Eye on Iran: Top U.S. Official: Iran Not Gaining Access to U.S. Financial System

Join UANI                Top Stories Reuters: "A senior State Department official reassured concerned lawmakers on Tuesday that the Obama administration is not planning to allow Iran access to the U.S. financial system or use of the U.S. dollar for transactions. 'The rumors and news that have appeared in the press ... are not true,' Under Secretary of State for Political Affairs Thomas Shannon told the Senate Foreign Relations Committee. U.S. lawmakers, mostly Republicans who opposed last year's Iran nuclear deal, have expressed deep concern about recent reports that the administration might let Iran use the dollar in some business transactions... During the hearing, some senators said they remained concerned, because of comments they see as ambiguous, such as Shannon saying the administration was open to discussing renewal of the Iran Sanctions Act if it does not conflict with the international nuclear agreement. 'You're like Exhibit A about why there was so much concern about this agreement,' said Republican Senator Bob Corker, the committee's chairman... Iran test-fired ballistic missiles this month, drawing international condemnation and prompting calls for more sanctions. The Obama administration imposed new sanctions in January over an October missile test. Shannon said the tests 'violated the intent' of a U.N. resolution, but would not say they violated the resolution itself... Shannon also told the committee the administration would use its veto power in the Security Council to block any sale of Russian Su-30 fighter aircraft to Iran." http://t.uani.com/25KV3Nt The Hill: "Secretary of State John Kerry says Iran is less of a threat now thanks to President Obama's nuclear deal with the country. 'It's not as dangerous as ever because it will not have a nuclear weapon,' Kerry told MSNBC's 'Morning Joe' on Tuesday. 'It cannot by definition be as dangerous as ever. It's not just for the short-term. I have faith and confidence that we will know exactly what they are doing during that period of time.' The deal, announced last summer, gave Iran economic sanctions relief in exchange for greater restrictions on atomic energy capabilities. 'Iran deserves the benefits of the agreement that they struck,' Kerry said. 'It's fair for Iran to get what it deserves because it has to date kept its end of the agreement in the nuclear deal. 'I'm not into prognostication about what their behavior is going to be. Iran needs to make some clear decisions about the role it intends to play in the region and the world.' ... Kerry on Tuesday said Iran is struggling with internal divisions over whether the nuclear deal benefits its people. 'Everybody has seen this fight play out publicly. There are people in Iran who oppose the Iran nuclear deal with the same ferocity as they do here. And they still do.'" http://t.uani.com/1SPEkBv AFP: "The number of known executions worldwide went up by more than 50 percent last year to at least 1,634, the highest figure recorded since 1989, Amnesty International said Wednesday. The surge was largely fuelled by Iran, Pakistan and Saudi Arabia, the London-based human rights organisation said in its annual report on death sentences and executions worldwide... Recorded executions were up by 54 percent on 2014's figure of 1,061. Some 89 percent of those executions were carried out by Iran, Pakistan and Saudi Arabia alone... 'The rise in executions last year is profoundly disturbing,' said Amnesty secretary general Salil Shetty... 'Iran, Pakistan and Saudi Arabia have all put people to death at unprecedented levels, often after grossly unfair trials. This slaughter must end... Iran executing at least 977 people is at odds with its opening up to the West after striking a deal with world powers last year on its nuclear ambitions, Amnesty said. 'Western countries are starting to build commercial ties and trade missions,' said James Lynch, Amnesty's Middle East and North Africa deputy director. 'However, human rights has been absolutely left in the margins,' he told AFP. 'That risks undermining all these efforts.' ... Amnesty said its reports indicted that four people in Iran and at least five in Pakistan were executed for crimes committed when they were aged under 18." http://t.uani.com/1RXJOdn U.S.-Iran Relations FT: "Global businesses may have expected a rush for Iranian customers and partners earlier this year, when international sanctions on the country were lifted in January as part of the landmark nuclear deal. But those hopes have floundered because of concerns about tough US fines for dealing with Iran, some of which remain in place. US officials are touring the world to host informal roadshows where they help businesses understand the maze of Iran sanctions in order to clarify penalties for those keen to start working with the Middle Eastern country. The events are ironically likely to benefit non-US companies, although foreign subsidiaries of US companies can also take part if they ringfence operations from their headquarters at home. 'We are not looking to discourage any business in Iran permitted by the agreement,' said Chris Backemeyer, the principal deputy co-ordinator for sanctions policy at the US Department of State, told reporters in Dubai, where a number of roadshow-style events took place last month. More are planned for Europe and Asia... Although the Obama administration insists that Iran will continue to be barred from the US financial system, US officials are looking at ways that would allow non-US banks to use dollars at some stage in a transaction with Iran as long as the final deal was not in US dollars or involve American banks. It is also examining ways to provide more assurance to non-American insurance companies about what sort of transactions with Iran are legitimate. 'Iran deserves the benefits of the agreement they struck,' said secretary of state John Kerry on Tuesday. 'In fact, we have tried to make sure that the banks that are supposed to be doing legitimate business with Iran after the agreement, that they are operating.' However, several members of Congress have criticised any mechanisms that might permit the use of US dollars in transactions with Iran. Bob Corker, Republican chair of the Senate foreign relations committee, said on Tuesday that Congress would look at ways to 'codify' the bar on Iran accessing the US financial system. Mr Backemeyer, one of the negotiators for the deal, said his team was also clarifying how financial transactions could be carried out by non-US financial institutions with Iranian clients. He reiterated that non-US banks could carry out deals as long as the transactions did not use the US financial system. In roundtable discussions at the Dubai events, the most common question concerned the level of due diligence that foreign companies would have to carry out to protect themselves from legal action and fines. 'This is not a game of gotcha - we are not looking to trick anyone,' said Mr Backemeyer, adding that the amount of due diligence would depend on the sector involved. He also pointed out that 99 per cent of cases investigated by the US Treasury's Office of Foreign Assets Control did not lead to any action. Some European and Asian companies are starting to trade and open new partnerships with Iranian partners, but they face costly commissions - estimated at more than 10 per cent of the value of the transaction - to transfer money via exchange houses and small developing-economy banks." http://t.uani.com/1V9dg3r Free Beacon: "Kerry was asked about the recent effort by the Obama administration to give Iran limited access to the dollar currency in an interview on Morning Joe. The show's panel pointed out to Kerry that Iran has increased its destabilizing activities and anti-Western rhetoric since the Iran nuclear deal was put into effect in January and questioned whether the U.S. should expand its sanctions relief given the Islamic Republic's aggressive behavior. 'One of the questions is why then is the U.S. Treasury, or why is the [Obama] administration sanctioning the idea of helping Iran get access to dollars or to get more investment?' MSNBC's Andrea Mitchell asked Kerry. 'We are working very hard to do what is fair,' Kerry said. 'But have they proved that they deserve that?' Mitchell asked. 'They have in terms of the nuclear agreement, absolutely,' Kerry said. 'Iran deserves the benefits of the agreement they struck. And President Obama has said it, I've said it, [Treasury] Secretary [Jack] Lew has said it.' Kerry also said the administration has worked 'to make sure' banks that are now allowed to do legitimate, transactional business with Iran after the nuclear agreement are doing so. 'It is fair for Iran to get what it deserves because it kept its part of the bargain to date with respect to the nuclear agreement,' Kerry said. 'But Mr. Secretary, you said earlier though that, and the president said this also, by not living up to the spirit of the agreement, they're sending the wrong signals to the world community and sending the wrong signals to businesses,' co-host Joe Scarborough said... 'Should they not first take care of the problem that both you and the president have diagnosed and then you all start helping them financially?' Scarborough asked. 'We're under an obligation ... if we said we would lift the sanction, we're under an obligation to lift the sanction,' Kerry said." http://t.uani.com/1UVNXlT Congressional Action FP: "Senate Republicans launched a new attack on the White House's nuclear deal with Iran on Tuesday and pledged to pass legislation authorizing fresh sanctions against the Islamic Republic. But the Obama administration punched back hard, saying the landmark agreement forged nine months ago 'is working' and is the best method for preventing Iran from becoming a nuclear power. The standoff was triggered by the testimony of Tom Shannon, a senior State Department official, before the GOP-controlled Senate Foreign Relations Committee in Washington. The panel's chairman, Bob Corker of Tennessee, vowed to pass new legislation to block Iran's access to the U.S. financial system and its ability to engage in dollar-based transactions. Corker cited new reports that the Obama administration may ease financial sanctions against the country. Corker said that different individuals in the Obama administration 'are not on the same page,' and that certain officials want to bend the rules of the Iran deal because they have warm 'relationships' with Iranian officials. 'My sense is there are other parts of the administration countering that,' Corker said." http://t.uani.com/1SPENUi Sanctions Enforcement AP: "German prosecutors say they've indicted three men for allegedly delivering valves to Iran for a company that was once responsible for building the country's Arak heavy-water reactor. Federal prosecutors said Tuesday that the three German citizens - identified only as Bernd L, Rene L. and Ralf C. in line with German privacy rules - were charged with violating export laws and attempting to violate weapons-control laws. They said the men delivered 51 valves to Iran in two batches, in 2010 and 2011, part of a larger order worth some 1 million euros ($1.14 million). Two of them are accused of giving the wrong customer name to get around export controls. Prosecutors say any deliveries to the actual customer, which wasn't named, were banned at the time under sanctions." http://t.uani.com/1oBMJO2 Sanctions Relief Reuters: "India's cabinet on Wednesday raised a credit line to Iran to $450 million as New Delhi aims to boost trade ties with Tehran after the lifting of international sanctions. The credit line, to be extended by the country's lending arm for the export of good and services, will help in supplying steel rails to Tehran. State-run Steel Authority of India Ltd and private firm Jindal Steel and Power Ltd have signed a deal with Iran to supply 250,000 tonnes of steel rails worth 17 billion Indian rupees ($255 million) in 2015. But supplies have not begun pending New Delhi's finalising of the credit line. India's Exim Bank and a consortium of Iranian banks led by the Central Bank of Iran struck a deal in 2014 for financing exports from India worth 9 billion rupees. The increased credit line will help Indian companies gain a foothold in Iran, the government said in a statement." http://t.uani.com/1UIfXZU Reuters: "Iranian Oil Minister Bijan Namdar Zanganeh said the country's crude output would reach four million barrels per day (bpd) by March 2017, state television reported on Wednesday. 'In the annual budget, the amount of oil export has been predicted around 2,250,000 bpd. This means our production this (Iranian) year will reach four mbpd,' Zanganeh was quoted as saying by state TV. The Iranian new year started on March 20. Zanganeh said Iran's oil output has increased after the lifting of international sanctions in January under a nuclear deal with six major powers... 'Fortunately Iran's oil export has increased since the lifting of sanctions ... for 10 months since March 2016, Iran's average monthly oil export was around 1,350,000 bpd,' Zanganeh said. He said Iran's oil exports surpassed 2 million bpd in the Iranian months of Esfand and Farvardin, which ends on April 19." http://t.uani.com/1RO2D06 Iraq Crisis Reuters: "The United States and Iran have formed an unlikely tacit alliance behind Iraq's prime minister as he challenges the ruling elite with plans for a non-political cabinet to fight corruption undermining the OPEC nation's economic and political stability. Local calls for Haider al-Abadi's removal -- including one by his predecessor as prime minister Nuri al-Maliki -- had been growing as he pursued a reshuffle aimed at addressing graft, which became a major issue after oil prices collapsed in 2014 and strained the government's finances as it launched a costly campaign against Islamic State. However, the two old adversaries -- Washington and Tehran -- put pressure on their respective allies in Iraq not to unseat Abadi as he seeks to fill the council of ministers with technocrats, according to politicians, diplomats and analysts. Sources familiar with the matter said U.S. and Iranian efforts helped stave off an attempt last week to unseat Abadi by Maliki, the head of the Shi'ite Dawa party who controls nearly a third of the seats in parliament." http://t.uani.com/1Wc8lOK Opinion & Analysis Rep. Ed Royce (R-CA) in WashPost: "Iran has yet to see the economic growth it wants from President Obama's nuclear deal, and it's demanding additional concessions - above and beyond the agreement - in return for nothing. Specifically, Ayatollah Ali Khamenei wants the United States to end sanctions aimed at curbing Iran's funding for terrorism and illicit weapons so Iran can gain access to the U.S. financial system, where the majority of international business is conducted. At a news conference Friday, Obama walked back reports that Iran would be allowed direct access to the U.S. dollar, saying, 'That's not actually the approach that we're taking.' He did not, however, explicitly close the door to other steps that would give the regime access to U.S. dollars through offshore clearinghouses. In other words, Iran would be allowed to launder dollars while the administration looked the other way. This is an alarming departure from the Obama administration's position just months ago. Indeed, when selling the nuclear deal to the American people last year, the administration repeatedly stressed to Congress that key terrorism, missile and human rights sanctions against Iran would continue to be vigorously enforced... Iran claims it wants an end to these sanctions, and in turn greater access to the world's financial systems, to spur economic growth. But countries that want to attract international investment shouldn't shovel cash to terrorists while accelerating production of the delivery vehicle for a nuclear weapon. Nor should they threaten neighbors with annihilation. Allowing a belligerent Iran access to the U.S. dollar poses real dangers to our country and economy. In February, the Financial Action Task Force - an organization comprising nearly 40 nations - warned that it is 'exceptionally concerned about Iran's failure to address the risk of terrorist financing and the serious threat this poses' to the world's financial system. That's why I'm working with colleagues on both sides of the aisle on legislation to put in place strict statutory prohibitions to keep Iran from receiving the benefits of accessing the U.S. financial system. Iran has seen what Obama will do to preserve his nuclear deal, and it's taking full advantage. The United States cannot cave again. Congress should make clear that until the Iranian regime drops its illicit missile program and funding of terrorism, it won't receive another dime of sanctions relief." http://t.uani.com/1UIim6X Patrick Clawson in WINEP: "On March 22, Supreme Leader Ali Khamenei declared that 'the Americans have not acted on their promises and only removed the sanctions on paper,' echoing the complaints of other Iranian officials. Although they are correct about Iran's ongoing difficulties with accessing the international financial system, they misdiagnose the cause. The real problem is that Iranian banks are out of step with international banking regulations established over the past two decades. The changing standards on which Iranian banks have fallen behind start with the strict anti-money laundering and counter-terrorist financing (AML/CFT) rules adopted across the world, and also include regulations tightened after the 2007-2008 global financial crisis, namely the 'Basel III' standards covering risk management, corporate governance, bankruptcy laws, and other bank safety requirements. In a January 20 Financial Times article, Valiollah Seif, governor of Iran's central bank (Bank Markazi Iran, or BMI), was quoted describing the country's system as 'outdated' and saying its banks must be brought in line with Basel III requirements. The same article quoted Morteza Bina, a senior risk manager at Iran's privately owned Middle East Bank, stating, 'If we had observed international standards, our banking crisis would have been much less severe.' The bank's chief executive, Parviz Aghili, added, 'Foreign banks are not obliged to risk their reputation by working with those Iranian banks which lack efficient compliance departments.' And an anonymous senior Tehran banker noted, 'Our banking system, like our economy, has been isolated and has no idea of what has happened in the world over the past decades.' Meanwhile, Iranian banks have become so badly run and heavily politicized that a recent study from London-based consultancy Darien Analytics warned about the risk of 'a major banking crisis three or four years from now.' It cited 'unsophisticated management controls and IT systems, accounting and auditing practices that are inconsistent and lax at recognizing [non-performing loans].' Finance Minister Ali Tayyebnia has warned that the government needs to repay banks despite the cash crunch caused by the oil price collapse. The BMI estimates that the government owes banks $33 billion, but Tayyebnia has implied the amount is much higher. The December 2015 IMF report on Iran's economy noted that President Hassan Rouhani's team had yet to finalize its data on these debts almost two years after taking office. Indeed, the Iranian business scene is characterized by lack of transparency on many matters. Deceptive financial activities are deeply ingrained in banking practice, partly in response to sanctions and partly as a reflection of the Islamic Republic's rampant corruption... The political problem facing Washington is that many in Iran and around the world may accept Tehran's propaganda blaming the United States for these financial barriers. Speaking at Chatham House on February 4, Foreign Minister Mohammad Javad Zarif insisted, 'Rebuilding the confidence of the banks that the United States will not re-intervene in their relations with Iran may require some further assurance from the United States.' This is entirely backwards, however: what banks need is further assurance from Tehran that reforms are on the way. By offering to help Iran update its banking regulations and enforcement measures, Washington can show who is truly blocking progress -- and in the very unlikely event that Tehran accepts that assistance, it could serve U.S. interests by impeding money laundering and terrorist financing." http://t.uani.com/1oBNGpE         Eye on Iran is a periodic news summary from United Against Nuclear Iran (UANI) a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Eye on Iran is not intended as a comprehensive media clips summary but rather a selection of media elements with discreet analysis in a PDA friendly format. For more information please email Press@UnitedAgainstNuclearIran.com United Against Nuclear Iran (UANI) is a non-partisan, broad-based coalition that is united in a commitment to prevent Iran from fulfilling its ambition to become a regional super-power possessing nuclear weapons.  UANI is an issue-based coalition in which each coalition member will have its own interests as well as the collective goal of advancing an Iran free of nuclear weapons.