Iranian bank hailed by the president faces embargo

Two days after the declaration of 1/5 billion dollars increase of state investment in Export Development Bank of Iran, the bank faced an embargo.

The new wave of American sanctions on Iran started with an embargo against Saderat Bank in 2006. On that time, Stuart Levi, U.S. Treasury Deputy Secretary in fighting terrorism, accused Iran’s Saderat Bank of helping Hizbullah. The US officials, who claimed Hizbullah is a terrorist group, said that from year 2001, Hizbullah has received 50 million dollars of the money in US banks via Saderat Bank. Due to this accusation, they declared financial relations of US institutions with Saderat Bank as illegal.

In Iran, it was only announced that Saderat Bank is facing an embargo. The official news did not contain any clue on Levi’s arguments on the case. Hizbullah- the Lebanese group-was considered a resistant group in Iran and the Iranian state aids to Hizbullah were not a mystery to Iranians.

After Iran’s rejection of putting an end to Uranium enrichment activities and the consent of permanent Security Council member states to refer Iran’s case to the Council, the pressures mounted on Iran. The condition for ending the sanctions against Iran has been declared as the complete ban of Uranium enrichment. In recent years, Iran has resisted this call and has tried to exploit the time to its own advantage via cooperation with IAEA and benefiting from the differences among 5+1 group. Iran’s aim in this regard is making the other side accept the new conditions. The continuation of this trend led to the second, third, and forth Security Council resolutions against Iran in 2007 and 2008. A month ago, the US state ordered US institutions of ending all their trade ties to Iranian Shipping Company. The US claimed that the company has forged documents for weaponry and military shipments. This is the same claim proposed against Export Development Bank of Iran.

It seems that it has become a normal trend for Stuart Levi to announce the news of sanctions against Iran on Wednesdays. Accordingly, the US treasury decision to block and confiscate the properties of Export Development Bank of Iran was declared last Wednesday. In this way, the US citizens and firms would not be authorized to have financial ties with this bank.

The US treasury has accused Export Development Bank of Iran of offering financial services to Iran’s ministry of defense to help with the production of ballistic missiles in Iran. According to Levi, the embargo imposed on Export Development Bank of Iran can clarify the role of this bank in breaching UN Security Council sanctions.

The expressions used in describing the activities of Export Development Bank of Iran are the same as the ones used about Iranian Shipping Company. The US claims that these institutions use tricky ways to hide their real missions of supporting terrorism and producing weapons of mass destruction.

The UN Security Council’s 1747 resolution put an embargo on Iran Sepah Bank due to the claims of offering financial services to nuclear and missile programs. There were warnings to Saderat and Melli Bank activities in 1803 resolution and accordingly, the UN Security Council asked members of the UN to be careful in dealing with such institutions. In the same way, the US treasury accused Iranian Shipping Company of forging documents for hiding weaponry shipments. According to Stuart Levi, in case of Iran’s insistence on pursuing nuclear ambitions, the country should be isolated in the world’s banking system. He claims that legal and legitimized trades with Tehran could possibly lead to global terrorism funding including the Iranian aids to Taliban and Hizbullah. Export Development Bank of Iran denied the US treasury claims and introduced it as propaganda to underestimate outcomes of the US financial crisis. In the statement issued by Export Development Bank of Iran to banks and international financial institutions, it has been emphasized that the activities of this bank have always been focused on domestic financial aspects and international export projects to boost the activities on agriculture, health, tourism, food and construction sectors. In this statement, the embargos and sanctions are portrayed as trivial attempts and it has been stated that all the trade partners of Export Development Bank of Iran will continue their cooperation with this bank.

The embargo on Export Development Bank of Iran was announced just two days after Mahmoud Ahmadinejad, the Iranian president, declared a 1/5 billion dollars increase of state investment in the bank. According to Ahmadinejad, the Iranian government plans to increase the investment and make it 5 billion dollars. He pointed to the success of exporters of non-oil productions and emphasized that Export Development Bank of Iran should help exporters so that the import and export of Iran reaches equal amounts in the near future.

It should be stated that the Iranian banks’ relations with state ministries-including the ministry of defense- is not an unusual phenomenon. In the same way, the Iranian defense ministry’s production of ballistic missiles and other weapons is not unusual as well. The same interactions between banks and defense ministries are prevalent in other countries in much more advanced stages. But the real problem is the approach taken by the international community to put pressure on Iran to put an end to its Uranium enrichment activities. In such circumstances, any international institute or bank cooperating with the defense ministry would be targeted and labeled as illegal.