The US Treasury has imposed sanctions on 18 Iranian banks in a blow to Tehran and to European allies who have been calling for restraint and to take into account the humanitarian situation.
The banks account for virtually all of Iran’s financial sector.
They are: Amin Investment Bank, Bank Keshavarzi Iran, Bank Maskan, Bank Refah Kargaran, Bank-e Shahr, Eghtesad Novin Bank, Gharzolhasaneh Resalat Bank, Hekmat Iranian Bank, Iran Zamin Bank, Karafarin Bank, Khavarmianeh Bank, Mehr Iran Credit Union Bank, Pasargad Bank, Saman Bank, Sarmayeh Bank, Tosee Taavon Bank, Islamic Regional Co-operation Bank and Tourism Bank.
“Today’s action to identify the financial sector and sanction 18 major Iranian banks reflects our commitment to stop illicit access to US dollars,” said the US Secretary of Treasury, Steve Mnuchin.
“Our sanctions programmes will continue until Iran stops its support of terrorist activities and ends its nuclear programmes.
“Today’s actions will continue to allow for humanitarian transactions to support the Iranian people.”
Foreign companies dealing with these banks will be given 45 days to end transactions or be faced with “secondary sanctions”.
European countries have urged the administration against blanket sanctions that will indirectly hit their institutions and deepen the humanitarian crisis in Iran.
Secretary of State Mike Pompeo said the sanctions would continue until Iran came to the table and changed its behaviour.
“Our maximum economic pressure campaign will continue until Iran is willing to conclude a comprehensive negotiation that addresses the regime’s malign behaviour," Mr Pompeo said.
“Our sanctions are directed at the regime and its corrupt officials who 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."
Henry Rome, an Iran analyst at the Eurasia Group, said the new sanctions would compound Tehran’s problems.
Mr Rome said they added to existing US sanctions, the global pandemic, and chronic mismanagement and corruption.
He linked the timing of the sanctions to the US election and building pressure on Iran to come to the table.
“The latest measures are part of the ‘slash-and-burn’ phase of the administration’s maximum pressure campaign," Mr Rome said.
"With Trump’s re-election odds waning, hawks in Washington are trying to both provoke Iran and complicate a potential Biden administration’s ability to re-enter the nuclear accord."