A Biden administration official acknowledged on Wednesday that Iran has made two “transactions” using money held in a bank in Oman under a sanctions waiver that was granted to the Islamic Republic last month.
Speaking at a hearing of the House Financial Services Committee, Elizabeth Rosenberg said that Iran has spent part of $10 billion of revenues for selling electricity to Iraq, which was held in an Omani escrow account.
Rep. Bill Huizenga (R-Mich.), chair of the House Financial Services Subcommittee on Oversight and Investigations, asked Rosenberg: “Have there been any humanitarian transactions facilitated from the Iranian funds held in Oman?”
“There have been two transactions,” confirmed Rosenberg, assistant secretary for terrorist financing and financial crimes at the U.S. Treasury Department, adding that she would only provide additional detail about those transactions in a classified setting.
Wednesday’s hearing appears to be the first acknowledgment by the Biden administration that Iran has spent part of the funds it received under these sanctions waivers.
Rosenberg did not say when the transactions took place. The Treasury Department did not immediately respond to a query from JNS.
Democrats on the committee noted that the recurring 120-day waivers for Iraq to pay its electric bills dated to the Trump administration. But when the Biden administration issued its most recent waiver in November, the Associated Press reported that none of the money held in Omani banks had been spent by Iran, citing unnamed U.S. officials.
The Biden administration has been under increasing pressure from both Republicans and Democrats in the wake of Hamas’s Oct. 7 terror attacks to freeze billions of dollars in Iranian funds that were allowed to be transferred to banks in Qatar and Oman under sanctions waivers.
Iran is a supporter of Hamas, and the Biden administration has described the Islamic Republic as being “complicit” in the Oct. 7 attacks but has said it does not have direct evidence of its participation.
Legislation to permanently freeze $6 billion in Iranian funds held in Qatar passed the House of Representatives in November with the support of 90 Democrats, including House Minority Leader Hakeem Jeffries (D-N.Y.).
That legislation would not apply to the Iranian money in Oman, and its companion in the Senate has not yet passed out of committee.
Administration officials have insisted that none of the $6 billion in Iranian funds held in Qatar has been spent. The money was released to Iran as part of a prisoner deal in September.
“Not a penny of this money has been spent, and these funds will not go anywhere anytime soon,” said Abram Paley, U.S. special envoy for Iran, who also testified at the hearing.
But the U.S. has also waived sanctions on $10 billion in funds held in escrow accounts that Iraq uses to pay Iran for electricity imports. It’s not clear how much of that money Iran might have spent in the two transactions.
Asked if there had been any “issues or problems” with those two transactions, Rosenberg said she was “confident in the series of restrictions we have in place” to ensure that the money could only be spent for humanitarian purposes. She would only elaborate in a closed hearing.
Rep. Bill Huizenga (R-Mich.) said at the hearing that he understood that response to mean that there had been issues with the transactions.
Because the Omani transactions are denominated in Euros, Palley and Rosenberg said that there were Omani, European and U.S. controls ensuring that Iran could only spend the money for humanitarian purposes. But Republicans have repeatedly argued that even humanitarian funds for Iran frees the regime to spend other money on terrorism.
“You understand what the term ‘fungible’ means?” Rep. Dan Meuser (R-Pa.) said at the hearing. “If Iran has $50 million and they were going to use that $50 million for food, and then they get a new $50 million, they can use the new $50 million for food and use the old $50 million to buy weapons for terrorists.”