|Photo by: REUTERS/Raheb Homavandi|
US Senators: EU must plug loophole in Iran sanctions
Senators urge European Union leaders to do more to stop the Iranian government from using the European Central Bank.
WASHINGTON - US senators on Monday urged European Union
leaders to do more to stop the Iranian government from using the European
Central Bank, saying the bank's payment system may inadvertently be aiding
Tehran in financing its nuclear program.
On the eve of talks between
Western powers and Iran, lawmakers told the EU's leadership in a letter that
Iran may be circumventing American and European sanctions by using the central
bank to convert euros into local currency and conduct trade.
concerned that these euro conversions in turn free up significant funds to
finance Iranian imports, stabilize Iran's monthly budget and allows the regime
to continue to engage in sanctionable and illicit activities," said the letter
to Herman Van Rompuy, the president of the European Council.
lawmakers have been successful in pushing the Obama administration to enact
tougher sanctions against Iran. Lawmakers also were instrumental in getting the
Belgium-based SWIFT electronic payment system to block Iranian
The Senate letter, which was copied to ECB President Mario
Draghi, was endorsed by Democrat Jeanne Shaheen and Republican Mark Kirk and
signed by 34 other senators with an interest in Iran sanctions and EU
It comes the day before talks between Iran and six world
powers in Almaty, Kazakhstan, about Tehran's nuclear program, which the West
says is being developed to make nuclear weapons. Iran denies those
The United States, Russia, China, Germany, Britain and France
are trying to persuade Iran to halt its higher-grade enrichment activities,
which is a step away from producing potential material for a nuclear
In the meantime, US lawmakers are trying to ensure that Iran
cannot skirt Western sanctions, which have so far slashed Iran's oil revenue and
led to the devaluation of the country's currency.
"While we understand
officials at the ECB want to take action to render Iran's foreign-held euros
non-functional, they are waiting for an order from the EU Council to proceed,"
said the Senate letter.
A number of lawmakers are working on a bill that
would impose economic sanctions on entities that use the ECB to do business with
Iran's government. The bill zeroes in on the ECB's cross-border payment system
known as Target2, which processes around 350,000 payments daily.
unclear when lawmakers will introduce the bill and whether the Obama
administration would enact another round of sanctions against Iran.
strongly urge you to take all necessary measures to immediately cut off Iran's
ability to use its foreign-held euros by prohibiting ... access to Target2
services by or on behalf of accounts owned or controlled by the government of
Iran or its affiliates," the letter said.