The US Secretary of the Treasury Steven T. Mnuchin, in consultation with the Secretary of State Michael Pompeo, on Thursday identified the financial sector of the Iranian economy pursuant to section 1(a)(I) of Executive Order (E.O.) 13902, which authorizes Treasury to sanction any Iranian financial institution.
Subsequently, the Office of Foreign Assets Control (OFAC) sanctioned eighteen major Iranian banks. As part of this action, OFAC sanctioned sixteen Iranian banks for operating in Iran’s financial sector and one bank for being owned or controlled by a sanctioned Iranian bank. Additionally, today’s action includes the designation of an Iranian military-affiliated bank under Treasury’s counter-proliferation authority.
“Today’s action to identify the financial sector and sanction eighteen major Iranian banks reflects our commitment to stop illicit access to U.S. dollars,” said Secretary Steven T. Mnuchin. “Our sanctions programs will continue until Iran stops its support of terrorist activities and ends its nuclear programs. Today’s actions will continue to allow for humanitarian transactions to support the Iranian people.”
Treasury’s action was taken pursuant to E.O. 13902, which provides authority to identify and impose sanctions on key sectors of Iran’s economy in order to deny the Iranian government financial resources that may be used to fund and support its nuclear program, missile development, terrorism and terrorist proxy networks, and malign regional influence. Treasury also sanctioned one bank pursuant to E.O. 13382, which provides authority to impose sanctions on proliferators of weapons of mass destruction (WMD) and their supporters.
The action under E.O. 13902 does not affect existing authorizations and exceptions for humanitarian trade, which remain in full force and effect for these seventeen banks. This action also does not affect activities subject to a State Department-issued waiver or exception, or activities subject to an OFAC general or specific license.
Under the provisions of E.O. 13902, the Secretary of the Treasury identified the financial sector of Iran’s economy as an additional avenue that funds the Iranian government’s malign activities. Today’s sanctions targeted major banks operating in Iran’s financial sector.
Amin Investment Bank, Bank Keshavarzi Iran, Bank Maskan, Bank Refah Kargaran, Bank-e Shahr, Eghtesad Novin Bank, Gharzolhasaneh Resalat Bank, Hekmat Iranian Bank, Iran Zamin Bank, Karafarin Bank, Khavarmianeh Bank (also known as Middle East Bank), Mehr Iran Credit Union Bank, Pasargad Bank, Saman Bank, Sarmayeh Bank, Tosee Taavon Bank (also known as Cooperative Development Bank), and Tourism Bank were previously identified as Iranian financial institutions pursuant to E.O. 13599. Today, they were sanctioned as entities operating in Iran’s financial sector.
Additionally, Islamic Regional Cooperation Bank, also previously identified as an Iranian financial institution under E.O. 13599, was sanctioned pursuant to E.O. 13902 for being owned or controlled by Eghtesad Novin Bank.
In May 2020, Hekmat Iranian Bank, a bank servicing Iran’s armed forces, merged with Bank Sepah, which has served as a financial platform for Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) to pay its agents abroad. Bank Sepah was designated on November 5, 2018 pursuant to E.O. 13382 for having provided support to MODAFL. Today, Hekmat Iranian Bank was also designated pursuant to E.O. 13382, as an entity owned or controlled by Bank Sepah.
The banks sanctioned are subject to the supervision and regulation by the Central Bank of Iran (CBI), which was previously designated under E.O. 13224 for providing support to the Islamic Revolutionary Guards Corps (IRGC), its Qods Force (IRGC-QF), and its terrorist proxy, Hizballah.