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U.S. official doubts Iran can find alternative to central bank
May 11, 2012 / 12:49 AM / 5 years ago

U.S. official doubts Iran can find alternative to central bank

EDITORS' NOTE: Reuters and other foreign media are subject to Iranian restrictions on leaving the office to report, film or take pictures in Tehran. An Iranian man walks past a currency exchange shop in northern Tehran January 3, 2012. REUTERS/Morteza Nikoubazl

WASHINGTON (Reuters) - A top U.S. Treasury official said on Thursday that he was skeptical that Iran could find an alternative payment system to its central bank, which is the target of U.S. sanctions aimed at depriving Tehran of funds needed to develop its nuclear program.

“It’s fair to say that we are going to be very skeptical about efforts to develop alternative payment methods,” David Cohen, Treasury’s Undersecretary for Terrorism and Financial Intelligence, said at an event in Washington.

“Our presumption going in is anyone buying oil from Iran is ultimately paying the central bank of Iran, even if there is some intermediary step,” he told the Center for Strategic and International Studies think-tank.

The Western sanctions against Iran are designed to deprive Iran of funds needed for its nuclear program by stopping financial institutions from conducting oil transactions with Iran’s central bank.

The West contends Iran is developing nuclear weapons, but Iran denies the accusation and says its program is for peaceful means.

Iran has authorized private exporters in the country to sell up to 20 percent of its crude exports in order to dodge U.S. sanctions that target Iran’s central bank, the head of the traders’ union said in a report on Wednesday.

Countries that buy Iranian crude have until June 28 to reduce their Iranian oil imports or their financial institutions could be blocked from U.S. markets.

Reporting by Rachelle Younglai, Editing by Gary Crosse

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