Tensions rise as US imposes new Iran sanctions

The US imposed new sanctions against Iran’s defence ministry, its Revolutionary Guard Corps and a number of banks today.

US Secretary of State Condoleezza Rice said the move was designed to punish Iran for its support for terrorist organisations in Iraq and the Middle East, missile sales and nuclear activities.

But she said the US remained committed to a “diplomatic solution” and had “no conflict” with the Iranian people.

The sanctions, the toughest since the takeover of the US Embassy in 1979, 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.

In a State Department press conference in Washington, Ms Rice said the action would “help to protect the international financial system from the illicit activities of the Iranian government”.

“The United States and our partners are fully committed to a diplomatic solution with Iran,” she said.

“If the Iranian government fulfils its international obligations to suspends its uranium enrichment and reprocessing activities, I will join my British, French, Russian, Chinese and German colleagues, and I will meet with my Iranian counterpart any time any where.

“We will be open to the discussion of any issue.

“But if Iran’s rulers choose to continue down a path of confrontation, the United States will act with the international community to resist these threats of the Iranian regime.”

To the Iranian people, she added: “We in the United States have no conflict with you. We want you to have every opportunity to develop and prosper in dignity, including the peaceful use of nuclear power.

“So we hope that your government will embrace the path of co-operation that we and the international community continue to offer.”

The Quds Force, a part of the Guard Corps that Washington accuses of providing weapons, including powerful bomb-making material blamed for the deaths of US soldiers in Iraq, and several banks, will be identified as “specially designated global terrorist” groups for their activities in Afghanistan, Iraq and the Middle East.

US Treasury Secretary Henry Paulson said 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,” he said, referring to Iran’s Revolutionary Guard Corps.

The actions mean that any assets under US jurisdiction which belong to the designated groups must be frozen and Americans are also forbidden from doing business with them.

The designations also put companies outside the US on notice that doing business with the designated groups could be problematic.

Mr Paulson said: “We have been working closely and intently with our international partners to prevent one of the world’s most dangerous regimes from developing the world’s most dangerous weapons.”

He went on: “The IRGC is so deeply entrenched in Iran’s economy and commercial enterprises, it is increasingly likely that if you are doing business with Iran, then you are doing business with the IRGC.

“As awareness of Iran’s deceptive behaviour has grown, many banks around the world have decided as a matter of prudence and integrity that Iran’s business is simply not worth the risk.”

In the UK, a Foreign Office spokesman said: “We endorse the US administration’s efforts to apply further pressure on the Iranian regime.

“As the PM has said on 24 October, we are prepared to lead the way to a third resolution of sanctions, and at the same time support tougher European Union sanctions.”