- The Washington Times - Tuesday, January 9, 2007

The Bush administration yesterday cut off Iran’s state-owned Bank Sepah from the U.S. financial system, saying the institution supports Iranian efforts to develop missiles capable of carrying weapons of mass destruction.

“Bank Sepah is the financial linchpin of Iran’s missile-procurement network and has actively assisted Iran’s pursuit of missiles capable of carrying weapons of mass destruction,” said Stuart Levey, Treasury undersecretary for terrorism and financial intelligence.

A former senior State Department official said the move might signify a trend.

Yesterday’s blacklisting follows a similar move in September when the administration cut Iran’s Bank Saderat off from the U.S. financial system to counter Iranian support for terrorism.

“One institution can be an accident; two is beginning to look like a trend,” said Jonathan M. Winer, former deputy assistant secretary of state for international law enforcement.

Bank Sepah is the fifth-largest Iranian state-owned bank and, according to the Treasury Department, provides financial support and services to Iran’s Aerospace Industries Organization (AIO) and two Iranian missile firms cited by the United Nations for their roles in Iran’s ballistic-missile programs.

“Bank Sepah is AIO’s bank of choice, and since at least 2000, Sepah has provided a variety of critical financial services to Iran’s missile industry, arranging financing and processing dozens of multimillion-dollar transactions” for the organization and its subordinate organizations, according to Treasury.

Treasury also said the bank had helped Iran’s international purchases of sensitive materials for its missile program, saying that in 2005 the bank financed a Chinese company’s sale of missile-related items to Iran and AIO had Sepah transfer more than half a million dollars to a North Korean firm associated with North Korea’s main ballistic-missile-related exporter.

“The financial partnership between Iran and North Korea, represented by the business facilitated by Bank Sepah, is, for obvious reasons, a great concern to the United States,” Mr. Levey told reporters.

In addition, he said, the bank has engaged “in a range of deceptive practices” to avoid detection, including asking other institutions to omit its name when processing transactions.

The order covers all branches of the bank, including its 290 branches in Iran and branches in Paris and Rome and in Frankfurt, Germany. It also covers the bank’s London subsidiary and its chairman and director, Ahmad Derakhshandeh.

Many of the proliferation-related services involved were handled by the bank’s Rome branch, Mr. Levey said.

The action was taken under a U.S. anti-proliferation executive order and a unanimous U.N. Security Council resolution to impose sanctions on Iran.

Mr. Winer yesterday said the move was “a big deal because it’s a big bank.”

Now a lawyer with Alston and Bird in Washington, Mr. Winer said that Bank Sepah has relations with numerous financial institutions, including credit-card firms and international banks and is involved in many business deals.

“What this order illustrates profoundly is that touching anything Iranian is risky business,” he said.

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