New Economic Sanctions Target Iranian Defense Ministry

Thursday, October 25th 2007, 7:39 am

By: News On 6

WASHINGTON (AP) _ The Bush administration announced sweeping new sanctions against Iran Thursday _ the harshest since the takeover of the U.S. Embassy in 1979 _ charging anew that Tehran supports terrorism in the Middle East, exports missiles and is engaging in a nuclear build up.

Secretary of State Condoleezza Rice, joined at a State Department news conference by Treasury Secretary Henry Paulson, said the steps the Bush administration is taking against the Revolutionary Guard Corps and a number of banks are designed, among other things, to punish Tehran for its support of terrorist organizations in Iraq and the Middle East.

Rice said the moves were in response to ``a comprehensive policy to confront the threatening behavior of the Iranians'' although she also said that Washington remains open to ``a diplomatic solution.''

But Rice quickly added: ``Unfortunately the Iranian government continues to spurn our offer of open negotiations, instead threatening peace and security by pursuing nuclear technologies that can lead to a nuclear weapon, building dangerous ballistic missiles, supporting Shia militants in Iraq and terrorists in Iraq, Afghanistan, Lebanon and the Palestinian territories, and denying the existence of a fellow member of the United Nations, threatening to wipe Israeli off the map.''

The announcement culminated a monthslong series of harsh statements from both sides amid public recriminations both within the administration and the Congress over Tehran's strategic intentions.

The United States has long labeled Iran as a state supporter of terrorism and has been working for years to gain support for tougher sanctions from the international community aimed at keeping the country from developing nuclear weapons.

The sanctions will cut off more than 20 Iranian entities, including individuals and companies owned or controlled by the Revolutionary Guards, from the American financial system and will likely have ripple effects throughout the international banking community.

The Quds Force, a part of the Guard Corps that Washington accuses of provided weapons, including powerful bombmaking materiel blamed for the deaths of U.S. soldiers in Iraq, and other banks will be identified as ``specially designated global terrorist'' groups for their activities in Afghanistan, Iraq and the Middle East, the officials said.

Rice said the new sanctions will ``provide a powerful deterrent'' for companies in the United States and abroad to sever business relationships with Iran.

Paulson said that Iran channels millions of dollars a year to help bankroll terrorist acts.

``It is increasingly likely that if you are doing business with Iran you are doing business with the IRGC,'' Paulson said, referring to Iran's Revolutionary Guard Corps.

The sanctions also cover three Iran state-owned banks, including Bank Melli.

The actions mean that any assets found in the United States belonging to the designated groups must be frozen. Americans are also forbidden from doing business with them.

Importantly, the designations also put companies outside the United States on notice that doing business with the designated groups could be problematic.

Paulson said it is nearly impossible for overseas businesses or banks to ``know one's customer'' in Iran and avoid unwittingly funding terrorism or other illicit activities.

Because of the IRGC's broad reach into business and other spheres, ``it is increasingly likely that if you are doing business with Iran you are doing business with the IRGC,'' Paulson said.

``It's simply not worth the risk.''

Rice had told a House committee Wednesday that the administration shares Congress' goal of making sanctions tougher on Iran. She also declared that activities in Iraq by the Quds Force ``are inconsistent with the Iranian government's obligations and stated commitment to support the Iraqi government.''

Iran's defense ministry and the Iranian Revolutionary Guard Corps were designated proliferators of weapons of mass destruction and ballistic missile technology, while several banks will be hit with sanctions for their role in supporting terrorist financing.

The United States hopes the measures would ratchet up pressure on Iran to negotiate.

The sanctions would be unilateral, however, and are believed to be the first of their type taken by the United States specifically against the armed forces of another government.

The sanctions reportedly will empower the United States to financially isolate a large part of Iran's military and anyone inside or outside Iran who does business with it.

Such steps could impact any number of foreign companies by pressuring them to stop doing business with the Revolutionary Guards or risk U.S. sanctions.

The Revolutionary Guards, formed to safeguard Iran's 1979 Islamic revolution, has pushed well beyond its military roots, and now owns car factories and construction firms and operates newspaper groups and oil fields.

Current and former members now hold a growing role across the country's government and economy, sometimes openly and other times in shadow.

The guards have gained a particularly big role in the country's oil and gas industry in recent years, as the national oil company has signed several contracts with a guards-operated construction company. Some have been announced publicly, including a $2 billion deal in 2006 to develop part of the important Pars gas field.

Now numbering about 125,000 members, they report directly to the supreme leader and officially handle internal security. The small Quds Force wing is thought to operate overseas, having helped to create the militant Hezbollah group in 1982 in Lebanon and to arm Bosnian Muslims during the Balkan wars.

The administration accuses the Quds Force of sending fighters and deadly roadside bombs, mortars and rockets to kill American troops in Iraq in recent years _ allegations that Iran denies.

The United States pressures U.S. and European banks to do no business with Iranian banks, such as Bank Sedarat that the Bush administration believes help finance guards' business operations. But the United States has been known for some time to also be considering naming the entire group as a foreign terrorist organization, allowing wider financial crackdowns.