Iran is still barred from accessing the U.S. financial system. But foreign banks can conduct transactions with Iranians and Tehran in U.S. dollars, Adam Szubin, acting treasury undersecretary for terrorism and financial intelligence, explained to the House Foreign Affairs Committee on Wednesday.
“Our sanctions do not control the actions of non-U.S. citizens,” Szubin explained. “Every bank in the world has U.S. dollars in their possession … our sanctions do not extend to those dollar bills; off-shore dollar clearing” is not affected by continuing U.S. sanctions aimed at coercing Iran into curbing its support for terrorist groups and reining in its ballistic missile program, he said.
Committee Chairman Ed Royce, R-Calif., reminded Szubin that the Treasury Department labeled Tehran a “primary money laundering” concern and that allowing Iran any access to the world’s top currency is dangerous.
“Any financial transaction with Iran or any offshore scheme that is set up risks supporting the regime’s ongoing illicit activities,” Royce said.
Royce also said Treasury Secretary Jack Lew seems more concerned about helping Iran benefit from the sanctions relief it has gotten.
“Instead of shutting the door right there,” Royce said about Lew’s assurances to him that Iran cannot access the U.S. financial system, “Secretary Lew said his focus was on making sure Iran gets relief.”
The U.S. continues “to prohibit U.S. persons from investing in Iran, importing or exporting to Iran most goods or services, or otherwise engaging in commercial or financial dealings with most Iranian persons or companies,” Szubin told the panel. “Iran will also continue to be denied access to U.S. markets.
“Along these lines, let me also say clearly that we have not promised, nor do we have any plans, to give Iran access to the U.S. financial system, or to reinstate what’s called the ‘U-turn’ authorization,” Szubin said, using a term for complicated financial transactions originating overseas and passing through the American banking system.
“We are not standing and will not stand in the way of permissible business activities involving Iran,” Szubin said. “Nor are we blocking Iran’s access to funds that are no longer restricted following” implementation of the deal Tehran struck with six world powers and the United Nations to curb its nuclear weapons program, “or encouraging others to do so.”
Szubin noted that Iran has benefited since the international community lifted some sanctions under the agreement.
“It has opened new bank accounts around the world; it has gained access to billions of dollars in reserves; and its oil exports to Europe have recovered to about half of pre-sanctions levels,” Szubin said.
