On May 15, the U.S. Treasury Department sanctioned four individuals and one bank for moving millions of dollars on behalf of the Islamic Revolutionary Guard Corps Qods Force (IRGC-QF) to the Lebanese militia and political movement Hizballah. One of the individuals was Valiollah Seif, Iran’s Central Bank Governor. Seif “covertly funneled millions of dollars on behalf of the IRGC-QF through Iraq-based al-Bilad Islamic Bank to enrich and support the violent and radical agenda of Hizballah,” said Treasury Secretary Steven T. Mnuchin. The bank and individuals were branded Specially Designated Global Terrorists. Seif has faced criticism from Iranian lawmakers, including calls for his dismissal, for not preventing the devaluation of the rial in April 2018. The Treasury Department’s press release is below.
Treasury Targets Iran’s Central Bank Governor and an Iraqi Bank Moving Millions of Dollars for IRGC-Qods Force
Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the Governor and a senior official of the Central Bank of Iran, an Iraq-based bank and its chairman, and a key Hizballah official, all of whom have moved millions of dollars on behalf of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) to Hizballah. They were designated as Specially Designated Global Terrorists (SDGTs) pursuant to Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism.
“Iran’s Central Bank Governor covertly funneled millions of dollars on behalf of the IRGC-QF through Iraq-based al-Bilad Islamic Bank to enrich and support the violent and radical agenda of Hizballah. It is appalling, but not surprising, that Iran’s senior-most banking official would conspire with the IRGC-QF to facilitate funding of terror groups like Hizballah, and it undermines any credibility he could claim in protecting the integrity of the institution as a central bank governor,” said Treasury Secretary Steven T. Mnuchin. “The United States will not permit Iran’s increasingly brazen abuse of the international financial system. The global community must remain vigilant against Iran’s deceptive efforts to provide financial support to its terrorist proxies.”
Today’s action cuts off Iran’s use of a critical banking network and follows last Thursday’s disruption of an IRGC-QF-associated currency exchange network procuring millions of dollars through the UAE. Both actions seek to stifle Iran’s ability to abuse the U.S. and regional financial systems. These actions continue the aggressive campaign against the IRGC and its proxies that the Treasury Department has led under this Administration. These actions build upon President Trump’s May 8 decision to cease the United States’ participation in the Joint Comprehensive Plan of Action (JCPOA) and begin reimposing U.S. sanctions that had been lifted under the JCPOA, including against the Central Bank of Iran.
The IRGC-QF was designated pursuant to E.O. 13224 on October 25, 2007. The IRGC-QF’s parent organization, the Islamic Revolutionary Guard Corps (IRGC) itself was also designated on October 13, 2017 pursuant to E.O. 13224 for its support to the IRGC-QF, and consistent with the Countering America’s Adversaries Through Sanctions Act.
Hizballah was designated by the Department of State as a Foreign Terrorist Organization in October 1997 and as an SDGT pursuant to E.O. 13224 in October 2001. It was listed in January 1995 in the Annex to E.O. 12947, which targets terrorists who threaten to disrupt the Middle East peace process, and also designated in August 2012 pursuant to E.O. 13582, which targets the Government of Syria and its supporters.
IRAN’S CENTRAL BANK GOVERNOR AND A SENIOR STAFF OFFICER
OFAC is designating Valiollah Seif, Iran’s Central Bank Governor, for assisting, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF. Seif has conspired with the IRGC-QF to move millions of dollars through the international financial system in a variety of foreign currencies to allow the IRGCQF to fund its activities abroad. Seif has also supported the transfer of IRGC-QF-associated funds to al-Bilad Islamic Bank, an Iraq-based bank which is also being designated today.
OFAC also is designating Ali Tarzali, the assistant director of the International Department at the Central Bank of Iran, for assisting, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF. Tarzali has worked with Hizballah and proposed that the terrorist group send funds through Iraq-based al-Bilad Islamic Bank.
As a result of today’s actions, Veifollah Seif and Ali Tarzali are subject to secondary sanctions pursuant to the Iranian Financial Sanctions Regulations (IFSR), which implement, among other authorities, the Comprehensive Iran Sanctions and Divestment Act of 2010 (CISADA). Pursuant to the IFSR, OFAC can prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that knowingly facilitates a significant transaction for designated agents or affiliates of the IRGC or persons designated pursuant to E.O. 13224 in connection with Iran’s support for international terrorism or E.O. 13382 in connection with Iran’s proliferation of weapons of mass destruction and their means of delivery.
Today’s designations of Valiollah Seif, Iran’s Central Bank Governor, and Ali Tarzali, assistant director of the International Department at the Central Bank of Iran, do not extend to the Central Bank of Iran. However, due to President Trump’s May 8, 2018 decision to cease the United States’ participation in the JCPOA, as of August 7, 2018, the United States Government will re-impose sanctions that extend to certain transactions with the Central Bank of Iran, including sanctions on the purchase or acquisition of U.S. dollars banknotes by the Government of Iran. Furthermore, on November 5, 2018, additional sanctions will be re-imposed on persons knowingly engaging in certain significant transactions with the Central Bank of Iran.
AL-BILAD ISLAMIC BANK AND ITS CHAIRMAN AND CHIEF EXECUTIVE
OFAC is designating Aras Habib, the Chairman and Chief Executive of Al-Bilad Islamic Bank, for assisting, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF. Aras Habib enabled the IRGC-QF’s exploitation of Iraq’s banking sector to move funds from Tehran to Hizballah, jeopardizing the integrity of the Iraqi financial system. Habib, who has a history of serving as a conduit for financial disbursements from the IRGC-QF to Iranian-backed Iraqi groups, has also helped provide IRGC-QF financial support to Lebanese Hizballah. Al-Bilad Islamic Bank is being designated for being owned or controlled by Aras Habib.
As a result of today’s actions, Aras Habib and Al-Bilad Bank are subject to secondary sanctions pursuant to the IFSR, which implement, among other authorities, CISADA. Pursuant to the IFSR, OFAC can prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that knowingly facilitates a significant transaction for designated agents or affiliates of the IRGC or persons designated pursuant to E.O. 13224 in connection with Iran’s support for international terrorism or E.O. 13382 in connection with Iran’s proliferation of weapons of mass destruction and their means of delivery.
HIZBALLAH OFFICIAL WORKING WITH IRGC-QF
OFAC is designating Muhammad Qasir (Qasir) for acting for or on behalf of Hizballah. Qasir acted as a critical conduit for financial disbursements from the IRGC-QF to Hizballah. Qasir has worked with the IRGC-QF to transfer funds.
Qasir is subject to secondary sanctions pursuant to the Hizballah Financial Sanctions Regulations, which implements the Hizballah International Financing Prevention Act of 2015. Pursuant to this authority, OFAC can prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that knowingly facilitates a significant transaction for Hizballah, or a person acting on behalf of or at the direction of, or owned or controlled by, Hizballah.
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Iranian Responses
Foreign Minsitry
The last week move by US Department of the Treasury to include the name of the governor of the Central Bank of Iran and one of its directors on the sanctions list is a sign of the US’ blatant defiance of well-established international norms and rules including immunity of governments and central banks.
Central banks play a role in shaping and implementing monetary policies and bringing monetary stability inside the countries and in the international system, so imposing sanctions on central bank officials is against customary and treaty obligations of governments to maintain international monetary policy. The US move, which indicates this government gives no weight to its international obligations, has prompted international observers to see the US government as an oath-breaker who pays no respect to international obligations.
The Foreign Ministry seriously condemns the US’ unconventional and illegal move, and announces that the Iranian government and Central Bank reserve the right to adopt all legal and political solutions to counter the US Treasury Department’s move. The Foreign Ministry believes a continuation of such destructive and unilateral moves by the US could have unpleasant consequences for international ties in the monetary and financial sectors.
―May 23, 2018, in a statement
Foreign Minister Mohammad Javad Zarif
"America is not in charge of everything in the world. Of course, Americans would like the whole world to think this way and when the world doesn't think this way, they take some angry actions such as sanctioning the head of the central bank without any reason."
"We must expect more such moves by the Americans. These moves are against the law, contrary to conventional international relations and indicate their weakness."
―May 16, 2018, to reporters on his flight back to Tehran, according to AFP
Foreign Ministry Spokesman Bahram Ghassemi
“We regard this inappropriate policy and move as part of the US government’s ongoing hostile policies and unwise behaviour against the Iranian nation, which has continued over the past decades in different ways. These spiteful policies will have no benefits for the US, and will only make the Iranian government and nation more determined, patient and resistant than ever to counter the United States’ anti-Iran moves.”
“The announcement of new sanctions against Iran, especially putting the name of the governor of the Central Bank of the Islamic Republic of Iran on the list of sanctions, at a time when Iran and Europe have kicked off talks and consultations on the JCPOA without the presence of the US, shows well that the United States has not yet been able to achieve its predetermined anti-Iran objectives by unilaterally pulling out of the JCPOA.”
“Now in the wake of its failure and the destructive fallout from its blatantly wrong predictions and mistakes after unilaterally leaving the JCPOA, the US government is seeking to sway the willpower and decisions of the remaining signatories to the JCPOA and other countries in the world.”
“Global reactions to the United States’ withdrawal from the JCPOA showed well that the US president’s illogical and unwise decision which runs counter to all international regulations has affected the credibility and increased the isolation of the US government and caused irreparable damage to the American people. The move also further proved that the great Iranian nation is right to regard the United States and its administrations as unreliable."
―May 16, 2018, in a statement