U.S. Loosens Iran Sanctions to Smooth Dollar Transactions

EghtesadOnline: The U.S. Treasury Department is loosening sanctions on Iran, relaxing rules on foreigners doing dollar-denominated transactions with businesses in the nation.

News ID: ۷۳۷۴۱۰

09 October 2016

According to Bloomberg, the new rules allow such deals with entities in Iran that aren’t under sanctions even if they are minority owned or controlled by someone who is on the sanctions list.

“It is not necessarily sanctionable for a non-U.S. person” to engage in deals with an entity not on the list “but that is minority owned, or that is controlled in whole or in part, by an Iranian or Iran-related person on the” list, the Treasury said in guidance for businesses updated on its website late on Friday.

It’s the third update to the guidance and was intended to clarify the scope of the sanctions lifting and those that remain in place, according to a department spokesman. The update doesn’t represent additional sanctions relief, the spokesman said in an e-mailed note.

The U.S. lifted some international sanctions in January after inspectors certified that Iran curtailed its nuclear program as promised under a 2015 agreement with world powers. Iranian officials have said the the U.S.’s restriction on dollar-denominated trades involving the nation has inhibited the sealing of additional agreements.

“This is a green light to foreign companies -- they can do business in U.S. dollars with Iran and Iranian parties without worrying about violating sanctions, as long as those dollars don’t touch the U.S. financial system at all,” said Eric Lorber, a senior associate at the Financial Integrity Network advising investors on economic sanctions and regulatory compliance.

“These clarifications are a loosening of sanctions,” said Lorber, who previously worked at the Treasury department. “By making it clear you are providing additional incentives and removing obstacles for companies wanting to go into Iran.”

The new guidance follows the U.S. approval given to Boeing Co. last month to sell commercial jetliners to Iran.

Treasury’s Office of Foreign Assets Control admonished businesses to use caution in engaging with such businesses and to ensure that transactions do not involve anyone on the sanctions list, which includes Iran’s Revolutionary Guards.