US talks of freezing assets of Iran's central bank

State Department and Treasury officials express support for "properly designed and targeted sanctions" on Iran's central bank.

December 1, 2011 20:20
2 minute read.
Iranian flag at embassy in Britain

Iran flag at Britain embassy 311 R. (photo credit: REUTERS/Stringer .)


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WASHINGTON - Top US officials revived talk on Thursday of sanctioning Iran's central bank but made clear they would only seek to do so in a carefully calibrated way so as not to roil oil markets or harm US allies.

The position, laid out by senior US State and Treasury Department officials, set up a clash with US senators who favor requiring sanctions on foreign financial institutions that do business with Iran's central bank.

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"We are committed to taking action against the CBI (Central Bank of Iran) to freeze its assets, to work with our allies to have them take a similar action, and to work with our allies to encourage them to take the steps that they have already indicated a willingness to consider, which is to ramp down their involvement with the CBI and their purchases of Iranian oil," Under Secretary of Treasury for Terrorism and Financial Intelligence David Cohen told US lawmakers.

The United States already bars its own banks from dealing with the central bank of Iran, so US sanctions would operate by dissuading other foreign banks from doing so, chiefly with the threat of cutting them off from the US financial system.

On Nov. 21, the United States, Britain and Canada announced new sanctions on Iran's energy and financial sectors, but the Obama administration stopped short of targeting Iran's central bank, a step that US officials said could send oil prices skyrocketing and jeopardized global economic recovery.

"We are already looking forward to what comes next. Iran's greatest economic resource is clearly its oil exports. Sales of crude oil line the regime's pockets, sustain its human rights abuses, and feed its nuclear ambitions like no other sector of the Iranian economy," US Under Secretary of State Wendy Sherman said in testimony before a US Senate committee.

"The Obama administration strongly supports increasing the pressure on Iran, and that includes properly designed and targeted sanctions against the central bank of Iran, appropriately timed as part of a carefully phased and sustainable policy towards bringing about Iranian compliance with its obligations," she added.

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