With the Obama administration pondering allowing banks and other countries to use the American dollar in transactions with Iran, U.S. Sen. Marco Rubio, R-Fla., and U.S. Sen. Mark Kirk, R-Ill., are leading the charge against the proposal.
Currently, the federal government has a ban in place on foreign governments and banks to use American currency in transactions with Iran. But with the White House cutting back on sanctions on Iran as part of its nuclear deal with that country, the administration is considering ending the currency restriction.
On Wednesday, at a speech to the Carnegie Endowment for International Peace, U.S. Treasury Sec. Jack Lew warned of “sanctions overreach”
“Since Iran has kept its end of the deal, it is our responsibility to uphold ours, in both letter and spirit," he told the Carnegie Endowment for International Peace.
Lew warned that "sanctions overreach" risked driving business away from the United States, hurting the U.S. and global economy and empowering economic rivals and hinted that the currency sanction could be part of that “overreach."
"If foreign jurisdictions and companies feel that we will deploy sanctions without sufficient justification or for inappropriate reasons — secondary sanctions, in particular — we should not be surprised if they look for ways to avoid doing business in the United States or in U.S. dollars,” Lew said.
Rubio and Kirk quickly fired back, sending a letter to Lew on Wednesday, insisting that the currency sanction is needed.
“Any such efforts would benefit Iran’s financiers of international terrorism, human rights abuses, and ballistic missile threats while also ignoring the Treasury Department’s finding under Section 311 the USA Patriot Act that Iran’s entire financial sector is a jurisdiction of primary money laundering concern, and undermining ongoing calls by the Financial Action Task Force (FATF) for countermeasures to protect international financial sectors from Iran’s terrorist financing,” the senators wrote on Wednesday. “We request corresponding assurances from you that the United States will not issue a general license authorizing ‘U-turn transactions’ for Iran, in which a U.S. bank processes a transaction for a foreign financial institution on behalf of Iran while the Iranian part of the transaction does not touch the U.S. financial system directly.
“We also request assurances from you that the United States will not work on behalf of Iran to enable Iranian access to U.S. dollars elsewhere in the international financial system, including assisting Iran in gaining access to dollar payment systems outside the U.S. financial system,” the senators added.
Reach Kevin Derby at kderby@sunshinestatenews.com or follow him on Twitter: @KevinDerbySSN
