On May 15th, the Treasury Department placed sanctions on an Iranian bank, three bank officials, and a key Hezbollah official, in the Trump administration’s first step towards re-imposing economic pressures on Iran since President Trump pulled out of the Iran deal earlier this month. The individuals were also designated as Specially Designated Global Terrorists, pursuant to Executive Order 13224, which President George W. Bush signed as a response to the 9/11 attacks. The Treasury Department accused the sanctioned bank officials of abusing the U.S. and regional financial systems in order to funnel millions of dollars to the Lebanese militia, Hezbollah, which the U.S. has designated as a terror group. Treasury Secretary Steven Mnuchin said that the United States would no longer “permit Iran’s increasingly brazen abuse of the international financial system” as a means to “provide financial support to its terrorist proxies”.
The Office of Foreign Assets Control (OFAC) designated Valiollah Seif, the governor of Iran’s Central Bank, as well as the bank’s assistant director of the international department, Ali Tarzali, and subjected them to sanctions that prohibit them from “opening or maintaining in the United States of a correspondent account…by a foreign financial institution” that is known to serve as a vessel for financial support “in connection with Iran’s support for international terrorism”. The department also singled out Aras Habib, the chief executive of Al-Bilad Islamic Bank, as well as the bank itself, and subjected them to similar sanctions. Finally, OFAC designated a key Hezbollah official, Muhammad Qasir, and subjected him to sanctions prohibiting him from using or opening a United States account for the purposes of facilitating transactions to Hezbollah or anyone connected with the group.
The sanctions have geopolitical consequences as well as economic ones. Iran gives money to Hezbollah so that the militia can act as its proxy in the Syria conflict and provide Iranian support to Bashar al-Assad. The Iranians have also supplied Hezbollah with missiles and other weapons in the past. The Trump administration will use these sanctions as a means to draw Iranian support out of the conflict, but it has yet to take military action against Iranian-backed militias in the region. These sanctions do not currently extend to the Central Bank of Iran, however Secretary Mnuchin noted that the Central Bank will once again be under sanctions for certain transactions, including “on the purchase or acquisition of U.S. dollars banknotes by the Government of Iran”. These sanctions, as well as additional sanctions on specific individuals, will be re-imposed later this year now that the United States will no longer participate in the Iran deal and is reverting to economic sanctions until President Trump can negotiate a better one.
For more on this:
Michael R. Gordon, U.S. Sanctions Iran’s Central Bank Governor, Alleges Hezbollah Ties, The Wall Street Journal, https://www.wsj.com/articles/u-s-sanctions-irans-central-bank-governor-alleges-hezbollah-ties-1526413596