The United States Friday warned foreign financial institutions that they will lose access to their U.S. counterparts unless they cut off ties with individuals and entities involved in Iranian nuclear programs.
Undersecretary for Terrorism and Financial Intelligence Stuart Levey issued the warning while announcing the conclusion of a three-week visit to South Korea, Bahrain, Brazil, Ecuador, Japan, Lebanon, Turkey and the United Arab Emirates by a U.S. team to discuss the new sanctions on Iran under U.N. Resolution 1929. The resolution was adopted in June to bolster sanctions for Iran's failure to abandon its uranium enrichment programs.
"During their travels, Treasury officials ... outlined the potential for foreign financial institutions continuing to do business with individuals or entities designated by the United States to lose access to the U.S. financial system," Levey said in a statement.
The statement comes as South Korea is considering suspending or shutting down Bank Mellat and two other Iranian entities in Seoul listed by the Treasury Department.
Robert Einhorn, the State Department's special adviser for nonproliferation and arms control who oversees U.S. sanctions on North Korea and Iran, visited Seoul early this month and called for South Korea's cooperation in banning business ties with blacklisted Iranian entities.
The Treasury Department announced early this month a new list of 21 Iranian companies and several Iranian officials for their alleged support of terror groups and transfer of weapons prohibited by the U.N. Resolution 1929.
The European Union, Australia and Japan joined forces in recent weeks to issue new sanctions on Iran.
South Korean firms are concerned that limits on business with Iran will greatly undermine their long-term opportunities there in the petrochemical, construction and plant export industries amid China's growing influence.
China, which has invested heavily in Iran despite international sanctions, has said it opposes new sanctions on Iran by the U.S. and its
allies, calling for more dialogue on the issue of uranium, which Tehran insists is for power generation.
Levin said Iran "will attempt to seek out new channels to access the international financial system for illicit purposes, as international
pressure mounts and its economic isolation increases."
"It is incumbent upon governments to put
into place the appropriate mechanisms to protect against this threat," he said. "The U.S. will continue its outreach to governments and the private sector around the world to prevent Iran from exploiting new banks and unwitting partners in furthering its nuclear and missile programs."
Einhorn and other U.S. officials will likely visit Beijing in early September to seek Chinese cooperation on new sanctions on North Korea and
Iran, as China is seen as key to effective implementation of the sanctions on both countries.
The U.S. is set to announce later this month a new list of North Korean entities and individuals involved in trading weapons, luxury goods,
counterfeit money, cigarettes, drugs and other illegal activities banned by U.N. resolutions adopted after the North's nuclear and missile tests last year. The U.S. currently blacklists more than 20 North Korean entities and individuals.
Beijing is considered a key to effective sanctions on Pyongyang because it is a lifeline to its impoverished communist neighbor, providing most of the fuel, food and other necessities.
China has been reluctant to slap sanctions on North Korea, focusing instead on reviving the six-party nuclear talks, which have been stalled
over U.N. sanctions.
South Korea has kept a balanced position on Iran and economic considerations for the past decade while following the obligatory sanctions
imposed by the U.N. Security Council and refraining from voluntary harsh measures toward Iran.
Iran recently warned South Korea it will face consequences if Seoul joins the international community in imposing stricter sanctions.
South Korean firms, including LG, Hyundai, Samsung Electronics, Hanjin Heavy industries and Daewoo Shipbuilding, have signed billion-dollar
contracts with Iran in recent years.
South Korea's trade with Iran reached US$10 billion last year. Iran, the world's fourth biggest crude oil producer, supplied nearly nine percent of South Korea's oil last year.