Related News

LMA tightens sanctions wording to protect insurers

UKEF and BAE reach deal over historic Iran weapons sales

Five decades later, UKEF-backed Iran missiles deal lands in court

Wells Fargo hit with sanctions fine over trade finance insourcing

Ukraine crisis tests Iran sanctions resolve

The US department of the treasury has blacklisted Bank Sepah, a state-owned Iranian financial institution, “for providing support and services to designated Iranian proliferation firms”. Bank Sepah International, a wholly-owned subsidiary of Bank Sepah in the UK, and Ahmad Derakhshandeh, Bank Sepah’s chairman and director, were also designated.
Fellow Iranian bank, Bank Saderat, was also blacklisted – in September last year.
Employees at Sepah’s European branches have greeted the US decision with alarm and disappointment. The London branch has a high trade finance turnover; it is having to swap all its dollar assets into other currencies like euro, yen and dirham.
“Luckily many counterparties are willing to buy from us and replace with non-dollar currencies,” says one insider. “We ‘re sorting out the whole portfolio, so you can imagine we ‘re extremely busy at present!”
“Bank Sepah is the financial linchpin of Iran’s missile procurement network and has actively assisted Iran’s pursuit of missiles capable of carrying weapons of mass destruction,” says Stuart Levey, the US Treasury’s under-secretary for terrorism and financial intelligence (TFI). “Our action gives effect to the United Nation’s call on all nations to deny financial assistance to Iran’s nuclear and missile programmes, and we urge other countries likewise to fulfil this serious obligation.”
Bank Sepah is accused of providing financial support and services to Iran’s Aerospace Industries Organization (AIO), Shahid Hemmat Industries Group (SHIG), and the Shahid Bakeri Industries Group (SBIG), which were designated by President Bush on June 29, 2005.
AIO, a subsidiary of the Iranian ministry of defence, oversees all of Iran’s missile industries and is the overall manager and coordinator of Iran’s missile programme.
“Through its role as a financial conduit, Bank Sepah has facilitated Iran’s international purchases of sensitive material for its missile programme,” states the US Treasury. “In 2005, Bank Sepah financed a Chinese firm’s sale of missile related items to Iran. Also in that year, AIO directed Sepah to transfer well over half of a million dollars to a North Korean firm associated with Komid, a North Korean entity designated for providing Iran with missile technology.
“SHIG is responsible for Iran’s ballistic missile programme, most notably the Shahab series of medium-range ballistic missiles based on the North Korean-designed No Dong missile. The Shahab is believed to be capable of carrying unconventional warheads and has a range of at least 1,500km. SHIG has received help from China and North Korea in the development of this missile.
“SBIG, an affiliate of Iran’s AIO, is also involved in Iran’s missile programme. Among the weapons SBIG produces is the Fateh-110 missile, with a range of 200km, and the Fajr rocket systems, a series of North Korean-designed rockets produced under licence by SBIG with ranges of between 40 and 100km. Both systems are capable of being armed with at least chemical warheads.”
Bank Sepah is the fifth largest Iranian state-owned bank with more than 290 domestic branches and a presence in Rome, Paris, Frankfurt, and a wholly-owned subsidiary in London. According to Banker’s Almanac, Bank Sepah’s total branch assets were US$13.9bn as of early 2005.