Obama administration tried secret bank workaround for Iran, new report says

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A new investigation conducted by the Senate Permanent Subcommittee on Investigations has found that the Obama administration granted a permit that gave the Iranian regime access to the United States financial system.

The funds were held in Omani rials, and because the rial is pegged to the dollar the most effective way to convert the funds was first to change them into dollars, which would have allowed Iran brief access to the US financial system, according to the committee's report. As a part of the nuclear deal, the USA agreed to carry secondary sanctions that focused different nations or establishments doing enterprise with Iran, its oil trade, and extra - but it surely stored in place most of its personal sanctions, together with blocking Iran from US banks.

But the Senate report revived criticism of how the Obama administration sought to accommodate Iran in connection with the nuclear deal.

"The Obama administration secretly sought to give Iran access - albeit briefly - to the USA financial system by sidestepping sanctions kept in place after the 2015 nuclear deal, despite repeatedly telling Congress and the public it had no plans to do so".

In September 2015, Adam Szubin, Obama's Beneath Secretary of the Treasury for Terrorism and Monetary Intelligence, stated in a speech, "Iran won't be able to open financial institution accounts with USA banks, nor will Iran be capable of entry the USA banking sector, even for that momentary transaction to, what we name, dollarize a global cost" - the very transfer Treasury granted Iran.

President Donald Trump exhibits a signed Presidential Memorandum after delivering an announcement on the Iran nuclear deal from the Diplomatic Reception Room of the White Home, Might 8, 2018, in Washington.

As the Obama administration pondered how to address Iran's complaints in 2016, reports in The Associated Press and other media outlets revealed that the USA was considering additional sanctions relief, including issuing licenses that would allow Iran limited transactions in dollars.

The issue also shows the importance of a close working relationship on such deals between Treasury and State, and the importance of closely overseeing such deals, the report says.

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Retired Staff Sgt. Robert Bartlett, who was seriously wounded in Iraq in 2005 by a roadside bomb made in Iran, called out the previous administration for talking tough on Iran and then allowing the Islamic republic to skirt sanctions that remained in place after the 2015 nuclear agreement. Well, when it comes to the Iran deal, the Obama administration took lying to new heights.

"As Secretary Lew said in the testimony quoted in the report: 'Part of the agreement was to give Iran access to money that it has a right to".

Eventually, Iranian officials "stopped complaining to the State Department" and converted small amounts of rials directly to euros without using the US financial system, the report says. They warned that unless Tehran was willing to give up more, the US shouldn't give Iran anything more than it already had. Most Republicans opposed the Iran deal, from which President Trump withdrew last month. The license authorized Iran to convert its once-frozen Omani rials into dollars and then euros.

Officials at Treasury's Office of Foreign Assets Control asked two USA banks to work as intermediaries and execute the transaction, but they declined, citing concern over potential regulatory backlash and a ding to their reputations. They said the Republican senators never interviewed former Obama administration officials involved and noted that no Democrats were involved.

He said he'd reimpose sanctions and work with US allies to "find a real, comprehensive and lasting solution to the Iranian nuclear threat".

The situation resulted from the fact that Iran had stored billions in Omani rials, a currency that's notoriously hard to convert.

- The State Department official negotiating implementation of the JCPOA understood giving Iran access to the US financial system was prohibited by USA sanctions and outside the relief under the JCPOA or JPOA. The U.S. dollar is the world's dominant currency, so allowing it to be used as a conversion instrument for Iranian assets was the easiest and most efficient way to speed up Iran's access to its own funds. Despite issuing the specific license to allow Iran to access the USA financial system, Bank Muscat was unable to effectuate the conversion using the US dollar.

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