U.S. Proliferation Activities
Treasury Designation of the Export Development Bank of Iran (EDBI) and Affiliated Entities for Proliferation Activities
Today, the Department of the Treasury designated under Executive Order 13382 (E.O. 13382) the Export Development Bank of Iran (EDBI) for providing financial services to Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and multiple MODAFL-subordinate entities, which permitted these entities to advance Iran’s weapons of mass destruction programs.
EDBI has facilitated the ongoing procurement activities of various front companies associated with MODAFL-subordinate entities. MODAFL was designated by the State Department under E.O. 13382 on October 25, 2007. Since the U.S. designation of Iran’s state-owned Bank Sepah under E.O. 13382 in January 2007, the EDBI has functioned as a key conduit for MODAFL-subordinate entities seeking alternative means to continue their illicit purchases of goods and equipment. In addition to handling transactions for Bank Sepah, which was listed in UN Security Council Resolution (UNSCR) 1747 for its proliferation-related activities, EDBI has facilitated financing for other proliferation-related entities sanctioned under both U.S. and UN authorities. Today’s designations further call attention to the risk that any business with Iranian state-owned banks could be unwittingly assisting Iran’s proliferation activities.
The use of EDBI to conduct proliferation transactions is another clear example of Iran’s efforts to circumvent sanctions and continue its proliferation-sensitive activities. Iran’s efforts to master the nuclear fuel cycle continue, now in contravention of five UNSCRs.It is critical that we work to maintain the integrity of the sanctions by remaining vigilant to new methods and entities used by Iran to engage in proliferation, and by taking action against them. We hope that these targeted measures will help dissuade Iran from continuing down the path of isolation.
Also designated today are three entities that were found to be owned or controlled by, or acting for or on behalf of, the EDBI. These entities are: the EDBI Stock Brokerage Company and the EDBI Exchange Company, both located in Iran; and Banco Internacional de Desarrollo, CA, a financial institution located in Venezuela. Banco Internacional de Desarrollo, CA was found to be owned or controlled by or acting or purporting to act for or on behalf of, the EDBI. As such, it could provide Iran a potential means of circumventing financial sanctions and facilitating defense-related payments. As of August 2008, the President of Banco Internacional de Desarrollo was the Chairman of the Board and Managing Director of the EDBI. Banks should reconsider doing business with or entering into joint ventures with Iranian banks due to the risks of becoming unwitting facilitators for Iran’s proliferation activities. Those entities that continue to act on the behalf of E.O.-designated entities, such as the EDBI, could face possible designation under E.O. 13382.