U.S. Continues Sanctions Campaign Against Iranian Financial System

By Andrew Cochran

The U.S. Treasury Department announced a new designation against Assa Corporation, a front company in New York City , and its parent organization, Assa Co. Ltd,, located in the Channel Islands . Concurrently, the Justice Department has filed a complaint in federal court to force Assa to forfeit its interest in its headquarters building in New York City , and funds have been seized by DOJ from Assa's bank accounts. Both allege that Assa is a front company owned and operated by Iran 's Bank Melli, which Treasury designated on October 25, 2007, for its role in financing Iran's nuclear proliferation program. A quote from the Treasury Department press release:

"Bank Melli created ASSA CORP. as a vehicle to hold Bank Melli's interest in a building located at 650 Fifth Avenue , New York , New York , whose construction had been financed, in part, by a Bank Melli loan. ASSA CORP. co-owns the building through a partnership formed with the Alavi Foundation of New York , called 650 Fifth Avenue Company. ASSA CORP. has repeatedly transferred rental income generated from the 650 Fifth Avenue partnership back to Bank Melli through ASSA CO. LTD. ASSA CORP. also has regularly followed Bank Melli's instructions with regard to ASSA CORP.'s affairs and its management of the investment, and has regularly reported back to Bank Melli on its financial situation, including frequently responding to Bank Melli requests for audits and information regarding company expenses."

You can download the federal complaint from here.

We discussed the designation of Bank Melli (and Bank Saderat) when it was announced and have continued to cover the scope and impacts of that decision and the U.S. sanctions campaign against the Iranian financial system, most recently in Matthew Levitt's December 11 post, which links to the article, "The U.S. Campaign to Squeeze Terrorists' Financing," by Matthew and Michael Jacobson. Today's joint actions by the Treasury and Justice Departments send a strong signal that counter-terrorist and anti-proliferation financing measures remain among the highest priorities of the Executive Branch during the transition to a new President. The sanctions campaign has included the designation of Iran's Bank Sepah in early 2007 and the Treasury Department’s announcement on November 6th cutting off “U-Turn” privileges under general license for all transactions involving Iran ’s financial institutions.