This report has been updated with additional information from the U.S. government and research by Kharon.

The U.S. Treasury Department on Friday imposed sanctions on the Iranian sovereign wealth fund and the central bank, marking the first U.S. response to attacks on Saudi Arabian oil facilities that Washington and Riyadh have blamed on Tehran or its proxies.

Iran has denied any role in the attacks, saying that Houthi rebels in Yemen, who claimed responsibility, were behind it. The Iranian envoy to the United Nations sent a letter to the U.N. denying any Iranian role in the attack. Iran has backed the Houthis with weapons and military advisers, according to reports, though Tehran has also denied this accusation. The attacks shut half of Saudi’s oil production, though officials said some output has since been restored. Houthi leaders said later Friday that they will halt attacks on Saudi Arabia, and they expect the Saudis to do the same. The U.S. sanctioned leaders of the Houthi movement in 2015.

President Donald Trump announced the designations during remarks Friday morning from the Oval Office of the White House. “We’ve never done it to this level,” he said. Late Friday, Defense Secretary Mark Esper announced that additional U.S. troops and air-defense assets would deploy to Saudi Arabia, emphasizing that they were going in a defensive nature.

The sanctions also came hours before Iranian officials, including Foreign Minister Javad Zarif, were set to arrive in New York City for the annual United Nations General Assembly. The trip was almost canceled over questions whether Zarif would receive a visa; he was sanctioned in July for acting on behalf of the Supreme Leader Ali Husseini Khamenei, who was designated in June.

The National Development Fund (NDF), which is Iran’s sovereign wealth fund and whose board of trustees includes Iranian President Hassan Rouhani, the country’s oil minister and the central bank governor, was established to serve the Iranian people by allocating revenue toward productive economic investments, the Treasury said. It controls $91 billion in assets, according to the Sovereign Wealth Fund Institute. However, the NDF has been a source of foreign currency and funding for the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and the Ministry of Defense and Armed Forces Logistics (MODAFL), according to the Treasury. 

The NDF, in coordination with the Central Bank of Iran (CBI), provided the IRGC-QF with half a billion U.S. dollars in 2017 and hundreds of millions of dollars more in 2018, the Treasury said. Despite an increase in the Islamic Revolutionary Guard Corps (IRGC) budget for 2019, Rouhani withdrew another $4.8 billion from the NDF in January to amend the budget for the IRGC and the Islamic Republic of Iran Broadcasting (IRIB), according to the Treasury. 

The IRGC was designated in April as a foreign terrorist organization (FTO). IRIB was sanctioned in February 2013 for censorship. MODAFL was designated in March for assisting the IRGC-QF; it was first sanctioned in 2007 for supporting Iranian proliferation activity.

Funds from the NDF are being used for a variety of Iranian projects, according to Iranian media. Khamenei agreed to withdraw $300 million earlier this month to launch a railway from Chabahar, on the coast of the Gulf of Oman, to Zahedan, a city that borders Pakistan and Afghanistan. The project, headed by Khatam al Anibya, the construction arm of the IRGC, has been ongoing for years, according to Radio Farda. The NDF in June signed a contract with Iran’s Export Development Bank worth $230 million to augment development projects, such as renovating the commercial transportation fleet, according to local reporting. Khamenei in April approved drawing up to $2 billion from the NDF for last-resort aid relief after catastrophic floods hit Iran in March of this year, causing an estimated $2.5 billion in damages.

The Iranian central bank was sanctioned Friday for its financial support to the IRGC-QF and Hizballah, the Treasury said. CBI is the first central bank sanctioned by the Treasury under its counterterrorism authorities, the department said in a social media post.

The IRGC-QF has since at least 2016 received the vast majority of its foreign currency from the CBI, and senior CBI officials have worked directly with the IRGC-QF to facilitate the support, according to the Treasury. The IRGC-QF oversaw the transfer of tens of millions of euros to Iraq from the CBI, the transfer was directed by former CBI Governor Valiollah Seif, who was sanctioned in May 2018, the Treasury said. 

In 2018 and 2019, the CBI facilitated the transfer of several billion U.S. dollars and euros to the IRGC-QF, and hundreds of millions to MODAFL from the NDF, according to the Treasury. Millions were also transferred to the Houthis and the CBI has coordinated with the IRGC-QF to transfer funds to Hizballah, the Treasury said. 

CBI has been designated since Nov. 5, 2018, when the U.S. reimposed its sanctions on Iran following the exit from the nuclear deal. It had been delisted as part of the nuclear agreement, having originally been sanctioned in 2012.

“We are putting governments on notice that they are risking the integrity of their financial systems by continuing to work with the Iranian regime’s arm of terror finance, its Central Bank,” said Treasury Under Secretary Sigal Mandelker.

Abdolnaser Hemmati, the CBI governor, was quoted in Iranian media as saying the sanctions show that the U.S. government has no leverage over Iran. If the sanctions were effective, the Iranian economic situation of Iran would be very different, he reportedly said.

The final company sanctioned Friday by the U.S. was Iran-based Etemad Tejarate Pars Co. It has been used to conceal financial transfers for military purchases by MODAFL, the Treasury said. The company as of early 2019 planned to send tens of millions in various currencies to Dubai-based Wilmington General Trading LLC, the Iranian embassy in Moscow and other companies on behalf of MODAFL, according to the Treasury. 

Wilmington General Trading was sanctioned in March for being owned and controlled by Asadollah Seifi, a financial facilitator of the IRGC Treasury said had obfuscated millions of dollars worth of transactions benefiting the Iranian government and the purchase of foreign currency for IRGC.

Analysts from the Iran team contributed to this report.