The U.S. government imposed sanctions on an Iranian bank on Friday, barring it from dealing with U.S. financial institutions, even indirectly.
The move against Bank Saderat was announced by Stuart Levey, the undersecretary for treasury, who accused the major state-owned bank in Iran of transferring funds for alleged terrorist groups, including Hezbollah.
While Iranian financial institutions are barred from directly accessing the U.S. financial system, they are permitted to do so indirectly through banks in other countries.
But the latest move severs that access for Bank Saderat and Levey said the action does not apply to other Iranian banks.
It was the Bush administration's latest effort against Iran and Hezbollah.
Levey said since 2001 a Hezbollah-controlled organization had received 50 million U.S. dollars directly from Iran through Bank Saderat.
He said the U.S. government will also persuade European banks and financial institutions not to deal with Iran.