In its continuing battle against one of Iran’s biggest banks, The United States Department of the Treasury Office of Foreign Assets Control (OFAC) designated both Bank Mellat’s Chairman, Ali Divandari and a Malaysian subsidiary of Bank Mellat, First East Export Bank (FEEB) under the U.S. Non-Proliferation Sanctions Regulations.

According to a press release from the U.S. Department of the Treasury, Bank Mellat, a state-owned Iranian bank, has facilitated the movement of millions of dollars for Iran’s nuclear program and has already been placed on OFAC’s Specially Designated Nationals List. The United Kingdom has also recently taken action against Bank Mellat. OFAC designated Mr. Divandari for the decision making role he plays as Chairman of Bank Mellat.

FEEB was designated despite the fact that Bank Mellat had received a license from Malaysian financial authorities to establish the bank in Labuan, Malaysia in late 2008. The Malaysian government publicly listed FEEB as an official offshore bank in April 2009. This was the first time an overseas subsidiary of an Iranian bank had been opened for business since a February 2009 Financial Action Task Force call to impose countermeasures to risks posed by Iran to the international financial system.

The designation of Mr. Divandari seems to be a little late in the game. Since an entity operates in the way its high level executives direct, then it would have made more sense to make this designation at the time in which Bank Mellat designated. However, now that it has happened, I have to believe that more designations of Bank Mellat executives will be forthcoming. OFAC apparently will not be stopping their fight against Iran’s banking powerhouse.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 at 202-351-6161 or ferrari@ferrari-legal.com.