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Washington Blacklists Iran's Entire Financial Sector

U.S. Treasury Secretary Steven Mnuchin (file photo)

Washington has blacklisted virtually all of Iran’s financial sector, striking an economy already hit hard by U.S. sanctions.

The move on October 8 blacklists 18 Iranian banks that had, so far, escaped most of the U.S. sanctions reimposed by Donald Trump's administration since the president pulled the United States out of a 2015 nuclear pact between Tehran and world powers.

Critically, the move subjects foreign, non-Iranian financial institutions to penalties for doing business with the blacklisted Iranian entities -- effectively cutting off Iran from the international financial system.

"Today's action to identify the financial sector and sanction eighteen major Iranian banks reflects our commitment to stop illicit access to U.S. dollars," U.S. Treasury Secretary Steven Mnuchin said.

“Our sanctions programs will continue until Iran stops its support of terrorist activities and ends its nuclear programs," Mnuchin said. "Today’s actions will continue to allow for humanitarian transactions to support the Iranian people."

A Treasury Department statement said the action targets 16 Iranian banks for their role in the country's financial sector. It says one bank was blacklisted because it is affiliated with Iran's military and one for being owned or controlled by another sanctioned Iranian bank.

Some of the institutions had been covered by previous designations, but the move on October 8 places them all under the same authority covering Iran's entire financial sector.

The targeted banks are the Amin Investment Bank, Bank Keshavarzi Iran, Bank Maskan, Bank Refah Kargaran, Bank-e Shahr, Eghtesad Novin Bank, Gharzolhasaneh Resalat Bank, Hekmat Iranian Bank, Iran Zamin Bank, Karafarin Bank, Khavarmianeh Bank, Mehr Iran Credit Union Bank, Pasargad Bank, Saman Bank, Sarmayeh Bank, Tosee Taavon Bank, Tourism Bank, and the Islamic Regional Cooperation Bank.

Foreign companies that do business with those banks were given 45 days to wind down their operations before facing so-called "secondary sanctions."

With reporting by Reuters and AP