NOVEMBER 21, 2011, 6:14 PM ET

http://blogs.wsj.com/corruption-currents/2011/11/21/us-designates-iran-as-primary-money-laundering-concern-sanctions-energy-sector/?mod=google_news_blog

In a significant ratcheting up of measures against Iran, the U.S. announced it designated the entire country as a “primary money-laundering concern” and imposed new sanctions on the country’s energy sector.

The measures, announced at a press conference by Treasury Secretary Tim Geithner and Secretary of State Hillary Clinton, represent the latest move by the U.S. in the wake of a report by the International Atomic Energy Agency that said Tehran was working on technology that could be used to produce nuclear weapons. Iran, however, strongly denies its nuclear program is geared toward weapons, and has rejected the findings of the report.

It also follows the announcement of an alleged plot to assassinate the Saudi Arabian envoy to Washington, D.C., which the U.S. said included elements of the Iranian regime. Iran denies involvement in the plot. The U.S. and others have frozen the assets of those it said were involved, however.

Using a provision of the U.S.A. Patriot Act, Geithner said Monday that Washington designated the entire Iranian banking sector, including the country’s central bank, as a “primary money-laundering concern.”

The little-used finding doesn’t freeze the sector’s assets, but is designed to put the fear of a total block from the U.S. financial system in the mind of anyone who does business with a designated entity.

A financial institution conducting any transaction with Iran’s banking sector is at risk of supporting its nuclear program, terrorism or its efforts to evade sanctions, Geithner said. “Any and every financial transaction with Iran poses grave risk of supporting those activities,” he said.

“Financial institutions around the world should think hard about the risks of doing business with Iran,” he said.

The “primary money-laundering concern” finding was last used in February against The Lebanese Canadian Bank SAL, or LCB, and it effectively put the bank out of business without warning, it said in May. It was last used on an entire jurisdiction in 2003, a senior administration official said during a conference call explaining the announcement.

“It’s the first time you can find anywhere of a complete laydown of all the illicit activity Iran currently engages in and has engaged in,” a senior administration official said.

Canada and the U.K. (pdf) joined the U.S. on Monday in blocking Iran’s access to its financial systems. A senior administration official said on the conference call it’s working on a worldwide campaign to get more countries to do the same.

In addition, the White House issued an executive order that targets Iran’s energy sector. Any single transaction worth $1 million or more that supports the development of Iran’s petroleum resources is banned under the new order, as is any transaction of $250,000 or more to maintain or expand the country’s petrochemical sector.

The executive order also expands sanctions already in place that make it more difficult for Iran to modernize or maintain its oil and gas sectors. In addition to the previous block on investment in the sectors, the new executive order prevents the sales of good or services to anyone operating there in those sectors.

“As long as Iran continues down this dangerous path, the U.S. will continue to find ways, both in concert with our partners and through our own actions to isolate and increase the pressure upon the Iranian regime,” said President Barack Obama in a statement.

Further, the U.S. imposed sanctions on 11 entities and individuals under an existing executive order for their alleged assistance to Iran’s nuclear programs, including its enrichment and heavy-water programs. Their assets under U.S. jurisdiction were frozen and any U.S. person is banned from doing business with them.

Clinton emphasized in her remarks that the impact of Monday’s measures will grow unless Iran’s leadership decides to change its course. “Today’s actions do not exhaust our opportunities to sanction Iran,” she said.