US slaps military sanctions on Iran

WASHINGTON—The United States on Thursday slapped sanctions on Iran’s military and three state-owned banks, sharply ratcheting up tensions over the Islamic state’s nuclear drive and alleged backing for terrorism. Secretary of State Condoleezza Rice and Treasury Secretary Henry Paulson said the sanctions cover Iran’s elite Quds Force as a supporter of terrorism and its Revolutionary Guards as a proliferator of weapons of mass destruction.
Some 22 Iranian government agencies, banks and individuals are being blacklisted as the United States steps up a drive to squeeze Iran out of the international banking system. “These actions will help to protect the international financial system from the illicit activities of the Iranian government,” Rice told reporters. “They will provide a powerful deterrent to every international bank and company that thinks of doing business with the Iranian government.”
The move is the latest by the US administration to step up pressure on Iran, which it accuses of fomenting global terrorism, supporting insurgents in Iraq and working to develop an atomic bomb. “What this means is that no US citizen or a private organization will be allowed to engage in financial transactions with these persons and entities,” Rice explained.
The secretary of state told the US Congress on Wednesday that Iran constitutes “perhaps the single greatest challenge” for US security. President George W. Bush suggested last week a nuclear-armed Iran could trigger “World War III.” Thursday’s announcement was likely to fuel speculation that the United States was readying possible military action against Iran for its nuclear program.
But a senior official, while expressing frustration with the UN Security Council’s slow pace on imposing new sanctions on Iran, said the US action complemented the diplomatic efforts. “You can’t give up on diplomacy. And this is part of the diplomacy, to try to use economic sanctions to persuade the Iranians that there’s going to be a heavy price to pay,” the official told reporters on condition of anonymity. Officials said these would be the broadest sanctions imposed on Iran since the country’s Islamic revolution in 1979.
It is also the first time the United States has directly sanctioned another country’s military. The United States broke off diplomatic relations with Iran after the seizure of US diplomats in Tehran in 1979 and has imposed a range of sanctions on the Islamic republic since then, with limited effect on the regime. In September the US Senate labeled the Revolutionary Guards a terrorist organization — a step that some Democrats said had set the United States on a path to war with Iran.
The Quds Force, the foreign operations branch of the Revolutionary Guard Corps, runs Tehran’s covert activities throughout the Middle East, though its existence has never been officially acknowledged. US commanders say Quds operatives have armed and trained Shiite militias that have attacked US troops in Iraq’s bloody sectarian conflict. The Revolutionary Guards, the most powerful wing of Iran’s military, controls construction companies, pharmaceutical plants, and segments of the oil industry.
US officials said it also operates the front companies that procure nuclear technology. As part of the new sanctions, the United States is pressing its allies to help cut Iran off from the international financial system, and so prevent what Rice called its “ill-gotten gains” being recycled through respectable banks. Another senior official said the administration had conducted “an extraordinary amount of outreach” to European governments and banks with extensive commercial interests in Iran.
“We’ve seen a very cooperative response from private financial institutions who very much don’t want to be involved in this kind of activity ... and want to protect their reputation,” he said. After Bush’s remark about a potential “World War III,” Vice President Dick Cheney on Sunday spoke of “serious consequences” unless the Islamic republic comes to heel. In her testimony to a House of Representatives committee, Rice said “serious consequences” would include a third round of UN Security Council sanctions to punish Iran’s refusal to renounce uranium enrichment.
Ratcheting up the pressure on Tehran, the United States on Thursday designated Iran’s Revolutionary Guard Corps a proliferater of weapons of mass destruction and its elite Qods force a supporter of terrorism. In total, Washington slapped sanctions on more than 20 Iranian companies, major banks and individuals as well as the defense ministry, in a bid to pressure Tehran to halt its nuclear program and curb its “terrorist” activities.
“Today, Secretary Paulson and I are announcing several new steps to increase the costs to Iran of its irresponsible behavior,” said Secretary of State Condoleezza Rice, who made the announcement alongside Treasury Secretary Henry Paulson. But Rice said the United States was committed to a diplomatic solution and urged Tehran to accept an offer made by major powers last year to give up sensitive nuclear work in exchange for incentives, including direct talks with Washington.
“We will be open to the discussion of any issue. But if Iran’s rulers choose to continue down a path of confrontation, the United States will act with the international community to resist these threats,” Rice said. Among the Iranian banks affected are Bank Melli, Iran’s largest bank, Bank Mellat and Bank Saderat, said another senior U.S. official.—Agencies