Iran denied on Tuesday a claim by the U.S. Treasury that its state oil company is linked to the country’s powerful Islamic Revolutionary Guard Corps (IRGC).
The designation, made in a Treasury report to Congress, enables the United States to apply new sanctions on foreign banks dealing with the National Iranian Oil Company (NIOC), one of the world’s largest oil exporters.
The move is part of a wider net of oil-related sanctions by Washington aimed at forcing Iran to curb the nuclear program which the West says is aimed at developing weapons. Tehran says its nuclear work is purely for peaceful purposes.
“We strongly deny these false allegations,” said Alireza Nikzad-Rahbar, a spokesman for Iran’s Oil Ministry, according to the Mehr news agency.
The IRGC, Iran’s elite military force, has long been under U.S. sanctions for what it defines as terrorism and human rights abuses.
In a statement on Monday, the U.S. Treasury said NIOC was an “agent or affiliate” of the IRGC, and cited the appointment as oil minister in 2011 of Rostam Qasemi, a former commander of the Guards’ engineering and construction wing, Khatam al-Anbia.
The Treasury said the company had obtained “billions of dollars” worth of contracts in Iran’s energy sector, many times without having to bid competitively.
But spokesman Nikzad-Rahbar said Qasemi no longer had any connection to Khatam al-Anbia, Mehr reported.
“The shuffling of people and managers between various governmental and non-governmental apparatuses is natural,” he said.
While U.S. companies are already prohibited from buying Iranian oil, the new determination means the United States can impose further sanctions on any foreign bank that facilitates transactions with NIOC, according to the sanctions law.
The new penalties will not apply to countries to which the United States has granted sanctions waivers as a reward for significantly cutting their purchases of Iranian oil.
But Monday’s move by the U.S. Treasury could make any foreign banks more nervous about taking on business with NIOC that, even if not banned, could nevertheless hurt relations with the U.S. government or banks.