The United States will harshly retaliate against any bank or company caught doing business that involves sanctioned Iranian entities, despite a recent announcement from the Treasury Department that had been broadly interpreted as loosening American sanctions against previously prohibited transactions with Iran, a top Obama administration official said on Thursday.
The threat, made by Under Secretary for Terrorism and Financial Intelligence Adam Szubin, came after THE WEEKLY STANDARD asked about a recent statement from Iran’s Central Bank (CBI) that Treasury’s new language had now made it “unacceptable” for foreign banks to deny Iran access to the U.S. dollar, even for business with entities controlled by Iran’s heavily-sanctioned Revolutionary Guard Corps (IRGC).
“You cannot do business with IRGC companies,” Szubin said. “If you do, and you’re doing so knowingly, you are risking the most draconian sanctions in our toolkit, and that governs not just U.S. persons but actors all around the world.”
Szubin also said that the U.S. continued to ban and sanction “the vast majority” of dollar transactions that Iran would want to engage in, because they would have “to come through a U.S. bank.”
“That is not legal, that is not okay, and you better be careful,” he said.
Szubin’s comments come amid growing controversy over the updated Treasury language, which was published late in the afternoon Friday before the Columbus Day weekend. Top Iranian officials described the measures as relaxing a range of previous financial sanctions, a sentiment also conveyed in the American press.
“Iran says the US Treasury Department has effectively opened the way for non-American banks and financial institutions to proceed with dollar-dominated (sic) transactions with Iranians,” read a report in Iran’s state-run PressTV. The Wall Street Journal and the Associated Press had a similar interpretation, with the AP writing that Treasury’s actions allow for “some previously prohibited dollar transactions with Iran” and “remove a blanket ban on foreign transactions with Iranian firms that may be controlled by a person who remains subject to U.S. sanctions.”
Lawmakers who asked for clarification about the guidelines received a general response from the Treasury Department, which said that some of the measures had been “mischaracterized,” and explained that the updates were not out of line with previous practices or U.S. law.
“If [Treasury’s] intent was to clarify and guide, it appears to have failed,” the office of Senate Banking Committee chairman Richard Shelby told TWS.
Sources who spoke to TWS said that Szubin’s comments from Thursday may set up a confrontation with the Islamic Republic.
“The Obama administration can’t admit what it’s really after, which is loosening as many sanctions on Iran as possible before the next president is inaugurated,” said a political operative who works closely with Democrats and Republicans in Congress on Iran issues.
“That makes businesses confused, and when businesses are confused they wait on the sidelines until things settle down—which is exactly what the Obama administration doesn’t want.”
