The Treasury’s decision effectively bars any US-owned banks and American citizens from having any dealings with Bank Sepah.
"Bank Sepah is the financial linchpin of Iran’s missile procurement network and has actively assisted Iran’s pursuit of missiles capable of carrying weapons of mass destruction," Treasury official Stuart Levey said in a statement.
Levey heads up the department’s anti-terrorism and financial intelligence office.
The Treasury said it had barred US business with Bank Sepah, which it said has offices in London, Paris, Rome and Frankfurt, because of its support to "Iranian proliferation firms."
The blacklisting of Bank Sepah cuts the Iranian state-owned bank off from conducting any transactions linked to the US financial system.
The Treasury claimed that Bank Sepah provides financial support and services to Iran’s Aerospace Industries Organization (AIO), as well as other groups which it said oversee Iran’s missile program.
"Through its role as a financial conduit, Bank Sepah has facilitated Iran’s international purchases of sensitive material for its missile program," the Treasury said in a statement.
It said Bank Sepah had financed a Chinese firm’s sale of "missile related items" to Iran in 2005.
The Treasury said that the AIO directed Bank Sepah in the same year to transfer over 500,000 dollars to a North Korean firm associated with Komid, a North Korean entity which the US says has provided Iran with missile technology.
The Treasury said AIO subsidiaries are developing ballistic missiles for Iran’s government, some of which are believed to be capable of carrying unconventional warheads and have a range of least 1,500 kilometers (932 miles).
The US blacklisting of Bank Sepah also effects its wholly-owned London-based subsidiary, Bank Sepah International Plc, and Bank Sepah’s chairman Ahmad Derakhshandeh.
The Treasury said the Iranian bank has over 290 domestic branches.
The US government had similarly blacklisted Iran’s Bank Saderat in September, citing that bank’s alleged "support for terrorism."