Biden Admin Poised To Grant Iran Billions in Sanctions Relief, Lawmakers Warn

Sanctions waiver unlocks upward of $10 billion for Tehran

Ayatollah Khamenei (Mohammad Sadegh Heydari/Wikimedia Commons)
March 12, 2024

The Biden administration is poised to issue a fresh sanctions waiver for Iran that will grant the country access to upward of $10 billion in frozen assets, providing Tehran with "a financial lifeline" as it foments terrorism across the Middle East, according to a group of GOP lawmakers.

In November, shortly after Hamas's attack on Israel, the State Department signed off on a sanctions waiver that permits Iraq to transfer multibillion-dollar electricity payments to Iran. The waiver, which grants Tehran access to around $10 billion in frozen funds, is set to expire this month unless the Biden administration renews it.

A group of Republican lawmakers is concerned that the sanctions waiver will be approved, according to a letter sent late Monday to the Treasury and State Departments and obtained by the Washington Free Beacon. The lawmakers ask the Biden administration to provide information on how much cash Iran has been able to access in the months since sanctions were lifted.

The sanctions waiver decision comes as Iran and its regional terror proxies—which include Hamas, Hezbollah, and the Houthi rebels in Yemen—foment chaos across the Middle East, including a series of missile attacks that killed 3 American military members and wounded more than 40. Critics of the sanctions waiver say it will enable Iran to continue funding its terrorist allies amid the worst spate of violence in the Middle East in years.

"Given the Biden Administration's posture on the last waiver we presume that the Biden Administration will renew the waiver again to continue to allow for the transfer of funds from Iraq to Oman," four Republican lawmakers, led by Rep. Bill Huizenga (Mich.), wrote in the letter. "By waiving the application of sanctions, the Administration is maintaining a financial lifeline for the Iranian regime, even as it continues to support terrorist organizations around the world."

The waiver allows Iraq to transfer payments for electricity imports from Iran into accounts outside the country that can be used by Tehran. The State Department maintains these funds can only be used for humanitarian purposes, such as food and medicine, but critics note that money is fungible and that Tehran can allocate resources into its terrorism enterprise if granted access to aid dollars.

"Iran has a history of lying about humanitarian transactions," the lawmakers write. "There is no reason to think that they will not try to skirt these restrictions again. Additionally, money is fungible, and the waiver and subsequent transfer will free up billions in funds that Iran can now spend on its terrorist proxies, nuclear activities, and military."

This possibility is particularly concerning to the GOP lawmakers in light of Iran's support for Hamas and other terrorist allies in the region.

"While the Biden administration alluded to a multi-tiered response to Hamas' attack, it has not addressed if and how waiving sanctions on Iran is part of the strategy to counter Iran's destabilizing role in the Middle East," the lawmakers write.

Reissuing the sanctions waiver would also conflict with recent statements from senior administration officials confirming that Iran is instrumental to the current conflict in Israel and the surrounding areas.

Pentagon deputy press secretary Sabrina Singh, for instance, told reporters in late January that the administration "will continue to call out the fact that Iran does fund and equip these groups and provide them the capabilities that they use to attack our service members."

Richard Goldberg, a former member of the White House National Security Council who worked on the Iran portfolio, said the Biden administration's decision to renew the waivers "subsidized October 7" as well as "the murder of three American soldiers in Jordan."

"It's subsidizing daily attacks on the U.S. Navy in the Red Sea, it's subsidizing drones and missiles sent to [Russian president Vladimir] Putin, and it's subsidizing the abuse of Iranian women," said Goldberg, a senior adviser at the Foundation for Defense of Democracies think tank.

"Congress can stop the money flow," he said. "The Senate is sitting on a House-passed bill that would freeze the money, lock it down immediately. But if Senate Republicans won't fight for it, Biden will keep subsidizing the mullahs all the way through November."

The State Department did not respond to a Free Beacon inquiry into whether the sanctions waiver has been renewed or will be renewed in the coming weeks.

Late last year, when the most recent waiver was approved, a State Department spokesman told the Free Beacon that the "restricted funds can only be used for humanitarian and other non-sanctionable transactions." The official added, "It is in the U.S. interest that this money leave Iraq and be spent down from Iran's accounts held overseas."