Statement from Deputy Spokesperson Mark Toner, October 18, 2011Footnote 1
Deputy Spokesperson Toner. We welcome the first interim report by the UN Special Rapporteur for human rights in Iran, Dr. Ahmed Shaheed, and take note of his assessment regarding the Iranian government's “pattern of systemic violation” of its citizens’ rights. The UN Secretary General's report on Iran's human rights situation also described an “intensified” campaign of abuses.
Under international law and its own constitution, Iran has committed to protect and defend the rights of its people, but officials continue to stifle all forms of dissent, persecute religious and ethnic minorities, harass and intimidate human rights defenders, and engage in the torture of detainees.
Iran's brutal repression continues unabated despite repeated international condemnation and increasing isolation: opposition leaders Mir-Hossein Moussavi and Mehdi Karroubi, now entering their ninth month under house arrest without charges, are being held virtually incommunicado, while journalists and student activists are targeted for their “anti-regime” activities. Dr. Shaheed and the Secretary General both expressed alarm over the growing use of the death penalty for minor crimes, against minors and without due process.
We are particularly concerned that Iran has ignored its UN obligations and refused to cooperate with Dr. Shaheed. We call upon Iran's government to allow the Special Rapporteur immediate access to the country.
We note that Iran has refused entry for any UN Special Rapporteur since 2005 in a blatant attempt to prevent the world from bearing witness to the abuses against its own people.
The United States stands by the Iranian people, who wish nothing more than to make their voices heard and hold their government accountable for its actions. We call upon the international community to use the occasion of these reports to redouble its condemnation of Iran's disgraceful abuse of the human rights of all its citizens and demand a change.
Statement by the Press Secretary, November 18, 2011Footnote 2
The United States welcomes today's strong vote by the United Nations General Assembly on a resolution deploring the assassination plot against the Kingdom of Saudi Arabia's Ambassador to the United States. The widespread support for this resolution, which was co-sponsored by UN members from all regions of the world, sends a strong message to the Iranian government that the international community will not tolerate the targeting of diplomats. We will continue to work closely with our allies and partners around the world to ensure that Iran understands that such outrageous acts only deepen Iran's isolation.
Excerpts of Statements by U.S. Permanent Representative to the United Nations Rice, November 18, 2011Footnote 3
Ambassador Susan E. Rice made these remarks at the U.N. General Assembly in New York
Ambassador Rice. Good evening, everybody.
I want to begin by congratulating the people of Saudi Arabia for their overwhelming success here in the General Assembly. But I also want to congratulate the member states of the General Assembly, because today—in a very powerful, unified statement of support—they came together to clearly condemn terrorism in all its forms, to deplore the plot to assassinate the Saudi Ambassador to the United States, and to call on Iran to fulfill its obligations under the 1973 convention and cooperate with this investigation.
I think it's noteworthy that over a 100 countries—a total of 106—voted in favor of this resolution, and only nine opposed it. Nine. Iran plus eight. Not one of those eight countries was another Islamic—predominantly Islamic—or Arab country. Not one.
The world came together in a very strong message that diplomats and the work we do are sacrosanct. We all deserve protection and the ability to do the work of the state without fear or threat of violence.
And today, the members of the General Assembly delivered that message very forcefully. Iran is increasingly isolated here in this body at the United Nations in New York, again, today in Vienna. And I think this is indicative of the world's growing abhorrence of their behavior, including their support for terrorism, their pursuit of a nuclear weapons program and their gross violations of Human Rights.
Happy to take a couple of questions.
Q. Madame Ambassador, how likely is it this resolution will entice Iran to cooperate with the judicial process to find the truth? I asked this question to the Iranian Ambassador. He said that he has been given no evidence—the government has been given no evidence and that what he has seen and written is not evidence, according to him. How willing is the United States to take the Iranian government on board and share information to find the truth?
Ambassador Rice. The Iranian government has the information that is now being used in our court system. They have all of that detailed evidence. The Iranian Ambassador actually said in front of the General Assembly today that Iran had no problem cooperating under the 1973 convention, and yet it opposes this resolution and it has refused thus far to cooperate in any way shape or form.
We hope that the overwhelming support that the members of the General Assembly today gave to the Saudi resolution with the support of 60 co-sponsors will cause Iran to reconsider its position and cooperate appropriately as it's obliged to do under the 1973 convention.
Q. You said that it's a very clear message, but what do you make of the abstentions of Security Council members like South Africa, India, Indonesia also abstained, China voted no. Is there a reason you didn't bring it to the Council? And those are pretty big countries. What do you think it says that they thought there's not due process or that it should go through the courts?
Ambassador Rice. Well, I think first of all, many of those countries explained their vote, and they all affirmed their condemnation of terrorism in all forms. We thought—and, I think, most importantly, the government of Saudi Arabia thought—that the General Assembly was the appropriate first stop for an effort to condemn this attack because it affects all of us as diplomats. And the General Assembly is the only forum where every state in the world is represented and has the opportunity to express their concern and condemnation of acts that target diplomats. So we think that was appropriate and right. It doesn't preclude the possibility that at some stage down the road that it may be appropriate for the Council, but this clearly was the right first step and we were very pleased to support it.
Statement by President Obama, November 21, 2011Footnote 4
President Obama. Today, my Administration has taken yet another step to further isolate and penalize Iran for its refusal to live up to its international obligations regarding its nuclear program. For years, the Iranian government has failed to abide by its obligations under the Nuclear Non-Proliferation Treaty. It has violated repeated UN Security Council resolutions, as well as its commitments to the International Atomic Energy Agency. In the face of this intransigence, the world has spoken with one voice—at the IAEA, at the UN, and in capitals—making it clear that Iranian actions jeopardize international peace and stability, and will only further isolate the Iranian regime.
Today, my Administration has taken action to impose an additional cost on Iran for its actions. New sanctions target for the first time Iran's petrochemical sector, prohibiting the provision of goods, services, and technology to this sector and authorizing penalties against any person or entity that engages in such activity. They expand energy sanctions, making it more difficult for Iran to operate, maintain, and modernize its oil and gas sector. They also designate 11 individuals and entities for their role in assisting Iran's prohibited nuclear programs, including its enrichment and heavy water programs. And today we have taken the next significant step to escalate the pressure by acting under Section 311 of the USA PATRIOT Act, identifying for the first time, the entire Iranian banking sector—including the Central Bank of Iran—as a threat to governments or financial institutions that do business with Iranian banks. We are joined in this action by the United Kingdom and Canada, who have also acted to cut off Iran from their financial systems today. I welcome these steps and encourage all of our partners to do the same.
As President one of my highest national security priorities is to prevent the spread of nuclear weapons, including to the Iranian government. Since taking office, I have made it clear that the United States is prepared to begin a new chapter with the Islamic Republic of Iran, offering the Iranian government a clear choice. It can fulfill its international obligations and reap the benefits of greater economic and political integration with countries around the world, or it can continue to defy its responsibilities and face even more pressure and isolation. Iran has chosen the path of international isolation. As long as Iran continues down this dangerous path, the United States will continue to find ways, both in concert with our partners and through our own actions to isolate and increase the pressure upon the Iranian regime.
Excerpts of Statements by Senior Administration Officials, November 21, 2011Footnote 5
Background briefing by Senior Administration Officials in Washington, DC via teleconference
Moderator. Hi folks, thank you so much for joining us this evening for this call. We just wanted to get on the line to answer any questions you might have and run through today's actions and how those fit into the broader Iran strategy. So you should all have the Executive Order, multiple fact sheets, statements from the President and Secretaries Geithner and Clinton. So with that, just a reminder we're on a background attributable to Senior Administration Officials. So I'll turn it over to our first official.
Senior Administration Official One. Great. Thanks, everybody, for joining the call. Sorry it's a bit late in the day. I'll just make a few opening comments and then turn it over to my colleagues to get into the details of today's actions.
As you know, since the beginning of the Administration, we've pursued a process of steadily ratcheting up the pressure on the Iranian Government because of its failure to live up to its obligations with regard to its nuclear program. That is an effort that we are pursuing on several fronts and it's included the most robust sanctions that have been applied to the Iranian Government to date. Of course, we've achieved a very strong basis of international unity for those sanctions through UN Security Council Resolution 1929, which in its own right imposed very strong sanctions on the Iranian Government but also provided a platform for us to continue ratcheting up the pressure on the Iranian Government through our own actions and through coordinated actions with likeminded partners.
Iran has continued to fail to live up to its obligations, and in recent days we've taken a number of steps to hold Iran accountable and to increase its international isolation and to increase its international isolation and to increase the costs on the Iranian Government for its actions. That includes in the aftermath of the IAEA report a very strong vote at the IAEA Board of Governors that made it clear that Iran needed to meet its obligations with regard to its nuclear program, on a separate line of effort that included a very strong resolution at the UN General Assembly which condemned the Iranian-sponsored plot to assassinate the Saudi ambassador here in the United States. That includes continued work that we're doing to isolate and pressure Iran for its violation of human rights. So on a number of fronts, we see the Iranian Government is more isolated than it's ever been. We see the sanctions we've applied on Iran having a real bite in terms of significantly impacting its economy and its activities in several areas. Today's efforts represent a significant step forward in our ongoing process of ratcheting up the pressure on Iran. As we said in the aftermath of the IAEA report, we were looking to build out our sanctions in a number of areas, and that is what we've done. We've also been looking to do so in a coordinated basis with other nations, and we're pleased that the United Kingdom and Canada took similar steps today. And in the days ahead we're going to continue to work with other countries to build out international pressure on the Iranian Government and to continue to increase the costs on the Iranian Government for its activities.
But with that, I'm going to turn it over to one of my colleague to walk through one set of the sanctions, and then we'll hand it over to one more of our colleagues to take your questions.
Senior Administration Official Two. Thank you. Thank you very much. And again, I join the first speaker in thanking you for being on the call. As he mentioned, the sanctions we've imposed so far over the last year and a half have already had a major impact. But what we've today have—these steps have added very significantly to those already dramatic effects. I'll go over a few of them and the third speaker will go over some other ones.
The steps today were especially important and impactful in the area of energy. We expand significantly our energy-related sanctions. The President issued today a new Executive Order. Its number is 13590, 135-90, and it allows us to impose sanctions on companies that provide goods and services to upstream Iranian oil and gas activities like development, exploration, extraction of oil and gas. As I'm sure most of you know, U.S. law already prohibits large-scale investment in these upstream oil and gas activities. And what's happened is the major oil companies have all left Iran, and what Iran has done to circumvent this sanction is to get domestic Iranian companies and smaller foreign companies to provide technology, equipment, and engineering services to help them develop their oil and gas resources. They're desperately in need of capital and technology because their oil production is declining. And what this measure will do is to impede their efforts to reverse this decline. And this is critical because oil production is critical to the Iranian economy. It's the main source of revenue for Iran. So this is a very important step.
A second step was also covered by this Executive Order 13590 and that is it allows us to impose sanctions on companies that provide goods, services, and technology to Iran's petrochemical industry. This is the first time we have targeted Iran's petrochemical industry. It's a very important sector of the Iranian economy. After crude oil, it's the biggest export earner for Iran. Indeed, about 50 percent of Iran's non crude oil exports come from the sale of petrochemicals.
So what we're doing is making it very difficult for Iran to maintain and expand its petrochemical industry. Now, that's part of the Executive Order. But independently of that, we are beginning today to launch a worldwide diplomatic campaign to encourage governments and companies that purchase petrochemicals from Iran to switch to alternative sources of supply. Now, this is not like crude oil, where there are difficulties in companies simply agreeing to forego imports of Iranian crude oil. There are lots of good producers of petrochemical products, and they can switch easily. And if they did, this would dramatically reduce Iran's export earnings. So we think this is a very significant step.
A third step we took, both State and Treasury have designated, in combination, 11 Iranian companies for activities related to the procurement of items for their nuclear program—their enrichment program, their heavy water research reactor program. The State Department designated four of these entities, Treasury seven of them. These—what this will do is freeze the assets of these entities under U.S. jurisdiction, make it illegal for U.S. persons to engage in transactions with any of them. But there will be secondary effects, I think, by listing these companies, companies and governments around the world are going to be very wary of having any engagement with these companies whatsoever. But another major area covered today was in the financial area, and the third speaker will cover that.
Senior Administration Official Three. Hi, everybody. Thanks for taking the time to hear us out this evening. What I'd like to talk about is the Section 311 action that we took today. I think it's a very important action; I think it's one that we've been waiting to do for some time now. It's really—it's one of the strongest financial tools that the Treasury Department has in its arsenal to target illicit finance anywhere in the world. And this is the first time since 2003 that we've used this authority with respect to a foreign jurisdiction, as opposed to simply a foreign financial institution; that we've taken the step of saying an entire jurisdiction is a primary money laundering concern under Section 311 of the Patriot Act. So what I'd like to do is just take a few minutes to explain to you exactly what Section 311 is as a technical∗ matter, talk about the case that we made with respect to Iran under Section 311, and then talk a little bit about what I think the impact of that is going to be. And then I'll certainly be happy to answer any questions, and I'll try to move through this fairly quickly.
Section 311 of the USA Patriot Act gives the Secretary of the Treasury the authority to identify a foreign financial institution or a foreign jurisdiction as being of primary money laundering concern. And that's a statutory term of art, “primary money laundering concern,” but in actuality, it's much broader than simply money laundering and covers all areas of illicit finance. It covers money laundering, it covers terrorist financing, it covers WMD proliferation finance, it covers deceptive financial practices, it covers just about any form of illicit finance that we'd be concerned about. It all gets wrapped up under the statutory term “primary money laundering concern.” So it gives the Secretary of the Treasury the authority to designate a foreign financial institution or a foreign jurisdiction as being of primary money laundering concern.
Once this identification has occurred, the Secretary has the authority to issue a regulation on U.S. financial institutions requiring them to take steps to protect themselves from the identified threat, up to and including requiring them to take actions to ensure that the designated threat does not have any direct or indirect financial access to the United States. And that's the measure that the Secretary took today. So today, we designated Iran as a jurisdiction of being a primary money laundering concern and issued a Notice of Proposed Rule Making to U.S. financial institutions that, when made final, will require them to take steps to ensure that none of their relationships with foreign financial institutions are used to provide direct or indirect access of any Iranian entity to the U.S. financial system.
One of the things that I think is important about the action we took today is that it's the first time, I think, you could find anywhere, in a formal way, a complete lay-down of all the illicit activities that Iran currently engages in and has engaged in for many, many years. It goes through—it's a full exposition and it makes a very, very clear case against Iran. It covers terrorist financing, it talks about Iran's activities as a state sponsor of terrorism with Hezbollah, with Hamas, and with so many other terrorist organizations. It talks about the role that the IRGC and the IRGC Qods Force plays in particular, with respect to Iran's support for terrorism. It talks about the Iranian plot to assassinate the Saudi ambassador to the United States here in Washington, recently. It talks about Iran's cooperation with al-Qaida. It talks about Iran's use of its private banks like Bank Saderat to provide terrorist financing. So it goes and makes the full case with respect to Iran's involvement in terrorist financing.
It also makes the full case with respect to Iran's involvement in financing the proliferation of weapons of mass destruction, and goes through all of the banks in Iran that engage in that activity—Banks like Bank Sepah, Bank Melli, Bank Mellat, Post Bank. The list goes on and on. And then it talks about the deceptive financial practices that Iran, Iranian entities, Iranian banks engage in, in order to disguise this nefarious conduct. It talks about their use of exchange houses and hawala. It talks about the stripping of originator information off of wires. It talks about the use of front companies. It talks about the penetration of the IRGC into the Iranian economy, so that when you're dealing with any entity in the Iranian economy, you don't know that you're not indirectly supporting the IRGC. Highlights in particular are actions taken earlier this year, with respect to Tidewater and with respect to Iran Air and the IRGC's involvement with those organizations.
And then it talks about the Central Bank of Iran funneling billions of dollars to designated Iranian banks that are involved in WMD proliferation finance and the attempts of the Central Bank of Iran to conceal those; to engage in deceptive financial practices to conceal those payments. It talks about the Central Bank of Iran's relationship with Khatam al-Anbiya, which is a big Iranian conglomerate controlled by the IRGC. And so, again, for the first time, all in one place, it makes the case, as Secretary Geithner said earlier today, that any transaction with Iran, any business dealing with Iran, is of grave risk, is subjecting the party engaging in that transaction to grave risk. And so that's what the designation lays out, or the—I'm sorry, the 311 lays out.
With respect to the impact of the Section 311, as a technical matter, it will require banks to take additional due diligence steps—U.S. banks to take additional due diligence steps to firewall off their operations from any foreign—from any operation that its international partners might have with Iran, to make sure that those international partners are not using their relationship with the U.S. bank to provide direct or indirect access to the U.S. financial system.
But I think the impact is going to be much, much greater with respect to how the international financial community reacts to this act. As I said, this is an authority that we use at the Treasury Department very sparingly. It is an authority that we haven't used with respect to an entire jurisdiction in many years. And we've seen in the past that when we do use this action, foreign financial institutions take it very seriously, and I think it's going to create a serious chilling effect on the willingness of any foreign financial institution anywhere in the world to do business—to continue to do business with Iran.
Q. My first question is for the third official who spoke. Am I correct in understanding that designating Iran as a jurisdiction of primary money laundering concern does not, in fact, bar any transaction today by a U.S. financial entity that was not already barred yesterday? If that is the case, can you then explain why you are so convinced that this will have a chilling effect on foreign financial entities, who presumably could just be very careful to make sure that any dealings they have with Iran don't impinge on their U.S. subsidiaries or U.S. banks, if they have them?
The other question I have is for the second official who spoke. Can you explain more clearly how it is that the sanctions on the development of the petroleum—of the energy sector go beyond what is already provided for in CISADA, which also describes goods, services, technology, and the provision of goods, services, technology, information, or support, and which has, if I'm not mistaken, pretty much the same triggers or thresholds of a million dollars in any one transaction or five million dollars for a series of transactions within one year?
Senior Administration Official Three. Okay, let me take the first question. So thanks for that question because it gives me an opportunity to clarify a couple of things. First of all, it's important to understand that Section 311 is not a sanction. Section 311 is a protective measure, a defensive measure that the Treasury Department employs to protect the U.S. financial system from abuse, to protect the U.S. financial system from allowing threats to access the U.S. financial system. So I probably in my explanation used the term “designation” a couple of times. That's a term we normally associate with sanctions. It's probably better to use the actual technical statutory terms. So what happened today was that the Treasury Department issued a finding where it found that Iran is a primary money laundering concern, and in response to that finding we issued a Notice of Proposed Rule Making. Again, that would—that has the impact that I said it would.
With respect to the second part of your question, what the measure does is ensure that financial institutions around the world do not use their relationships with their U.S. correspondents to allow Iran to have indirect access to the U.S. financial system. As such, you are correct; those financial institutions can continue doing whatever lawful business that they're currently doing, but it places a heavy burden on them to ensure that in doing that that they're not providing access to the United States financial system to Iran. Because if it turns out that they are, then whatever profits that they're making with respect to their relationship with Iran is going to have to be balanced against the risk of being cut off entirely from the U.S. financial system. For most financial institutions, that's simply not a risk that they're willing to take, and that's why traditionally, historically, Section 311 has been so powerful with respect to foreign financial institutions and their willingness to immediately bring themselves into compliance with it.
Senior Administration Official Two. Let me address Arshad's second question, what's new in the energy sanctions area. Currently, the ISA-CISADA legislation covers large-scale investments in upstream oil and gas activities like exploration, development, extraction, so on. CISADA deals with refined petroleum in one of two ways: It sanctions the provision of goods and services and technology for Iran's refinery industry; it also sanctions the provision of refined petroleum products, for example the sale of gasoline to Iran. That's what existing measures call for.
This does two—this Executive Order does two very different things. For upstream oil and gas activities, it goes beyond investment to the provision of goods and services, for example, the sale of drilling equipment, the provision of engineering services. These are very, very important to help Iran develop its energy, its petroleum resources. And they're vital to enable Iran to reverse this long-term decline in its production of oil, which means a decline in oil revenue. So that's a vital loophole to fill.
Second, it deals for the first time with Iran's petroleum—I'm sorry, petrochemical industry, which is distinct from its refinery industry. And it allows us to sanction companies providing goods and services and technology to help maintain and expand the petrochemical industry. And as I also said, we're launching a diplomatic campaign to discourage purchases of Iran's petrochemical products, which are a major source of export earnings for Iran.
Q. Thank you. Thank you very much for the opportunity to ask this question. Actually, I am interested if there are any Russian companies in oil and gas sector that could be covered by these sanctions. Thank you.
Senior Administration Official Two. I don't have in front of me a list of companies who are engaged in these kinds of activities. We know there are some European, there are some Asian companies. I wouldn't want to name any specific ones that are involved in the provision of these goods and services. But I cannot off the top of my head think of any Russian companies.
Senior Administration Official One. Yeah, I'd only add that when we have been building out this sanctions regime and these pressure mechanisms on the Iranian Government, the foundation of those efforts is the international unity that we achieved through the P-5+1 and UN Security Council Resolution 1929, which of course had important Russian support that provided essentially a foundation and platform from which we've been building out our sanctions ever since, understanding that different nations were going to be able to take unique steps on their own and that, of course, the position of the United States is to coordinate as intensive pressure as we can upon the Iranian Government. But the Russian Government, of course, has provided critical support for the basis of that multilateral sanctions regime that has been imposed on the Iranian Government. Similarly, the Russian Government provided important support for the statement of unity at the IAEA Board of Governors meeting as well. So separate and apart from the specific question of companies, I think it is important to underscore that we're building out here from a position of unity in the international community and in the P-5+1, and the cooperation between the United States and Russia has been important to that.
Press Release from the Department of the Treasury, November 21, 2011Footnote 6
Today, the United States is taking a series of actions to confront the threat posed by Iran and significantly increase pressure on Iran to comply with the full range of its international obligations and to address the international community's longstanding concerns regarding its nuclear program. These steps include: expanding sanctions to target the supply of goods, services, technology, or support (above certain monetary thresholds) to Iran for the development of its petroleum resources and maintenance or expansion of its petrochemical industry; designating eleven individuals and entities under Executive Order 13382 for their role in Iran's WMD program; and identifying the Islamic Republic of Iran as a jurisdiction of “primary money laundering concern” under section 311 of the USA PATRIOT Act.
These actions underscore the Administration's continued strong commitment—particularly in light of the IAEA Director General's most recent report—to hold the Iranian regime accountable for its refusal to comply with its international obligations regarding its nuclear program. The Administration is also sending an unequivocal message to the Government of Iran today that it will continue to face increasing international pressure until it addresses the international community's legitimate concerns regarding the nature of Iran's nuclear program.
New Sanctions under Executive Order (E.O.) 13590:
On November 19, President Obama signed E.O. 13590, which significantly expands existing energy-related sanctions on Iran to authorize sanctions on persons that knowingly provide:
1. Goods, Services, Technology, or Support for the Development of Petroleum Resources:
The sale, lease, or provision of goods, services, technology, or support to Iran that could directly and significantly contribute to the enhancement of Iran's ability to develop petroleum resources located in Iran could trigger sanctions if a single transaction has a fair market value of $1 million or more, or if a series of transactions from the same entity have a fair market value of $5 million or more in a 12-month period.
2. Goods, Services, Technology, or Support for the Maintenance or Expansion of the Petrochemical Sector:
The sale, lease, or provision of goods, services, technology, or support to Iran that could directly and significantly facilitate the maintenance or expansion of its domestic production of petrochemical products could trigger sanctions if a single transaction has a fair market value of $250,000 or more, or if a series of transactions from the same entity have a fair market value of $1 million or more in a 12-month period.
If a person is found to have provided a good, service, technology, or support described in E.O. 13590, the Secretary of State, in consultation with other agencies, has the authority to impose sanctions, including prohibitions on: foreign exchange transactions; banking transactions; property transactions in the United States; U.S. Export-Import Bank financing; U.S. export licenses; imports into the United States; loans of more than $10 million from U.S. financial institutions; U.S. government procurement contracts; and, for financial institutions, designation as a primary dealer or repository of U.S. government funds.
Designation of Entities under E.O. 13382:
The U.S. Department of State has designated the Nuclear Reactors Fuel Company, Noor Afzar Gostar Company, Fulmen Group, and Yasa Part under E.O. 13382 for their role in Iran's nuclear procurement networks. They support a variety of Iran's proscribed nuclear procurement activities, including centrifuge development, heavy water research reactor activities, and uranium enrichment.
The U.S. Department of the Treasury also has designated Javad Rahiqi, Modern Industries Technique Company (MITEC), Neka Novin, Parto Sanat, Paya Partov, Simatic, and the Iran Centrifuge Technology Company (TESA) under E.O. 13382. These entities are linked to the Atomic Energy Organization of Iran (AEOI), which is a key actor in Iran's nuclear program as the main Iranian organization for research and development activities in the field of nuclear technology, including Iran's centrifuge enrichment program and experimental laser enrichment of uranium program. The AEOI was listed in the Annex to E.O. 13382 and has been sanctioned by the United Nations in Security Council resolution 1737.
E.O. 13382 blocks the assets under U.S. jurisdiction of the designated persons and prohibits U.S. persons from engaging in transactions involving them.
Identification of the Islamic Republic of Iran as a Jurisdiction of “Primary Money Laundering Concern” Under Section 311 of the USA PATRIOT Act:
The U.S. Department of the Treasury identified the Islamic Republic of Iran as a jurisdiction of primary money laundering concern under Section 311 of the USA PATRIOT Act (Section 311) based on Iran's support for terrorism; pursuit of weapons of mass destruction (WMD); reliance on state-owned or controlled agencies to facilitate WMD proliferation; and the illicit and deceptive financial activities that Iranian financial institutions—including the Central Bank of Iran—and other state-controlled entities engage in to facilitate Iran's illicit conduct and evade sanctions.
In issuing today's Finding, Treasury has for the first time identified the entire Iranian financial sector; including Iran's Central Bank, private Iranian banks, and branches, and subsidiaries of Iranian banks operating outside of Iran as posing illicit finance risks for the global financial system.
The Finding also creates a clear public record of the scope and depth of Iran's illicit conduct, detailing the involvement of Iranian government agencies and banking institutions in WMD proliferation, support for terrorism, and other illicit conduct. In particular, the Finding includes new information about the Central Bank of Iran's role in facilitating Iran's illicit conduct and Iran's efforts to evade international sanctions.
Today's action reinforces U.S. and international sanctions already in place against Iran and provides greater certainty that the U.S. financial system is protected from Iranian illicit activity.
Treasury's Financial Crimes Enforcement Network (FinCEN) also today filed a Notice of Proposed Rule Making (NPRM), in which it proposes imposing a special measure against Iran. While current U.S. regulations already generally prohibit U.S. financial institutions from engaging in both direct and indirect transactions with Iranian financial institutions, this action would require U.S. financial institutions to implement additional due diligence measures in order to prevent any improper indirect access by Iranian banking institutions to U.S. correspondent accounts.
Statement by Secretary of the Treasury Geithner, November 21, 2011Footnote 7
Secretary Tim Geithner gave these remarks at the State Department
Secretary Geithner. Thank you, Secretary Clinton.
I want to thank you, and I want to commend my colleague at Treasury, David Cohen, and his counterparts here at the State Department for working so hard to put together today's very significant financial actions.
Since President Obama came into office, this administration has put in place an aggressive strategy to stop Iran's illicit activities. A key part of this strategy has been to impose overwhelming financial pressure on Iran.
Because of this strategy, Iran has been subjected to new and damaging levels of financial and commercial isolation.
First, we have dramatically reduced Iran's access to the international financial system. Iranian banks are losing the ability to do business around the world, which in turn has reduced the ability of the Iranian government to finance activities opposed by the international community.
Second, Iran's national shipping line—which has transported material in support of Iran's missile program—is now shut off from many of the world's major ports and routinely finds its ships seized or turned away.
And third, Iran's primary source of revenue—its oil sector—is in decline, because it cannot attract the foreign investment that it desperately needs to maintain production.
Together, the intensification of sanctions by this Administration, alongside our partners around the world, has inflicted substantial damage to the Iranian economy.
To continue these efforts, the Treasury Department today is designating additional entities for their support of Iran's nuclear and proliferation-related activities.
Today we are also taking the next significant step to escalate the pressure by acting under Section 311 of the USA PATRIOT Act. For the first time, we are identifying the entire Iranian banking sector—including the Central Bank of Iran—as a threat to governments or financial institutions that do business with Iranian banks.
If you are a financial institution and you engage in any transaction involving Iran's Central Bank or any other Iranian bank operating inside or outside Iran, you are at risk of supporting Iran's illicit activities: its pursuit of nuclear weapons, its support for terrorism, and its efforts to deceive responsible financial institutions and evade sanctions.
Any and every financial transaction with Iran poses grave risk of supporting those activities.
Financial institutions around the world should think hard about the risks of doing business with Iran.
We are taking this latest action alongside our partners in the United Kingdom and Canada, who announced earlier today that they have implemented similar measures to insulate their banks from Iran. As a result of this coordinated effort, Iran is now cut off from three of the world's largest financial sectors.
We encourage other leaders around the world to take forceful steps—like the action we are announcing today—to prevent Iran from simply shifting financial activity to banks within their nations.
As we put these new measures in place, and as we continue to work to expand their reach around the world, we will continue to explore other measures. No option is off the table—including the possibility of imposing additional sanctions on the Central Bank of Iran.
The policies Iran is pursuing are unacceptable. Until Iran's leadership agrees to abandon this dangerous course, we will continue to use tough and innovative means to impose severe economic and financial consequences on Iran's leadership.
Thank you.
Remarks by Under Secretary Cohen, December 1, 2011Footnote 8
Under Secretary for Terrorism and Financial Intelligence David S. Cohen delivered these remarks before the Senate Committee on Foreign Relations in Washington, DC
Introductory Remarks Omitted
Under Secretary Cohen. I will focus my remarks today on our Iran sanctions strategy, with particular emphasis on the Treasury Department's most recent action to expose the extensive illicit finance threat that the entire Iranian financial sector—including Iran's Central Bank—poses to the international financial system. I will also discuss the impact that our implementation of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA) and other financial sanctions are having on Iran, as well as our plans to increase the cost of Iran's intransigence until Iran agrees to curtail its pursuit of nuclear weapons. As I will explain, we are at a critical crossroad today in our effort to bring consequential pressure to bear on Iran. The options that we are now considering, including additional sanctions against the CBI, require that we work together to ensure that we deliver strong and well-targeted pressure on Iran.
Iran Sanctions Strategy The Treasury Department's increasingly powerful and disruptive sanctions are embedded in the dual-track strategy that the United States and our allies are pursuing to address Iran's continued failure to meet its international obligations regarding its nuclear program. As Under Secretary Sherman describes in her testimony, the Obama Administration has presented Iran with a genuine opportunity for dialogue, creating a clear choice for Tehran. Iran's leadership can choose to meet Iran's international obligations, allowing Iran to deepen its economic and political integration with the world and achieve greater security and prosperity for the Iranian people. Or, Tehran can continue to flout its responsibilities and face even greater pressure and isolation. Unfortunately, Iran has steadfastly refused to respond meaningfully to the Administration's offer of engagement and has continued to pursue technologies and equipment that could only be applied to a nuclear weapons program. Just last month, the International Atomic Energy Agency (IAEA) issued a stark report laying out in detail Iran's past and present nuclear weapons-related activities. Shortly thereafter, the IAEA's Board of Governors adopted a resolution expressing its “deep and increasing concern” about unresolved questions regarding Iran's nuclear program, including its possible military dimensions.
Our broad-based pressure strategy is aimed at persuading Iran to change its course and to make clear to Iran the consequences of its continued intransigent behavior. Among the most important elements of this strategy are targeted financial measures designed to disrupt Iran's illicit activity and to protect the international financial system from Iran's abuse. We have focused our efforts on exposing Iranian entities’ illicit and deceptive activities, an approach that has garnered support among foreign governments and led them to take similar actions, enhancing substantially the impact of our actions. Because these actions have highlighted the pervasive nature of Iran's illicit and deceptive conduct and the reputational risks associated with Iran-related business, the private sector around the world has taken notice and has often taken voluntary steps beyond their strict legal obligations, further amplifying government actions.
Our ability to implement this pressure strategy was strengthened considerably last year when President Obama signed CISADA into law. CISADA has helped us make the case to foreign governments and foreign financial institutions that neither the Islamic Revolutionary Guard Corps (IRGC) nor Iranian banks designated for their involvement in support for proliferation and terrorism should be allowed to have access to the international financial system. The results have been dramatic: our implementation of CISADA has resulted in a massive disruption of designated Iranian banks’ access to the international financial system, impeding their ability to facilitate Iran's illicit activities and creating unprecedented financial and commercial isolation for Iran.
Implementing the Pressure Strategy In implementing the pressure strategy, Treasury has focused on developing sanctions actions that expose the Iranian government's involvement in a broad range of illicit conduct, including nuclear and missile proliferation, support for terrorism, human rights abuses, and deceptive financial conduct and evasion of international sanctions. Our actions in recent months illustrate that such illicit conduct is indeed pervasive in multiple Iranian government sectors—including Iran's government-owned banks, its government-operated transportation infrastructure, and the IRGC, a branch of Iran's military. Examples of recent actions targeting Iranian illicit conduct include:
Abuse of the Global Financial System. Treasury actions targeting Iranian banks are intended to prevent those banks from using the international financial system to facilitate Iran's proliferation activity or terrorism support, or from assisting other banks or entities in evading U.S. or international sanctions. We continued these efforts in May by designating Iran's Bank of Industry and Mine (BIM) under E.O. 13382 for providing financial services for other designated Iranian banks. BIM is the 22nd Iranian-state owned financial institution to be designated by Treasury in the last five years.
Use of Transportation Infrastructure to Facilitate Illicit Conduct. Our actions against key elements of Iran's transportation infrastructure are aimed at impeding Iran's use of ships, airlines and ports for its proliferation-related or terrorism support activities. This year, we designated Tidewater Middle East Co. (Tidewater), an IRGC-owned port operating company that manages the main container terminal at Bandar Abbas and has operations at six other Iranian ports. We imposed sanctions against Iran Air, the Iranian national airline carrier and its largest airline, because it has been used by the IRGC and Iran's Ministry of Defense for Armed Forces Logistics (MODAFL) to transport military-related equipment. We also designated the second largest airline in Iran, Iranian commercial airline Mahan Air, for providing financial, material, and technological support to the IRGC-Qods Force. We sanctioned 46 companies and individuals affiliated with Iran's national maritime carrier, the Islamic Republic of Iran Shipping Lines, which is subject to U.S. and international sanctions, and three individuals who each play a key role in aiding IRISL's sanctions evasion activities worldwide.
Human Rights Abuses. As the Iranian regime's abuse of its citizens’ human rights has continued, Treasury, working with State, has imposed sanctions against 11 senior Iranian officials and three Iranian entities—the IRGC, the Basij Resistance Force, and Iran's Law Enforcement Forces (LEF)—including the IRGC's commander, the LEF chief, and Iran's Intelligence Minister. Under an authority that targets those responsible for or complicit in human rights abuses in Syria, Treasury designated the LEF for supporting the Syrian General Intelligence Directorate in its brutal suppression of the Syrian people. Treasury also designated LEF's Chief and Deputy Chief, and two senior IRGC-Qods Force officers, including IRGC-QF Commander Qasem Soleimani for supporting the brutal suppression of the Syrian people orchestrated by the Syrian General Intelligence Directorate.
Support for Terrorism. We designated six members of an al-Qa'ida facilitation network operating in Iran under an agreement with the Iranian goveminent, thereby degrading this network's ability to function while exposing Iran's continued support for terrorism worldwide. Treasury also sanctioned five individuals, including four senior IRGC-QF officers—among them the previously designated IRGC-QF Commander Soleimani—connected to a plot to assassinate the Saudi Arabian Ambassador to the United States Adel Al-Jubeir and carry out follow-on attacks against other countries’ interests inside the United States and in another country.
Proliferation-related Activities: On November 21, the State Department and Treasury designated 10 entities and one individual for their links to the Atomic Energy Organization of Iran (AEOI), the main Iranian organization responsible for research and development activities in the field of nuclear technology, including Iran's centrifuge enrichment program and experimental laser enrichment of uranium program.
Exposing the Iranian Financial Sector as an Illicit Finance Risk
The depth and breadth of Iranian financial institutions’ illicit activities—from direct support for proliferation transactions, to assisting known proliferators’ sanctions evasion efforts, to operating without appropriate regulatory controls—means that any financial institution that transacts with any Iranian bank runs a grave risk of facilitating Iran's illicit activities. Recognizing this pervasive risk to the U.S. and international financial systems, Treasury took regulatory action on November 21 to identify the entire Iranian financial sector—including not only already designated banks and their branches operating outside of Iran, but also non-designated banks, their foreign affiliates, and the Central Bank of Iran (CBI)–for posing an illicit finance risk to the global financial system. We did so by identifying Iran as a jurisdiction of “primary money laundering concern” pursuant to Section 311 of the USA PATRIOT Act.
The term “primary money laundering concern” covers multiple forms of illicit finance of greatest concern, such as terrorist financing and WMD proliferation financing. Indeed, the Section 311 finding against Iran sets out an unambiguous public record of the broad scope of Iran's illicit conduct. In particular, the finding describes Iran's activities as a state sponsor of terrorism, its longstanding provision of financing and support to Hizballah, Hamas, and other terrorist organizations, and more recent Iranian cooperation with al-Qa'ida. The finding explains the role that the IRGC and the IRGC-Qods Force, in particular, play in facilitating Iran's support for terrorism. The Qods Force involvement in terrorism support has been highlighted most recently in the public allegations that the Qods Force was involved in an Iranian plot to assassinate the Saudi ambassador to the United States. The finding also explains Iran's use of its banks, such as Bank Saderat, to provide terrorist financing, and describes its lack of sufficient laws to combat terrorist financing.
In addition, the finding makes a full case with respect to Iranian financial sector involvement in the financing of WMD proliferation, providing a detailed accounting of the many banks in Iran that engage in such activity. The finding explains the deceptive financial practices that Iranian banks use to disguise illicit conduct, and explains the role that exchange houses and front companies play in this deception, and Iran's involvement in the stripping of identifying information off of international wire transfers, putting the foreign banks that handle such transfers at risk for involvement in illicit conduct.
The Section 311 finding also provides new information about the role of Iran's Central Bank in facilitating illicit conduct and sanctions evasion. Since Section 311 was enacted in 2001, Treasury has applied it on a few occasions to other jurisdictions that pose substantial money laundering threats. But in each prior instance where special measures were proposed, Treasury explicitly exempted central banks from the reach of the so-called “jurisdiction 311” in order to allow the central bank to perform those duties that central banks customarily execute.
Not so this time, and for good reason. Iran presents a unique case. As the November 21 finding explains, the Central Bank of Iran is actively facilitating the evasion of international sanctions by supporting Iran's designated banks. For example, the CBI assisted designated Iranian banks, including Bank Saderat, Bank Mellat, the Export Development Bank of
The Treasury Department's increasingly powerful and disruptive sanctions are embedded in the dual-track strategy that the United States and our allies are pursuing to address Iran's continued failure to meet its international obligations regarding its nuclear program.
Iran, and Bank Melli, by transferring billions of dollars to them through a variety of payment schemes designed to deceive large international banks and take advantage of smaller, perhaps less sophisticated intermediaries. Similarly, the CBI also provided financial support directly to the U.S.-, EU-, and UNSC-designated engineering arm of the IRGC, Khatam al-Anbiya, which has been involved in Iran's proliferation activities and has been recruited to develop Iran's key energy resources.
This regulatory action reinforces U.S. and international sanctions already in place against Iran and provides greater certainty that the U.S. financial system is protected from Iranian illicit activity. While U.S. financial institutions already are generally prohibited from engaging in both direct and indirect transfers with Iranian financial institutions, Treasury's Financial Crimes Enforcement Network (FinCEN) issued a proposed rule alongside the 311 finding that would require U.S. financial institutions to implement additional due diligence measures in order to prevent any improper indirect access by Iranian banking institutions to U.S. correspondent accounts. Although the Section 311 action will have a regulatory impact for U.S. banks, we also expect that it will have a broader chilling effect on foreign banks’ willingness to do business with Iran, given the risks that are detailed in the finding.
The U.S. is by no means alone in its assessment of the risks posed by the Iranian financial system. The UK and Canada also took similar strong actions on November 21 to protect their respective financial sectors from the Iranian threat. Highlighting that “the Iranian regime's actions pose a significant threat to the UK's national security and the international community,” the UK announced that it had imposed new financial restrictions against Iran by cutting off Iran's banking sector from access to the UK. All UK credit and financial institutions are now generally required to cease business relationships and transactions with all Iranian banks, including the Central Bank of Iran, and their branches and subsidiaries. For its part, Canada imposed new restrictions under its Special Economic Measures Act in response to the IAEA's report, prohibiting financial transactions with Iran, sanctioning additional individuals and entities, and expanding the list of prohibited goods.
U.S., UK and Canadian concerns about the risks posed by the Iranian financial system are only further reinforced by recent reports of a massive embezzlement scandal in Iran. The Government of Iran has accused a network of Iranian state-owned and private banks of forging documents and issuing fictitious and fraudulent loans with an estimated value of approximately $2.6 billion to politically-connected individuals for the purchase of stakes in state-owned companies. The scandal has thrown into sharp relief the Iranian government's abiding weakness in the supervision of its financial sector and echoes the extensive fraud and corruption that exists in many sectors of the Iranian economy. While the regime has tried to distance itself from the scandal as much as possible, the Minister of Economy and Finance, Shamseddin Hosseini, who narrowly survived an impeachment vote by the Iranian Parliament, has publicly conceded that “we need to have a multi-level oversight system so institutions can control the loans they disburse,” acknowledging that had such safeguards been in place, “such a huge fraud could not have happened in the banking system.” The scandal, implicating the highest levels of the Iranian government, including the Deputy Governor of the CBI, reinforces persistent doubts about the integrity of Iran's financial sector.
The Impact of Sanctions on Iran's Financial Sector
During testimony before the Senate Banking Committee in October, I reported that Iran's financial isolation, and the economic impact of that isolation, have continued to grow. Today, I can report that the trend continues to accelerate.
Due to a combination of factors—including UNSCR 1929, financial sanctions imposed by the U.S., EU, and other like-minded countries, and foreign banks’ interest in avoiding CISADA actions or the reputational risk of doing business with Iran—the number and quality of foreign banks willing to transact with designated Iranian financial institutions has dropped precipitously over the last year. Today, Iran's largest state-owned banks—each of which has been sanctioned by the U.S., the EU, and several of our allies—are largely unable to access the international financial system. Iran's shrinking access to financial services and trade finance has made it more difficult for Iran to attract foreign investment, pay for imports, and receive payment for exports. This has exacerbated persistent macroeconomic weakness due to the Iranian government's mismanagement of its economy.
One good illustration of the economic pressure resulting from this financial squeeze is Iran's recent difficulty in defending the value of its currency, the rial. For nearly a decade, the CBI has supported a single, official exchange rate for the rial, using hard currency earned through oil sales to stabilize it. Since the adoption of UNSCR 1929 and various UN member states’ actions to implement the Resolution, however, the CBI has struggled to maintain stability in Iran's currency markets. Sanctions have increased the cost and difficulty of accessing adequate foreign exchange, weakening the CBI's ability to respond adequately to pressures in currency markets, particularly as accelerating inflation has exerted unusual pressure on the rial exchange rate. This has produced a multiple-tier currency market in Iran—including an official exchange rate and an even-more-expensive market rate.
In September 2010, the spread between the official and the market exchange rate widened dramatically. While the rial made a moderate recovery during the Fall of 2010, it rapidly began to lose value again in January 2011. To close this gap, the CBI devaluated the rial by 11 percent in June 2011. The CBI's policy response, however, failed to stabilize the market, and the rial plunged in value against the dollar and the euro over the past several weeks.
Today, the spread between the official and open market rates hovers above 20 percent, one of the highest levels in recent history, fueling serious inflation, high unemployment, and domestic discontent. (A chart depicting the increasing spread between the official and market rate is appended to my testimony.) Because of the rial's decline in value, ordinary Iranians are urgently seeking out foreign currency, such as dollars or Euros, for safety, yet they are having trouble accessing hard currency, and when they can, they have to pay the unofficial market rate. At the same time, senior government officials and preferred businesses, including IRGC-owned and controlled operations, are able to access foreign exchange at the official rate, essentially engaging in profitable arbitrage on the back of the average Iranian. Central Bank Governor Bahmani has conceded that the CBI has limited ability to respond to volatility in currency markets and blamed U.S. and international sanctions, noting that “Iran is now facing international restrictions and this has to be taken into consideration.” Iran's ability to respond to macroeconomic challenges will continue to be hampered by sanctions, at great cost to Iran's long-term economic growth.
There is little doubt that our sanctions strategy has markedly reduced Iran's access to the international financial system and, consequently, has contributed to a noticeable weakening of the Iranian economy. In a recent speech to the Iranian Parliament, President Ahmadinejad finally admitted the strong impact that sanctions are having on Iran's economy. He noted that “the West imposed the most extensive…sanctions ever” and that “this is the heaviest economic onslaught on a nation in history.” He went on to acknowledge that “every day, all our banking and trade activities and our agreements are being monitored and blocked.” This significant admission is a clear sign that U.S. and international sanctions are having a strong impact on the Iranian economy and the Iranian regime.
The Continuing Threat and the Way Forward
In light of the mounting evidence of the impact of sanctions, and in light of Iran's continued refusal to engage meaningfully and substantively with the international community, we are committed to applying greater financial and economic pressure on Iran. Let me be clear: We are firmly devoted to significantly intensifying the pressure on Iran, and doing so in a way that delivers swift, focused and powerful pressure on the Iranian leadership to further sharpen their choice between isolation and engagement.
As we explore opportunities to increase pressure on Iran, we are keenly focused—as is the Congress—on applying additional sanctions on the Central Bank of Iran. So we welcome French President Sarkozy's suggestion last week for a multilateral asset freeze on the CBI, as we recognize that coordinated and focused action against the CBI could have a particularly powerful impact on Iran's access to the international financial system and its ability to access the hard currency it earns from oil sales. And we welcome the opportunity to continue to work with Congress on an effective, well-designed and well-targeted sanction against the CBI. As we prepare these steps, it is imperative that we act in a way that does not threaten to fracture the international coalition of nations committed to the dual-track approach, does not inadvertently redound to Iran's economic benefit, and brings real and meaningful pressure to bear on Iran.
It is also important to remember that delivering potent pressure on Iran is not wholly dependent on how we address the Central Bank. Put simply, a designation of the CBI is not the only step, nor would it be the last step, available to bring consequential pressure to bear on Iran. For example, as more and more countries and foreign banks refuse to deal with designated Iranian banks, we remain keenly focused on the possibility that non-designated Iranian financial institutions may become involved in proliferation activity or terrorist financing. When we see Iranian banks stepping in to pick up business for designated banks, or beginning to process proliferation transactions, we will swiftly impose new sanctions, as was the case recently with Bank of Industry and Mine.
We will continue our intensive efforts to implement CISADA, which, as I noted, have been enormously successful in driving down to almost nil the international activity of designated Iranian banks. As we learn of activities that may trigger CISADA sanctions, we will continue to either obtain immediate resolution or impose CISADA sanctions.
We will stay ahead of efforts by Iran to develop workarounds to its financial isolation. This means working with our partners around the world to identify the ways—both overt and deceptive—in which Iran seeks to establish new financial footholds, and take action to stop them.
We will relentlessly pursue IRISL ships, front companies, agents and managers, exposing and sanctioning them, and driving IRISL out of operation. And, as evidenced by the Tidewater designation in June, we will aggressively expose the IRGC's expanding role in the Iranian economy and work with our partners in Europe and elsewhere to apply sanctions on IRGC-controlled companies.
Conclusion
Although we are making progress to identify Iran's illicit behavior and pressure Iran to comply with its international obligations, there is, of course, significant work still before us. The recent IAEA report, which exposes Iran's activities relevant to the development of a nuclear explosive device, coupled with the recently exposed plot by which Iran's IRGC-QF planned to assassinate the Saudi Ambassador to the United States, only underscores the importance of not only maintaining, but qualitatively enhancing, the pressure on Iran.
As Secretary Geithner has said, “the policies that Iran is pursuing are unacceptable—and until Iran's leadership agrees to abandon this dangerous course, we will continue to use tough and innovative means to impose severe economic and financial consequences on Iran's leadership.” We want to work with Congress to broaden and strengthen CISADA and other Treasury authorities and to take careful, focused steps to address the illicit conduct of the CBI.
I look forward to continuing our work with this Committee as Treasury continues to pursue this enormously important strategic objective.
Press Release from the Department of the Treasury, December 13, 2011Footnote 9
The U.S. Departments of Treasury and State today announced the designation of Hassan Firouzabadi, Chairman of Iran's Joint Chiefs of Staff, and Abdollah Araqi, the Deputy Commander of the Islamic Revolutionary Guard Corps (IRGC) Ground Force, pursuant to Executive Order (E.O.) 13553 for being responsible for or complicit in serious human rights abuses in Iran.
“The Iranian people have suffered tremendously at the hands of senior officials, who instead of protecting their basic rights have ordered and orchestrated widespread, serious human rights abuses aimed at silencing criticism and punishing dissent,” said Office of Foreign Assets Control (OFAC) Director Adam J. Szubin. “In support of the Iranian people's quest for justice and accountability, we are taking further action today to expose the involvement of senior Iranian government officials in serious human rights abuses.”
Signed by President Obama in September 2010, E.O. 13553 targets serious human rights abuses by officials of the Government of Iran and persons acting on behalf of the Government of Iran since the June 2009 election. As a result of today's action, U.S. persons are prohibited from engaging in any transactions with Firouzabadi or Araqi and any assets they may have under U.S. jurisdiction are frozen. The designees are also subject to visa sanctions by the Department of State.
State Department Assistant Secretary for Democracy, Human Rights and Labor Michael Posner added, “Today's action underscores our enduring commitment to hold accountable Iranian government officials responsible for or complicit in serious human rights abuses. Through today's designations, we affirm that we will take action against those who perpetrate such serious abuses. We will help Iranian citizens hold their government accountable to preserve and protect their human rights, as declared in their own law and international conventions to which the Iranian government is a party.”
Hassan Firouzabadi
As Chairman of Iran's Joint Chiefs of Staff, Major General Hassan Firouzabadi is the highest military authority in Iran, responsible for directing all military divisions and policies and overseeing and directing Iran's army (Artesh), the IRGC, and the Basij Forces. In addition, Hassan Firouzabadi is Head of the Permanent Passive Defense Committee, a member of the Supreme National Security Council of Iran, a member of Iran's Expediency Council, and a member of the Basij.
Both the IRGC and the Basij were designated by Treasury pursuant to E.O. 13553 on June 9, 2011. The IRGC is responsible for serious human rights abuses that have occurred since the contested June 12, 2009, presidential election, including the violent crackdowns on protesters and the mistreatment of political detainees held in a ward of Tehran's Evin prison controlled by the IRGC. As one of Iran's primary guarantors of domestic security, the Basij has also been heavily involved in the violent crackdowns and serious human rights abuses occurring in Iran since the June 2009 contested presidential election. The Basij have been implicated in attacks on university students, abuse of detainees, and violence against peaceful protesters.
Abdollah Araqi
Prior to being appointed as Deputy Commander of the IRGC Ground Forces, Abdollah Araqi was the Commander of Greater Tehran's Mohammad Rasulollah Division of the IRGC, an elite IRGC unit charged with maintaining security throughout Greater Tehran. Abdollah Araqi's IRGC unit assumed responsibility for security in the months after the June 12, 2009 election and played a key role in the violent crackdown on the post-election protesters.
Press Release from the Department of the Treasury, December 20, 2011Footnote 10
The U.S. Department of the Treasury today announced the designation of 10 shipping and front companies and one individual based in Malta affiliated with the Islamic Republic of Iran Shipping Lines (IRISL), an entity facing international sanctions for its involvement in Iran's efforts to advance its missile programs and transport military cargoes. Today's action is being taken as IRISL and its subsidiaries have increasingly relied upon multiple front companies and agents to overcome the impact of U.S. and international sanctions and increased scrutiny of their behavior.
“As IRISL and its subsidiaries continue their deceptive efforts to escape the grasp of U.S. and international sanctions, we will continue to take action—as we are today—to expose the front companies, agents and managers working with IRISL and work to stop this illicit business,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen.
The entities and individual designated today are owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, IRISL, Irano Hind, or ISI Maritime.
IRISL has facilitated shipments of military-related cargo destined for Iran's Ministry of Defense and Armed Forces Logistics (MODAFL) and its subordinate entities, including organizations designated by the United States for sanctions pursuant to Executive Order (E.O.) 13382 and listed in United Nations Security Council Resolutions 1737 in 2006, 1747 in 2007, and 1929 in 2010. The Department of State designated MODAFL pursuant to E.O. 13382 in October 2007, and the Treasury Department designated IRISL in September 2008.
In September 2009, the Treasury Department also designated the IRISL-Shipping Corporation of India joint venture, Irano Hind. The UN Security Council designated Irano Hind in Resolution 1929 in 2010.
Pursuant to E.O. 13382—which is aimed at freezing the assets of proliferators of weapons of mass destruction and their supporters, excluding them from the U.S. financial and commercial systems—Treasury today designated:
10 Malta-based IRISL and Irano Hind affiliated shipping companies: BIIS Maritime Limited, ISIM Amin Limited, ISIM Atr Limited, ISIM Olive Limited, ISIM Sat Limited, ISIM Sea Chariot Limited, ISIM Sea Crescent Limited, ISIM Sinin Limited, ISIM Taj Mahal Limited, and ISIM Tour Limited.
The Chief Executive and Managing Director of Irano Hind, Jamshid Khalili, who is an Iranian national.
