The Obama administration’s efforts to provide Iran with unprecedented access to the United States financial system is provoking push-back from leading legislators in the foreign policy arena, the Washington Free Beacon reported on Monday.
The White House is looking at new ways to grant financial relief to Iran following complaints from the Islamic Republic that the economic concessions it was afforded under the nuclear deal, including the release of more than $100 billion in frozen funds by the U.S., are not sufficient, according to the Free Beacon.
Now visits are made by western sides having no positive effects so far. Unless results are seen in action, agreement on paper is of no use.
— Khamenei.ir (@khamenei_ir) March 10, 2016
The reported plans to widen the scope of the sanctions relief, including by opening the American financial system to Iran, are contrary to assurances given last year by administration officials, including Treasury Secretary Jack Lew.
The news comes on the heels of a report last week that the White House engaged in secret negotiations with Iran for years before agreeing to pay it $1.7 billion in taxpayer funds, which has been viewed as a ransom for Americans held by Iran.
— Mark Kirk (@MarkKirk) March 28, 2016
“Any administration effort to get foreign financial institutions or foreign-based clearing houses to enable Iran’s terror-sponsoring regime to conduct transactions in U.S. dollars ignores American laws and the Financial Action Task Force,” warned Sen. Mark Kirk (R., Ill.). “Such an effort would benefit Iran’s terror financiers while fundamentally undermining the USA PATRIOT ACT 311 finding that Iran’s entire financial sector is a jurisdiction of primary money laundering concern.”
The senator explained that further opening up America’s financial system to Iran would weaken “the Financial Action Task Force’s ongoing calls for international countermeasures to protect financial sectors from Iran’s terrorist financing.” Kirk is part of a congressional effort to impose new sanctions on Iran for its ballistic missile program.
Rep. Mike Pompeo (R., Kan.), a member of the House Permanent Select Committee on Intelligence, told the Free Beacon that the administration’s efforts to placate Iran could give the Islamic Revolutionary Guard Corps (IRGC) a foothold in the U.S., a situation Pompeo described as “comical if it wasn’t so dangerous.”
“American and international businesses can’t ignore the Islamic Revolutionary Guard Corps’ vast control of the Iranian economy and the threat Iranian banks pose to the international financial system,” Pompeo explained.
The dangers that Iran poses to the international financial system generally, and to the American system specifically, were emphasized by Mark Dubowitz and Jonathan Schanzer in an op-ed published Monday in The Wall Street Journal.
— AJ Beloff (@aj_beloff) March 28, 2016
Dubowitz and Schanzer, respectively the executive director and vice president for research at the Foundation for Defense of Democracies, also explained why Congress is preparing to fight future administration concessions to Iran.
It’s not hard to understand why. The Financial Action Task Force, a global antiterrorism finance body, maintains a severe warning about Iranian financial practices. Last month it warned that Iran’s “failure to address the risk of terrorist financing” poses a “serious threat . . . to the integrity of the international financial system.” The Treasury Department also recognizes the danger, in 2011 labeling the Islamic Republic a “jurisdiction of primary money laundering concern.” That finding, which remains in place, cites Iran’s “support for terrorism,” and “illicit and deceptive financial activities.”
— Mark Dubowitz (@mdubowitz) March 27, 2016
Dubowitz and Schanzer dismissed anticipated claims by the administration that allowing Iran access to the American banking system would yield possible intelligence benefits to the U.S., asserting that Iran will reduce its exposure to American currency to escape scrutiny and that the damage done through its corruption would, in any case, outweigh any minimal intelligence that could be gleaned from its transactions.
— Robert Silverman (@silverrj99) March 28, 2016
They also argued that by granting this final measure of sanctions relief, the administration would be throwing away the last bit of leverage it has over Iran. During the debate over the nuclear deal, the administration emphasized that it would prevent Iran from accessing the American financial system precisely because it needed the leverage in case Iran would violate the deal. Dubowitz and Schanzer asked, “Why throw away that leverage in exchange for no new concessions?”
Dubowitz and Schanzer concluded by calling on Congress to “oppose Iran’s access to the U.S. financial system” until it “can get the intelligence community to verify that Iranian banks have stopped financing terrorist groups such as Hezbollah and Hamas—not to mention money laundering and other financial crimes.”
The administration previously agreed to extend waivers to travelers who had recently been in Iran, contravening the visa waiver program previously passed by Congress and signed into law by President Barack Obama, after Iranian Foreign Minister Mohammad Javad Zarif complained that the law violated American commitments to Iran as part of the nuclear deal.
Despite complaints by Iran that the U.S. is breaching the terms of the nuclear deal, Secretary of State John Kerry clarified in testimony before the Senate Foreign Relations Committee last summer that the U.S. had only agreed to lift nuclear sanctions.
We’re not going to come back and just slap [sanctions] on again, but that absolutely does not mean that we are precluded from sanctioning Iranian actors, sectors, as any actions or circumstances warrant. So all of our other sanctions authorities remain in place, they are unaffected by this agreement, and Iran only said, if you read what it says, that they would treat the imposition of new nuclear related sanctions as the grounds to cease performing. But they are clear and we are clear that we have all other kinds of authorities and let me specific on that because it’s important for this whole debate to be clear.
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