The United States on Monday sought to tighten the financial screws on Iran by imposing sanctions on the country’s third-largest bank for allegedly helping Tehran develop its nuclear program.
Now any foreign firm that deals with Iranian state-owned Bank Tejarat and its affiliate, Belarus-based Trade Capital Bank, will no longer be able to access the U.S. financial system.
The sanctions “will deepen Iran’s financial isolation, make its access to hard currency even more tenuous, and further impair Iran’s ability to finance its illicit nuclear program,” Treasury Undersecretary David Cohen said in a statement.
The United States and Europe are pressuring Iran to talk to the international community about its nuclear activities, which the West says are aimed at developing a weapons program but which Tehran says are peaceful.
The European Union on Monday banned imports of oil from Iran and followed the United States in imposing sanctions on its central bank, which acts as the clearinghouse for the country’s oil revenue.
A senior U.S. Treasury official said he was optimistic that Europe would also blacklist Bank Tejarat, which has nearly 2,000 branches in Iran, as well as branches in France and Tajikistan.
Bank Tejarat was penalized for providing financial services to the Islamic Republic of Iran Shipping Lines and other entities already sanctioned for their involvement with the country’s nuclear program.
The action “strikes at one of Iran’s few remaining access points to the international financial system,” Cohen said. Twenty-three Iranian-linked firms have been sanctioned by the United States, a list that now includes all of the largest state-owned banks.
Washington also accused Bank Tejarat of indirectly supporting the activities of Iran’s Revolutionary Guard.
The United States is working to apply sanctions signed by President Barack Obama last year that seek to block countries and their institutions from dealing with the Iranian central bank.
The aim is to starve Iran of revenues needed to develop nuclear weapons without disrupting jittery oil markets and impeding the U.S. economic recovery.
“We do expect there will be a significant reduction in Iran’s exports,” said the senior U.S. official.
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Iran’s rial drops 10 pct as EU bans oil imports
Iran’s rial currency plunged 10 percent to a new record low on Monday as the EU imposed a ban on Iranian oil imports, posing a major headache for President Mahmoud Ahmadinejad who has said sanctions will not hurt the economy.
European Union governments agreed to an immediate ban on all new contracts to import, purchase or transport Iranian crude oil and petroleum products, EU officials said, in a move aimed at ramping up pressure on Tehran to curb its nuclear activities.
The ban, which comes on top of new U.S. sanctions aimed at hampering Iran’s oil exports around the world, sent Iranians rushing to convert their savings into hard currency as efforts to curb black market trading failed.
The price of dollars rose 7 percent from Saturday, the last working day, to 20,500 rials, up 15 percent from last week. It has rallied almost 50 percent from a month ago, according to the financial website Mesghal.
The rial’s slide is likely to exacerbate inflation which is already at 20 percent and rising, as Iran is heavily reliant on imported consumer and intermediate goods whose prices have surged as the rial has depreciated.
President Obama: The 44th. 