Washington has blacklisted virtually all of Iran’s financial sector, striking an economy already hit hard by U.S. sanctions.
The move on October 8 blacklists 18 Iranian banks that had, so far, escaped most of the U.S. sanctions imposed by President Donald Trump's administration since the United States pulled out of a 2015 nuclear pact between Tehran and world powers.
Critically, the move subjects foreign, non-Iranian financial institutions to penalties for doing business with the blacklisted Iranian entities -- effectively cutting off Iran from the international financial system.
"Today's action to identify the financial sector and sanction 18 major Iranian banks reflects our commitment to stop illicit access to U.S. dollars," U.S. Treasury Secretary Steven Mnuchin said in statement.
“Our sanctions programs will continue until Iran stops its support of terrorist activities and ends its nuclear programs," Mnuchin added. "Today’s actions will continue to allow for humanitarian transactions to support the Iranian people."
However, Iranian Foreign Minister Mohammad Javad Zarif accused the United States of targeting Iran's "remaining channels to pay for food & medicine” in the midst of the coronavirus pandemic.
“Iranians WILL survive this latest of cruelties," he tweeted.
The Treasury Department statement said the action targets 16 Iranian banks for their role in the country's financial sector. It says one bank was blacklisted because it is affiliated with Iran's military and one for being owned or controlled by another sanctioned Iranian bank.
Some of the institutions had been covered by previous designations, but the move on October 8 places them all under the same authority covering Iran's entire financial sector.
The targeted banks are the Amin Investment Bank, Bank Keshavarzi Iran, Bank Maskan, Bank Refah Kargaran, Bank-e Shahr, Eghtesad Novin Bank, Gharzolhasaneh Resalat Bank, Hekmat Iranian Bank, Iran Zamin Bank, Karafarin Bank, Khavarmianeh Bank, Mehr Iran Credit Union Bank, Pasargad Bank, Saman Bank, Sarmayeh Bank, Tosee Taavon Bank, Tourism Bank, and the Islamic Regional Cooperation Bank.
Foreign companies that do business with those banks were given 45 days to wind down their operations before facing so-called "secondary sanctions."
U.S. sanctions “are directed at the regime and its corrupt officials that have used the wealth of the Iranian people to fuel a radical, revolutionary cause that has brought untold suffering across the Middle East and beyond," Secretary of State Mike Pompeo said in a statement.
"Our maximum economic pressure campaign will continue until Iran is willing to conclude a comprehensive negotiation that addresses the regime's malign behavior," he said.