US hits Iran’s central bank boss with terror sanctions
Washington – The United States intensified its financial pressure on Iran on Tuesday, slapping anti-terror sanctions on the head of its central bank and barring anyone around the world from doing business with him. That dealt a further blow to European hopes of salvaging the Iranian nuclear deal in the wake of President Donald Trump’s withdrawal.
Valiollah Seif, the governor of the Iranian central bank, was named a “specially designated global terrorist” along with another senior official, Ali Tarzali, who works in the central bank’s international division. The Treasury Department accused the men of secretly funneling millions of dollars through an Iraqi bank to help Hezbollah, the militant network that the U.S. considers a terrorist group.
Although the sanctions do not technically extend to the central bank itself, they could significantly increase Iran’s isolation from the global financial system. Seif, whose role is equivalent to the Federal Reserve chairman in the U.S., oversees major financial decisions in Iran. Any transactions that involve his signature could potentially run afoul of the sanctions, creating a strong disincentive for governments or businesses considering deals involving Iran’s central bank.
“The United States will not permit Iran’s increasingly brazen abuse of the international financial system,” Treasury Secretary Steven Mnuchin said. “The global community must remain vigilant against Iran’s deceptive efforts to provide financial support to its terrorist proxies.”
Typically, when the U.S. punishes individuals with sanctions, it prohibits Americans or U.S. companies from doing business with them. In this case, the U.S. chose to also impose “secondary sanctions,” which also apply to non-Americans and non-U.S. companies. That means that anyone in any country who does business with Seif or Tarzali could be punished.
The latest move comes as Trump’s administration, deeming the 2015 nuclear accord insufficiently tough on Iran, seeks to construct a global coalition to place enough pressure on Tehran that it comes back to the negotiating table.
Yet the European members of the international accord, livid at Trump over his withdrawal, have yet to commit to that effort. To the contrary, Britain, France and Germany are working to salvage it. Their top diplomats met Tuesday in Brussels with Iranian Foreign Minister Mohammad Javad Zarif in a bid to keep Iran from bailing.
Whether the deal can survive without the U.S. depends on whether Tehran continues to receive sufficient economic benefits by way of business with the Europeans. Not only is Trump re-imposing sanctions on Iran, but he’s also threatening to take the dramatic step of punishing European businesses that don’t wind down their dealing there. That has left the Europeans in the undesirable position of having to decide whether to call his bluff.
The new sanctions on central bank officials appear designed to strengthen Trump’s hand, creating another avenue by which anyone doing business in Iran could risk being cut off from New York, the beating heart of the global financial system.
“Trump can use this in his arguments with Europe to deter business with Iran,” said Behnam Ben Taleblu, an Iran sanctions expert at the hawkish Foundation for Defense of Democracies. “All of this is another arrow in the quiver.”
There was no immediate comment Tuesday night from Iranian officials.
The sanctions were expected to be followed by additional U.S actions in coming weeks, as the Trump administration works to dismantle the main banking conduits exploited by Iran and its Revolutionary Guards to convert Iranian rials into euros or dollars. Those Western “hard currencies” can be used to fund extremist elements, such as in Lebanon and Syria.
Seif, a career banker, became the head of Iran’s Central Bank in 2013 under President Hassan Rouhani, who shepherded the nuclear deal. Seif frequently visits Washington to attend meetings of the International Monetary Fund. He has helped guide Iran’s economy through the web of previous sanctions placed on that country.
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