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    Sanctions enforcer says he travels globe to twist arms

    between doing business with the United States or with Iranian banks—but they cannot do both.

    He says that usually is not a tough decision for foreign bankers to make.

    David S. Cohen, who recently succeeded Stuart Levey as the under secretary of the Treasury for terrorism and financial intelligence, told the Senate Banking Committee last Thursday he and his staff are “aggressively” enforcing the newest sanctions law, known as CISADA in Washington jargon, that was signed into law a year ago.

    “My colleagues in the Treasury Department and I have … met with foreign banks, regulators and government officials in nearly 50 countries. We explain to banks and governments worldwide that CISADA offers a clear choice: a foreign bank can have access to the largest and most important financial sector in the world—the United States—or it can do business with sanctioned Iranian banks.

    “But it cannot do both. For the overwhelming majority of foreign banks, the choice has been a simple one,” Cohen said. “Those with potentially santionable relationships quickly elected to stop that business. And where we learn of potentially sanctionable activity under CISADA, we have actively investigated it, engaging, in particular, with the foreign bank’s regulator and home government.”

    Cohen said, “Our efforts are paying off. Iran is now facing unprecedented levels of financial and commercial isolation. The number and quality of foreign banks willing to transact with designated Iranian institutions has dropped precipitously over the last year. Iran’s shrinking access to financial services and trade finance has made it extremely difficult for Iran to pay for imports and receive payment for exports.” The best example of that is the trouble India has had arranging to pay for Indian oil, but Cohen did not cite any particular cases.

    Cohen said, “Iran’s Central Bank has been unable to halt the steady erosion in the value of its currency.” That is true—but it has been true ever since the revolution and didn’t just start with the US banking restrictions. Most analysts blame the long slide in the rial’s value on Iranian financial policies, not US sanctions.

    Cohen also said, “Iran has been increasingly unable to attract foreign investment, especially in its oilfields, leading to a projected loss of $14 billion a year in oil revenues through 2016.” That figure drew a lot of attention. Cohen did not say how that statistic was developed and some thought it was a soft number, not a real and hard figure.

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