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Financial Times / Biz - Money

US sanctions target Iran central bank governor

The US Treasury targeted the governor of Iran’s central bank on Tuesday as the Trump administration ratcheted up sanctions in the wake of its decision to pull out of the nuclear deal.

Washington’s threat to impose the “highest level” of punitive measures against Tehran has left EU signatories struggling to keep the multilateral accord alive.

The Treasury imposed sanctions against Valiollah Seif and Ali Tarzali, another central bank official, for allegedly helping to move millions of dollars from the Iranian Revolutionary Guard’s Quds Force to Lebanon’s Hizbollah, which the US considers a terrorist organisation.

“It is appalling, but not surprising, that Iran’s most senior banking official would conspire with the [Quds Force] to facilitate funding of terror groups like Hizbollah, and it undermines any credibility he could claim in protecting the integrity of the institution as a central bank governor,” said Treasury secretary Steven Mnuchin.

Last week Washington imposed sanctions against a United Arab Emirates-based currency exchange network that the US said was funnelling millions of dollars to the Quds special forces. “Both actions seek to stifle Iran’s ability to abuse the US and regional financial systems,” said the Treasury.

The developments raised pressure on EU leaders, who are trying to salvage the 2015 deal in which Iran agreed to curb its nuclear programme in exchange for the relaxation of economic sanctions.

Foreign ministers from the “E3” signatories to the agreement — France, Germany and the UK — were due late on Tuesday to meet Mohammad Javad Zarif, their Iranian counterpart.

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Speaking ahead of the meeting, Mr Zarif said the parties were on the “right track to make sure the interests of the remaining signatories” of the nuclear deal, “especially Iran, (were) guaranteed.”

On Wednesday, the European Commission is due to discuss possible countermeasures to US sanctions, a day ahead of an EU summit that is also expected to address the issue.

Earlier on Tuesday in Paris, French finance minister Bruno Le Maire and foreign affairs minister Jean-Yves Le Drian met about 130 corporate executives to urge them to hang on to their Iranian assets while the government devised an EU-wide response to the sanctions.

Mr Le Maire and Mr Le Drian told the executives that the government was asking the US administration for more time — as well as exemptions — before sanctions were implemented. Companies that attended the meeting included aircraft maker Airbus, train maker Alstom, oil major Total, and carmakers Renault and Peugeot. Spokespersons for the companies declined to comment on the meeting because it was private.

“We expressed our determination to fight so that US decisions don’t affect French companies,” Mr Le Drian said after the meeting. Mr Le Maire added: “Many companies in the aeronautics, pharmaceutical, energetic and automobile sectors have invested in Iran significantly.”

During the meeting, French state-owned investment fund BPI said it was exploring alternative funding channels. An Airbus representative said that it would not seek an exemption because many of their aircraft were made in the US.

A Peugeot representative said it was unlikely the company would take the risk of staying in Iran without a waiver. The carmaker signed a joint venture in 2016 to invest €400m by 2020 and sold 445,000 cars in Iran last year.

A person briefed on the meeting described the mood as “basically depressed.”

EU officials also cautioned they did not expect much leniency from the US administration.

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