Measure Goes into Effect on 6 February
David Cohen, U.S. government’s top Iran sanctions official, said on Thursday that a measure that takes effect in February could have the most dramatic impact yet on Iran’s ability to export oil.
Starting 6 February, buyers of Iranian oil must hold payments in special funds that can be used only for bilateral trade on a list of approved commodities. If banks transfer Iran's oil earnings beyond their borders, they will risk losing access to the U.S. banking system. The measure would effectively lock up a substantial amount of Iran’s funds.
“Iran's oil revenues will largely be shackled within a given country and only useable to purchase goods from that country,” Cohen said in a speech to the Foundation for Defense of Democracies. (Reuters, 6 December)
Cohen, undersecretary for terrorism and financial intelligence at the U.S. Treasury Department, added that the U.S. is committed to increasing the financial pressure on Iran and will look for innovative ways doing so.
“Virtually all countries that purchase oil from Iran run a significant trade deficit, meaning the value of their oil imports from Iran is greater than the value of their exports to Iran,” Cohen said. “As a result, this provision should lock up a substantial portion of Iran's earnings in each of these countries,” he added.
Photo credit: Iran’s Kharg Island Oil Export Terminal. (Getty Images)