US sanctions Iran’s central bank in wake of Aramco attacks

Targeting Iran’s central bank could inhibit Tehran’s ability to import sanctions-exempt humanitarian goods.

Saudi Aramco damage
On Friday, Saudi officials took reporters to inspect the Saudi Aramco facilities damaged in last weekend's attacks [Reuters]

The United States Department of the Treasury on Friday slapped sanctions on Iran‘s central bank and its sovereign wealth fund, ratcheting up the pressure on Tehran nearly a week after attacks on Saudi Arabia’s oil infrastructure that Riyadh and Washington have blamed on Iran.

Speaking at a White House press conference alongside visiting Australian Prime Minister Scott Morrison, US President Donald Trump described Friday’s action as the “highest level of sanctions”. 

Trump has said he wants a peaceful solution to the conflict following the weekend oil attacks, which the US Secretary of State, Mike Pompeo, has described as an “act of war”.

Iran has denied any involvement in the September 14 attacks on Saudi state oil giant Saudi Aramco, which shook global oil markets and ratcheted up tensions between Washington and Tehran. On Friday, Saudi officials took reporters to inspect the damaged facilities.

A statement issued by the US Treasury on Friday said, “Iran’s brazen attack against Saudi Arabia is unacceptable.” It also accused Iran’s central bank of providing “billions of dollars to the Islamic Revolutionary Guard Corps (IRGC), its Qods Force (IRGC-QF) and its terrorist proxy Hizballah [sic]”.

“We are continuing the maximum pressure campaign,” US Treasury Secretary Steven Mnuchin told reporters at the White House. “This is very big. We’ve now cut off all source of funds to Iran.”

In addition to Iran’s central bank and its sovereign wealth fund, the National Development Fund (NDF), Friday’s round of sanctions also targeted Etemad Tejarate Pars Co, which the US treasury said is concealing financial transfers for Iran’s military, including funds originating from NDF.

Most of Iran’s economy is under sanctions as part of Washington’s “maximium pressure” campaign against Tehran. Targeting the Central Bank of the Islamic Republic of Iran could, however, inhibit Iran’s ability to pay for imported humanitarian goods, which are exempt from sanctions. 

In recent weeks, Trump had weighed the possibility of easing sanctions on Iran as he sought to meet with Iranian President Hassan Rouhani, who is scheduled to attend the United Nations General Assembly in New York City next week.

The Trump administration has imposed a wide range of sanctions on Iran after pulling out of the world powers’ 2015 Iranian nuclear pact. The sanctions, part of a US campaign to increase economic pressure on Tehran over its nuclear programme, were championed by former National Security Adviser John Bolton, who was ousted this month.

Previous US sanctions have targeted Iran’s foreign minister, its Islamic Revolutionary Guards Corps, space agencies, and various networks that Washington has said helped boost Iran’s nuclear programme, among others.

Source: Reuters