WASHINGTON: United States President Donald Trump’s administration imposed sweeping sanctions on Iran’s banking sector, taking a major new step to cripple the arch-rival’s already struggling economy weeks ahead of US elections.
The US Treasury Department said it was designating 18 major Iranian banks, a move that could largely cut off the nation from the world’s financial system. The United States defied concerns from European allies and insisted it was making exemptions for humanitarian trade.
“Our sanctions are directed at the regime and its corrupt officials that have used the wealth of the Iranian people to fuel a radical, revolutionary cause that has brought untold suffering across the Middle East and beyond,” Secretary of State Mike Pompeo said.
He said the Iranian leadership was to blame for devoting funds to the military when it has health needs.
“Our maximum economic pressure campaign will continue until Iran is willing to conclude a comprehensive negotiation that addresses the regime’s malign behavior,” Pompeo said.
The Treasury Department did not list specific accusations against most of the banks, instead declaring broadly that the entire Iranian financial sector may be used to support the government’s contested weapons programs and regional efforts.
Iranian Foreign Minister Mohammad Javad Zarif accused the United States of trying to “blow up our remaining channels to pay for food and medicine” during the pandemic. “Iranians WILL survive this latest of cruelties. But conspiring to starve a population is a crime against humanity,” Zarif wrote on Twitter.
The Treasury Department said it was exempting transactions in humanitarian goods such as food and medicine. European diplomats have argued that US sanctions nonetheless have dire consequences with few institutions willing to take the risks of legal action in the world’s largest economy.
Trump took action after a resounding failure at the United Nations, where European allies rejected the US legal argument that Washington has the power to revive UN sanctions against Iran. The Treasury Department said the sanctions will take effect in 45 days, giving companies time to wind down transactions in Iran.
Trump has already moved to stop all Iranian oil exports and bolted from a deal negotiated under former President Barack Obama through which Iran had curtailed its nuclear program.
Biden’s running mate Kamala Harris, in a debate with Vice President Mike Pence, said the pullout from the accord has led to Iran building “what might end up being a significant nuclear arsenal.”
“Because of Donald Trump’s unilateral approach to foreign policy, coupled with his isolationism, he pulled us out and has made America less safe,” she said.
