Obama Admin Granted Iran Access to U.S. Financial System Despite Sanctions

In selling the 2015 nuclear deal with Iran to Congress, the Obama administration assured lawmakers that Tehran would not have access to the U.S. financial system. But in 2016, the administration secretly granted Iran a license to do just that, according to a Republican-led Senate report released Wednesday.

The 53-page report by the Senate’s Permanent Subcommittee on Investigations (PSI), chaired by Ohio senator Rob Portman, also reveals the extent of Obama administration efforts to encourage foreign countries to do business with Iran. Its release comes after President Donald Trump announced that the U.S. would be withdrawing from the agreement and reimposing nuclear deal-related sanctions on Iran.

The lifting of those sanctions in January 2016 allowed Tehran to tap into its previously frozen assets abroad, including $5.7 billion rials held in an Omani bank, Bank Muscat. Iran wanted to convert those funds to euros, which could be done most efficiently by first converting to U.S. dollars as an “intermediary step.” In an effort to allow Iran to convert its once-frozen rials, the Treasury Department granted a specific license in February 2016 that authorized the Iranian assets to be converted using the U.S. financial system, according to the report.

“A conversion to U.S. dollars on behalf of the [Central Bank of Iran] was prohibited under U.S. sanctions,” the report says. “Other options existed to convert the funds from rials to euros without using the U.S. financial system. But using the U.S. dollar as an intermediary step was the most efficient means, even though U.S. sanctions prohibited it.”...