The State Department offered strong hints Monday that the Obama administration is looking for ways to give Iran access to dollar-denominated transactions through non-U.S. banks, despite increasing worries in the Republican Congress that the administration is going too far to make it easy for Iran to do business around the world.
Last week, Republicans jumped on a Wall Street Journal report that the administration was thinking of giving Iran access to the U.S. financial market. President Obama himself and the Treasury Department rejected that story, and a Treasury spokeswoman said: “The administration has not been and is not planning to grant Iran access to the U.S. financial system.”
But on Monday, State Department spokesman Mark Toner indicated that he agrees there are ways the U.S. can get Iran access to dollar-denominated transactions.
Toner was asked specifically if the administration has ruled out the idea of telling foreign banks that they can conduct dollar-denominated transactions with Iran, without fear of U.S. penalties. Toner replied by saying Obama did hint at these sorts of other options.
“The specificity of your question, I’m not certain of, but he did mention the fact that there are other available options for some of these companies that are separate and apart from the U.S. financial system,” he said.
Toner also made it clear that access to these dollar transactions overseas is not the same thing as giving Iran access to the U.S. financial system.
“Allowing Iran to have access to transactions that are conducted in dollars is not allowing them access to the U.S. financial system. Is that correct?” he was asked.
“That’s my understanding,” Toner replied. He then seemed to agree with the premise that foreign banks might soon be relieved of sanctions by the Obama administration, even if they deal with Iran in dollars.
“So … the administration intends to make clear to banks, to foreign banks, that if they want to handle transactions where the ultimate payee is in Iran, that those transactions can use dollars, and it won’t run afoul of any U.S. law. Is that correct?” Toner was asked.
“Right,” Toner replied. “I mean, it’s not necessarily that we are going to take the approach of them going through dollar-denominated transactions, but it is possible for them to work through European financial institutions, and we’re going to work to continue to clarify that.”
Toner was asked if the administration was preparing some rule or announcement on this controversial issue, but said, “We’re not there yet,” and referred reporters to the Treasury Department.
Toner’s comments are likely to further infuriate Republicans in Congress who say the administration continues to give too much away to Iran, starting with accepting the nuclear agreement last year.
House Speaker Paul Ryan and others warned last week that Iran shouldn’t be able to do business in dollars, and the administration’s apparent intentions in that direction have some members saying the administration purposefully misled Congress on the kinds of sanctions relief it wanted to give to Iran.
But Toner insisted that the administration has been forthright with Congress.
“No,” Toner said when asked if officials misled Congress. “We made every effort… made ourselves available to members on the Hill, to explain every aspect of the JCPOA agreement, and made every effort in engaging with Congress to be as transparent as possible about what we were trying to achieve through the actual agreement, but also the fact that we would retain every ability to continue to exert sanctions pressure on Iran.”
