US Lawmakers Highlight Lack Of Iran Sanctions Enforcement

Iran has quadrupled its oil revenue since President Joe Biden took office, helping the regime better fund its malign activities, a Congressional hearing was told on Tuesday.

China buys almost three-quarters of the Iranian crude oil shipments, according to experts’ testimony at the hearing, making the most of the Biden administration’s reluctance to antagonize Tehran.

“The Biden administration has taken a consistently weak approach to enforcing the energy sanctions that would have the strongest economical impact on Russia, Iran and Venezuela,” said Rep. Blaine Lutkemeyer, chairing the hearing.

“Iran has been emboldened to throw its weight around the Middle East from Yemen to Gaza, with it or its proxies directly attacking US military sites and warships essentially without consequences,” he added.

The hearing was entitled Restricting Rogue-State Revenue: Strengthening Energy Sanctions on Russia, Iran, and Venezuela. It was hosted by the US House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions.

Recent data show that “due to diminished sanctions enforcement, Iran has accumulated north of $80 billion dollars in oil revenues since 2021,” said Claire Jungman, chief of staff of United Against Nuclear Iran (UANI).

Investigations by United Against a Nuclear Iran (UANI), an advocacy group in Washington, suggest that Iran has between 300 and 400 “foreign owned and foreign flagged oil tankers shifting its oil.” These are called the “ghost fleet,” vessels that operate under the radar and are not sanctioned by the US.

Almost half these vessels are flagged by Panama – in the US backyard.

Last week, 15 Members of Congress called on the US Secretary of State Antony Blinken to crack down on a “ghost armada” of ships that evade sanctions and find ways to hold Panama accountable for their complicity in Iranian funded terrorism.

Biden critics say his Iran policy has had disastrous consequences for the region and beyond. They argue that Hamas –funded primarily by Iran– could not have pulled off the horrors of 7 October without support from a regime flush with new cash.

Since October 17, militant groups backed or affiliated with the Islamic Republic have attacked American troops 92 times with little or no retaliatory operations by the US.

“The Iranian regime is largely unconstrained and unfettered from a resource standpoint, said Marshall Billingslea, former assistant secretary of the Treasury for terrorist financing. “They’ve gone right back to where they were after the JCPOA was enacted by the Obama administration.”

The JCPOA (or the Iran nuclear deal) was signed in 2015. President Trump ripped it off shortly after taking office and introduced the Maximum Pressure campaign to squeeze the Islamic Republic. After Trump, that campaign was abandoned for a more lenient policy that was hoped to set the scene for a return to some form of a nuclear agreement.

Rep. Dan Meuser said this thinking was flawed. “Our foreign policy prioritizes appeasement over strength. Appeasing hostile regimes does not bring peace, but undermines it.”

Last September, the Biden administration released $6 billion in frozen Iranian oil money to help facilitate the return of five Iranian-Americans held hostage in Tehran. The decision was opposed vehemently by Republicans who said the money would be used for malign activities, regardless of any restricting stipulations in the deal.

Democratic Congresswoman Joyce Beaty countered this in the hearing.

“Under the Biden administration, the US maintained the most extensive set of comprehensive sanctions against Iran, including those related to the illicit sales of Iranian oil,” Rep. Beaty said. “Contrary to accusations leveled by the Republicans, Secretary [of the Treasury] Yellin recently set the record straight that we have not in any way relaxed our sanctions on Iranian oil.”

However, the issue, as set forth by experts at the hearing, is primarily “enforcement” of the sanctions when it comes to Iran.

“The real problem for Iran is not that they’re getting $6 billion into the system,” said Adam Smith of Partner, Gibson, Dunn & Crutcher, “it’s their ability to use that $6 billion to buy things, to send to Hamas, to send to Houthis, etc.”

Chairman Lutkemeyer agreed. “The United States and its allies should return to an approach of strongly reinforcing energy sanctions against these rogue regimes to weaken our enemies,” he said.

Another lawmaker, Rep. Zach Nunn, who has introduced a bill to enhance sanctions enforcement, highlighted the need for new technologies to improve surveillance and tracking (of ghost fleets, for instance) as a necessary step to keep up with increasingly sophisticated methods used by Iran to circumvent sanctions and sell oil.

Such practical considerations, however, are secondary. The real issue is not so much the capabilities than is willingness to change course. And that’s what many critics of the Biden administration say is missing.

“Autocratic regimes have for years tried to advance the narrative that sanctions don’t work,” said Billingslea, “And now some in Washington DC are beginning to parrot their talking points… Sanctions do work when applied properly and enforced.”