The Biden administration on Wednesday reapproved a sanctions waiver that unlocks upwards of $10 billion in frozen funds for the Iranian government, according to a copy of the notice submitted to Congress late Wednesday and reviewed by the Washington Free Beacon.
The sanctions waiver—which has drawn fierce GOP opposition on Capitol Hill—allows Iraq to transfer electricity payments to Iran via third-party countries. The sanctions waiver was last approved by the Biden administration in November and set to expire this month, putting the White House in a tight position as a mounting chorus of GOP lawmakers express concern about sanctions being bypassed. The authority granted in the latest waivers allows Iraq to convert dinars into Euros and transfer payments into Iranian banks accounts in Oman.
Republican foreign policy leaders in Congress raised concerns about the waiver earlier this week, the Free Beacon reported, saying that sanctions should not be lifted on the hardline Iranian regime in light of its support for Hamas and other terrorist proxy groups waging war on Israel and American outposts in the region.
While the State Department maintains the funds can only be accessed by Iran to pay for humanitarian supplies, like food and medicine, critics of the sanctions waiver argue that money is fungible, and that the waiver frees up cash for Iran to spend on its global terrorism operations.
The State Department would not immediately confirm transmitting the sanctions waiver to Congress, but defended its previous renewals on Tuesday in response to Free Beacon questions.
"Since 2018, the waiver has remained necessary as Iraq weans itself off Iranian energy imports, which cannot happen overnight," a State Department spokesman told the Free Beacon. "And Iraq is making progress in its path to energy self-sufficiency by increasing regional electricity interconnections, capturing and utilizing natural gas associated with oil production, and developing new domestic gas resources."
But the waiver remains necessary to ensure Iraq has access to electricity and is able to pay down its debt to Tehran, according to the State Department.
"Under these waivers, no money has been permitted to enter Iran," the official maintained. "Any notion to the contrary is false and misleading. These funds, which are held abroad in third countries, can only be used for transactions for the purchase of food, agricultural commodities, medicine, medical devices, and other non-sanctionable transactions. The money goes straight to the trusted vendor or financial institution in another country. The money never touches Iran."
But Republicans on Capitol Hill say continued use of the sanctions waiver is enabling Iran to divert funds it would otherwise be forced to spend on critical humanitarian goods.
"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," Rep. Bill Huizenga (Mich.) and three GOP House colleagues wrote to the Biden administration earlier this week.
Iran, the lawmakers argued, "has a history of lying about humanitarian transactions. 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."
Richard Goldberg, a former White House National Security Council member who worked on the Iran portfolio, said the latest version of the sanctions waiver is substantially different than the one issued during the Trump administration. The Biden version, he said, gives Iran far more leeway in how the money is used.
"This is not the same waiver for Iraqi electricity imports that has been issued since 2018. This is an Iran sanctions relief waiver that allows Tehran to access money and use it for budget support, including debt payments and import subsidies," said Goldberg, a senior adviser for the Foundation for Defense of Democracies think tank.
"The fact that the administration will not even tell the American people how much money Iran has accessed over the last four months—money that subsidized three American soldier deaths and nonstop attacks on the American Navy—should prompt the U.S. Senate to immediately pass the No Funds for Iranian Terrorism Act and send to the president’s desk," he said, referring to legislation that would cut off Iran's access to previously frozen funds.