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World Bank suspends payments to
Iran

By
Steven R. Weisman

Published: November 4, 2007

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WASHINGTON:
The World Bank, newly caught up in the Bush administration's campaign against
Iran, has had to suspend payments for earthquake relief, sanitation and other
projects there in response to new American sanctions on leading Iranian banks,
World Bank officials say.

Only $5.4 million in payments has been suspended for four projects, involving
earthquake relief, water and sanitation, environment management and urban
housing, the officials said, and they do not expect the suspensions to be
permanent.

But the bank has no plan to resume payments because it is having trouble
finding banks in Iran through which to route them now that the United States has
barred dealing with four of Iran's largest banks, accusing them of involvement
in terrorism, or nuclear or missile programs.

"At this point, the World Bank is looking for alternate ways to support these
projects," said a bank official, who spoke on condition of anonymity. "It is
unknown how difficult that might be. It is not that easy to find alternatives.
We have no answer on how or when at this point."

American officials said they hoped that the decision by the World Bank would
increase pressure on Iran, not necessarily by stopping humanitarian projects but
by dramatizing the country's economic isolation in light of its refusal to
suspend uranium enrichment and negotiate with the West over its nuclear
program.

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The payments for the World Bank projects have all gone through Bank Melli,
one of Iran's largest banks, but Bank Melli was accused last month by the United
States of being involved in nuclear proliferation and terrorism. Also listed
were two other institutions, Bank Mellat and Bank Saderat. Bank Saderat had
already been listed by the United States as being involved in financing
terrorism.

Some congressional critics of the administration's Iran policies have called
on the United States to block World Bank aid programs for Iran altogether. The
World Bank has nine active projects in Iran and, by last year, had financed 48
operations worth about $3.4 billion, according to the bank's Web site.

The effect of the United States' listing these major Iranian banks is that no
American bank is allowed to facilitate any dollar-based transaction between them
and any other bank in the world.

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