GOP senators seek to block proposal on Iran dollar rules

AP News
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Posted: Apr 06, 2016 1:31 PM
GOP senators seek to block proposal on Iran dollar rules

WASHINGTON (AP) — Two Republican senators opposed to the Iran nuclear deal are trying to block an Obama administration proposal that would ease rules on using U.S. dollars in trade transactions with Iran.

Marco Rubio of Florida and Mark Kirk of Illinois introduced legislation on Wednesday that would bar the Treasury from permitting foreign banks to conduct foreign currency trades in U.S. dollars for transactions involving Iran. A copy of the bill was obtained by The Associated Press.

The bill would expressly forbid Treasury from issuing any license that would allow anyone "to conduct an offshore United States dollar clearing system for transactions involving the government of Iran or an Iranian person" or "provide United States dollars for any offshore United States dollar clearing system conducted or overseen by a foreign government or a foreign financial institution for transactions involving the government of Iran or an Iranian person."

Administration officials have denied they are considering giving Iran direct access to dollars or to the U.S. financial system as part nuclear sanctions relief, but have left open the possibility of easing some rules on the indirect use of dollars for transactions with Iran as long as they did not involve U.S. or Iranian banks.

The Associated Press reported last week that Treasury has prepared a general license that would permit offshore financial institutions to conduct foreign currency trades in dollars in support of legitimate business with Iran.

A pact agreed to by the United States, Iran and five other powers in July 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.

No final decision has been made on the license and several restrictions would apply. The license would not give Iran access to the U.S. financial system and it would not allow Iran itself to conduct business in American dollars. But the change could prove significant for Iran's sanctions-battered economy.

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.

Many lawmakers have expressed concern that the proposal would give Iran more than it deserves and open the door to Iranian access to the U.S. financial system, which is currently barred by law. Republican and a few Democratic lawmakers say the administration promised to maintain a strict ban on dollars along with other non-nuclear penalties on Iran after last July's seven-nation agreement that is designed to prevent Iran from becoming a nuclear power.

In an opinion piece published Wednesday in The Washington Post, the chairman of the House Foreign Affairs Committee, Ed Royce, R-Calif., said that allowing even indirect dollar transactions would be "an alarming departure from the Obama administration's position just months ago" and would abet Iranian money laundering.

"Iran would be allowed to launder dollars while the administration looked the other way" if the proposal went ahead, Royce wrote.