WASHINGTON (JTA) — A bipartisan slate of U.S. senators introduced a bill that would sanction banks that allow Iran to carry out foreign currency exchanges.
The Iran Sanctions Loophole Elimination Act introduced Wednesday would sanction any financial institution that exchanges foreign currency for Iranian entities already under sanctions.
“Closing the foreign currency loophole in our sanctions policy is critical in our efforts to prevent Iran from acquiring a nuclear weapons capability,” the senators — Mark Kirk (R-Ill.), Joe Manchin (D-W.Va.), Susan Collins (R-Me.), Bill Nelson (D-Fla.) and John Cornyn (R-Texas) — said in a statement. “We urge international financial regulators, including those from the European Union, to issue regulations to comply with this legislation.”
The release said the legislation would cut off “billions of dollars” worth of foreign reserves.
A staffer for one of the senators told JTA that Iran keeps up to one-third of its money banked overseas in foreign currency accounts, mostly in euros.
The money Iran kept in local currencies would still be available to Iran and could be used to buy non-sanctionable food and medicine for Iranians, the statement said.