US Imposes Sanctions On Bank Sepah.

The US Treasury on Jan. 9 imposed sanctions against Iran's commercial Bank Sepah, accusing it of assisting Tehran's missile programme and having links with an alleged North Korean missile exporter. Bank Sepah International, a wholly owned subsidiary in the UK, and Ahmad Derakhshandeh, the parent bank's chairman and director, were targeted by a notice barring any US citizen from dealing with them and freezing any assets they have under US jurisdiction.

The unilateral moves were the first taken by the US since the UNSC imposed sanctions. The US last September banned dollar transactions with Bank Saderat, Iran's largest commercial bank, accusing it of facilitating the transfer of $1m to Lebanon's Hizbullah and other "terrorist organisations".

Stuart Levey, the Treasury under-secretary for terrorism and financial intelligence, said: "Bank Sepah is the financial linchpin of Iran's missile procurement network and has actively assisted Iran's pursuit of missiles capable of carrying weapons of mass destruction. Our action today gives effect to the United Nations' call on all nations to deny financial assistance to Iran's nuclear and missile programmes, and we urge other countries likewise to fulfill this serious obligation".

The action will have limited impact as US trade with Iran is severely limited by American sanctions imposed in the 1990s. However, the US is putting pressure on its allies to isolate Iran from the international financial system, using the cover of last month's UN resolution.

Iran is open about its indigenous development of missiles as allowed under international law but denies it has a covert nuclear weapons programme.

Reuters cited Ali Larijani, Iran's chief nuclear negotiator, as telling a domestic news agency that US "harassment" of Iran's banking system "are not issues that can affect Iran's will".

Tehran Won't Quit NPT: IRNA on Jan. 9 quoted Larijani as saying Tehran may alter its level of co-operation with the UN's International Atomic Energy Agency (IAEA) if Iran continued to be put under pressure over its nuclear programmes, but will not drop out of the Non-Proliferation Treaty (NPT), adding: "We do not insist on quitting the NPT... There are various methods to revise the co-operation level".

In reaction to the UNSC sanctions resolution out on Dec 23, Iran's parliament passed a bill obliging the government to revise its co-operation level with the IAEA, and to accelerate its nuclear work. The bill, passed last month, gave a free hand to Ahmadi-Nejad's government to decide whether it wanted to pull out of the NPT if pressured. Larijani repeated Iran's call for talks to resolve the nuclear dispute with the West.

Larijani said: "We think that returning to talks is the best way to resolve the nuclear issue", adding that "Iran will stick to its atomic work as a national cause".

Open criticism of the handling of the nuclear issue is unusual because it is considered a matter of national security, but Ahmadi-Nejad's policies have been criticised in the country since the resolution was passed. Ahmadi-Nejad accused the West of trying to create discord among Iranians to reach its aim, which he said was depriving Iran of its legal right to nuclear technology. Ahmadi-Nejad said: "The aim of the [UNSC] resolution, passed by the enemies, is to pave the ground for some elements in Iran...to scare our people and to weaken the nation's will" - in a clear reference to the recent criticism of his atomic policies.

A group of reformist parliamentarians has criticised Ahmadi-Nejad for letting Iran's case be sent to the UNSC to face sanctions. Iran's main pro-reform party, the Islamic Iran Participation Front, has called for a review of the nuclear policy, saying in an statement on Jan. 6 that the government should refrain from what it described as "adventurous" policies.

Some conservative newspapers have become critical of the nuclear policies of the president who has called the UNSC resolution "a piece of torn paper". The hardline Jomhuri-ye Eslami newspaper's editorial on Jan. 9 said: "You (Ahmadi-Nejad) use such an aggressive tone that sounds so stubborn to listeners...while the nature of our atomic motion is prudent".

Supreme Leader Khamenei, not the president, has the final say in state policy. But Ahmadi-Nejad seems to be trying to - and to some extent succeeding in - toughening Iran's line with fiery speeches.