U.S. Treasury Department designates Iranian bank for facilitating proliferation activities

U.S. Treasury Department designates Iranian bank for facilitating proliferation activities

2011-05-18 03:09:01 GMT+7 (ICT)

WASHINGTON D.C. (BNO NEWS) -- The United States Treasury Department on Tuesday designated the Iranian state-owned Bank of Industry and Mine (BIM) for facilitating transactions in support of Iran's proliferation activities.

According to the U.S. Treasury Department, BIM is used by the Iranian government to evade U.S. and international sanctions against financial institutions that provide or facilitate support related to the proliferation of weapons of mass destruction (WMD).

BIM, which is owned entirely by the government, was designated pursuant to Executive Order (E.O.) 13382 for providing financial services to Bank Mellat and Europaisch Iranische Handelsbank (EIH), two Iranian banks previously designated in connection with Iran's proliferation activities.

"Iran has a well-established practice of migrating illicit financial activities from one bank to another to facilitate transactions for sanctioned banks," said Acting Under Secretary for Terrorism and Financial Intelligence David Cohen.

The E.O. 13382 order is aimed at freezing the assets of proliferators of weapons of mass destruction (WMD) and their supporters and thus, isolating them from the U.S. financial and commercial systems.

The European Union imposed sanctions targeting Iran’s nuclear and missile proliferation activities after the adoption of United Nations Security Council Resolution 1929. The sanctions included prohibiting 18 Iranian banks from conducting transactions in Europe.

After the implementation of the restrictive measures, BIM allowed EIH to transfer deposits it held for many of those designated banks to an account at BIM in Iran. Then, it used this account as a conduit for payments and transactions into Europe by some of these EU-sanctioned banks.

The state-owned bank has participated in this scheme since July 2010. It was devised by EIH to circumvent international banking sanctions by transferring funds from Bank Mellat's account at BIM to EIH's account at BIM. EIH then disbursed euro-denominated payments to Mellat's customers in Europe.

In August 2010, the Treasury Department issued the Iranian Financial Sanctions Regulations which allowed the department to prohibit, or impose strict conditions on foreign financial institutions' access to the U.S. financial system for providing significant financial services for a bank designated by the U.S.

"The sophisticated nature of this scheme illustrates the disruptive impact of sanctions on Iran’s efforts to sustain its proliferation activities," Cohen added "Treasury will remain relentless in our efforts to counter Iran’s abuse of the international financial system."

The U.S. designated Bank Mellat in October 2007 as a supporter of the Atomic Energy Organization of Iran (AEOI) and Novin Energy Company. AEOI, which reports directly to the Iranian president, is its main organization for research and development of nuclear technology, and manages fissile material production program.

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