The Obama administration won’t provide Congress with a range of details about a recent announcement that cleared the way for doing business with Iran, including Iranian firms controlled by sanctioned military and terrorist groups, according to congressional sources and experts who spoke to THE WEEKLY STANDARD.
The new guidelines, which were issued by the Treasury Department on the Friday before Columbus Day, told foreign banks they could work with Iran in U.S. dollars, allowed foreign firms to do business with companies “controlled in whole or in part” by sanctioned Iranian entities, and loosened the responsibility of banks to avoid funding illegal transactions.
The timing of the announcement prompted criticism that the administration was trying to bury new concessions in response to renewed Iranian demands for more relief as part of last summer’s nuclear deal. The U.S. had long warned against any business with companies controlled by sanctioned Iranian groups, and the Obama administration had broadly promised Congress last summer to maintain economic pressure on Iran.
Inquiries and criticism of the administration from Congress have been met with blanket declarations that the guidelines contain nothing new, according to multiple sources.
In a letter from the Treasury Department sent to Senate Banking Committee chairman Richard Shelby and obtained by TWS, the administration accused critics of having “mischaracterized” its efforts but did not address a range of specifics about the updates.
“If [the letter’s] intent was to clarify and guide, it appears to have failed,” Shelby’s office told TWS.
The letter focused on two measures in particular, pertaining to offshore dollar transactions and foreign business with sanctioned entities, that it said did not diverge from previous practices or U.S. law.
“This guidance is fully consistent with the legislation Congress passed beginning in 2010 to impose secondary sanctions, and reflects the legal standard in place since long before these FAQ updates,” the letter read, in reference to the latter measure.
A source who works closely with Congress on Iran sanctions issues disagreed with that assessment, noting that the U.S. government has had a longstanding precedent of “prohibiting work with sanctioned entities.”
“But all the administration will do is keep repeating that there’s nothing new here,” the source said. “Meanwhile the Iranians have begun crowing that banks have to give them dollars and do business with them specifically because of the new Treasury language.”
Earlier this week, the Central Bank of Iran (CBI) declared that the Treasury update had made it “unacceptable” for non-American banks to withhold dollars from Iran because “providing dollar-related services [to Iranians] will no longer expose non-American banks to the risks of sanctions provided that they stay clear of [the U.S.] financial system.”
English-language Iranian media emphasized that the Treasury announcement “effectively opened the way for non-American banks and financial institutions to proceed with dollar-dominated (sic) transactions with Iranians.”
U.S. media outlets, including the Wall Street Journal and Associated Press, also reported the guidelines as a shift in policy and a relaxation of financial sanctions on Iran. The AP described the changes as a “further easing” of sanctions and said that the updates allow for “some previously prohibited dollar transactions with Iran.”
Experts noted that Treasury’s
“Taken together, the new measures undermine the remaining non-nuclear sanctions against Iran, which the Obama administration promised Congress it would vigorously enforce,” said Mark Dubowitz, Annie Fixler, and Eric Lorber, sanctions experts at the Foundation for Defense of Democracies. “These measures will only increase congressional concerns that, even in the waning days of this administration, the White House is giving away even more significant concessions to Tehran.”
