Ban on dollar use with Iran could end
Some lawmakers voice objections
Washington — The Obama administration is considering easing financial restrictions that prohibit U.S. dollars from being used in transactions with Iran, U.S. officials said. Angry lawmakers countered that Tehran would be getting more than it deserves from last year’s nuclear accord.
While no final decision has been made, officials told The Associated Press the Treasury Department has prepared a general license permitting offshore financial institutions to access dollars for foreign currency trades in support of legitimate business with Iran, a practice that is currently illegal.
Several restrictions would apply, but the change could prove significant for Iran’s sanctions-battered economy. It also would be highly contentious in the United States, where Republican and some Democratic lawmakers say the administration promised to maintain a strict ban on dollars along with other nonnuclear penalties on Iran after last July’s seven-nation nuclear agreement.
“These reports are deeply concerning, to say the least,” House Speaker Paul Ryan said Thursday in a statement. “As Iran continues to undermine the spirit of its nuclear agreement with illicit ballistic missile tests, the Obama administration is going out of its way to help Tehran reopen for business. The president should abandon this idea.”
The nuclear pact provided Iran with billions of dollars in sanctions relief for curtailing programs that could lead to nuclear weapons. But the Iranians say they haven’t benefited to the extent envisioned under the deal because of other U.S. measures linked to human rights, terrorism and missile development concerns.
The new guidance would allow dollars to be used in currency exchanges as long as no Iranian banks are involved, according to the officials, who weren’t authorized to speak publicly on the matter and demanded anonymity. No Iranian rials can enter into the transaction, and the payment wouldn’t be able to start or end with American dollars. The ban would still apply if the final payment is intended for an Iranian individual or business on a U.S. sanctions blacklist.
In a speech Wednesday, Treasury Secretary Jack Lew said, “Since Iran has kept its end of the deal, it is our responsibility to uphold ours, in both letter and spirit.”
Lew warned that “sanctions overreach” risked driving business away from the United States, hurting the U.S. and global economy and empowering economic rivals.
“If foreign jurisdictions and companies feel that we will deploy sanctions without sufficient justification or for inappropriate reasons — secondary sanctions, in particular — we should not be surprised if they look for ways to avoid doing business in the United States or in U.S. dollars,” Lew told the Carnegie Endowment for International Peace.
In a letter to the president Thursday, Rep. Brad Sherman, a Democrat, said allowing dollar transactions for business with Iran “is clearly not required” by the nuclear deal and would only lead the Iranians to make further demands.
In a separate letter, Republican Sens. Marco Rubio and Mark Kirk cited testimony last year by Treasury Department’s sanctions chief, Adam Szubin, who told lawmakers Iran wouldn’t be allowed “even to execute a dollarized transaction where a split second’s worth of business is done in a New York clearing bank.”