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 Treasury Cuts Iran's Bank Saderat Off From U.S. Financial System


9/8/2006

HP-87

 

Levey: "It is remarkable that Iran has a nine-digit line item in its budget to support terrorism."

In a move to counter Iran's support for terrorism, the U.S. Department of the Treasury today announced that Iran's Bank Saderat is being cut off from all access to the U.S. financial system, direct or indirect.

"Bank Saderat facilitates Iran's transfer of hundreds of millions of dollars to Hizballah and other terrorist organizations each year. We will no longer allow a bank like Saderat to do business in the American financial system, even indirectly," said Stuart Levey, Under Secretary for Terrorism and Financial Intelligence (TFI).

Bank Saderat is one of the largest Iranian-owned banks, with roughly 3400 branch offices. The bank is used by the Government of Iran to transfer money to terrorist organizations, including Hizballah, Hamas, the Popular Front for the Liberation of Palestine-General Command and Palestinian Islamic Jihad. A notable example of this is a Hizballah-controlled organization that has received $50 million directly from Iran through Bank Saderat since 2001.

Under the current Iranian Transactions Regulations (31 CFR Part 560), U.S. banks may process certain funds transfers involving an Iranian bank, such as transfers for authorized or exempt transactions and "U-turn" transactions. U-turn transactions allow U.S. banks to process payments involving Iran that begin and end with a non-Iranian foreign bank. Bank Saderat will not be able to participate in any transfers involving U.S. banks, effective from the date that the amendment to the regulations is filed with the Federal Register early next week.

By prohibiting U-turn and all other transactions with Bank Saderat, the bank is denied all direct and indirect access to the U.S. financial system.

 

 

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