More sanctions for Syria as US targets bank

The Treasury Department has targeted the Syria International Islamic Bank, which they say has been acting as a front for Syrian banks trying to get around existing sanctions.

By Anne Gearan and Julie Pace,?The Associated Press / May 30, 2012

The Syrian embassy in Washington, DC. The US has expelled diplomats and imposed more sanctions in response to the latest atrocities by Bashar Assad's regime.

Carolyn Kaster/AP

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The Obama administration added new sanctions on a Syrian bank Wednesday as a top White House official said the U.S. wants to economically throttle the regime of Syrian President Bashar Assad and cut off salaries of pro-government thugs blamed for the grisly massacre in Houla.

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The Treasury Department said the Syria International Islamic Bank has been acting as a front for other Syrian financial institutions seeking to circumvent sanctions. The new penalties will prohibit the SIIB from engaging in financial transactions in the U.S. and will freeze any assets under U.S. jurisdiction.

With the Obama administration unwilling at this point to pursue military options in Syria, the U.S. has relied heavily on economic sanctions as a means for pressing Assad to leave power. The United States will host other nations in Washington next week to look at ways to tighten international sanctions further.

"We are strangling the regime economically," White House deputy national security adviser Denis McDonough said.

David Cohen, Treasury undersecretary for terrorism and financial intelligence, said the toll taken by sanctions on Syria is "mounting day by day."

"They're drawing down their reserves without a ready means of replenishing those reserves," Cohen said.

The White House also blamed Iran for stirring up violence inside Syria and said Assad's fall would be a huge blow to Tehran. The United States is increasingly linking Syria and Iran rhetorically and tactically, applying economic pressure with and without help from the United Nations or other countries.

Iran is Syria's only staunch defender in the Middle East, and the Syria crisis has united Sunni Arab neighbors who see in Syria a way to weaken Iran, their main Shiite enemy.

"The Assad clique will end up, ultimately, in the dustbin of history and the people of Syria will have the chance to determine their own destiny," McDonough said. "When that happens, it will also be the most profound strategic setback that Syria's closest ally, Iran, has faced in decades. That is surely why Iran has provided material support and advice to the regime in brutalizing the Syrian people."

Speaking to a Brookings Institution forum in Doha, Qatar, McDonough pointed to what he called a recent "stunning" admission from Iran that its armed forces were joining the fight in support of the regime in Syria, and said Iran had tried to backtrack and "cover up" the announcement.

He blamed the Assad regime squarely for the massacre of 108 civilians last weekend in the town of Houla, and said claims that the killings were carried out by unaffiliated roughnecks are "a lie." Assad's associates pay the pro-government gunmen known as the shabiha, he claimed.

"Our objective is straightforward: Starve the regime of the resources it requires to pay the army, and deprive Assad's cronies of the money they need to buy the shabiha's brutal conspiracy."

The violence in Syria is spiraling out of control as an uprising against Assad that began in March 2011 has morphed into an armed insurgency.

In the wake of the Houla massacre, the United States and several other countries expelled Syrian diplomats to protest the killings.

McDonough said the U.S. is also lobbying Russia to distance itself from its ally Syria and apply pressure on Assad to leave office. A negotiated exit similar to one the U.S. helped broker for Yemen's longtime leader is one possibility, McDonough said, but he offered little optimism that U.S. arguments are gaining traction.

"I won't speak for any other government," White House press secretary Jay Carney said in Washington. "I would simply say that it is our belief, and it's the belief that we express in these conversations, that supporting the Assad regime is placing oneself or one's nation on the wrong side of history."

The U.S. has also sought United Nations action against Syria, but those efforts have been stymied by Russia and China, both of whom have veto power on the U.N. Security Council.

Susan Rice, ambassador to the United Nations, said the most likely scenario is that the peace plan crafted by special envoy Kofi Annan will fail.

She said it's preferred that Assad implement the Annan plan immediately. If he doesn't, the Security Council should increase sanctions.

Russia criticized the diplomatic expulsions, calling them "counterproductive," and has said new Security Council action would be premature.

Cohen said he plans to travel to Russia to discuss Syria. He said he thinks Russia shares the goal of a more open political system, although so far Russia has been a dogged defender of Assad. He also said some of Russia's commercial ties to Syria are troubling. He did not elaborate, but Russia is a trading partner to Damascus and has supplied the regime with weapons, food and medical supplies.

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