TEHRAN (Reuters) - Iran dismissed on Saturday a threat by Washington to impose sanctions on its central bank in response to an alleged assassination plot, saying the United Nations would block the plan and other central banks would not accept it.
Central bank Governor Mahmoud Bahmani said allegations that Iran had plotted to kill the Saudi ambassador in Washington — already rejected by Tehran as a fabrication — should not be used as an excuse to further undermine an economy already under a raft of sanctions over its nuclear activities.
“This (alleged plot) is a political discussion and many countries will not support this decision in the wake of it,” the ISNA news agency quoted Bahmani as saying.
“The UN would not buy that notion and neither would the world’s central banks go along with it,” he said, referring to Washington’s announcement last week that it was considering “very actively” sanctions on Iran’s central bank.
Washington and the European Union have already pushed four rounds of sanctions through the United Nations over Iran’s nuclear programme and imposed unilateral measures that have deterred western investment in Iran’s oil sector and made it harder to move money in and out of the country.
Imposing sanctions on the central bank would tighten that screw and make it more difficult for Iran to receive payment for exports — particularly oil, a vital source of hard currency for the world’s fifth biggest crude exporter.
Even without sanctions on the central bank, Iran was temporarily unable to receive some $5 billion of petrodollars from its second biggest customer earlier this year when India scrapped the payment system previously used — a move applauded by Washington.
A member of Iran’s Chamber of Commerce said sanctions on the central bank “would have very heavy consequences”.
“Central bank sanctions would certainly be a heavy blow ... a blow that might not be bearable for our transitional economy,” Massoud Daneshmand was quoted as saying by the ILNA news agency.
After the U.S. allegations of an assassination plot — which many Iran experts regard as flimsy — Washington and the EU imposed sanctions on individual Iranians who U.S. authorities said were behind the plot, but more retaliation is expected.
U.S. President Barack Obama said he aimed “to mobilise the international community to make sure that Iran is further and further isolated” and under “the toughest sanctions”.
U.S. financial institutions are already generally prohibited from doing business with any bank in Iran, including the central bank so the new measure being mooted by Washington would have to be carried out with international agreement.
Any new UN action would require the assent of permanent Security Council members Russia and China, which backed four previous rounds of sanctions but may be hard to persuade to go further on the basis of the allegations made so far.
Additional reporting by Hashem Kalantari and Mitra Amiri; Editing by Tim Pearce