Business And Markets

US Hints at Indirect Dollar Deals by Iran

US Hints at Indirect Dollar Deals by Iran US Hints at Indirect Dollar Deals by Iran

The US State Department hinted on Monday that the Obama administration may allow Iran to conduct dollar-denominated transactions through non-US banks, in a move to keep its side of the deal after the International Atomic Energy Agency (IAEA) once again confirmed Iran’s commitment to the nuclear agreement with the six world powers.

 State Department spokesman Mark Toner indicated at a news conference that he agrees there are ways the US can get Iran access to dollar-denominated transactions. Under current sanctions, Iran is barred from any direct dealings with US banks and investment houses.

Toner was asked specifically if the administration has ruled out the idea of telling foreign banks that they can conduct dollar-denominated transactions with Iran, without fear of US penalties. Toner replied by saying Obama had hinted at these sorts of other options.

"The specificity of your question, I'm not certain of, but he did mention the fact that there are other available options for some of these companies that are separate and apart from the US financial system," he said in comments later posted on the State Department's website.

President Obama said on Friday that his administration is not considering allowing Iran to use dollars for business transactions.

Toner also made it clear that access to these dollar transactions overseas is not the same thing as giving Iran access to the US financial system.

"Allowing Iran to have access to transactions that are conducted in dollars is not allowing them access to the US financial system. Is that correct?" he was asked.

Not in Breach

"That's my understanding," Toner replied. He then seemed to agree with the premise that foreign banks might soon be relieved of sanctions by the Obama administration, even if they deal with Iran in dollars.

"So... the administration intends to make clear to banks, to foreign banks, that if they want to handle transactions where the ultimate payee is in Iran, that those transactions can use dollars, and it won't run afoul of any US law. Is that correct?" Toner was asked.

"Right," Toner replied. "I mean, it's not necessarily that we are going to take the approach of them going through dollar-denominated transactions, but it is possible for them to work through European financial institutions, and we're going to work to continue to clarify that."

Toner reiterated, however, that the administration has not been and is not planning to grant Iran access to the US financial system. "

The issue of access to US financial system is hot-button issue both in the US and Iran with Iranians occasionally complaining that its battered economy has not yet seen any benefits after some sanctions were lifted when the nuclear deal was signed to curb its nuclear program last July.

Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei has accused the US of undermining the spirit of the sanctions relief outlined by the seven-nation accord.  The Republican-controlled US Congress has also repeatedly expressed concerns that the Obama administration is going too far to make it easy for Iran to do business around the world.