TEHRAN - Iran rejected on Saturday as "baseless" the reasons given by the United States for sanctioning a Malaysian-based subsidiary of its second-largest bank, the official IRNA news agency reported.
The U.S. Treasury on Thursday sanctioned Iran's state-owned Bank Mellat in Malaysia and its chairman, labelling them as proliferates of weapons of mass destruction.
"America has not provided specific and justifiable reasons for sanctioning Iran's Mellat Bank in Malaysia," said deputy Economy Minister Asghar Abolhasani, IRNA reported.
The U.S. Treasury said it named First East Export Bank, a Bank Mellat subsidiary located in Malaysia, and Bank of Mellat's chairman, Ali Divandari, for acting on behalf of Bank Mellat.
The move freezes assets and bans Americans from doing business with them.
The United States has previously targeted Bank Mellat, along with other Iranian state banks, with sanctions because of concerns they were involved in helping to develop nuclear weapons.
Abolhasani said accusing Bank Mellat of being involved in the Islamic state's nuclear programme was "merely a pretext".
"Based on rules and regulations of the United Nations, any bank can invest in peaceful nuclear energy," Abolhasani said.
Washington and its European allies fear Iran is trying to build nuclear weapons under cover of a civilian programme.
Iran, the world's fifth-largest crude exporter, has said its nuclear programme is peaceful and aimed at generating electricity so it can export more of its gas and oil.
In the Islamic Republic's first part-privatisation of a bank, a 5 percent stake in Bank Mellat was sold in February.
European Union leaders have called on Iran to accept a U.N.-drafted nuclear proposal in which it would send most of its low-enriched uranium abroad by the end of the year for further enrichment to turn it into fuel for a medical reactor in Tehran.
The plan aims to reduce Iran's LEU stockpile below the minimum quantity that could be turned into the highly enriched uranium needed for a bomb.
Tehran seems to be stalling by saying talks were needed on the deal and that Tehran wants to import atomic fuel rather than send its own uranium abroad for processing.
Western powers have signalled their patience is limited and they will consider new sanctions early next year unless Iran makes its nuclear work more transparent. The U.N. Security Council has imposed three sets of sanctions on Iran since 2006.