Middle East Focus: Iran’s Central Bank: Real Target or Decoy in Sanctions Talks…………

Arabia Deserta

Iran’s Central Bank: Real Target or Decoy in Sanctions Talks…………

“The US is seeking to convince Russia and China to include Iran's central bank in a United Nations sanctions resolution against Tehran's nuclear programme, a move that would deepen the Islamic republic's economic isolation. Diplomats say Bank Markazi is a focus of discussions between the US and the other four permanent members of the UN Security Council, even as Washington has scaled back an earlier push to agree a complete embargo on arms sales to Iran. "The central bank remains the one major financial institution which officials have outed as being involved in Iran's illicit activity but has not yet been targeted," said Matthew Levitt, a former US Treasury official now at the Washington Institute for Near East policy, who notes that the US itself has yet to impose unilateral sanctions on Markazi. "Closing that loophole would have a major impact on Iran's ability to finance its proliferation and other illicit activities." Bank Markazi insists it has always adhered to the best international practices and has respected international laws……… But US officials say they are confident they can obtain agreement among the permanent five members in coming weeks, making passage of a resolution a near certainty. ……..”

That is the central bank of the country, Bank Markazi, the equivalent of the Federal Reserve System in the United States. It sets monetary policy, supervises financial institutions, and holds much of the country’s foreign monetary reserves. Part of its assets consists of the country’s contribution to the capitals of the IMF and the World Bank. Blocking central bank transactions is tantamount to strangling a country and freezing its foreign assets. Hence my belief that it is almost certain Russia and China, at least, will refuse to include it within any possible sanctions. The talk about the central bank may be a bargaining decoy by the Obama administration to get other sanctions agreed to.
Cheers
mhg

Mon Email