The Biden administration is set to approve a sanctions waiver that will allow Iran to access at least $10 billion in previously frozen funds held in Iraq, according to political and media circles.
The decision comes just a month after the Tehran-backed Hamas launched an attack on Israel that left 1,200 mostly civilians dead.
On Monday, the Washington Free Beacon said that the waiver would extend the multibillion-dollar sanctions relief first issued in July that expired on Tuesday.
It allows Iraq to transfer frozen electricity payments into Iranian-owned bank accounts in Europe and Oman.
The waiver renewal is driving concerns that the Biden administration is maintaining financial avenues for Tehran as the country’s “terrorist proxies” foment chaos across the Middle East.
Richard Goldberg, a senior adviser at the Foundation for Defense of Democracies and sanctions expert who previously served on the White House National Security Council, told Asharq Al-Awsat, “It's hard to imagine a significant easing of sanctions on Iran after Oct. 7 amid continued attacks on US forces.”
He added that if Washington approves the sanctions waiver, then the US administration is still running the nuclear appeasement policy it had followed over the summer towards Iran.
Biden agreed to unfreeze $6 billion in Iranian assets for a prisoner swap prior to the October 7 attacks, but following overwhelming pressure from Congress and the American people, it agreed with Qatar to re-freeze the money.
The Washington Free Beacon said the Iraq-Europe-Oman sanctions waiver would signal the United States is still trying to provide financial relief to the hardline regime.
Commenting on the US consideration to approve the sanctions waiver, Republican Senator Bill Hagerty wrote on his X account, “This underscores why Congress should pass my Iran Sanctions Relief Review Act (S.2210) supported by 41 senators. Russia sanctions relief gets an up-or-down vote in Congress thanks to a law called CAATSA. Iran sanctions relief proposals—like this one—should get the same treatment.”
The Trump administration first allowed Iraq to import electricity and gas from Iran, but only on the condition that the payments were kept in an escrow account in Baghdad.
The Biden administration continued to issue that waiver, and then broadened it in July so that Iraq could move more than $10 billion outside the country, enabling Tehran to draw on the funds for its budget and humanitarian needs.
In late October, the governor of the Central Bank of Iran reportedly discussed expediting Iran's access to the funds with his Omani counterpart.
In testimony before Congress late last month, Goldberg advised Congress to lock down the $10 billion as punishment for Tehran’s role in supporting Hamas’s war on Israel.
The Biden administration insists that, like the $6 billion held in Qatar, Iran can only use the $10 billion for non-sanctioned purposes.
Critics argue that since money is fungible, the access allows Iran to free up cash in other places for illicit activities.
Republican lawmakers in Congress made this argument when they pressured the Biden administration to halt its $6 billion ransom payment to Iran, arguing that even though the money was allocated for humanitarian purposes, it helped the hardline regime divert funds into terror groups.
Iranian leaders in recent days have emphasized the importance of the electricity payments, reportedly telling Omani leaders they should “accelerate the use of these new foreign exchange resources” and signaling the regime is relying on the Biden administration to continue freeing up this cash.
And while the State Department declined to comment on the sanctions waiver or confirm whether it will be renewed this week, it announced a third round of sanctions targeting Hamas-affiliated individuals and entities in connection with the October 7 attacks on Israel.
The Department designated Akram al-Ajouri as a Specially Designated Global Terrorist for being a leader of the Palestinian Islamic Jihad (PIJ).
Ajouri is the PIJ Deputy Secretary General and leader of its militant wing, the Al-Quds Brigade.
The Department of the Treasury is also designating seven individuals and two entities that have provided support to or acted on behalf of Hamas or PIJ.
“Iran’s support, primarily through its Iranian Revolutionary Guard Corps, enables Hamas and PIJ’s terrorist activities, including through the transfer of funds and the provision of both weapons and operational training,” a State Department statement said.
It added that Iran has trained PIJ fighters to produce and develop missiles in Gaza while also funding groups that provide financial support to PIJ-affiliated fighters.
