The U.S. Sanctions the Governor of Iran's Central Bank

On Tuesday, May 15, the U.S. Treasury Department sanctioned Valiollah Seif, the Governor of the Central Bank of the Islamic Republic of Iran. Mr. Seif is accused of providing millions of dollars in financial resources for the Lebanese Hezbollah group. Ali Tarzali, Deputy Director of the International Department of the Central Bank of Iran, the Islamic Bank 'Al-Bilad' based in Iraq, Karim Aras Habib, the CEO of this bank, and Mohammad Qasir, the financial liaison of the Quds Force of the IRGC and Hezbollah, were also included in the U.S. sanctions list on Tuesday. These individuals, accused of supporting international terrorism, are subject to U.S. secondary sanctions, prohibiting American individuals and institutions from engaging in transactions with them. However, the U.S. sanctions do not include the Central Bank of the Islamic Republic of Iran. In a statement, U.S. Treasury Secretary Steve Mnuchin stated that 'the Governor of the Central Bank of Iran, on behalf of the Quds Force of the Islamic Revolutionary Guard Corps and through the Islamic Bank 'Al-Bilad' based in Iraq, secretly spent millions of dollars to bolster and support the violent and extremist actions of the Hezbollah group (Lebanon).' The statement adds: 'It is alarming but not surprising that a senior official of the Central Bank of Iran, in collusion with the Quds Force of the IRGC, is financing terrorist groups such as Hezbollah, which undermines his claim that he is the guarantor of the integrity of this institution as its head.' Mr. Mnuchin stated that the United States will not allow Iran to brazenly exploit the international financial system. The U.S. Treasury Secretary called for international vigilance regarding what he termed Iran's 'deceptive' efforts to financially support terrorist networks. The sanctions announced on Tuesday come after Donald Trump, the President of the United States, announced on May 7 that the country would withdraw from the JCPOA and that sanctions against Tehran would be reinstated. In another part of his statement, the U.S. Treasury Secretary emphasized that these sanctions are in line with the President's decision to withdraw from the JCPOA and restore sanctions that had been suspended due to the nuclear agreement with Iran. The Hezbollah group was designated as a terrorist organization by the U.S. State Department in October 1997. The U.S. Treasury Department states that the sanctions against Valiollah Seif and Ali Tarzali do not include the Central Bank of the Islamic Republic. However, based on President Trump's decision on May 7 to withdraw from the Joint Comprehensive Plan of Action (JCPOA), the U.S. government will reinstate sanctions regarding specific transactions with the Central Bank of Iran starting August 7, including sanctions on the purchase or acquisition of U.S. dollars by the Iranian government. Additionally, on November 5 of this year, additional sanctions will be reinstated against individuals who knowingly engage in significant transactions with the Central Bank of Iran. Mr. Seif, after the lifting of international sanctions against Iran following the nuclear agreement in July 2015 with six world powers, was one of the prominent officials in Tehran who consistently complained about Iran's lack of access to the global financial system and that the Islamic Republic had not benefited from the advantages resulting from the lifting of sanctions. The U.S. sanctions are announced on the same day that Mohammad Javad Zarif, Iran's Foreign Minister, is in Brussels to consult with his French, British, and German counterparts, along with Federica Mogherini, the EU's foreign policy chief, to find a way to preserve the JCPOA after the U.S. withdrawal. Iran has called for necessary guarantees from the remaining five countries in this agreement, and European countries have also stated that they wish to preserve the JCPOA. However, it remains unclear how the European Union will be able to protect its private companies that trade with Tehran from these sanctions as the reinstatement of U.S. sanctions against Iran begins.