"Treasury has now exposed 20 banks owned by the government of Iran for supporting Iran's nuclear and missile programs or terrorism," said Stuart Levey, Treasury Undersecretary for Terrorism and Financial Intelligence.

Treasury said Bank Refah also facilitated payments from the Iran Aircraft Manufacturing Industrial Company to businesses and individuals linked to Iran's weapons-related procurement.

"The pervasiveness of this illicit conduct explains why legitimate financial institutions everywhere are deciding to shun Iranian banks," said Levey, a holdover from the Bush administration who announced his resignation late last month.

The latest actions prohibit U.S. entities from any transactions with the designated firms and individuals, and seek to freeze assets they may have under U.S. jurisdiction.

Previous similar moves also have effectively cut off international financing to sanctioned entities.

The European Union imposed sanctions against Bank of Refah in July 2010, the Treasury said.

Iran says its nuclear enrichment program is designed to generate electric power. The United States and its Western allies accuse it of seeking to acquire nuclear weapons.

**Reporting Corbett B. Daly; Editing by Xavier Briand