Pursuing its strategy of economic warfare against the Islamic Republic of Iran, the U.S. Treasury Dept. this week issued a warning about the risks of doing business with “in effect the whole of Iran’s banking sector,” the Financial Times of London reported Friday.[1]  --  U.S. President George W. Bush also made the strange, not to say outrageous, accusation that Iran is “announcing they want to destroy countries with a nuclear weapon,” though Iran denies that it is attempting to develop nuclear weapons and though there is no evidence that it is doing so.  --  The Washington Post quoted the president slightly differently, as having said:  "They've declared they want to have a nuclear weapon to destroy people — some in the Middle East.  And that's unacceptable to the United States, and it's unacceptable to the world,” noting that the statement differs from “the judgments of a recent U.S. intelligence estimate.”[2]  --  The full statement, as reported in the transcript posted on the White House web site, reads:  “[T]he people of Iran must understand that the conditions exist in large part because of either management by the government or isolation because of the government's decisions on foreign policy matters — such as announcing they want to destroy countries with a nuclear weapon.  It is irresponsible remarks like that which cause great credibility loss with the Iranian government, the actions of which are affecting the country.”[3]  --  Bush’s statement was doubly ironic.  --  First, because it combined an outright lie with an accusation that the statements Iranian leaders have never made constituted “irresponsible remarks . . . which cause great credibility loss with the Iranian government.”  --  Secondly, because the Associated Press said the Treasury Dept.’s justification for its attempt to undermine the Iranian banking system was that it engaged in “deceptive practices.”[4]  --  The White House transcript showed that Bush also made this statement:  “My thought is, is that the reformers inside Iran are brave people, they've got no better friend than George W. Bush, and I ask for God's blessings on them on their very important work.  And secondly, that I would do nothing to undermine their efforts.”  --  But Iranian reformers have often said that statements like these do undermine, rather than help, their efforts....



Middle East & North Africa

By Daniel Dombey and Stephanie Kirchgaessner

Financial Times (London)
March 21, 2008


WASHINGTON -- Washington has called on international financial institutions to steer clear of doing business with Iran’s central bank, in the U.S.’s most wide-ranging attempt yet to isolate Tehran financially.

The Treasury Department has issued a warning of the risks of doing business with 51 state-owned and seven privately held Iranian banks -- in effect the whole of Iran’s banking sector. The list includes institutions specializing in export financing and foreign investment, as well as Iranian state-owned banks located as far away as Venezuela, Hong Kong, and the U.K.

The move is an attempt to raise pressure on Tehran through measures that fall short of formal sanctions but go further than the private warnings U.S. officials have delivered to regulators and financiers in recent months.

Over the past two years, Washington has experienced long delays in its push to get successive rounds of United Nations sanctions agreed and even unilateral U.S. sanctions often take time to put in place because of bureaucratic and legal procedures.

This week, President George W. Bush ramped up the rhetoric on Iran by accusing its government of “announcing they want to destroy countries with a nuclear weapon.” Iran says its nuclear program is peaceful.

The move against the banks follows the U.N. Security Council’s recent passage of a sanctions resolution that called on countries to “exercise vigilance” in their dealings with all Iranian banks, but which cited only two Iranian banks by name as being of particular concern. The Treasury Department list is also intended to follow up on warnings by the Financial Action Task Force, a 32-country body, about Tehran’s shortcomings in anti-money laundering and terror financing legislation. The U.S. has been considering since last year whether to take formal measures against Bank Markazi, Iran’s central bank, for allegedly funnelling funds to Hezbollah.

Daniel Glaser, deputy assistant Treasury secretary for terrorist financing and financial crimes, said: “It’s very important that we put the central bank on this list of institutions that financial institutions around the world should be closely examining.”

Separately, U.S. financial authorities warned banks of “serious deficiencies” in Uzbekistan’s anti-money laundering programs.

The Financial Crimes Enforcement Network (Fincen), a division of the U.S. Treasury, said Uzbekistan recently passed decrees that suspended the ability of intelligence units to collect and analyze information on transactions involving potential money laundering.

The decrees also barred cooperation with foreign agencies on money-laundering issues. Fincen called on banks and other institutions operating in the U.S. to apply increased due diligence to transactions involving correspondent accounts with Uzbekistan.



Bush administration

By Robin Wright

** Experts Say President Is Wrong and Is Escalating Tensions **

Washington Post
March 21, 2008
Page A14


President Bush said Thursday that Iran has declared that it wants to be a nuclear power with a weapon to "destroy people," including others in the Middle East, contradicting the judgments of a recent U.S. intelligence estimate.

The president spoke in an interview intended to reach out to the Iranian public on the Persian new year and to express "moral support" for struggling freedom movements, particularly among youth and women. It was designed to stress U.S. support for Iran's quest for nuclear energy and the prospects that Washington and Tehran can "reconcile their differences" if Iran cooperates with the international community to ensure that the effort is not converted into a weapons program.

But most striking was Bush's accusation that Iran has openly declared its nuclear weapons intentions, even though a National Intelligence Estimate concluded in December that Iran had stopped its weapons program in 2003, a major reversal in the long-standing U.S. assessment.

"They've declared they want to have a nuclear weapon to destroy people -- some in the Middle East. And that's unacceptable to the United States, and it's unacceptable to the world," Bush told U.S.-funded Radio Farda, which broadcasts into Iran in Farsi.

Experts on Iran and nuclear proliferation said the president's statement was wrong. "That's as uninformed as [Sen. John] McCain's statement that Iran is training al-Qaeda. Iran has never said it wanted a nuclear weapon for any reason. It's just not true. It's a little troubling that the president and the leading Republican candidate are both so wrong about Iran," said Joseph Cirincione, president of Ploughshares Fund, a global security foundation.

Others said it is unclear whether the president believes what he said or was deliberately distorting Iran's position.

"The Iranian government is on the record across the board as saying it does not want a nuclear weapon. There's plenty of room for skepticism about these assertions. But it's troubling for the administration to indicate that Iran is explicitly embracing the program as a means of destroying another country," said Suzanne Maloney, an Iran specialist at the State Department until last year and now at the Brookings Institution's Saban Center.

National Security Council spokesman Gordon Johndroe said Bush was referring to previous Iranian statements about wiping Israel off the map. "The president shorthanded his answer with regard to Iran's previously secret nuclear weapons program and their current enrichment and ballistic missile testing," Johndroe said.

In two interviews beamed into Iran, Bush expressed deep respect for Iranian history and culture. In a second interview with the Voice of America's Persian News Network, Bush said: "Please don't be discouraged by the slogans that say America doesn't like you, because we do, and we respect you."

But analysts warned that Bush's statement on Iran's nuclear intentions could escalate tensions when U.S. strategy for the first time in three decades is to persuade Iran to join international talks in exchange for suspending its uranium enrichment, a process used for peaceful nuclear energy that can be converted for use in a weapons program. "The bellicose rhetoric from one side only produces the same from the other," Maloney said.

Signaling further pressure on Tehran, the administration also issued a warning on Thursday to U.S. financial institutions about the dangers of doing business with Iranian banks because of inadequate checks on money laundering and the growing risks to the international financial system posed by Iran's financial sector. "The government of Iran disguises its involvement in proliferation and terrorism activities through an array of deceptive practices," the Treasury Department said.

The advisory lists 59 major banks or their branches in cities such as Athens, Hong Kong, London, and Moscow. It includes Iran's Central Bank and covers many banks not facing sanctions from the United Nations or the United States.

The Treasury's Financial Crimes Enforcement Network said that Iran's Central Bank and commercial banks started asking that their names be removed from global transactions to make it more difficult for intermediary financial institutions to determine their true identity or origin.

The United States recently imposed new restrictions on dealings with Bahrain-based Future Bank, which is controlled by Iran's Bank Melli.

"Over the past eight days, the U.S. government has undertaken a number of steps to put Tehran on notice that the international community will not allow the Iranian government to misuse the international financial system or global transportation network to further its aspirations to obtain nuclear weapons capability, improve its missile systems, or support international terrorism," State Department spokesman Sean McCormack said in a statement.

--Staff writers Michael Abramowitz and William Branigin contributed to this report.


Map Room
March 19, 2008
1:11 p.m. EDT


Q Mr. President, let me thank you first on behalf of the Voice of America, on behalf of the Persian News Network for giving us your time. We really appreciate that, sir.


Q As you know, Mr. President, this is the eve of Nowruz, the Iranian New Year. What is your message to the Iranian people as they face tough economic circumstances and infringement on their freedoms?

THE PRESIDENT: Well, first, Nowruz a tan Mubarak. Secondly, that the people of the United States respects the people of Iran; that we respect the traditions of Iran, the great history of Iran. We have differences with the government, but we honor the people, and we want the people to live in a free society. We believe freedom is a right for all people and that the freer the world is, the more peaceful the world is. And so my message is, please don't be discouraged by the slogans that say America doesn't like you, because we do, and we respect you.

Q What do you say to the regime, sir -- what would you say to the regime?

THE PRESIDENT: I'd say to the regime that they made decisions that have made it very difficult for the people of Iran. In other words, the Iranian leaders, in their desire to enrich uranium -- in spite of the fact that the international community has asked them not to -- has isolated a great country; and that there's a way forward. I mean, the Iranian leaders know there's a way forward, and that is verifiably suspend your enrichment and you can have new relationship with people in the U.N. Security Council, for example.

It's just sad that the leadership is in many ways very stubborn, because the Iraqi -- the Iranian people are not realizing their true rights. And they're confusing people in Iraq, as well, about their desires. It's a tough period in history for the Iranian people, but it doesn't have to be that way.

Q On the nuclear issue, sir, is there a solution to the problem that would both satisfy the United States' concern and at the same time allow Iran to proceed with non-military nuclear energy research?

THE PRESIDENT: Well, part of the problem is that it's very hard for people to trust the Iranian government because they haven't told the full truth, and that's why the people of Iran have got to understand there are great suspicions right now, not only in the United States, but around the world. But there is a better way forward. And I thought, for example, the Russians proposed an interesting way, that says -- and I have said publicly, and the Iranian people need to know that I believe Iran has the right to have civilian nuclear power. I believe in civilian nuclear power. Iran is a sovereign country and they should have it.

The problem is we just don't trust the government because they haven't been forthcoming about their enrichment of fuels to go into the reactor, and therefore Russia has offered to provide fuel on a contractual basis and provide fuel on a consistent basis. It would help solve the problem, and that is the Iranians wouldn't need to enrich, it would have fuel for their reactor and the people would have cheaper electricity. And I support that idea.

Q Sir, would you allow enrichment inside Iran if there are guarantees and international supervision?

THE PRESIDENT: I would have to be convinced that any secret programs would be disclosed. In other words, I -- once a nation hasn't told the truth, it requires a lot of work to convince people that they'll be telling the truth in the future. And my problem is, is that the Iranian government has not been forthcoming, has not fully disclosed their programs like the IAEA asked them to. So there's a lot of distrust right now.

And the better way forward is for there to be a contractual, solid obligation to provide fuel for a nuclear reactor and then the Iranians can have their civilian nuclear power.

Q At a time when Iranians are going through very difficult economic circumstances -- there's high employment -- high unemployment, there are high prices, there are unfilled promises -- the United Nations Security Council just passed a new set of sanctions against the regime. Is the United States concerned, sir, that the regime might exploit these circumstances to whip up anti-American sentiment, and also to use those and misuse them?

THE PRESIDENT: Sure. No, I appreciate that. Of course we are. We're always concerned about the individual. I'm concerned about the mom trying to raise her child in a hopeful environment. I'm concerned about a child wanting to gain the knowledge so that he or she can realize her God-given talents. And of course we're worried about the human condition.

And any time a government is failing to meet the needs of people -- or a lot of times, not "any time," but a lot of times governments have failed to meet the needs of their people, particularly in relatively non-transparent, non-free societies they always look for somebody to blame. And I'm not surprised that the leaders would blame the United States for the problems they, themselves, have created.

So, yes, this enters my mind. On the other hand, the people of Iran must understand that the conditions exist in large part because of either management by the government or isolation because of the government's decisions on foreign policy matters -- such as announcing they want to destroy countries with a nuclear weapon. It is irresponsible remarks like that which cause great credibility loss with the Iranian government, the actions of which are affecting the country.

Q Mr. President, if I may, I want to ask you about Iraq also. Today is the fifth anniversary of the start of the Iraq war and you had a speech on the war on terror. Are you satisfied with the political situation in Iraq, in view of the improving security situation? And also, has Iran played a role in this?

THE PRESIDENT: I am pleased, but not satisfied. I am pleased because there's a modern constitution in Iraq. I am pleased because people have voted in Iraq. I am pleased because they're heading toward provincial elections in Iraq. I'm pleased to see democracy moving. I'm not satisfied because there's more work to be done.

One of the problems we do have in Iraq is the -- there's been some negative Iranian influence, such as the exportation from Iran of certain weapons that have been used by extremists to murder and to kill people. And it's been particularly unhelpful.

Now, look, I understand Iraq and Iran are going to have relations; after all, they've got a long border. But from my perspective, Iran has not been helpful in terms of helping this young democracy survive. I would think it would be in Iran's interests to have a peaceful neighbor. They had been at war at one time with Iraq. I would believe that a peaceful Iraq would be in the long-term interests of the Iranian people. And yet it's hard to have a peaceful Iraq if there are elements inside the country that are trying to use violence and murder to continue to stir up sectarian doubts and raise concerns which will cause more violence.

Q There have been recent contacts between the United States and Iran over Iraq. Some dissidents inside Iran think that these might expand to other areas, and they feel that this will undercut their position and that would strengthen the regime's hand. What are your thoughts on that, sir?

THE PRESIDENT: My thought is, is that the reformers inside Iran are brave people, they've got no better friend than George W. Bush, and I ask for God's blessings on them on their very important work. And secondly, that I would do nothing to undermine their efforts. And thirdly, that the talks between Iran -- between the U.S. and Iran about Iraq are solely about Iraq, and that the message to the Iranians is: Stop importing your weapons, your sophisticated IEDs, or there will be consequences inside of Iraq. And when we find people transporting weapons that are aimed to harm innocent people or to arm militias that are aiming to harm innocent people, then they will be brought to justice; that there's a better way to deal inside of Iraq than the Iranians are now dealing. And so this message is nothing more than limited to Iraq.

Q Mr. President, thank you very much. And thanks for allowing me to do the interview, sir.

THE PRESIDENT: Thank you; yes, ma'am.

END 1:20 P.M. EDT


By Jeannine Aversa

Associated Press
March 21, 2008


WASHINGTON -- The Bush administration issued a fresh warning Thursday to U.S. banks that Iran is using "an array of deceptive practices" to hide its alleged involvement in nuclear proliferation and terrorist activities.

The Treasury Department's Financial Crimes Enforcement Network alleged that Iran is resorting to such alleged practices to evade detection and skirt financial sanctions.

"The government of Iran disguises its involvement in proliferation and terrorism activities through an array of deceptive practices specifically designed to evade detection," FinCen said in its warning to banks.

For instance, the agency said that the Iran's central bank, also known as Bank Markazi, and Iranian commercial banks have requested that their names be removed from global financial transactions to make it difficult to "determine the true parties in the transaction."

It marked the government's latest effort to ramp up pressure on Iran, which the United States accuses of bankrolling terrorism and seeking a nuclear bomb.

The United States' warning to U.S. banks comes after an international financial watchdog -- the Paris-based Financial Action Task Force -- pressed its 34 member countries to urge banks to monitor their dealings in Iran. The watchdog group said Iran hasn't done enough to fight money laundering and to combat terror financing.

In Thursday's warning, the U.S. government told U.S. banks that the Treasury Department is "particularly concerned that the central bank of Iran may be facilitating transactions for sanctioned Iranian banks."

Under U.S. financial sanctions, virtually all trade and investment activities with the government of Iran -- including government-owned banks -- are prohibited. Moreover, other sanctions have been imposed on Iranian entities that the United States believes are linked to terrorist activities and the spreading of weapons of mass destruction.

The State Department, meanwhile, said vessels that arrived at U.S. ports after recent visits to Iran "will be scrutinized" because Iran has not maintained effective anti-terrorism measures in its ports.

The U.N. Security Council recently passed a third round of sanctions on Iran ordering financial assets to be frozen of additional Iranian officials and companies with links to the country's nuclear and missile program. For the first time, it also banned trade with Iran in some goods that have both civilian and military use.

Iran insists its enrichment program is intended to produce fuel for nuclear reactors that would generate electricity and has vowed to push ahead with it.