Iran says US sanctions on central bank are ‘unfounded’

Mahmoud Bahmani, the governor of the Central Bank of Iran, on Monday said plans by US Congress to impose sanctions on Iran's central bank were "unfounded".

Iranian Students' News Agency, a government-funded newspaper, quoted Bahmani as saying the use of sanctions by foreigners on the central bank would be "unfair" and not entirely possible.

"[The] Iranian Central Bank is not linked to the government, it belongs to the nation and that is why it sometimes acts independently. Everybody should know that nations should not be sanctioned," Bahmani was reported as saying. The Central Bank of Iran could not be reached for comment.

The remarks come after ninety US senators signed a letter to the US President Barack Obama pressing him to penalise Iran's central bank after it was suspected of helping banks circumvent existing sanctions.

The letter, dated August 9, called on President Obama to embark on a "comprehensive strategy" to pressurise Iran's financial system by imposing "crippling sanctions" on the Central Bank of Iran.

Washington is concerned at the rapid acceleration in Iran's uranium enrichment and the Iranian regimes' refusal to cooperate with the United Nations' (UN) nuclear watchdog on the development of nuclear weapons.

The activities of the Central Bank of Iran have been tightly monitored by the US Treasury since the enactment of the Comprehensive Iran Sanctions, Accountability and Divestment Act (Cisada) on July 1, 2010.

On May 3, 2011, under-secretary of the Treasury for Terrorism and Financial Intelligence, David Cohen, said he was concerned the central bank had been facilitating transactions for sanctioned Iranian banks by requesting their names be removed from international payment messages, making it more difficult for intermediary financial institutions to determine the true parties to the transaction.

The UN Security Council is also working on a similar proposal to impose sanctions on the Iranian central bank and in May released a draft document, calling on member states to "exercise vigilance" over transactions involving Iranian banks, including the Central Bank of Iran.