Enforcing existing sanctions on Iran

November 6, 2011

The Washington Times on November 4, 2011 released the following:

By Avi Jorisch -The Washington Times

“U.S. empowered to crack down on business with regime’s central bank

In recent years, the United States has imposed a punishing sanctions regime on Iran’s banking sector. To further increase Tehran’s level of financial pain, a great number of congressional and advocacy groups have repeatedly called on the White House to blacklist the Central Bank of Iran (CBI). Doing so, the thinking goes, would seriously hamper the Islamic republic’s ability to abuse international markets in its pursuit of nuclear weapons. Yet unbeknownst to most lawmakers and Washington policymakers, the U.S. Treasury actually hasblacklisted the CBI, and not once, but twice in recent years. The real question is why the U.S. government has not enforced its own sanctions regime.

The CBI has been accused of helping fund Iran’s nuclear weapons program, facilitate money transfers to terrorist organizations and proliferate weapons of mass destruction. The Treasury Department has publicly declared that between 2001 and 2006, the CBI facilitated a $50 million payment for Hezbollah. Treasury also has disclosed that the bank engaged in “deceptive practices,” including helping Iran’s Sepah and Melli banks, two financial institutions blacklisted by the United Nations, the European Union and United States for their role in facilitating illicit international transactions.

The United States maintains a number of “blacklists” sponsored by different agencies, including but not limited to the Departments of State, Treasury and Commerce. The Specially Designated Nationals (SDN) list is a broad compilation of persons and entities – a “list of lists” – administered by Treasury’s Office of Foreign Assets Control (OFAC). Those on the SDN list include not only persons and entities involved in terrorism, but also weapons proliferators, drug traffickers and those designated under country-specific sanctions programs.

Today, the SDN list has more than 6,000 entries, includingthe Central Bank of Iran. Unless specifically exempted, all U.S. persons and entities must block any property in which an SDN has an interest and report the action to OFAC. Blocked property may not be “transferred, withdrawn, exported, paid, or otherwise dealt in” without prior authorization from OFAC. If OFAC thinks a person or institution has violated the law, it has several options at its disposal, including cease-and-desist orders, civil penalties, suspension or revocation of licenses, and criminal charges.

The Treasury Department’s Web page clearly shows that the Central Bank of Iran appears on the SDN list of June 16, 2010, under the Iran country sanctions program. Treasury’s Financial Crimes Enforcement Network also took action against the CBI; in March 2008, it issued a banking advisory that fingered the bank for the “money laundering threat involving illicit Iranian activity.”

Treasury Secretary Timothy F. Geithner recently wrote to Congressthat “all options to increase the financial pressure on Iran are on the table, including the possibility of imposing additional sanctions against the CBI.” But the United States does not need new sanctions; it just needs to implement the existing regime, which could be a very potent tool for pursuing Iranian financial activity around the globe.

At this point, concerned parties should advocate a number of measures. The United States should ask banks that provide services of any kind to the Central Bank of Iran to cease doing so immediately. If they refuse to comply, the U.S. government should take immediate legal action in accordance with the PATRIOT Act and the U.S. Code, Title 18, Section 981, freezing any U.S.-based assets they hold and blocking their access to American markets.

Moving against the Central Bank would necessitate indirect action because the bank does not appear to possess assets in America. However, the U.S. government does have the power to freeze the funds deposited in a foreign bank on behalf of the Central Bank if the foreign bank maintains an account (known as an “interbank” or “correspondent account”) at a U.S. financial institution or has actual operations or property in the United States.

Washington should begin implementing the SDN as soon as possible. At a minimum, Treasury should designate one or a number of the biggest offenders among those engaging in business transactions with Iran’s Central Bank. This would likely cause many, if not most, of the companies and banks currently doing business with, or on behalf of, the Central Bank to cut their ties.

Policymakers in Washington are now keenly interested in imposing greater financial costs on the Iranian regime in an effort to derail its nuclear program. To do so, the need to target Iran’s Central Bank should be readily apparent. So, too, should the fact that levying real pressure on Iran’s most important economic construct is simply a matter of enacting already-existing restrictions and penalties. The Obama administration should do so without delay.”

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Douglas McNabb – McNabb Associates, P.C.’s
OFAC SDN Removal Videos:

OFAC Litigation – SDN List Removal

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OFAC SDN Removal Attorneys

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To find additional global criminal news, please read The Global Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Written Testimony of Under Secretary for Terrorism and Financial Intelligence David Cohen before the House Committee on Foreign Affairs

October 14, 2011

U.S. Department of the Treasury on October 14, 2011 released the following:

“Chairman Ros-Lehtinen, Ranking Member Berman, and distinguished members of the Committee: Thank you for the opportunity to appear before you today to discuss the Treasury Department’s efforts to implement and enforce Iran and Syria sanctions.

The focus of my testimony today will be the progress we are making in our financial strategies to increase pressure on the Iranian and the Syrian regimes. But first, I would like to say a few words about this week’s revelation that we disrupted an Iran Qods Force plot to assassinate the Saudi Ambassador here in Washington.

This is a dramatic reminder that the urgent and serious threat we face from Iran is not limited to Iran’s nuclear ambitions. We have been working for several years to address the full spectrum of Iranian illicit conduct, including nuclear and missile proliferation, human rights abuses, misuse of the international financial system and support for terrorist groups worldwide.

This week is no different. On Tuesday, Treasury imposed financial sanctions against five individuals, including the Commander of the Qods Force and three other senior Qods Force officers connected to the assassination plot. In taking this action, Treasury exposed the Iranian government’s involvement in the plot through the Qods Force, Iran’s primary arm for exporting terror.

And Wednesday, we took another action targeting Qods Force involvement in terrorist activities, this time by imposing sanctions on Mahan Air – Iran’s second largest airline – which was secretly ferrying operatives, weapons and funds on its flights for the Qods Force.

Actions like these, along with a raft of additional sanctions we have imposed on Iran over the past several months and years, have put increasing financial pressure on Iran in recent years.

CISADA has markedly amplified this effect. As we have explained to banks and governments in nearly 50 countries around the world, CISADA offers a clear choice: a foreign bank can have access to the largest and most important financial sector in the world – the United States – or it can do business with sanctioned Iranian banks, but it cannot do both. For the overwhelming majority of foreign banks, the choice has been a simple one. Those with potentially sanctionable relationships quickly elected to stop that business. And where we learn of potentially sanctionable activity under CISADA, we have actively investigated it.

Our efforts are paying off. Iran is now facing unprecedented levels of financial and commercial isolation. The number and quality of foreign banks willing to transact with designated Iranian financial institutions has dropped precipitously over the last year. Iran’s shrinking access to financial services and trade finance has made it extremely difficult for Iran to pay for imports and receive payment for exports. Iran’s Central Bank has been unable to halt the steady erosion in the value of its currency. And Iran has been increasingly unable to attract foreign investment, especially in its oil fields, leading to a projected loss of $14 billion a year in oil revenues through 2016.

Our efforts in Syria are also yielding results. Since the uprising in Syria began in March, President Obama has issued three new Executive Orders to establish sanction programs that have systematically escalated the financial pressure on the Asad regime. These U.S. sanctions – which target human rights abusers, block the assets of the Government of Syria, impose a import ban on Syrian petroleum products, and prohibit new investment in Syria – are intended to pressure Asad to relinquish power. Our efforts have been echoed by our European partners, who have established an embargo on Syrian oil and imposed financial sanctions targeting officials responsible for Syrian repression.

Echoing action that we have taken, just this morning the EU announced sanctions on the Commercial Bank of Syria, by far the largest bank in Syria, and its key link to the international financial system.

As a result of these sanctions, the Asad regime is struggling to find buyers for its oil, to access foreign currency, and to maintain economic stability. The IMF has revised its projections for the Syrian economy this year — from three percent growth to a two percent contraction – and predicts increasing pressure on Syria’s foreign currency reserves and ability to finance imports.

We are making progress, but there is still much to be done to prevent Iran and Syria from evading sanctions already in place and to take new steps to increase the pressure on these regimes. In the case of Iran, we continue to focus on the Central Bank of Iran (“the CBI”). Although U.S. financial institutions are already generally prohibited from doing business with any bank in Iran – including the CBI – further U.S. action against the CBI, if it attained multilateral support, could further isolate the CBI, with a potentially powerful impact on Iran. I can assure the Committee, as Secretary Geithner said in his letter of August 29, “All options to increase the financial pressure on Iran are on the table, including the possibility of imposing additional sanctions against the CBI.” We will also continue to work with governments in Europe, the Gulf, and elsewhere to impose financial measures that will ratchet up the pressure on Asad to step down.

If the Iranian and Syrian regimes continue to choose the path of defiance, we will continue to develop new and innovative ways to impose additional costs on them. I look forward to continuing our work with Congress to advance our national interests.”

To find additional global criminal news, please read The Global Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Oral Testimony by Under Secretary for Terrorism and Financial Intelligence David S. Cohen before the Senate Banking Committee

October 13, 2011

U.S. Department of the Treasury on October 13, 2011 released the following:

“As Prepared for Delivery

Chairman Johnson, Ranking Member Shelby, and distinguished members of the Committee: Thank you for the opportunity to appear here today to discuss the Treasury Department’s contribution to the Obama Administration’s integrated strategy to address the threat posed by Iran’s nuclear program and its support for terrorism.

The focus of my testimony today will be the progress we are making in our financial strategy to pressure Iran, and, in particular, the steps we are taking to implement the financial provisions of CISADA.

But first, I would like to say a few words about this week’s revelation that we disrupted an Iran Qods Force plot to assassinate the Saudi Ambassador here in Washington.

This is a dramatic reminder that the urgent and serious threat we face from Iran is not limited to Iran’s nuclear ambitions. We have been working for several years to address the full spectrum of Iranian illicit conduct, including nuclear and missile proliferation, human rights abuses, misuse of the international financial system and support for terrorist groups worldwide.

This week is no different. On Tuesday, Treasury imposed financial sanctions against five individuals, including the Commander of the Qods Force and three other senior Qods Force officers connected to the assassination plot. In taking this action, Treasury exposed the Iranian government’s involvement in the plot through the Qods Force, Iran’s primary arm for exporting terror.

And just yesterday, we took another action targeting Qods Force involvement in terrorist activities, this time by imposing sanctions on Mahan Air – Iran’s second largest airline – which was secretly ferrying operatives, weapons and funds on its flights for the Qods Force.

This week’s actions follow on a series of recent steps taken by the Treasury Department to expose Iranian illicit behavior and ratchet up the pressure on Tehran. In the last few months, we have imposed sanctions on –

  • Tidewater, a major Iranian port operator owned by the IRGC;
  • Iran Air, Iran’s national airline, for supporting the IRGC;
  • an al Qa’ida network operating in Iran under an agreement with the Iranian government;
  • and individuals and entities involved in human rights abuses, both within Iran and supporting the Syrian government’s repression of the Syrian people.

Actions like these – along with international sanctions — have put increasing financial pressure on Iran, and CISADA has markedly amplified this effect. CISADA has helped us deepen and broaden Iran’s isolation from the international financial system. Since the President signed CISADA into law last July, my colleagues in the Treasury Department and I have worked aggressively to implement it. We have met with foreign banks, regulators and government officials in nearly 50 countries. We explain to banks and governments worldwide that CISADA offers a clear choice: a foreign bank can have access to the largest and most important financial sector in the world – the United States – or it can do business with sanctioned Iranian banks, but it cannot do both.

For the overwhelming majority of foreign banks, the choice has been a simple one. Those with potentially sanctionable relationships quickly elected to stop that business. And where we learn of potentially sanctionable activity under CISADA, we have actively investigated it, engaging in particular with foreign bank’s regulator and home government.

Our efforts are paying off. Iran is now facing unprecedented levels of financial and commercial isolation. The number and quality of foreign banks willing to transact with designated Iranian financial institutions has dropped precipitously over the last year. Iran’s shrinking access to financial services and trade finance has made it extremely difficult for Iran to pay for imports and receive payment for exports. Iran’s Central Bank has been unable to halt the steady erosion in the value of its currency.

And Iran has been increasingly unable to attract foreign investment, especially in its oil fields, leading to a projected loss of $14 billion a year in oil revenues through 2016.

We are making progress, but there is still much to be done to prevent Iran from evading sanctions already in place and to apply sufficient additional pressure on Iran. In this regard, we continue to focus on the Central Bank of Iran (“the CBI”). Although U.S. financial institutions are already generally prohibited from doing business with any bank in Iran – including the CBI – further U.S. action against the CBI, if it attained multilateral support, could further isolate the CBI, with a potentially powerful impact on Iran. I can assure the Committee, as Secretary Geithner said in his letter of August 29, “All options to increase the financial pressure on Iran are on the table, including the possibility of imposing additional sanctions against the CBI.”

If Iran continues to choose its path of defiance, we will continue to develop new and innovative ways to impose additional costs on Iran. I look forward to continuing our work with Congress to advance our national interests.”

To find additional global criminal news, please read The Global Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.