US urges European bank to cut Iran out of transfer system

WASHINGTON (JTA) — The Obama administration has joined Congress in urging the European Central Bank to shut Iran out of its money transfer system.

David Cohen, an undersecretary of the Treasury, said in a Senate Banking Committee hearing Thursday that his department is pressing the ECB to ban access by Iranian officials to “Target2,” the bank’s cross-border funds transfer system.

“We have fed into that process and we will continue to press the ECB to take what we think is the right step here,” Cohen said. “Which is to cut off euro clearing for the, or to apply to euro clearing the same set of restrictive measures that the European Union has on any Iranian business.”

Last month, Sens. Mark Kirk (R-Ill.) and Jeanne Shaheen (D-N.H.) initiated a letter signed by 36 senators to the European Council, urging it to direct the central bank to take such action.

The senators alleged in their letter that Iran uses the system to launder euros in its accounts, allowing it to alleviate tough U.S. and European sanctions aimed at forcing the regime to be more transparent about its nuclear program.

Cohen also said the Obama administration was pressing Europe “very, very hard” to designate Hezbollah, a Lebanese group allied with Iran, as a terrorist organization.