The Obama administration sidestepped economic sanctions to allow Iran to more easily access some of its foreign assets in accordance with the 2015 nuclear agreement, a new report from Senate Republicans published on Wednesday found.
In February 2016, Obama’s Treasury Department issued a license to Bank Muscat in Oman that would have allowed Iran to convert $5.7 billion in Omani rials into euros by first converting them into U.S. dollars.
The Obama administration never disclosed the license. Publicly, administration officials denied the U.S. would grant Iran access to its monetary system to convert its assets into more transferable currencies like the euro and Japanese yen.
The transaction ultimately fell through after two U.S. banks refused to facilitate the deal — even after Obama officials met with the banks to complete it.
The banks were unwilling to “take on the legal and compliance risk posed by the complex conversion,” the report states, and avoided the deal out of “reputational concerns in doing business with a comprehensively [sanctioned] country like Iran.”
Sen. Rob Portman of Ohio, the chairman of the Senate Permanent Subcommittee on Investigations, was scathing in his assessment of the Obama administration’s actions to skirt its own sanctions.
“The Obama administration misled the American people and Congress because they were desperate to get a deal with Iran,” Portman said in a statement Wednesday. “Sanctions are a vital foreign policy tool, and the U.S. government should never work to actively undermine their enforcement or effectiveness.”
In July 2015 three Obama officials, including Treasury Secretary Jack Lew, testified before Congress that under the Iran nuclear agreement Iran would not be given access to the dollar system to execute financial transactions.
Iran “will continue to be denied access to the [U.S.’s] financial and commercial market,” Lew said at the time.
Iran eventually cashed in its $5.7 billion in assets at Bank Muscat by converting the funds in small increments through European banks without accessing the dollar system, the State Department said, according to the report.
“We cannot prevent an Iranian nuclear bomb under the decaying and rotten structure of the current agreement,” Trump said, announcing that he would begin reinstating “U.S. nuclear sanctions on the Iranian regime” and at “the highest level of economic sanction.”