The White House on Friday rejected a complaint from a senior Iranian official that the Obama administration is not living up to its side of the nuclear deal by refusing to provide access to dollar-denominated business transactions.
Presidential press secretary Josh Earnest said Iran misunderstood which sanctions the U.S. would lift in terms of access to the dollar and the U.S. banking system. The Obama administration never envisioned nor promised that as part of sanctions relief Iran would receive for curbing its nuclear weapons program, Earnest said.
“Giving access to the U.S. financial system was not part of the deal and is not being contemplated,” Earnest said on Friday.
Iran’s banking chief blasted the administration in an interview published Friday for not living up to its side of the nuclear deal Tehran reached with six world powers last year.
Valiollah Seif, head of Iran’s central bank, said in a speech at the Council on Foreign Relations Friday that Tehran still cannot access frozen funds abroad, and urged Washington to do more to encourage international banks to engage with Iran, including providing access to the U.S. financial system.
He also specifically said Iran understood that banks would have access to the U.S. financial system through “U-turn” transactions with U.S. banks to complete business deals. U-turn transactions are those between Iran and a third country bank that very briefly involve dollars to get the transaction done.
Seif’s argument seems to square with some of the early reporting on the issue in the last few weeks, which said the Obama administration may have been considering allowing U-turn transactions, by telling banks they wouldn’t face sanctions if they conduct them.
Seif, who is in Washington for the spring summits of the International Monetary Fund and the World Bank, also issued a thinly veiled threat by saying if the administration doesn’t change its stance, the “deal breaks up on its own terms.”
Earnest admitted Friday that what Iran and its foreign business partners can do with regard to American banks and the U.S. dollar is “highly technical,” but he said Seif’s interpretation is wrong.
The joint nuclear agreement “does not include access to the U.S. financial system or to allow the execution of so-called U-turn transactions. And we have ruled out giving Iran access to those two options,” Earnest said.
State Department spokesman John Kirby also said Seif is wrong in demanding access to the U.S. financial system.
“We have met all our [nuclear deal] commitments,” Kirby said. “There’s no need to do more when we’ve met all of our commitments.”
“We understand that they still have concerns. We understand that they want more [sanctions] relief, faster,” he continued.
The Obama administration has struggled in recent weeks to knock down several reports citing anonymous U.S. officials, including several in the Associated Press and Wall Street Journal stories, that said the administration was planning to allow Tehran to engage in some form of U-turn transactions.
President Obama and the Treasury Department have flatly denied any intention to allow Iran access to the U.S. dollar or U.S. financial system, saying they would instead provide further clarity to what type of transactions the nuclear deal allows. Complex international banking laws have added to the confusion about how Tehran and other countries can proceed in doing business while the U.S. maintains its sanctions prohibiting U.S. companies and banks from dealing with Iran.
Curt Mills contributed to this report
