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President Donald Trump tightens the screws on Iran's financial sector by adding 18 banks to the blacklist. Image Credit: New York Times

Washington: The Trump administration announced sweeping new sanctions on Iran's financial sector, a move intended to choke off the country's economy from the rest of the world and raise pressure on its government to enter a new deal constraining its nuclear programme.

The administration blacklisted 18 banks in Iran that have so far escaped some US restrictions, using authorities designed to punish entities associated with terrorism, ballistic-missile development and human-rights abuses. The Iranian financial sector was also designated as off-limits under an executive order that President Donald Trump signed in January.

The new sanctions were revealed in a web posting by the Office of Foreign Assets Control. They had been telegraphed in advance by US officials, who have been weighing the move for weeks.

"Today's action to identify the financial sector and sanction 18 major Iranian banks reflects our commitment to stop illicit access to US dollars," said Treasury Secretary Steven Mnuchin in a statement. "Our sanctions programmes will continue until Iran stops its support of terrorist activities and ends its nuclear programs."

Cut off

The move all but severs Iran from the global financial system, slashing the few remaining legal links it has and making it more dependent on informal or illicit trade. The country's economy has already been crushed by the loss of oil sales and most other trade thanks to existing American restrictions imposed after Trump quit the 2015 Iran nuclear deal.

"Amid COVID-19 pandemic, US regime wants to blow up our remaining channels to pay for food & medicine," Iranian Foreign Minister Javad Zarif said in a tweet after the sanctions were announced. "Iranians will survive this latest of cruelties. But conspiring to starve a population is a crime against humanity."

Iran has continued to do business with several countries including China and the United Arab Emirates, with total non-oil foreign trade reaching $24.6 billion in March-August, according to the country's customs administration.

Critics of the hardline approach say Iran is already so heavily sanctioned that one more set of restrictions won't make much difference. Indeed, the administration introduces new sanctions against Iran on a near daily basis, including Thursday, when the Treasury Department designated two Iranian judges under the Countering America's Adversaries Through Sanctions Act.