A decision to renew a sanctions waiver for Iran in the waning days of the Joe Biden administration has raised hackles among Republicans who argue the outgoing president has consistently allowed Tehran to replenish its coffers.
Totaling $10 billion, the funds are Iraqi payments for electricity provided by neighboring Iran.
The move was made two days after the November presidential election, the state department confirmed last week, riling Biden's critics.
“The House voted to eliminate these waiver authorities - twice. But the Biden administration is still waiving the sanctions, putting more money in the Iranian regime’s pockets to fund its terrorist proxies and nuclear weapons program," Republican Michael McCaul said on X.
"The US should not be subsidizing Iran’s malign activities.”
On November 8, Secretary of State Antony Blinken announced: "it is in the national security interest of the United States" to waive mandatory economic sanctions that bar Iraq from transferring upward of $10 billion to Iran in electricity import payments.”
Republicans have objected to the move, warning that the money will not be used for the benefit of Iran’s cash-strapped population - one third of which now live below the poverty line - but will instead be funneled toward Tehran’s militant allies in the region.
The administration previously signed off on renewing the waiver one month after Hamas's October 7 attack on Israel, the Washington Free Beacon reported on Tuesday. Iran has armed, funded and trained the Palestinian militant group.
Last year, the US unfroze $6 billion in Iranian funds to bank accounts in Qatar in exchange for the release of five US-Iranian prisoners held by Tehran. That move was lambasted by Republican critics as indulging Iranian hostage diplomacy.
Amid bipartisan pressure following the Oct. 7 attack by Iran-backed Hamas against Israel, the Biden administration told lawmakers it would effectively refreeze those funds for the foreseeable future.
The most recent waiver lifted sanctions for 120 days and will overlap with the incoming administration of Donald Trump, whose punishing sanctions gutted Iranian finances.
Given the pledge by incoming Trump administration officials to renew that “maximum pressure” stance on Iran, the waiver could be scrapped.
During the previous Trump administration the waiver was in force but access to the funds was stricter, according to the Beacon, which regularly lampoons Democrats and supports Republicans.
“The Biden State Department tweaked the waiver last year to allow Tehran to convert the funds from Iraqi dinars to euros, then hold those euros in bank accounts based in Oman,” the Beacon reported.
“Access to a widely traded currency like the euro enables Iran to more easily spend the cash in international markets. Under the first Trump administration, Iran had to keep the cash in an escrow account in Baghdad, making it more difficult to access.”
State Department deputy spokesman Vedant Patel told reporters in a briefing on Nov. 7 that the administration still considered Iran an adversary but wanted to facilitate the provision of Iranian electricity to Iraq.
"We remain committed to reducing Iran's malign influence in the region,” he said. The United States last year designated Iran the world’s top state sponsor of terrorism.
"Our viewpoint is that a stable, sovereign, and secure Iraq is critical to these efforts.”
The funds are mandated for use on humanitarian needs such as medicines, according to the Biden State Department instructions.
However, its Republican detractors maintain that the money is fungible, allowing Tehran to divert its dwindling cash reserves to regional allies such as Hamas, Hezbollah, and the Houthi rebels in Yemen.
"Joe Biden and his team are taking credit for bringing down Assad just a few weeks after renewing a sanctions waiver to give Iran access to billions of dollars," Richard Goldberg, a former White House National Security Council member who worked on the Iran portfolio, told the Beacon.
"Give me a break. This policy of appeasement needs to end on January 20, and locking down these accounts so Iran can't get access should be priority one.”
Western countries stepped up sanctions on Iran this year over its human rights record and support of Russia in its war on Ukraine.
Iran has managed to circumvent many of the sanctions and boost revenue from oil exports during Biden's term, leading critics including some Democrats to urge a more muscular approach.
