These actions are so drastic they are almost an invitation to war an invitation that Iran will decline of course. However, I just wonder if these types of sanctions are not going to result in the creation of new financial relations in China and Russia that will operate outside the grasp of US foreign policy. The US has more and more tried to US its financial clout and influence on global financial institutions for foreign policy aims. This is surely bound to create a reaction.
Analysis: US hopeful firms will cut ties with Iranian banks
Oct 25, 2007, 22:40 GMT
Washington - The US decision to slap new, broad sanctions on Iran reflects the growing frustration within the Bush administration about the lack of progress in the international effort to prevent the Islamic state from developing nuclear weapons.
US Secretary of State Condoleezza Rice announced the sanctions that target three of Iran's largest banks, hoping the move will prompt banks worldwide to cut ties with the Iranian institutions and further squeeze the regime's ability to finance nuclear activities or terrorism in the Middle East.
At the same time, Rice made it clear Washington remains committed to the diplomatic process through the United Nations Security Council to resolve the dispute over Iran's nuclear ambitions, even though the United States has acted unilaterally by imposing the sanctions.
'The United States and our partners are fully committed to a diplomatic solution with Iran,' Rice said, reiterating her willingness to meet with her Iranian counterpart 'any time, anywhere' if Tehran agrees to suspend uranium enrichment - a condition Iran has repeatedly rejected. Iran insists its nuclear activities are solely for civilian energy use.
Some analysts, however, warn the US decision to act alone could send the wrong message to the five other countries - Britain, China, France, Russia and Germany - who are working closely with the United States to ensure Iran does not acquire nuclear weapons.
'It makes it more difficult for the United States to make the argument that we need to maintain an international consensus and be in lock step ... if we have just imposed unilateral sanctions,' said Jon Wolfstahl of the Centre for Strategic and International Studies in Washington.
The sanctions target the elite Iranian Revolutionary Guard Corps and its commercial entities, and three of the largest state-owned banks suspected of helping finance the nuclear programme and terrorism. They are the most sweeping sanctions since the 1979 seizure of the US embassy in Tehran.
Going after the three banks - Bank Melli, Bank Mellat and Bank Saderat - serves as a 'powerful deterrent' to international banks carrying out business transactions with Iran, Rice said.
The United States hopes the effectiveness of the new sanctions lies in a desire of outside European and Asian banks to not do business with Iranian banks accused of financing illicit activities.
'We've seen a dramatic effect in the last several months with financial institutions and others deciding they don't want to be bankers for this regime,' said Stuart Levey, a US Treasury Department undersecretary.
The United States has no plans to sanction banks that continue relationships with Iranian banks, Levey said. The announcement of the new sanctions came as President George W Bush stepped up his rhetoric over the dispute with Iran, saying last week that a nuclear-armed Iran could provoke a conflict on the scale of World War III.
Vice President Dick Cheney said Sunday that the United States was 'prepared to impose serious consequences' if Iran did not comply with international demands to come clean on its nuclear ambitions.
Lee Wolosky, a former member of the White House's National Security Council under Bill Clinton and Bush, said the sanctions could have an effect comparable to steps taken against a bank in Macau for handling North Korean illicit funds. The Banco Delta Asia was crippled when banks cut ties after the United States imposed sanctions.
'When the US government declares a financial institution radioactive, we see a tremendous ripple effect throughout the financial community,' Wolosky said.
© 2007 dpa - Deutsche Presse-Agentur