U.S. Permits Iraq to Release Billions to Iran

Latest Developments

The Biden administration has authorized the transfer of $2.76 billion from Iraq to Iran, Reuters reported on June 10. The news comes within days of emerging reports that Washington hopes to trade Iranian funds trapped in foreign accounts for a halt to further nuclear escalation by Tehran. While the United States has issued sanctions waivers to allow Iraq to import electricity from Iran in the past, U.S. sanctions have prevented Tehran from repatriating funds paid into escrow in Baghdad.

Expert Analysis

“There’s enough evidence on the surface to suspect the release of Iraqi funds to Iran is tied in some way to the U.S.-Iran indirect nuclear talks brokered by the Omanis. There doesn’t have to be a formal deal in place for the administration to negotiate an agreement as defined in U.S. law. A sanctions relief waiver tied to a request to halt higher levels of enrichment would constitute willful evasion of mandatory congressional review.” — Richard Goldberg, FDD Senior Advisor

“Members of Congress on both sides of the aisle must be vigilant in ensuring that the Biden administration does not circumvent their oversight as the White House continues to try to enter an Iran nuclear agreement. Both the House and Senate must leverage all available legislative tools at their disposal to force the administration to be transparent with respect to its Iran policy, which has not been the case.”— Matt Zweig, Senior Director of Policy for FDD Action

Bypassing Congress in A Deal Without a Deal

The Iran Nuclear Agreement Review Act (INARA) prohibits the president from issuing statutory sanctions relief for Iran in connection with any broadly defined “agreement” related to Iran’s nuclear program in which the U.S. “commits or otherwise agrees to take action, regardless of the form it takes, whether a political commitment or otherwise, and regardless of whether it is legally binding or not.” Open questions thus remain as to whether Iraq’s provision of sanctions relief to Iran — as enabled by the Biden administration — triggers the statutory requirement to submit any agreement to Congress pursuant to INARA.

Related Analysis

“U.S. Denies Reports of Cash Offers to Iran for Limited Enrichment Concessions,” FDD Flash Brief