New Targeted Sanctions hit Iran’s Revolutionary Guard Shipping Operations Hard

Source: The Wall Street Journal

The Obama administration enacted new financial sanctions on Iran’s elite military unit and its largest shipping company, as the U.S. intensifies efforts to choke Tehran off from the global financial system.The Treasury Department’s announcement Tuesday comes just weeks ahead of a scheduled second round of negotiations in Turkey between Iran and the international community focused on containing Tehran’s nuclear program, which Iran says is peaceful in nature.

Senior U.S. officials said the new measures illustrate that Washington and its allies won’t relax their financial campaign against Iran even as the diplomatic process continues in late January. “It’s clear that our policy is going to be to continue to impose pressure on Iran so long as it defies its international obligations,” said Stuart Levey, the Treasury’s point man on Iran sanctions.

The five permanent members of the United Nations Security Council, plus Germany, held an earlier diplomatic round with Iran on Dec. 6-7 in Geneva. The talks registered little progress and have sparked concern that Iran may seek to use the diplomacy to deflect international pressure while continuing to advance its nuclear capabilities.

The Treasury on Tuesday heightened its financial war against Iran’s principal military organization, the Islamic Revolutionary Guard Corps, by blacklisting two banks and a financial foundation allegedly aiding the IRGC’s activities.

The Obama administration charges that the guard corps is the driving force behind Iran’s nuclear and ballistic missile programs and has overseen a crackdown on President Mahmoud Ahmadinejad’s political opponents over the past 18 months.

The IRGC and its hundreds of affiliated companies have also taken a dominant position inside the Iranian economy in recent years, according to Iran analysts, crowding out private businesses.

The new U.S. measures bar Americans from doing business with the designated Iranian entities and would freeze any assets they hold inside the U.S. Foreign companies doing business with Ansar and Mehr banks, as well as the Bonyad Taavon Sepah foundation, risk being banned from the U.S. financial system.

The Treasury said Bonyad Taavon Sepah oversees and structures IRGC investments. Ansar Bank, it said, provides financial credit to IRGC personnel, while Mehr Bank provides financial services to the IRGC’s Bassij, a volunteer militia.

Also on Tuesday, the Treasury sanctioned Moallem Insurance Co., described as the primary maritime insurer for vessels owned by the Islamic Republic of Iran Shipping Lines, or IRISL.

Washington and its allies have been engaged in a global cat-and-mouse game with IRISL, Iran’s biggest shipper, over the past two years as the U.S. has sought to hobble Tehran’s ability to import and export goods.

The Treasury first blacklisted IRISL in 2008 for allegedly aiding Iran’s arms shipments. The shipping firm has renamed a number of its affiliated companies and often sails its ships under false flags, according to U.S. officials. IRISL has also been charged with repainting its boats to avoid detection.

Still, U.S., U.N. and European sanctions are taking a growing toll on IRISL, said U.S. officials. British and Bermudan insurance consortiums, key players in the global market, have stopped insuring its ships. IRISL has increasingly turned to Moallem Insurance to underwrite its ships.

Squeeze on Tehran

Treasury’s sanctions aim to:

Blacklist shipping firms accused of helping move arms.

Undercut Tehran’s ability to insure ships.

Sanction a foundation, banks seen as aiding military activities of Revolutionary Guard.

Bar U.S. investment to Iran- owned Paris Oil & Gas Co.