Iran: Top U.S. Official Says Financial Clampdown Is Working.

October 17, 2007 (RFE/RL) -- If the United States is waging a financial war against Iran, as some Western media say, then Stuart Levey might be seen as the commanding general in the battle to force Tehran to halt its atomic program, which Washington says masks a secret drive for nuclear weapons.


Levey, the undersecretary for terrorism and financial intelligence at the U.S. Treasury, has been at the forefront of recent U.S. efforts to persuade banks and financial institutions around the world to curtail or cut off their dealings with the Islamic Republic of Iran. And a growing number of them -- reportedly 40, including major European banks -- have agreed to jump on board the Levey-led U.S. campaign to squeeze Iran’s economy in a bid to persuade it to suspend uranium enrichment, a key process in making nuclear weapons.

“Iran is seeing itself isolated politically through UN sanctions,” Levey told RFE/RL’s Radio Farda in an exclusive interview in Washington on October 16. “They’re seeing themselves isolated financially because the conduct that they’re engaged in is so offensive to financial institutions around the world that those financial institutions have decided that they don’t want to do business with Iran now, in any currency.”

Since the beginning of the year, Iran’s ability to finance major oil deals and generally do business with the rest of the world has been curtailed. Two of Germany’s biggest banks -- Deutsche Bank AG and Commerzbank AG -- announced an end to most ties to Iranian companies, a step taken also by UBS, the world’s biggest bank as measured by total assets. HSBC, Britain’s biggest bank, announced it would conduct no more new business with Iranian clients, as have three of Japan’s biggest banks. And many other international financial institutions have followed suit, Levey says, although they have preferred to remain anonymous.
Shady Business Practices

“You’ve seen a dramatic decrease in foreign investment in Iran, including in its oil infrastructure, which is really the future of the country,” Levey said. “A lot of companies are pulling out of Iran, not only because of the sanctions that are imposed but because there are deceptive commercial practices that Iran is engaged in, and companies are worried that they may not know with whom they are really dealing, that they might be dealing with a company, for example, that holds itself out as a legitimate commercial enterprise but is in fact connected to the military or connected to the IRGC [Iranian Revolutionary Guards Corps].”

Two key Iranian targets of the international community are Bank Sepah and Bank Saderat. The United States has moved against both. Last year, it banned U.S. institutions from doing business with Bank Saderat, which Levey said has been a lynchpin in funding terror groups like Hamas and Hizballah. In January, Washington passed a similar measure against Bank Sepah, accusing it of financing much of Iran’s missile program, including payments to a North Korean group that exports such technologies.More on the story.