By Timothy Gardner and Jonathan Saul

WASHINGTON, Feb 10 (Reuters) – The United States has sold more than a million barrels of Iranian fuel seized under its sanctions program last year, a Department of Justice official said, as another ship with intercepted Iranian crude oil sails to a U.S. port.

The seizures are part of Washington’s tough economic sanctions on Tehran imposed over its nuclear program and the U.S. designation of a number of Iranian groups as terrorists, continuing decades of rancor between the two nations. Iran rejects U.S. accusations of wrongdoing.

In a new approach last year, the administration of former U.S. President Donald Trump used civil forfeiture procedures to seize some 1.2 million barrels of gasoline it said were being sent from Iran to Venezuela aboard four tankers.

The shipments, the largest seizure by Washington of Iranian fuel to date, were transferred to other vessels and sent to the United States, where the fuel was meant to be sold and the proceeds distributed to a fund for U.S. victims of state-sponsored terrorism.

Department of Justice spokesman Marc Raimondi told Reuters this week that the sale of the cargoes had been completed, adding that the government was “still working out the final expenses.”

“The petroleum has been seized, and an interlocutory sale has preserved the cash value of the petroleum, which is now held by the U.S. Marshals Service” he said. The value of the gasoline was not known, but was likely worth tens of millions of dollars based on benchmark European gasoline prices.

Raimondi said the department still needs the U.S. District Court in Washington, D.C., to enter an order of forfeiture “and then the funds will be transferred to the U.S. Victims of State Sponsored Terrorism Fund.”

The fund was established by the U.S. government in 2015 to award compensation to individuals who suffered harm as a result of an act of international terrorism by a state sponsor of terrorism.

Last week, the United States filed a lawsuit to seize another cargo, this one of crude oil it says came from Iran -rather than Iraq, as stated on the bill of lading – contravening U.S. terrorism regulations.

That cargo, loaded onto the Liberian-flagged Achilleas tanker, last reported its position in Caribbean waters. The U.S. Gulf port of Galveston was its destination with a scheduled arrival on Feb. 15, Refinitiv ship tracking data showed on Wednesday.

Houston and Galveston pilots groups said they have not been informed of the Achilleas arrival or which agent will handle unloading the cargo.

Iran has not commented on the tanker as yet.

Relations between Washington and Tehran worsened under Trump. His administration pulled out of the 2015 nuclear deal between Iran and six world powers, imposed more sanctions on Tehran and killed the head of the elite Quds Force in an air strike.

U.S. President Joe Biden supports returning to diplomacy with Iran if it comes into compliance with the 2015 nuclear deal. But this week he said the United States will not lift its economic sanctions on Iran in order to get Tehran back to the negotiating table to discuss how to revive the deal.

(Reporting by Timothy Gardner in Washington, Jonathan Saul and Ron Bousso in London, Gary McWilliams in Houston, Marianna Parraga in Mexico City, Parisa Hafezi in Dubai; Editing by Dan Grebler)