Treasury blacklists 21st Iranian state bank

WASHINGTON (Reuters) - The United States on Tuesday blacklisted another Iranian state-owned bank for its role in what Washington sees as an increasingly sophisticated campaign by Tehran to evade international sanctions.

The Treasury said it labeled Iran's Bank of Industry and Mine as a proliferator of weapons of mass destruction for handling transactions on behalf of two previously sanctioned institutions, Bank Mellat and Europaeisch-Iranische Handelsbank.

The addition of the 21st Iranian state bank to the U.S. sanctions blacklist illustrates a systematic effort by Tehran to continually shift international transactions to new banks in an effort to finance its weapons development activities, Treasury officials said.

"The sophisticated nature of this scheme illustrates the disruptive impact of sanctions on Iran's efforts to sustain its proliferation activities," David Cohen, the Treasury's undersecretary for terrorism and financial intelligence, said in a statement.

The Treasury's latest move prohibits U.S. entities from dealing with Bank of Industry and Mine and seeks to freeze any assets that it may have under U.S. jurisdiction.

The bank, with about $5.2 billion in assets and 41 branches, had previously done no business outside Iran, Treasury officials said. As its name suggests, it mostly provided services and loans to domestic manufacturing and mining firms.

After the United States imposed sanctions last year on EIH, an Iranian state-owned trade bank based in Germany, the Tehran government pressed Bank of Industry and Mine into service. The bank is EIH's largest shareholder.

EIH, which has not been blacklisted by the European Union, is still conducting business with international customers, but officials in Germany say EU sanctions are now likely against EIH.

The Treasury said it has found evidence that Bank of Industry and Mine was shuttling funds between Bank Mellat and EIH to try to conceal Mellat's involvement in international payments.

Mellat, was first sanctioned by the United States in 2007 for helping to finance Iran's nuclear activities, which the West contends is aimed at developing nuclear weapons.

Treasury officials likened the Bank of Industry and Mine scheme to a similar one involving Iran's Postbank, which has also been slapped with international sanctions. The officials anticipate Tehran, which says its nuclear program is for power generation, will keep trying to enlist other banks to handle transactions.

But they said Iran is running out of non-sanctioned state banks to which it could turn. According to the Treasury's Financial Crimes Enforcement Network, there are just 23 state-owned banks and six privately owned banks in Iran.

None of the private banks have been sanctioned.

Source: http://www.fox4kc.com/news/politics/sns-rt-politics-us-cw-irantre74g6fd-20110517,0,3179101.story