Iran: Cash Flow Jihad (Sanctions) Update

I covered some of this story in Iran Cash Flow Squeezed. There is now more news on the subject. The story points out that the banking restrictions are part of the sanctions against the Iranian regime.

WASHINGTON - According to a Saturday report by the Washington Post, the Bush administration has intensified efforts to 'choke off' the ability of Iranian banks to transfer funds to Hizbullah and Palestinian terror organizations, and subsequently, to hamper these organizations' ability to acquire weapons technology.

The US, in the past, has succeeded in barring al-Qaeda access to funds by cutting off suspect banks and firms from the international banking system. It recently began to take the same steps with regards to Iran and the initiative has gathered steam in recent weeks, even as US-led efforts to facilitate UN sanctions against Iran for its nuclear activities have slowed.

So American sanctions are in whether the UN acts or not. The banking sanctions, as I note in Squeezing Hamas' Cash Flow, are already having a severe effect on Hamas.

Evidently the American initiative is becoming popular with other nations.

The US initiative is blazing a trail that is apparently being followed by international banks, as was strikingly illustrated in the behavior of banks in Switzerland. Earlier this year the Swiss bank UBS ended its dealings with Iran, while two other banks, HSBC and Credit Suisse, sharply curtailed their business.

Stuart Levey, the Treasury undersecretary for terrorism and financial intelligence, intends to go to Europe next week to enlist support from governments and financial institutions for severing Iran from the international financial system. Other Treasury and State Department officials are traveling across Asia and the Middle East on similar missions.

Levey called the move "a sign of the costs that Iran's leaders will impose on the Iranian people if the leadership chooses to remain on its current path of defiance…The regime will end up isolating Iran from the world community, with reputable financial institutions becoming increasingly unwilling to handle Iran's business," he continued.

Sieges (sanctions, blockades) are slow moving affairs. The bigger the economic unit they are applied to the longer the effort is required to take effect. However, the effect, once felt, becomes more and more severe as resources go unreplaced.

The Iranian people, already pinched by their government's bad economic policy (socialism), are complaining about how their government is spending its money.

Economic riots are always harder to put down than those that are merely political. Hungry people have less to lose.

It also looks like Hizballah has just lost a chunk of change.

On Thursday, the treasury department separately targeted two Lebanon-based financial institutions that officials said acted as Hizbullah's unofficial treasury, helping secure loans and finance business deals for the organization, among other things.

One of these, the Beit al-Mal bank, headed by Hussein al-Shami, had its assets frozen. US sources said that al-Shami acts under the supervision of Hizbullah leader Hassan Nasrallah.

I covered some of Hizballah's cash flow problems in Hizballah Joins the Cash Flow Jihad. It looks like those problems are getting worse.

Any one who says America doesn't have a strategy on Iran is nuts. Their problem is that they look for something big and showy like explosions. What is going on is big and quiet and thus escapes much notice.