By Glenn Kessler
Washington Post Staff Writer
Wednesday, February 10, 2010; 7:06 PM
The Treasury Department on Wednesday slapped sanctions on four construction-related companies that it said serve as fronts for the growing business interests of Iran's Islamic Revolutionary Guard Corps, which is heavily involved in Tehran's nuclear and missile programs.
The move represents stepped-up enforcement of existing sanctions on Iran as the Obama administration prepares to push for tougher and broader punitive measures by the U.N. Security Council, the European Union and a coalition of major trading partners in an effort to force Iran to negotiate seriously on its nuclear ambitions.
Officials are considering additional sanctions on Guard companies, as well as finance, insurance and other entities connected to the government elite but face weeks of haggling with China and Russia before those measures can be enacted.
Russia has warned that it will probably not support economic measures, but Russian Deputy Foreign Minister Sergei Ryabkov told the Interfax news agency Wednesday that Iran's decision this week to begin producing a higher-enriched uranium has given "additional relevance" to a new sanctions resolution. Even with the Iranian announcement, however, China has remained cool to new sanctions.
Also Wednesday, Iran rejected an offer from the United States to help provide it with a steady supply of medical isotopes. Iran said it needs to produce higher-enriched uranium to replace the fuel at an aging research reactor that produces the isotopes to treat 850,000 patients, though it does not have the expertise to fashion the reactor's fuel rods.
"This proposal is not logical, " said Ramin Mehmanparast, a spokesman for Iran's Foreign Ministry.
In 2007, the Bush administration cited the Revolutionary Guard Corps and a group of front companies for their links to terrorism and proliferation -- including a major contractor known as Khatam al-Anbiya that channeled billions of dollars a year to the Guard from its activities in oil, construction, transportation and other industries.
This week's action freezes the assets of four companies that the Treasury Department said are owned or controlled by, or that act on behalf of, Khatam al-Anbiya. It also targets Guard Gen. Rostam Qasemi, who is the commander of Khatam al-Anbiya Construction Headquarters.
The Guard has received at least $6 billion worth of government contracts in two years, according to state-run media, but the total is probably much higher because many contracts are not disclosed. Working through its private-sector arm, the group operates Tehran's international airport, builds the nation's highways and constructs communications systems. It also manages Iran's weapons-manufacturing business, including its controversial missile program.
The Guard also is responsible for the construction of a network of underground tunnels to conceal and protect Iran's military and nuclear programs, according to a senior U.S. official who asked not to be identified.
"As the IRGC consolidates control over broad swaths of the Iranian economy, displacing ordinary Iranian businessmen in favor of a select group of insiders, it is hiding behind companies like Khatam al-Anbiya and its affiliates to maintain vital ties to the outside world," said Treasury Undersecretary Stuart A. Levey. "Today's action exposing Khatam al-Anbiya subsidiaries will help firms worldwide avoid business that ultimately benefits the IRGC and its dangerous activities."
The companies targeted Wednesday are the Fater Engineering Institute, the Imensazen Consultant Engineers Institute, the Makin Institute and the Rahab Institute.
The European Union has also sanctioned Khatam al-Anbiya, and U.S. officials hope that the action will highlight to European firms the risk of doing business with companies inside Iran. Khatam al-Anbiya or its affiliated companies have historically worked with firms based in Europe and Asia.
While companies affiliated with the Guard in the past did not hide their connection, U.S. officials say that increasingly the links are being obscured as the United States has focused on identifying the web of dozens of companies controlled by the Guard.