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US targets Iran's central bank as world takes aim at Iran's nuclear program

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The US action taken Monday does not formally sanction Iran’s central bank, also called Bank Markazi, but the “money laundering” designation is expected to entail serious impact on its operations.

Similar steps taken in the past against North Korean and Lebanese banks caused other countries and international businesses to sever ties, and US officials are clearly hoping for a similar impact in the case of Iran.

The US also announced sanctions on a list of companies it says are involved in supporting Iran’s nuclear program, and new measures targeting Iran’s production and sales of petrochemicals and oil exports.

Secretary of State Hillary Rodham Clinton called the measures “a significant ratcheting up of pressure on Iran.”

The administration’s action, announced jointly by Secretary Clinton and Treasury Secretary Timothy Geithner, comes as Congress moves forward on its own measures aimed at Iran’s central bank.

US officials said the decision to name Iran’s central bank for money laundering, while stopping short of sanctioning the bank directly, was part of an effort to allow foreign governments and companies still doing business with Iran to prepare now for more draconian measures expected in coming weeks.

Officals say the money laundering designation was justified by the central bank’s involvement in transactions in support of terrorism, and for its continuing work on behalf of other Iranian banks that have been sanctioned by the US and others for financing aspects of Iran’s nuclear program.

Some members of Congress expressed support for the administration’s actions, while characterizing them as only a first step toward sanctioning Iran’s central bank.

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