The Obama administration appears willing to offer new sanctions relief to Iran, including allowing the country to access the U.S. financial market, causing concern among lawmakers and experts, the Associated Press reported Thursday.
Administration officials had previously insisted that this would not be the case. Treasury Secretary Jack Lew said before Congress in July 2015 that Iran would continue to be “denied access to the world’s largest financial and commercial market.” Adam Szubin, the director of Treasury Department’s Office of Foreign Assets Control, declared in a September 2015 speech that “Iran will not be able to open bank accounts with U.S. banks, nor will Iran be able to access the U.S. banking sector.” Szubin emphasized further that the Iran deal would not allow Iran to “dollarize a foreign payment” and the financial sanctions would remain in place because they “had their origins long before Iran had a nuclear program,” and therefore could not be considered nuclear sanctions. The administration has insisted that non-nuclear related sanctions, such as those put in place for Iran’s human rights violations and support for terrorism, would remain in place.
“The sanctions were put in place [in 2011] to combat Iranian money laundering and terrorism finance based on evidence that met strict legal criteria,” Mark Dubowitz and Jonathan Schanzer of the Foundation for Defense of Democracies wrote in Foreign Policy last July. They argued that removing these sanctions would undermine international financial markets. This assessment was shared by the Financial Action Task Force, a global anti-money laundering watchdog, which concluded recently that Iran posed a “serious threat…to the integrity of the international financial system.” Dubowitz and Schanzer explained that such “relaxed banking standards will grant the Iranian regime the ability to move its money anywhere in the world.” “If they permit this, it is the end of U.S. sanctions on Iran,” Dubowitz told the AP.
Such a “concession would go a long way to meet Iran’s complaints that it hasn’t been sufficiently rewarded by the West,” The AP’s Bradley Klapper wrote. House Foreign Affairs Committee chairman Rep. Ed Royce (R-Calif.) said in response to these reports that “Any financial transaction with Iran risks supporting the regime’s illicit activities.”
The administration has appointed a diplomat, Chris Backemeyer, to reassure firms who want to do business with Iran but are nervous about additional sanctions or that the deal will be rescinded by a future administration. Backemeyer insisted that he also seeks to reassure the Iranians: “If we don’t do this, it’s easy for narratives to spring that we are in some way opposed to real sanctions relief. We are 100-percent committed to fulfilling our obligations under the (deal) and we are in no way trying to stand in the way of legitimate business activity in Iran.”
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