June 16 (Bloomberg) -- The U.S. took action to block an Iranian bank, the country’s Revolutionary Guard Corps and the group’s business interests from using the international financial system, implementing new United Nations sanctions.
“In the coming weeks we will continue to increase financial pressure on Iran,” Treasury Secretary Timothy Geithner said at the White House in Washington.
The U.S. invoked UN Security Council Resolution 1929, passed June 9 with the backing of China and Russia, to bar transactions involving the Post Bank of Iran and the Guard Corps’ Air Force and Missile Command. Treasury Undersecretary Stuart Levey told reporters that Iran was using the domestic-oriented Post Bank for international transactions after the U.S. took action against other Iranian banks for moving money beneficial to the country’s nuclear program.
The air force and missile units of the Revolutionary Guard have ties to Iran’s ballistic-missile program, according to a Treasury statement on the action.
Levey said the penalties would have the effect of exposing Iranian deception in trying to evade sanctions and would persuade companies worldwide to shun Iran.
Also cited in the Treasury action were: Rah Sahel and the Sepanir Oil and Gas Engineering Co., described by Treasury as subsidiaries of the Revolutionary Guard’s engineering arm; five companies identified as fronts for the Islamic Republic of Iran Shipping Lines; and two leaders of the Revolutionary Guard.
Treasury barred financial transactions with 22 insurance and petrochemical companies owned or controlled by Iran’s government, including 17 based outside the country.
The U.S. also identified 98 vessels linked to what Levey described as Irisl efforts to evade UN sanctions. Individuals named in the action include Defense Minister Ahmad Vahidi, Revolutionary Guard Corps Commander Mohammad Ali Jafari and Mohammad Reza Naqdi, a Guards Corps leader.
The U.S. steps flowed from a provision of the UN resolution that calls upon governments to freeze the assets and bar financial transactions with Iranian entities when it is determined that there are “reasonable grounds” to believe they contribute to the nation’s nuclear program.
Resolution 1929, adopted after six months of negotiations aimed at winning the support of veto-wielding Security Council members China and Russia, is intended to prevent Iran from developing a nuclear weapon and to compel the Middle Eastern nation to enter international talks.
Iran, with the world’s second-biggest oil and natural gas reserves, has said its nuclear program is intended for generating electricity for its growing population.
The U.S. move came as European Union governments prepared to widen their sanctions against Iran. EU penalties will hit “key sectors of the gas and oil industry with prohibition of new investment, technical assistance and transfers of technologies, equipment and services,” according to a statement prepared for tomorrow’s EU summit in Brussels that was obtained by Bloomberg News.
Iranian President Mahmoud Ahmadinejad today threatened “retaliation” against any country that acts to enforce the UN sanctions, while the parliament in Tehran is considering a bill to reduce International Atomic Energy Agency inspections of its atomic facilities.
“Any country that would damage Iran’s interests because of the sanctions will face Iran’s severe retaliation,” the Iranian president said in an address televised live by the state broadcaster from the city of Shahrekord.
The U.S. Congress will soon produce Iran sanctions legislation of unprecedented strength that could be the “last chance” to avoid military confrontation with the regime, a U.S. senator said today.
“There have never been sanctions this broad and this strong,” said Senator Joseph Lieberman, a Connecticut independent.
The sanctions package, still being completed, will focus on Iran’s nuclear program and human rights violations. “Very powerful sanctions” will target the Iranian financial industry as well as suppliers of gasoline and other refined petroleum products and related products to Iran, Lieberman said.
The House and Senate should be finished coordinating their different versions of the bill by next week, Lieberman said at a press conference.
To contact the editor responsible for this story: Mark Silva in Washington at email@example.com