Iran Sanctions - Foreign Press Centers

Financial Sanctions: CISADA and Sanctions on
Dealings with Iran’s Central Bank
Iran Sanctions
U.S. efforts to shut Iran out of the international banking system have gained strength as other
countries have joined the effort. These efforts have been implemented by the Treasury
Department through progressively strong actions discussed below, culminating with legislation in
late 2011 to cut off even Iran’s Central Bank from the international financial system.
Early Efforts: Targeted Financial Measures
During 2006-2010, strengthened by leverage provided in five U.N. Security Council Resolutions,
then Under Secretary of the Treasury Stuart Levey and his aides presented information on Iran’s
efforts to use foreign banks to fund WMD programs and funnel money to terrorist groups. In so
doing, Levey’s office convinced at least 80 foreign banks to cease handling financial transactions
with Iranian banks. Levey left office in April 2011 and was replaced by Daniel Cohen.
These actions built on efforts to prevent Iran from accessing the U.S. financial system. On
September 6, 2006, the Treasury Department barred U.S. banks from handling any indirect
transactions (“U-turn transactions,” meaning transactions with non-Iranian foreign banks that are
handling transactions on behalf of an Iranian bank) with Iran’s Bank Saderat, which the
Administration accused of providing funds to Hezbollah. 28 The Treasury Department extended
that U-Turn restriction to all Iranian banks on November 6, 2008.
The Treasury Department also used punishments to pressure firms to cease doing business with
Iran. In 2004, the Treasury Department fined UBS $100 million for the unauthorized movement
of U.S. dollars to Iran and other sanctioned countries, and in December 2005, the Treasury
Department fined Dutch bank ABN Amro $80 million for failing to fully report the processing of
financial transactions involving Iran’s Bank Melli (and another bank partially owned by Libya).
In the biggest such instance, on December 16, 2009, the Treasury Department announced that
Credit Suisse would pay a $536 million settlement to the United States for illicitly processing
Iranian transactions with U.S. banks.
On December 17, 2008, the U.S. Attorney for the Southern District of New York filed a civil
action seeking to seize the assets of the Assa Company, a UK-chartered entity. Assa allegedly was
maintaining the interests of Bank Melli in an office building in New York City. An Iranian
foundation, the Alavi Foundation, allegedly is an investor in the building.
Banking Provisions of CISADA
The Treasury Department efforts have been enhanced substantially by the authorities of Section
104 of CISADA and U.N. and EU sanctions. Broadly, Section 104 of CISADA seeks to exclude
foreign banks from operating in the United States if these banks conduct transactions with the
Revolutionary Guard or its affiliates, or with Iranian entities that are subject to international or
U.S. sanctions (under various executive orders issued under IEEPA, such as 13224 and 13382
28 Kessler, Glenn. “U.S. Moves to Isolate Iranian Banks.” Washington Post, September 9, 2006.
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