"More than 40 major international banks and financial institutions have either cut off or cut back business with the Iranian government or private sector" as a result of the campaign.
Iranian President Mahmoud Ahmadinejad's wild statements on the international stage have perhaps done as much to scare off the financiers as the US campaign, but the strategy is certainly putting the squeeze on financing for the Iranian government's petroleum development projects. And Iranian importers are suffering, "with many having to pay for commodities in advance when a year ago they could rely on a revolving line of credit."
However, embedded in the report is a very ominous sign about how things are really going in Iran: The Iranian Revolutionary Guard Corps (IRGC) "control and influence in the Iranian economy is growing exponentially under the regime of Ahmadinejad," according to Treasury undersecretary for terrorism and financial intelligence Stuart Levey.
The new [US financial campaign] particularly targets financial transactions involving the [IRGC], which is now a major economic force beyond its long-standing role in procuring arms and military materiel. Companies tied to the elite unit and its commanders have been awarded government contracts such as airport management and construction of the Tehran subway. The practice has increased since the 2005 election of [Ahmadinejad], U.S. officials say. The Revolutionary Guard -- of which Ahmadinejad is a former member -- is part of the hard-line leader's constituency.It seems the IRGC represents the most fanatical faction in Iran, and now it seems as if their economic clout is strengthening their vise-like grip on the country. So Pundita worries that the UN sanctions and the US financial campaign could have the opposite intended effect -- unleashing the kind of bunker mindset and actions that characterized Saddam Hussein's response to UN sanctions.
I note that the 15 British troops wrongfully detained in Iran last Friday were seized by the IRGC navy unit, which operates separately from Iran's navy.
1) Iran Feels Pinch As Major Banks Curtail Business by Robin Wright, Washington Post Staff Writer.
2) See also Pundita's Treasury puts the whammy on Axis of Evil.