Today is the anniversary of the seizure of the U.S. Embassy in Tehran that occurred twenty-nine years ago. In Tehran, students were bused in for demonstrations, according to an Associated Press report.
The dispute between the United States and the clerics who control Iran has raged and simmered at various times since the embassy takeover. Recently, the New York Times profiled Stuart Levey, under secretary for terrorism and financial intelligence at the Treasury Department and his efforts to establish a new type of sanctions against Iran. The new sanctions seek to prevent Iran, a country that has traditionally benefited greatly from foreign trade, from doing business with foreign banks.
The results of the new sanctions have been promising:
Levey has since made more than 80 foreign visits of his own to talk to more than five dozen banks. Several countries required multiple trips to reassure suspicious (or just annoyed) governments about American intentions — and then to persuade the banks. Levey offered specifics. U.S. intelligence, he told them, had traced $50 million transmitted by Iran’s Bank Saderat through a London subsidiary to a charity affiliated with Hezbollah in Lebanon. Saderat, which has 3,400 offices worldwide, is Iran’s equivalent of Citibank. Its Lebanon branch, Levey said, also supposedly sent millions of dollars to Palestinian extremists.
The Treasury Department then started blacklisting Iran’s biggest banks, urging other nations to follow suit. In 2006, Saderat was barred from direct or indirect business with U.S. banks. In early 2007, the department sanctioned Bank Sepah for financing projects to develop missiles that could carry nuclear weapons. (Sepah, meaning “army,” was established with money from Iran’s military pension fund and is now associated with Revolutionary Guard projects.) The Treasury Department then blacklisted Bank Melli, Iran’s largest bank, for supposedly helping to finance defense industries under U.N. sanctions.
Iran has angrily denied illicit activity. Its banks pledged compliance with international practices. Tehran complained to the International Monetary Fund. Some banks even wrote to the Treasury Department to protest. Iran’s Central Bank governor spoke of “financial terrorism.” Yet the innovative efforts have spread. Actions against Iranian banks became a feature of Security Council sanctions resolutions, beginning in 2006. Last June, the European Union blacklisted Melli and froze its assets. Last month, Australia sanctioned Melli and Saderat, while the U.S. blacklisted the Export Development Bank of Iran, which it claimed had taken over many of Sepah’s accounts and provided services for missile programs. The Treasury Department is also scrutinizing Iran’s Central Bank and considering blacklisting it too, which could undermine not only the country’s banking system but also international support for the U.S. campaign.
The New York Times article also describes how the sanctions focused on compliance with international banking laws have been effective and led to other financial based sanctions:
For the first time in 30 years, U.S. officials contend, Washington has found a tangible way to pressure Iran. Whatever happens with the Bush administration’s diplomatic or intelligence efforts, this is the program most likely to be continued by the next administration because it has bipartisan support.
And Levey is continuing to pick new battlefronts. In September, the Treasury Department sanctioned Iran’s national shipping company and affiliates in 10 countries for falsifying documents and for transporting cargo on behalf of entities tied to weapons of mass destruction by the United Nations. Treasury officials say the insurance industry is next. “This is one of the most powerful actions that can be taken, short of military action,” Paulson told me. “It’s not a knockout punch, but it is effective.”
But the New York Times suggests these sanctions, while having some effect on Iran, will take a decade or longer to be fully effective at curbing Iran’s aggressive and will that be sufficient to deter Iran’s nuclear ambitions.
The war continues 29 years after “students” took over the U.S. Embassy.