U.S. Sees Insurance Clampdown on Iran Over Nuclear Program

September 11, 2008

The United States is discussing with allies how insurance firms can more rigidly apply sanctions on Iran to step up pressure over its disputed nuclear program, a senior U.S. Treasury official said on Tuesday.

Stuart Levey, Treasury undersecretary for terrorism and financial intelligence, said Western banks had reined in dealings with Iran in the light of successive U.N. Security Council resolutions, but argued there was potential scope for the insurance sector to get tougher.

“I think that is something that is worth looking at and we are in discussions about that,” Levey told Reuters in an interview during a European trip including talks with officials in Belgium, Austria, the Netherlands and Germany.

“Have we applied all the prohibitions in the U.N. Security Council resolutions that apply to financial services to Iran? Have those been applied to insurance, and have insurance companies grappled with the issue?” he said.

Levey declined to detail specific measures which the sector could take in its dealings with Iran. “We are still in discussions with our allies about these issues,” he said.

Major powers suspect Iran of seeking the atom bomb despite Tehran’s assertions that its nuclear program is peaceful. They have used a mix of sanctions and trade and other incentives to seek to persuade Iran to suspend uranium enrichment.

A third set of U.N. Security Council sanctions voted in March called on states to “exercise vigilance” in taking on new commitments for financial support for trade with Iran, including export credits, guarantees or insurance.

Governments were also urged to monitor dealings between financial institutions in their countries and banks domiciled in Iran, especially the large Bank Melli and Bank Saderat.

“We should be looking at implementing very strictly the sanctions that have already been enacted in terms of looking at the call for vigilance in (UNSC resolution) 1803 on financial institutions. Let’s really be vigilant,” he said.

Levey said vigilance should extend to checks on whether Iran was using front companies for dubious dealings, whether certain transactions were going through third countries to mask Iran’s role in the deal, and thorough checks on Iran’s shipping sector.

“We are on the right path in terms of presenting Iran with this stark choice. I think we need to continue down that path,” he added.

(Editing by Dale Hudson)

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