Federal Showdown Over Increased Monetary Access to Iran

Henry Whipple

As his final year in office winds down, President Barack Obama has been making his mark on the world. In recent weeks, the president has made headlines with his historic visit to Cuba, the first by a sitting President in 88 years. Following his return to the United States, he turned his focus towards further progress with Iran, albeit facing some backlash within the federal government. 

Under the 2015 nuclear arms agreement between the US and Iran, critical nuclear technology sanctions against Iran were eliminated. However, such measures have done little to help Iran’s long-constricted economy expand and prosper, and the Obama administration is currently considering options to relieve economic sanctions. A key part of this relief package is unprecedented access to U.S. currency, via licenses that would allow foreign financial institutions to conduct trade with the dollar in order to support Iranian business dealings.

It’s critical to note that Iran would still be shut out of the American financial system; the Obama administration’s proposal would only lighten the burden upon Iran when trying to do business with Western nations. Congress finds a problem with this policy, however, since President Obama previously assured its members that, under the nuclear arms deal, Iran would never be granted access to the dollar and financial markets. Several Republican legislators fear that Obama’s attempt to boost Iran’s economic standing would go too far, cutting into the United States’ own economic influence while concurrently putting the global economic system at stake. Two Republicans in particular, Mark Kirk and Mike Pompeo, are propelling forward this viewpoint on behalf of many frustrated colleagues. 

“Any administration effort to get foreign financial institutions...to enable Iran’s terror-sponsoring regime to conduct transactions in U.S. dollars...would benefit Iran’s terror financiers while fundamentally undermining the USA PATRIOT ACT 311 finding that Iran’s entire financial sector is a jurisdiction of primary money laundering concern,” argues Kirk of Illinois. 

The Republican senator, who is already supporting a new push in Congress to confront Iran’s recent ballistic missile test with increased sanctions, sees a direct relationship between increased financial access and supporting a culture of terrorist ideas and illicit economic activities. Congressman Pompeo of Kansas similarly fears the empowerment of the Islamic Revolutionary Guards Corps (IRGC), Iran’s most powerful security and military organization, which also maintains extreme economic influence via its authority over political decisions (Nader, USIP). “American and international businesses can’t ignore the [IGRC]’s vast control over the Iranian economy and the threat Iranian banks pose to the international financial system,” Pompeo emphasized to The Free Beacon.

The surface-level numbers for Iran’s economy are poor enough: high levels of inflation, a weak currency, skyrocketing youth unemployment rates, and incomplete construction endeavors are all putting the country in a bind. Yet since U.S. sanctions began isolating Iran’s economy, corruption has dominated the nation by way of the IRGC’s immense market influence (for example, filling the shoes of major international companies that fled Iran following the sanctions). 

Current President Hassan Rouhani has failed to attract new investors into the country in order to help eliminate widespread market corruption, a shortcoming that is encouraging U.S. lawmakers to push back against President Obama’s economic proposal. The administration sees little issue with granting Iran the same conventional economic freedoms held by most economically involved countries, but many Republican legislators are concerned with expanding economic access to a nation caught in the crossfire.