Israel declares Central Bank of Iran a terrorist organization

The designation could mark the beginning of a process that encourages other countries to follow Israel’s lead.

By JNS

Israeli Defense Minister Israel Katz has signed a special order designating the Central Bank of Iran a terrorist organization, he announced on Wednesday.

The decision was made “at the request of the Mossad and the National Bureau for Economic Warfare,” he posted on X.

Iran’s Central Bank serves as “a conduit for funneling billions to murderous terrorism,” he continued.

This measure strikes the ayatollah regime “where it hurts most—its financial lifelines—which fund the terrorism of Hezbollah, the Houthis, Shiite militias in Iraq, Hamas and terror in Judea and Samaria,” wrote Katz.

He stressed that no group or state involved in terrorism has immunity. Israel will “continue to expose, strike and dry up the Iranian axis of evil wherever it operates,” he concluded.

However, Eyal Ofer, a former government adviser and expert on “Hamas economics,” told JNS on Wednesday that Katz’s measure was “mostly symbolic.”

The world will largely continue its economic policies with Iran in accordance with the present sanctions regime of the Trump administration, he said.

Former senior advisor to the Prime Minister’s Office and Bank of Israel economist Ido Norden concurred.

“One of the most effective tools in the global financial war against terrorism is designating a financial institution as a supporter of terrorism,” he told JNS.

“Such a designation prevents all financial entities operating in countries that are members of the Financial Action Task Force (FATF) from engaging in any financial interaction with the institution. In this way, all transfers of funds to terrorist organizations are blocked.”

Until now, he continued, “the Central Bank of Iran operated freely in the financial arena, despite being a key channel for financing terrorist actors worldwide.”

However, “terrorist organizations that rely on Tehran—particularly in the Middle East, their main theater of activity—primarily receive their funding in cash, making this move less impactful on them directly.”

For Katz’s measure to have real effect, “other FATF member states must join Israel in this designation, as the Iranian bank has no financial interactions with Israeli banks anyway. As such, the move currently carries primarily declarative significance,” he said.

However, the designation could mark the beginning of a process that encourages other countries to follow Israel’s lead, he added.

The defense ministry’s move comes on the back of a 12-day war with Iran, in which Israel preemptively struck air defense systems, military leaders and nuclear scientists, as well as nuclear facilities, across the Islamic Republic in the early morning hours of June 13.

The Islamic Republic in response launched approximately 550 ballistic missiles at Israeli territory, with most intercepted by Israeli and American air defense systems, according to Hebrew media.

Out of 1,000 drones launched by Iran during the war, only one managed to hit a residential building.

The Israeli military destroyed in Iran 80 anti-aircraft batteries, along with approximately 250 missile launchers out of an estimated 700 to 750, Israel’s Channel 12 News reported.

Most of Iran’s military and Islamic Revolutionary Guard Corps leadership was eliminated, the report added.

Israeli Prime Minister Benjamin Netanyahu on Tuesday night declared the war as a “historic victory” for the Jewish state, saying the Israel Defense Forces had neutralized two existential threats.

In a video address, Netanyahu said Israel’s military campaign had eliminated the danger posed by Iran’s nuclear weapons program and its ballistic missile arsenal.

“At the decisive moment, we rose up and stood like lions, and our roar shook Tehran and echoed around the world,” he said.