Sherman Responds to Reports of Iran Sanction Relief
March 31, 2016
The Honorable Barak Obama
President of the United States
The White House
Washington, DC 20500
Dear Mr. President:
Recent press reports, including an AP story from early today, indicate that your Administration may be considering allowing the use of the U.S. dollar for transactions with Iran that is currently forbidden.
It is unclear what precise form this sanctions relief would take. If these press reports are true, perhaps your Administration is considering a reversal of the ban on so-called U-turn transactions, or perhaps considering licensing some other form of dollar clearing mechanism for foreign financial institutions to clear dollars on behalf of Iranian clients.
Whatever the case may be, such relief runs counter to testimony to Congress by U.S. officials and is clearly not required by the Joint Comprehensive Plan of Action (JCPOA), U.N. Security Council Resolution 2231, or any other authority or commitment by the United States.
The recent missile tests demonstrate the Iranian approach to the JCPOA and UNSCR 2231: what is not expressly prohibited is permitted. Since UNSCR 2231’s language concerning missile development is not mandatory, the Iranians believe they have the right to test. We should adopt a similar approach when it comes to sanctions relief: that which is not expressly required of us should not be provided.
The Iranians bargained for certain sanctions relief. Your Administration has been meticulous in its regulatory actions to provide exactly that relief. Irrespective of the additional economic windfall that dollar clearing may provide Iran – and this could be significant – the Iranians and all other parties to the agreement should simply receive the benefit of the bargain. Otherwise, I believe this will set bad precedent, and it will not be the last time the Iranians and/or their business partners receive additional relief not contemplated by the JCPOA or UNSCR 2231.
I hope the press reports are inaccurate. If they are not, I strongly urge you to reconsider. Thank you very much for your consideration of my views on this matter.
Member of Congress
cc: Secretary of the Treasury Jack Lew
Secretary of State John Kerry
 See, for example, http://docs.house.gov/meetings/FA/FA00/20150728/103823/HHRG-114-FA00-Wstate-LewJ-20150728.pdf, where Treasury Secretary Jack Lew said, “Iranian banks will not be able to clear U.S. dollars through New York, hold correspondent account relationships with U.S. financial institutions, or enter into financing arrangements with U.S. banks. Iran, in other words, will continue to be denied access to the world’s largest financial and commercial market.”