New U.S. sanctions amount to near-total blacklist of Iranian banks

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The Trump administration on Thursday announced a sweeping new round of sanctions on Iran, a financial blockade that cuts off virtually all of the few remaining Iranian lenders able to work with international banks to finance deals.

The move comes less than a month after U.S. allies and adversaries alike largely ignored a U.S. effort to preserve trade bans and a weapons embargo set to be lifted under terms of the 2015 Iran nuclear deal, a deal President Trump renounced two years ago.

The newest sanctions, announced by Treasury Secretary Steven Mnuchin, target 18 Iranian banks that had not yet been hit by previous U.S. penalties. The move also penalizes foreign banks for conducting business with Iranian financial institutions.

The escalation “reflects our commitment to stop illicit access to U.S. dollars,” Mr. Mnuchin said in a statement. “Our sanctions programs will continue until Iran stops its support of terrorist activities and ends its nuclear programs.”

He insisted the sanctions would still allow humanitarian mission transactions to continue to “support the Iranian people.”

Secretary of State Mike Pompeo said the sanctions will take effect after a 45-day “wind-down period,” after which foreign banks will be vulnerable to what have been dubbed “secondary sanctions.”

He rejected criticisms that the sanctions would prevent Iran from being able to fund humanitarian deals for a population facing both an economic and a public health crisis.

“We are committed to continuing the Iranian people’s access to humanitarian goods and other essential goods and services,” he said, “and we reaffirm the United States’ offer to assist Iran in its response efforts to the COVID-19 outbreak.”

The move comes amid uncertainty over the future of the U.S. hard line toward Tehran. Democratic vice presidential nominee Sen. Kamala Harris of California, in her Wednesday night debate with Vice President Mike Pence, criticized the Trump White House’s decision to reject the nuclear deal, saying it had left the U.S. isolated and less safe as Iran exceeds the limits on its nuclear programs.

The latest round of sanctions produced a quick angry response from Iranian officials, who claimed the despite U.S. denials, Washington is making an effort to “blow up” humanitarian supply channels.

“Amid [COVID-19] pandemic, U.S. regime wants to blow up our remaining channels to pay for food and medicine,” Iranian Foreign Minister Javad Zarif said on Twitter.

“Iranians WILL survive this latest of cruelties,” he wrote. “But conspiring to starve a population is a crime against humanity.”

Democrats on Capitol Hill echoed Ms. Harris’s skepticism.

“Since Trump failed to win UN support for his Iran strategy, he’s going it alone & imposing sanctions that will ‘crush’ humanitarian channels that have always been protected,” Rep. Ted Deutch, Florida Democrat, tweeted following the announcement. “The goal of sanctions is to change regime behavior, not unnecessarily harm civilians during a pandemic.”

Barbara Slavin, director of the Future of Iran Initiative at the Atlantic Council, called the new sanctions “sadism masquerading as foreign policy.”

“They won’t bring the Iranian government to its knees but will hurt ordinary people, encourage more smuggling and in the long run, undermine dollar-based sanctions,” she argued.

But other analysts said that the humanitarian supply lines will remain intact while putting new pressure on Tehran’s malign policies in the region and its threats to U.S. allies such as Israel.

“Imposing sanctions on Iran’s financial sector will put extraordinary pressure on its economy and the resources available to the regime,” said Richard Goldberg, a former National Security Council aide who worked on cutting off Iran’s access to weapons of mass destruction.

The U.S., he said, “continues to go above and beyond to facilitate humanitarian transactions with Iran despite the regime’s illicit conduct.”

The other signatories to the 2015 deal — including Britain, France, Germany, Russia and China — say they are determined to preserve the pact in the face of the U.S. pressure campaign. Iran’s official press said Mr. Zarif was traveling to Beijing Friday for talks with senior Chinese officials, with expanding bilateral economic ties on the agenda.

The targeted banks include the Amin Investment Bank, Bank Keshavarzi Iran, Bank Maskan, Bank Refah Kargaran, Bank-e Shahr, Eghtesad Novin Bank, Gharzolhasaneh Resalat Bank, Hekmat Iranian Bank, Iran Zamin Bank, Karafarin Bank, Khavarmianeh Bank, Mehr Iran Credit Union Bank, Pasargad Bank, Saman Bank, Sarmayeh Bank, Tosee Taavon Bank, Tourism Bank and Islamic Regional Cooperation Bank.

• This story is based in part on wire service reports.

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