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Kirk Welcomes House Vote on Iran Sanctions, Urges Senate to Act

House bill includes Kirk legislation freezing Iran’s access to foreign exchange reserves immediately; Kirk urges sanctions targeting all Iranian Government revenue and reserves

Wednesday, Jul 31, 2013
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WASHINGTON – U.S. Sen. Mark Kirk (R-Ill.) today welcomed House passage of the Nuclear Iran Prevention Act, H.R. 850, which passed by a vote of 400-20. The House bill incorporates the Iran Sanctions Loophole Elimination Act, S. 892, which was introduced by Sen. Kirk and Sen. Joe Manchin (D-W.Va.) in May.

“I applaud the House of Representatives, especially Chairman Royce and Ranking Member Engel, for pressing forward with tougher sanctions to prevent Iran from acquiring a nuclear weapons capability,” Sen. Kirk said. “The House bill would cut off access to the U.S. banking system for any foreign financial institutions that conducts transactions in foreign currencies for blacklisted Iranian banks and sectors. The message to Asian banks and clearinghouses is clear – if you conduct a euro transaction for Iran, you will be held accountable. Now is the time for the Senate to act. I look forward to working with my colleagues to swiftly pass a bipartisan sanctions bill that dries up all Iranian government revenue and reserves before the regime can achieve nuclear critical capability.”

The Iranian Government, including the Central Bank of Iran, maintains bank accounts around the world filled with foreign exchange reserves – with the majority of those held in euros. Reports suggest that Iran uses these reserves to circumvent the total impact of American and European sanctions by converting them into local currencies in order to finance imports and stabilize the country’s monthly budget.

Under the House-passed sanctions bill, it will become illegal – retroactive to May 22, 2013 – for a foreign bank to facilitate a transaction in a non-local currency for any blacklisted Iranian bank or economic sector. For example, if an Asian bank conducts a transaction for the Central Bank of Iran or the National Iranian Oil Company in euros – or converts Iran’s euros into a local Asian currency – both the Asian bank and its European correspondent clearing on the euro transaction would lose their access to the U.S. market.

On February 25, 2013, 36 Senators (19 Democrats and 17 Republicans, including majorities of both the Senate Foreign Relations and Banking Committees) signed a bipartisan letter to the European Union urging the EU to take immediate action to close the “euro loophole” in U.S. and EU sanctions policy. On March 23, 2013, the U.S. Senate unanimously passed an amendment to the budget supporting efforts to block Iran’s access to its foreign exchange reserves and limit the ability of designated Iranian entities like the Central Bank of Iran to conduct transactions in euros. With the EU failing to act, Sen. Kirk and Sen. Manchin introduced the Iran Sanctions Loophole Elimination Act on May 8, 2013.

Separately in May, Sen. Kirk joined Sen. John Cornyn (R-Tex.) in introducing the Iran Export Embargo Act, S. 1001, which would prohibit the purchase or transfer of goods and services from any entity owned or controlled by the Government of Iran and banning all transactions on behalf of such entities for the purpose of exports from Iran. The bill would block all assets of entities deemed to be Government of Iran and also prohibit any insurance or reinsurance for such entities.

“We owe it to the American people to exhaust all available options before the diplomatic clock runs out,” Sen. Kirk said. “It’s time to send a clear message to all nations of the world – there is no such thing as legitimate trade with the Government of Iran. Money is fungible and any funds deposited into the Iranian Government’s coffers help subsidize its rogue nuclear program, illicit proliferation networks and unprecedented human rights abuses.”

In 2011, Sen. Kirk co-authored the Menendez-Kirk amendment, which imposed sanctions on the Central Bank of Iran and led to unprecedented economic pressure inside Iran. In 2012, Sen. Kirk authored an amendment to impose sanctions on the financial messaging providers servicing designated Iranian banks, which ultimately led the European Union to order the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to disconnect such banks. In December 2012, the Senator again co-authored a Menendez-Kirk amendment to the FY13 National Defense Authorization Act, which blacklisted whole sectors of the Iranian economy and prohibited the sale or delivery of raw, semi-finished and precious metals to Iran.

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