December 06, 2024

Scott, Banking Republicans Press Biden Administration on Sanctions Enforcement on Iran’s Oil Sector

Washington, D.C. – As part of his ongoing efforts to hold the Biden-Harris administration accountable and stop the flow of funds to Iran and its terror proxies, Ranking Member Tim Scott (R-S.C.) led Senate Banking Republicans in raising concerns with the delayed implementation and enforcement of sanctions on Iran’s oil sector. In a letter to U.S. Secretary of the Treasury Janet Yellen, Ranking Member Scott and his colleagues urged the Treasury Department to deploy all available sanctions enforcement tools to monitor and sanction illicit oil transactions involving Iran and to provide detailed information regarding the administration’s efforts to do so.

Banking Committee Republicans, including Senators Mike Crapo (R-Idaho), Mike Rounds (R-S.D.), Thom Tillis (R-N.C.), John Kennedy (R-La.), Bill Hagerty (R-Tenn.), Katie Britt (R-Ala.), Kevin Cramer (R-N.D.), and Steve Daines (R-Mont.) joined the Ranking Member on the letter.

In the letter, the senators wrote, “Congress has consistently identified Iran's oil sector as a critical area for sanctions due to its significant role in financing destabilizing regional terrorism and nuclear development. Unfortunately, delays in fully implementing the SHIP Act remain a concern, as does the need for increased sanctions enforcement.”

The letter continued, “The recent determination on October 11th to expand Executive Order 13902 to persons supporting Iran’s petroleum or petrochemical sectors and the subsequent action on December 3rd are encouraging steps, but now your Department must continue to follow through with rigorous enforcement action. Lax sanctions enforcement has enabled certain nations, particularly in Southeast Asia, to openly disregard U.S. sanctions and sell Iranian crude to China. For example, trade data show that Malaysia is exporting oil to China in excess of its own production capacity, a clear indication of involvement in Iranian oil trade. To address these deficiencies, it is critical that Treasury deploys all available enforcement tools and fully engages in monitoring and sanctioning illicit oil transactions involving Iran.”

In closing, the letter demands the following information from the Treasury Department no later than December 20, 2024:

  1. An assessment of all vessels listed by UANI in its Tanker Tracker and its Ghost Armada to determine whether they meet the criteria for sanctions under E.O. 13902 as entities operating in Iran’s petroleum and petrochemical sectors.   
  2. A comprehensive assessment of all foreign financial institutions facilitating Iranian oil exports.
  3. A briefing on Treasury’s engagements with foreign governments to improve sanctions enforcement on Iranian oil exports.
  4. A classified briefing on Treasury’s utilization of intelligence community resources to effectively monitor Iranian oil exports and the associated financial networks.
  5. An updated Financial Crimes Enforcement Network (FinCEN) advisory to financial institutions alerting them of recent tactics and emerging trends in sanctions evasion by Iran and its oil buyers.

To read the full letter, click here.

BACKGROUND:

Ranking Member Scott has conducted rigorous oversight over the flow of funds to Iran and its terror proxies, particularly following the October 7, 2023, attack on Israel by Hamas. Ranking Member Scott has taken the following actions with regards to Iran:

  • Immediately following the Biden administration’s August 2023 decision to release $6 billion to Iran, Ranking Member Scott led his colleagues in demanding answers from the administration.
  • After the October 7, 2023, attack on Israel by Hamas, Ranking Member Scott called for Treasury Secretary Janet Yellen to testify on the release of the $6 billion and for the Senate to investigate the matter.
  • Following the attacks, Ranking Member Scott introduced the Revoke Iranian Funding Act (RIFA), a bipartisan bill to permanently freeze $6 billion released by the Biden administration to Iran and direct the Treasury Secretary to provide Congress with the information it needs to prevent Iran from accessing and using sanctioned funds. He also led the Solidify Iran Sanctions Act to permanently extend key sanctions targeted to stop Iran’s malign activity, including the pursuit of nuclear weapons.
    • The reporting requirement in RIFA was signed into law as part of the national security supplemental in April 2024.
  • Last November 2023, following a wave of attacks on U.S. forces and the Biden administration’s decision to extend an Iran sanctions waiver to allow Iraq to pay Iran for electricity, Ranking Member Scott led a group of 24 senators criticizing the administration’s lack of a cohesive Iran strategy.
  • In April 2024, in response to the Biden administration’s decision to release yet another Iran sanctions waiver potentially worth billions of dollars, Ranking Member Scott led 13 Republican senators in a letter to Treasury Secretary Janet Yellen and Secretary of State Antony Blinken raising concerns that the waiver makes sanctioned Iranian funds, which could be used to fund terrorism, more accessible to the Iranian regime and disregards congressional intent calling for severe restrictions on payments to Iran.
  • After Treasury Deputy Secretary Wally Adeyemo admitted in testimony before the Senate Banking Committee that any dollar Iran has access to funds terrorism, Ranking Member Scott sent a letter to Treasury Secretary Janet Yellen requesting an accounting of all international high-value Iranian assets around the world that are currently blocked by U.S. sanctions and to provide additional steps Treasury will take to actively account for current funds that have already been released to Iran.
  • Following reports that the Federal Reserve Bank of New York (NY Fed) failed to implement basic anti-money laundering controls on account relationships with the Central Bank of Iraq, resulting in potentially billions of dollars flowing to Iran and its terror proxies, Ranking Member Scott demanded answers from the NY Fed and Federal Reserve System.

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