US Hits Head of Iran's Central Bank With Terror Sanctions

The United States designated the head of Iran's central bank as a terrorist and barred anyone around the world from doing business with him, escalating financial pressure on Iran in the wake of President Donald Trump's withdrawal from the nuclear deal.

Valiollah Seif, the governor of the Iranian central bank, was named a "specially designated global terrorist" along with another senior official, Ali Tarzali, who works in the central bank's international division. The Treasury Department accused the men of secretly funneling millions of dollars through an Iraqi bank to help Hezbollah, the Iran-backed militant network that the U.S. considers a terrorist group.

The moves come as Trump's administration, after deeming the 2015 nuclear deal insufficiently tough on Iran, seeks to construct a global coalition to place enough pressure on Tehran that it comes back to the negotiating table to strike a "better deal." The sanctions targeting Iran's central bank executives are some of the first actions by Trump's administration since pulling out of the deal to start ramping up that economic pressure.

"The United States will not permit Iran's increasingly brazen abuse of the international financial system," Treasury Secretary Steven Mnuchin said. "The global community must remain vigilant against Iran's deceptive efforts to provide financial support to its terrorist proxies."

The exact ramifications of the sanctions for Iran's economy were not immediately clear. The U.S. said that the sanctions did not extend to Iran's central bank itself. Still, the U.S. said it was imposing so-called secondary sanctions on the Iranian bank officials, which could significantly increase Iran's isolation from the global financial system.

Typically, when the U.S. punished individuals with sanctions, it prohibits Americans or U.S. companies from doing business with them. Secondary sanctions also apply to non-Americans and non-U.S. companies. That means that anyone, in any country, who does business with Seif or Tarzali could themselves be punished with sanctions, cutting them off from the U.S. financial system.

Seif, as the central bank's governor, has helped guide Iran's economy through the web of sanctions in place on that country. In the aftermath of the 2015 deal, in which nuclear sanctions on Iran were lifted, Seid was a prominent voice complaining that Iran was still being kept out of the global financial system and not receiving the economic benefits it was promised in exchange for curtailing its nuclear program.

The Treasury said that Seif undermined the central bank's credibility by routing millions of dollars from the Quds Force, the expeditionary unit of Iran's hard-line Revolutionary Guards, to al-Bilad Islamic Bank, which is based in Iraq. Those funds were then used to "enrich and support the violent and radical agenda of Hezbollah," Treasury said.

Al-Bilad Islamic Bank and its CEO and chairman, Aras Habib, were also hit with U.S. sanctions, as was Muhammad Qasir, who the Treasury said is a Hezbollah official who has been a "critical conduit" for transferring funds to Hezbollah from the Revolutionary Guards.

Lebanon's Hezbollah, the powerful Shiite guerrilla force that is also a prominent political player in Lebanon, has long helped carry out Iran's foreign policy objectives in the Arabic-speaking world. Most recently, the U.S. has been concerned about the role that Hezbollah fighters are playing in Syria to help prop up President Bashar Assad. Hezbollah fought a war with Israel in 2006, and Israeli officials have been deeply concerned about the prospect of another confrontation.