updated 2/21/2008 1:52:11 PM ET 2008-02-21T18:52:11

The United States on Thursday imposed economic sanctions against a prominent Syrian businessman as part of an effort to punish officials in Syria for alleged efforts to undermine the governments of Iraq and Lebanon.

The Treasury Department said the sanctions would be imposed on Rami Makhluf, who was identified as a prominent Syrian businessman and regime insider.

President Bush last week signed an executive order that expanded penalties against senior government officials in Syria and their associates who are judged to have benefited from public corruption.

The Treasury Department order freezes any assets that Makhluf holds in U.S. financial institutions and prohibits U.S. citizens and firms from engaging in any business contacts with him.

Makhluf is the first cousin of Syrian President Bashar Assad, and is considered one of the most powerful and influential businessmen in Syria. The 39-year-old controls the country's mobile phone network, SyriaTel, as well as other lucrative businesses.

"Rami Makhluf has used intimidation and his close ties to the Assad regime to obtain improper business advantages at the expense of ordinary Syrians," Stuart Levey, Treasury's undersecretary for terrorism and financial intelligence, said in a statement.

"The Assad regime's cronyism and corruption has a corrosive effect, disadvantaging innocent Syrian businessmen and entrenching a regime that pursues oppressive and destabilizing policies, including beyond Syria's borders, in Iraq, Lebanon and the Palestinian territories," Levey said.

'Psychological pressure'
Syrian lawmaker Mohammed Habash said the American move will have no effect on Makhluf because he has no money or assets in the United States or in U.S. financial institutions.

"They know that neither Rami nor other Syrian officials have money in America. This move is part of psychological pressure to affect people who do business with him (Makhluf)," Habash told The Associated Press in a telephone interview.

"We are expecting a lot of such measures in the next six months, but this will not affect Syria's policy," Habash said. "There is no solution with this American administration, and we have to wait for the next president."

Bush signed the executive order on Feb. 13, one day after Imad Mughniyeh, one of the world's most wanted and elusive terrorists, was killed in a car bombing in Syria nearly 15 years after dropping from sight.

The one-time Hezbollah security chief was the suspected mastermind of attacks that killed hundreds of Americans in Lebanon as well as the brutal kidnappings of Westerners.

The new executive order builds on one that Bush issued in May 2004 that banned all U.S. exports to Syria except for food and medicine.

The 2004 order also banned flights to and from the United States to Syria and authorized the Treasury Department to freeze assets of Syrian nationals and entities involved in terrorism, weapons of mass destruction, occupation of Lebanon or terrorism in Iraq.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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