US Treasury's Levey says Iran sanctions bearing fruit

WASHINGTON (AFP) - The US Treasury's mounting financial sanctions against Iranian companies tied to alleged nuclear activities, proliferation and terror funding are bearing fruit, the Treasury's top anti-terrorism official, Stuart Levey, said Thursday.

Levey, the undersecretary for Terrorism and Financial Intelligence, said in a telephone interview that the Treasury is talking to private companies and financial institutions and warning them of the dangers of doing business with Iran.

The Treasury has stepped up its blacklisting of Iranian entities and individuals in the past 12 months as US President George W. Bush has accused Iran of seeking to develop a nuclear weapon.

The government of Iranian President Mahmoud Ahmadinejad has steadfastly denied such charges and insists its nuclear program is peaceful, but Tehran has been sanctioned by the UN Security Council for refusing to halt uranium enrichment, which can be used to build a nuclear weapon.

"We believe that there is a real potential that these sanctions will have the effect of changing the government of Iran's mind about the defiant policy it is currently pursuing," Levey, who formerly coordinated counterterrorism operations at the Justice Department, said of the Treasury's measures.

The department has sanctioned over a dozen Iranian entities so far this year, mainly companies tied to Iran's nuclear, energy and industrial sectors, but the US financial offensive has also zeroed in on Iran's banking sector.

It imposed sanctions against Iran's state-owned Bank Sepah, the country's fifth-largest bank, in January and against Bank Saderat last September, moves which Levey said were partly intended to cut off funding for Iran's missile programs.

Treasury officials believe Bank Sepah financed a Chinese firm's sale of "missile-related items" to Iran in 2005. Bank Saderat, which operates a large network across the Middle East, was blacklisted for allegedly supporting terrorism.

"We're keeping a broader eye on the Iranian banking sector, but I don't want to speculate or signal possible future actions," Levey said two days after the Treasury targeted the Iranian-based Martyrs Foundation.

US officials said the foundation helped raise funds for Hezbollah, the Lebanese Shiite militant and political organization which the State Department considers a "terrorist" group.

Levey said Washington hopes people in Iran will realize that their ability to do business is being hampered by the policies being pursued by Ahmadinejad's government.

However, he stressed that the department, which has been supported in its efforts by the Commerce Department and other agencies, is not just pursuing sanctions.

"There's a fairly attractive set of incentives put on the table by the allies for the Iranians if they do suspend their uranium enrichment," he said.

The Treasury's sanctions generally bar US companies and invididuals from doing any business or transactions with blacklisted Iranian firms, while also seeking to freeze any assets of the targeted entities that come under US control.

The Bush administration hopes such moves will encourage other countries to close off their financial and trading links with Iran.

Levey said the department had received good cooperation from the private sector and that Treasury officials have briefed executives about the "deceptive practices" used by Iranian entities.

The Treasury's anti-terrorism point man added that, as a result, "a lot of financial institutions" have opted not to do business with Iran.

He said the Treasury relies on "concrete" intelligence to support its actions, noting that banking records can yield traceable names and addresses.

Levey's office of Terrorism and Financial Intelligence was created in 2004 to bolster US efforts targeting illicit financing. Levey, a Harvard graduate, was named to oversee its operations by Bush the same year.

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