iran politics

Trump Sanctions Iran Central Bank, SWF, Cuts Off ‘All Source Of Funds’ For Country

"This is very big".

“If I may intercede for just a second”, Donald Trump said, while seated with Australian Prime Minister Scott Morrison at the White House on Friday.

The US president interrupted perfunctory media availability with his Australian counterpart to announce new sanctions on Iran, which he teased earlier this week.

The US, Trump said, has now sanctioned Iran National Bank and the sovereign wealth fund. “We have just sanctioned the Iranian National Bank – that is their central banking system – and it’s going to be at the highest level of sanctions”, he declared.

 

A terrified-looking Steve Mnuchin proceeded, at Trump’s request, to “say a word”.

“We are continuing the maximum pressure campaign, this is the last remaining source of funds”, Mnuchin began.

 

“So both the central bank of Iran and the national development fund will be cut off from our banking system”, Mnuchin continued. “This is on top of our oil sanctions and our financial institutions sanctions”, he added.

“This is very big”, Steve went on to say, in response to an inquisitive reporter. “We’ve now cut off all sources of funds to Iran”.

“Iran’s Central Bank and the National Development Fund were ostensibly intended to safeguard the welfare of the Iranian people, but have been used instead by this corrupt regime to move Iran’s foreign currency reserves for terrorist proxies”, Mnuchin said, in a statement released simultaneously. The announcement details how the central bank and the SWF fund the Quds.

“We are putting governments on notice that they are risking the integrity of their financial systems by continuing to work with the Iranian regime’s arm of terror finance, its Central Bank”, Sigal Mandelker, Under Secretary for Terrorism and Financial Intelligence remarked.

For months, there have been questions about whether the administration’s “maximum pressure” campaign had reached its limits. In addition to crippling the country’s economy by implementing a de facto oil embargo, the Trump administration has sanctioned, among other entities and individuals, the IRGC, Iran’s space program, an individual oil tanker (and its captain), a shipping network, the foreign minister and, of course, Khamenei himself, with the latter decision being described by Hassan Rouhani as indicative of “mental retardation” on the part of the US president. (Putting sanctions on Khamenei is about like sanctioning the Easter Bunny – it sounds impressive, but it’s largely meaningless.)

In June, Trump told reporters that “it’s hard to believe” the US can sanction Iran further.

Iran has, at times, adopted a similarly incredulous tone. “Are there any other sanctions left for the US to impose?” a spokesman for the foreign ministry asked, half-jokingly, over the summer. “[Trump] knows full well that if pressure and sanctions were the answer, they would have yielded results much earlier”, the person added.

Javad Zarif reiterated those sentiments during his CNN interview on Thursday. “They’ve done whatever they could and they haven’t been able to bring us to our knees”, Zarif said.

Trump went on to confirm that he will, as reported, discuss options today for responding to the attacks on Saudi Arabia’s oil infrastructure. Officials have drawn up a list of military options, although the president has variously suggested that he’d rather not go that route.

“[We’re] always prepared” for war, he said Friday, declining to say whether any action was planned, and reiterating his remarks from Wednesday that exercising restraint “shows strength”, not weakness, as Lindsey Graham suggested.

As ever, the risk is that the new measures provoke Iran further. The Trump administration faces a similar problem with Iran as it does with China in the trade war. There’s no question that Trump’s policies are exerting pressure and turning the screws, but both Tehran (in the context of the scrapped nuclear deal) and Beijing (in the context of the trade war) are proving to be far more resilient than the administration perhaps figured.

Even if Trump is “winning” in terms of crippling his rivals’ economies, he may be losing the race against time. The IRGC can fund itself in all manner of illicit ways and nobody knows what the economic pain threshold for everyday Iranians is beyond which they decide to overthrow the theocracy.

Full sanctions announcement from Treasury

Action targets major sources of funding for the regime’s proxies and terrorist arms, including the IRGC, the Qods Force, Hizballah and the Houthis

WASHINGTON- Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against the Central Bank of Iran (CBI), the National Development Fund of Iran (NDF), and Etemad Tejarate Pars Co. under its counterterrorism authority, Executive Order (E.O.) 13224.  Iran’s Central Bank has provided billions of dollars to the Islamic Revolutionary Guards Corps (IRGC), its Qods Force (IRGC-QF) and its terrorist proxy, Hizballah.  Iran’s NDF, which is Iran’s sovereign wealth fund and whose board of trustees include Iran’s president, oil minister, and the governor of the Central Bank, has been a major source of foreign currency and funding for the IRGC-QF and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL).  Etemad Tejarate Pars, also designated today, is an Iran-based company that is used to conceal financial transfers for MODAFL’s military purchases, including funds originating from the NDF.

“Iran’s brazen attack against Saudi Arabia is unacceptable.  Treasury’s action targets a crucial funding mechanism that the Iranian regime uses to support its terrorist network, including the Qods Force, Hizballah, and other militants that spread terror and destabilize the region.  The United States will continue its maximum pressure campaign against Iran’s repressive regime, which attempts to achieve its revolutionary agenda through regional aggression while squandering the country’s oil proceeds,” said Treasury Secretary Steven T. Mnuchin.  “Iran’s Central Bank and the National Development Fund were ostensibly intended to safeguard the welfare of the Iranian people, but have been used instead by this corrupt regime to move Iran’s foreign currency reserves for terrorist proxies.”

“We are putting governments on notice that they are risking the integrity of their financial systems by continuing to work with the Iranian regime’s arm of terror finance, its Central Bank,” said Sigal Mandelker, Under Secretary for Terrorism and Financial Intelligence. “We will vigorously enforce our sanctions to cut off the Iranian regime’s funding of global terrorism and its domestic oppression of the Iranian people, who are the regime’s longest suffering victims.”

CENTRAL BANK OF IRAN FUNDS THE IRGC, ITS QODS FORCE AND HIZBALLAH

Today’s action targets the CBI for its financial support to the IRGC-QF and Hizballah.  In May 2018, OFAC designated the CBI’s then-Governor Valiollah Seif, and the Assistant Director of the International Department Ali Tarzali, for facilitating financial transfers for the IRGC-QF and Hizballah.  Also, in November 2018 and as part of Treasury’s disruption of an international oil-for-terror network, OFAC designated the CBI’s International Department Director Rasul Sajjad, and the CBI’s International Department Director, Hossein Yaghoobi, for conducting financial transactions for the IRGC-QF.

Since at least 2016, the IRGC-QF has received the vast majority of its foreign currency from the CBI and senior CBI officials have worked directly with the IRGC-QF to facilitate CBI’s financial support to the IRGC-QF. In 2017, the IRGC-QF oversaw the transfer of tens of millions of euros to Iraq from the CBI. Then-Governor of the CBI Valiollah Seif directed the transfer.

During 2018 and early 2019, the CBI facilitated the transfer of several billion of U.S. dollars and euros to the IRGC-QF and hundreds of millions to MODAFL from the NDF.  Additionally, millions were to be transferred to the Houthis. CBI has also coordinated with the IRGC-QF to transfer funds to Hizballah.

OFAC is designating the CBI today for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to, the IRGC-QF and Hizballah.

The IRGC-QF, which was designated pursuant to E.O. 13224 on October 25, 2007, is a branch of the IRGC responsible for external operations and has provided material support to numerous terrorist groups, including the Taliban, Hizballah, HAMAS, and the Palestinian Islamic Jihad, making it a key component of Iran’s destabilizing regional activities. The IRGC, including its external arm, the IRGC-QF, was designated as a Foreign Terrorist Organization on April 8, 2019.

Hizballah was designated by the Department of State as a Foreign Terrorist Organization in October 1997 pursuant to E.O. 13224 in October 2001.  It was also designated in August 2012 pursuant to E.O. 13582, which targets the Government of Syria and its supporters.

NATIONAL DEVELOPMENT FUND: A SLUSH FUND FOR THE IRGC-QF AND MODAFL

According to Article 84 of the Fifth Development Plan of the Islamic Republic of Iran, the NDF was established to serve the welfare of the Iranian people by allocating revenues that originated from selling oil, gas, gas condensate, and oil products to durable wealth and productive economic investments.  However, the NDF has been used as a slush fund for the IRGC-QF, which has, for years, received hundreds of millions of dollars in cash disbursements from the NDF.

The NDF, in coordination with the CBI, provided the IRGC-QF with half a billion U.S. dollars in 2017 and hundreds of millions of dollars in 2018. Also, despite an increase in the IRGC’s overall budget for 2019, the Rouhani administration withdrew some $4.8 billion from the NDF in January 2019 to amend the budget allocated to the IRGC and the Islamic Republic of Iran Broadcasting (IRIB).

The IRIB was designated pursuant to E.O. 13628 in February 2013 for assisting or denying the free flow of information to or from the Iranian people. IRIB was implicated in censoring multiple media outlets and airing forced confessions from detainees.

During 2018 and early 2019, the CBI facilitated the transfer of hundreds of millions to both the Atomic Energy Organization and MODAFL from the NDF.  Some of the funds to be transferred via Iran-based Etemad Tejarate Pars Co. were intended to be used for military purchases.

As of early 2019, Etemad Tejarate Pars Co. planned to send tens of millions in various currencies, including euros, to Wilmington General Trading LLC in Dubai, UAE, the Embassy of the Islamic Republic of Iran in Moscow, Russia, and to companies on behalf of MODAFL.

OFAC is designating NDF for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to, the IRGC-QF and MODAFL.

OFAC is designating Etemad Tejarate Pars Co. for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to, MODAFL.

On March 26, 2019, OFAC designated MODAFL pursuant to E.O. 13224 for its role in assisting the IRGC-QF. Wilmington General Trading LLC was also designated on March 26, 2019 for being owned or controlled by Asadollah Seifi who obfuscated millions of dollars’ worth of transactions benefiting the Iranian regime and the purchase of foreign currency for the IRGC.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of these entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.  OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

In addition, persons that engage in certain transactions with the entities designated today may themselves be exposed to designation.  Furthermore, any foreign financial institution that knowingly facilitates a significant financial transaction or provides significant financial services for entities designated in connection with Iran’s support for international terrorism or any Iranian person on OFAC’s List of Specially Designated Nationals and Blocked Persons could be subject to U.S. correspondent account or payable-through account sanctions.

The United States has a long standing policy of allowing for the sale of agricultural commodities, food, medicine and medical devices, and OFAC will continue to consider requests related to humanitarian trade with Iran as appropriate.


Iran-related Designations; Counter Terrorism Designations

OFFICE OF FOREIGN ASSETS CONTROL

Specially Designated Nationals List Update

The following entities have been added to OFAC’s SDN List:

 
ETEMAD TEJARATE PARS CO., No. 101 Sohrevardi St., Tehran, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] (Linked To: MINISTRY OF DEFENSE AND ARMED FORCES LOGISTICS).
 
NATIONAL DEVELOPMENT FUND OF IRAN (a.k.a. NATIONAL DEVELOPMENT FUND OF ISLAMIC REPUBLIC OF IRAN (Arabic: صندوق توسعه ملی جمهوری اسلامی ایران)), No. 25 Gandhi St., Building National Development Fund of Iran, Tehran 15176-55911, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] [IRGC] [IFSR] (Linked To: ISLAMIC REVOLUTIONARY GUARD CORPS (IRGC)-QODS FORCE; Linked To: MINISTRY OF DEFENSE AND ARMED FORCES LOGISTICS).
 
The following changes have been made to OFAC’s SDN List:
 
BANK MARKAZI JOMHOURI ISLAMI IRAN (a.k.a. BANK MARKAZI IRAN; a.k.a. CENTRAL BANK OF IRAN; a.k.a. CENTRAL BANK OF THE ISLAMIC REPUBLIC OF IRAN), PO Box 15875/7177, 144 Mirdamad Blvd, Tehran, Iran; 213 Ferdowsi Avenue, Tehran 11365, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN]. -to- BANK MARKAZI JOMHOURI ISLAMI IRAN (a.k.a. BANK MARKAZI IRAN; a.k.a. CENTRAL BANK OF IRAN; a.k.a. CENTRAL BANK OF THE ISLAMIC REPUBLIC OF IRAN (Arabic: بانک مرکزی جمهوری اسلامی ایران)), PO Box 15875/7177, 144 Mirdamad Blvd, Tehran, Iran; 213 Ferdowsi Avenue, Tehran 11365, Iran; Mirdamad Blvd, 144 – P.O. Box 15875/7/77, Tehran, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN] [SDGT] [IRGC] [IFSR] (Linked To: ISLAMIC REVOLUTIONARY GUARD CORPS (IRGC)-QODS FORCE; Linked To: HIZBALLAH).


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4 comments on “Trump Sanctions Iran Central Bank, SWF, Cuts Off ‘All Source Of Funds’ For Country

  1. Harvey Cotton

    They keep on adding pressure like this and I am going to think that what they were doing before wasn’t maximum pressure.

  2. Off-The-Run

    Trump also announced that Iran is now on double secret probation.

  3. I certainly prefer sanctions such as these to military attacks so sought after by War Secretary Pompus, Senator Graham, and most neocon hawks. Military strikes universally rally the populace of the attacked country around their leaders. Economic sanctions draw ire against the imposing country, but it allows the populace to still distrust their own government, and allows the imposed upon government some behind the scenes options.

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