Over the past two days, the United States Department of the Treasury Office of Foreign Assets Control (OFAC) has added a number of individuals and entities to the OFAC SDN List. Yesterday, the additions were due to a designation by the United States Department of the Treasury of Bank of Industry and Mine of Iran a.k.a. Bank Sanad va Madan; a.k.a. “BIM”.

According to Treasury, Bank of Industry and Mine (BIM), an Iranian state-owned bank, has been used by the Government of Iran to evade U.S. and international sanctions against Iranian financial institutions involved in facilitating transactions in support of Iran’s proliferation activities. The primary basis of this designation was due to BIM’s alleged provision of financial services to Bank Mellat and Europaisch Iranische Handelsbank (EIH), two Iranian banks previously designated on the OFAC SDN List.

The European Union has also implemented sanctions targeting Iran’s nuclear and missile proliferation activities which prohibit 18 Iranian banks from conducting transactions in Europe. Following the EU’s implementation, BIM is accused of allowing EIH to transfer deposits it held for many of those designated banks to an account at BIM in Iran. This was then purportedly used as a conduit for payments and transactions into Europe by some of these EU-sanctioned banks, including Bank Mellat and Bank Saderat.

Treasury alleges that this activity has been ongoing since July 2010 and that as part of the transactions BIM would transfer funds from Bank Mellat’s account at BIM to EIH’s account at BIM and then EIH would disburse euro-denominated payments to Bank Mellat’s customers in Europe.

BIM is the majority owner of EIH, which has been designated since September 2010 for providing financial services to Bank Mellat, Persia International Bank, the Export Development Bank of Iran and Post Bank of Iran; all entities designated on the OFAC SDN List. EIH reportedly handles billions of dollars worth of transactions on behalf of the Iranian banking sector.

In addition to BIM’s designation, the President also designated certain individuals and entities under the Syria sanctions program, most notably of which was Syrian President Bashar al-Assad. President Obama also imposed sanctions against six other senior officials of the Government of Syria in an effort to increase pressure on the Government of Syria to end its use of violence against its people and begin transitioning to a democratic system that protects the rights of the Syrian people.

Moreover, OFAC was involved in designating of 10 individuals and entities pursuant to a separate executive order signed at the end of last month. That executive order targeted Syrian officials and others responsible for human rights abuses, including repression against the Syrian people, as well as a set of companies tied to Syrian corruption.

In signing the new Executive Order, the President has implemented additional sanctions on the following individuals listed in the Annex to the Order:

Bashar al-Assad: President of the Syrian Arab Republic
Farouk al-Shara: Vice President of the Syrian Arab Republic
Adel Safar: Prime Minister of the Syrian Arab Republic
Mohammad Ibrahim al-Shaar: Minister of the Interior of the Syrian Arab Republic
Ali Habib Mahmoud: Minister of Defense of the Syrian Arab Republic
Abdul Fatah Qudsiya: Head of Syrian Military Intelligence
Mohammed Dib Zaitoun: Director of Political Security Directorate

As with most sanctions programs, this action blocks any property in the United States or in the possession or control of U.S. persons in which the individuals listed in the Annex have an interest, and prohibits U.S. persons from engaging in transactions with them.

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

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