force is an elite unit in charge of the IRGC overseas operations. </s> WASHINGTON: The United States slapped sanctions Tuesday on Valiollah Seif, the governor of the Central Bank of Iran, accusing him of helping the country's Revolutionary Guard Corps transfer millions of dollars to Lebanon's Hezbollah.

In the second move in a week taking aim at the money networks of the Revolutionary Guards, or IRGC, the US Treasury also blacklisted a second central bank official, Iraq's Al-Bilad Islamic Bank and its top two executives, and a liaison between IRGC and Hezbollah, which Washington has designated an international terrorist group.

The Treasury said Seif covertly moved "hundreds of millions of dollars" to Hezbollah from IRGC via Al-Bilad Islamic Bank.

Tuesday's action seeks to cut off what the US called a "critical" banking network for Iran, and deny those blacklisted access to the global financial system.

"The United States will not permit Iran's increasingly brazen abuse of the international financial system," said US Treasury Secretary Steven Mnuchin.

"The global community must remain vigilant against Iran's deceptive efforts to provide financial support to its terrorist proxies."

On Thursday, the Treasury announced sanctions against a "large scale" currency exchange network serving the Revolutionary Guards, hitting six individuals and three companies at the center of the network.

At the time, the US singled out the Central Bank of Iran as "complicit" in the operation, foreshadowing Tuesday's action.

The move against Seif came one week after President Donald Trump withdrew from the Iran nuclear accord and signalled plans to ratchet up pressure on the Iranian economy, and especially on the economic power of the Revolutionary Guards.

A European official said that some senior figures in the US administration were pushing for a "North Korea scenario" in Iran, in reference to the drastic sanctions imposed on the North Korean regime which Washington believes helped push the country's leader, Kim Jong Un, into halting missile and nuclear testing and agreeing to renewed negotiations.

The blacklisted head of Iraq’s Al-Bilad Islamic Bank was named as Aras Habib, who ran in last weekend's general elections as a candidate on the slate of Prime Minister Haidar al-Abadi, whose government has been supported by the United States and the international community. He is expected to gain a seat in the newly elected assembly. </s> Six years after SWIFT cut ties with Iranian banks during the last round of Western sanctions on the Persian nation, on Thursday afternoon the U.S. took another step toward cutting Iran off from the global economy when the US Treasury announced it was levying sanctions on a financing network and accusing the country’s central bank of helping funnel U.S. dollars to the blacklisted elite military unit of the Iranian Revolutionary Guard known as the Quds Force, the WSJ reported.

Acting together with the United Arab Emirates, the US Treasury said that it had sanctioned six individuals and three "front companies engaged in a large-scale currency exchange network that has procured and transferred hundreds of millions" of dollars to Iran's elite military force; overnight Israel’s government blamed the the same Quds Force for rocket attacks from Syria Wednesday night, an action that triggered massive retaliatory strikes by Israel’s military against Iranian targets in Syria, escalating the risk of a wider regional war.

In Washington, Treasury Secretary Steven T. Mnuchin accused "the Iranian regime and its Central Bank" of misusing banking access in the UAE to acquire US dollars to fund the IRGC-QF's "malign activities, and to arm its "regional proxy groups." The new sanctions also ban US individuals and entities from doing business with the currency network.

Mnuchin alleged that the sanctioned entities had concealed the acquisition of funds and transfers: "We are intent on cutting off IRGC revenue streams wherever their source and whatever their destination."

“Countries around the world must be vigilant against Iran’s efforts to exploit their financial institutions to exchange currency and fund nefarious actions of the IRGC-QF and the world’s largest state sponsor of terror,” Mnuchin also said.

Specifically, the Treasury accused an Iranian company, Jenah Aras Kish, of being a front for the Quds Force, and said the firm received oil revenues from Central Bank of Iran accounts and gave that money to couriers who exchanged it for millions of U.S. dollar notes in the U.A.E. through two Iranian firms, Khedmati & Co. and Rashed Exchange.

Washington has repeatedly accused the Iran Revolutionary Guard of backing terrorist groups and militias affiliated with Iran, including in Lebanon and Syria where missile warfare involving Israel and allegedly Al Quds unfolded on Thursday.

In February 2015, Reuters reported that at least $1 billion in cash had been smuggled into Iran despite US and other sanctions. In that case, the cash passed through money changers and front companies in Dubai, in the UAE, and Iraq. As we further reported in December 2015, the smuggling ring used gold as the key commodity used to bypass borders and monetary barriers, as well as middlemen in Turkey and the UAE where the chain of accountability led to the very top echelons of government in both nations.

The Treasury also accused Iran's central bank of being "complicit" in supplying the IRGC.

Thursday's actions foreshadow the return of U.S. economic penalties as Washington reimposes sanctions that had been lifted as part of the 2015 nuclear agreement. Iran’s central bank wasn’t formally sanctioned in Thursday’s actions, but will be in the coming months, at which point the entire nations will once again be blacklisted by SWIFT, making USD-based international transactions impossible.

And while Thursday’s action targets only one network, it is a model of how the administration plans to implement a complete ban on dealings with the Central Bank of Iran and dollar transactions coming due in the months ahead.

Incidentally, this time around, SWIFT may not need to even get involved. “There are secondary sanctions consequences for doing business with these entities,” said the Treasury’s under secretary for terrorism and financial intelligence, Sigal Mandelker, referring to the currency-exchange network. Secondary sanctions are actions against companies that interact with blacklisted entities.

Because of Trump’s decision to reimpose broad U.S. sanctions, the use of U.S. dollar banknotes by Iran is banned after August, “and you can expect that we’re going to take that authority very seriously,” she said. “Foreign financial institutions, governments all over the world need to be on high alert to make sure that they understand the pattern and practice that these networks use to try to gain access to the USD.”

Meanwhile, western governments and companies - many of whom disagreed with Trump's withdrawing from the nuclear deal, have been trying to figure out how aggressively Washington plans to enforce its new sanctions regime against Iran, "wary of Treasury sanctioning European bank and firms, for example, if they continue to do business with Iran beyond deadlines for compliance approaching over the next six months."

For now, European officials have said they plan to stay in the nuclear deal with Iran, which may not only give license to their companies to maintain ties to Iran, but also may be setting up a diplomatic rift between the U.S. and its closest allies.

However, if and when the US imposes a few multi-billion fines on European banks, any willingness the EU has to bypass Trump's sanctions will promptly evaporate. Furthermore, Europe "doesn’t have the power to take important decisions," said Alaeddin Boroujerdi, head of the Iranian parliament’s nation security and foreign policy committee. The "Europeans, by sanctioning Iran, seek to dance in front of the Americans."

As a result, it's only a matter of time before Iran finds itself locked out financially from the world.

Or rather the Western world, because as the US and Europe fade away as key partners for Iran, China is about to step in again.

As Bloomberg reported today, "to develop its $430 billion economy, Iran is being forced to rely on political allies in the east. Trade with China has more than doubled since 2006, to $28 billion. The biggest chunk of Iran’s oil exports go to China, about $11 billion a year at current prices."

China is “already the winner,’’ Dina Esfandiary, a fellow at the Centre for Science and Security Studies at King’s College in London, told Bloomberg. "Iran has slowly abandoned the idea of being open to the West. The Chinese have been in Iran for the past 30 years. They have the contacts, the guys on the ground, the links to the local banks.’"

And they’re more willing to defy U.S. pressure as Trump slaps sanctions back on.

In short, the more Trump pushes Iran - and the broader middle-eastern region - to comply with the will of Israel and Saudi Arabia, the closer Iran will get with China whose influence in the middle-east, where it is ideologically aligned with Russia, will only grow... </s> The United States and Gulf partners imposed additional sanctions on Lebanon's Hezbollah leadership Wednesday, targeting its top two officials, Sayyed Hassan Nasrallah and Naim Qassem.

The U.S. Treasury Department said four other individuals also had been sanctioned, as was the group Islamic State in the Greater Sahara. It was the third round of sanctions announced by Washington since the United States pulled out of the Iran nuclear deal last week.

Wednesday's sanctions targeted members of the primary decision-making body of Hezbollah, the Treasury Department said in a statement.

"By targeting Hezbollah's Shura Council, our nations collectively rejected the false distinction between a so-called 'Political Wing' and Hezbollah's global terrorist plotting," Treasury Secretary Steven Mnuchin said.

The measures were imposed jointly by Washington and its partners in the Terrorist Financing and Targeting Center, or TFTC, which include Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and United Arab Emirates, it said.

A number of those targeted by the TFTC had been previously blacklisted by the United States.

On Tuesday, the United States imposed sanctions on Iran's central bank governor and an Iraq-based bank for "moving millions of dollars" for Iran's elite Revolutionary Guard.

Last week, the U.S. Treasury imposed sanctions against six individuals and three companies it said were funneling millions of dollars to the Revolutionary Guard's external arm, the Quds Force. </s> WASHINGTON—The U.S. Treasury Department on Thursday levied sanctions against several Iranian firms, individuals and officials it said are operating an illegal currency-exchange network in the United Arab Emirates, and accused Iran’s central bank of being complicit in operations that funneled dollars into the country for Iran’s elite military unit, the Quds Force, and Tehran’s regional proxies.

The action, the first since President Donald Trumppulled the U.S. out of the landmark nuclear deal with Iran and Washington began reimposing... </s> WASHINGTON (Reuters) - The United States imposed sanctions on Thursday against six individuals and three companies it said were funneling millions of dollars to Iran’s Islamic Revolutionary Guard’s elite Quds Force, just days after President Donald Trump withdrew from the 2015 Iran nuclear deal.

FILE PHOTO: Steven Mnuchin, Secretary, U.S. Department of the Treasury speaks at the Milken Institute 21st Global Conference in Beverly Hills, California, U.S., April 30, 2018. REUTERS/Mike Blake

The Treasury Department, acting with the United Arab Emirates where front companies were located, said it had disrupted the large network’s operations, and accused Iran’s central bank of helping the group access U.S. dollars held in foreign banks to sidestep Western sanctions.

“The Iranian regime and its central bank have abused access to entities in the UAE to acquire U.S. dollars to fund the IRGC-QF’s malign activities, including to fund and arm its regional proxy groups, by concealing the purpose for which the U.S. dollars were acquired,” U.S. Treasury Secretary Steven Mnuchin said in a statement.

The IRGC is by far Iran’s most powerful security entity and has control over large stakes in Iran’s economy and huge influence in its political system. The Quds Force is an elite unit in charge of the IRGC’s overseas operations.

The six individuals and three entities, including front companies for the IRGC-QF and currency traders, were sanctioned under U.S. regulations targeting specially designated global terrorist suspects and Iranian financial activity, the Treasury said.

The UAE said later it had placed the same companies and people on its list of terrorist and terrorist organizations doing business with the IRGC-QF.

The crackdown comes as U.S. Secretary of State Mike Pompeo pushes allies in Europe, Asia and the Middle East to pressure Iran to return to negotiations over its nuclear and missile programs.

Trump’s decision has given grace periods of 90 days to six months for companies to wind down their trade with Iran.

The Treasury Department said one of the companies sanctioned was also involved in retrieving oil revenue from foreign bank accounts held by the Iranian central bank for IRGC-QF activities.

In February 2015, Reuters reported that at least $1 billion in cash had been smuggled into Iran despite sanctions. Before it reached Iran, the cash was passed through money changers and front companies in Dubai, in the United Arab Emirates and Iraq, sources told Reuters.

Before the 2015 nuclear deal was reached, front companies had mushroomed in Dubai to facilitate payments to Iran. The use of multiple front companies, which bought dollars from currency traders in Dubai and Iraq, was preferred as it concealed the overall size of the dollar-purchasing operation.
The United States Treasury Department announces new sanctions on Iran central bank governor Valiollah Seif and assistant director Ali Tarzali for allegedly helping the Islamic Revolutionary Guard Corps and Quds Force support Hezbollah.