U.S. names Iranian bank a weapons proliferator

WASHINGTON (Reuters) - The U.S. Treasury Department named Iran's state-owned Bank Sepah as a proliferator of weapons of mass destruction and said on Tuesday it was urging other countries to help block Iran's nuclear program.

The action against Bank Sepah means no U.S. companies or citizens can do business with it, and any of its assets that come under U.S. jurisdiction will be blocked.

"Bank Sepah is the financial linchpin of Iran's missile procurement network and has actively assisted Iran's pursuit of missiles capable of carrying weapons of mass destruction," said Stuart Levey, Treasury's under secretary for terrorism and financial intelligence.

Levey said the United States was urging other nations to join the bid "to deny financial assistance to Iran's nuclear and missile programs," as supported by a United Nations Security Council resolution passed last month.

In addition to Bank Sepah, the Treasury order names Sepah International Plc, a wholly owned subsidiary of Bank Sepah in Britain and the bank's chairman and director, Ahmad Derakhshandeh, as weapons proliferators.

In London, a spokesman for the British Treasury said Britain supports "robust action" to combat terrorism and takes seriously any concerns about British-based banks' activities, but declined comment on Sepah International specifically.

In Tehran, Iran's chief nuclear negotiator, Ali Larijani, told Iran's Student News Agency ISNA, "This is not the first time that such measures of America take place and the bank harassments of America have happened in some cases, however these are not issues that can affect Iran's will."

The U.S. action was taken under an executive order by President George W. Bush signed in June 2005 and reflects the administration's determination to use U.S. legal authority to pressure Iran to abandon its nuclear program, something Tehran has repeatedly insisted it will not do.

Iran denies that it is seeking nuclear weapons and says its program is for peaceful energy uses only.

Some other countries lack comparable executive authority to invoke against Iranian companies, Levey said in response to questions at a news conference. But U.S. officials were urging others to do what they could to follow a U.N. resolution requiring states to deny any financial assistance for Iran's nuclear program, he said.

'PROLIFERATION AND TERRORISM'

Iran was "facilitating its proliferation and terrorism activities through the world's financial system, using its state-owned banks and an array of front companies and other deceptive techniques" to evade controls that responsible financial institutions put in place, Levey said.

There was a growing movement by global financial institutions to scale back their dealings with Iran, he said.

They were doing it because "they did not wish to be the banker for a regime that funds terrorism, defies the U.N. Security Council in pursuing a nuclear program and deliberately conceals the nature of its business."

In September, Levey announced measures to cut off one of Iran's main state-owned banks, Saderat, from dealings with the U.S. financial system, accusing the Iranian government of using the bank to transfer money to terrorist organizations. Iran has denied various U.S. charges that it supports terrorism.

The U.N. Security Council in December imposed sanctions that target 10 Iranian organizations or companies and 12 individuals associated with Tehran's nuclear and ballistic missile programs.

The resolution, number 1737, was adopted by a 15-0 vote and requires that countries freeze the financial assets abroad of those on the list.

(Additional reporting by Carol Giacomo)