Republican Senator for Texas Ted Cruz and Congressman Mike Gallagher, a Republican from Wisconsin, introduced a new bill into the American Senate and House Thursday, a bill designed to “impose maximum financial pressure on Iran.
The “Blocking Iranian Illicit Finance Act” (H.R.7321)
was also co-sponsored by 6 other Republican Senators and 6 Republican representatives in Congress.
The bill seeks to restore pressure established by successive rounds of sanctions imposed on by the US on Iran starting in the early 2000’s.
According to the sponsors, the effect of those sanctions was seriously eroded when America signed the Joint Comprehensive Plan of Action (JCPOA), commonly referred to as the Iran Nuclear Deal, along with China, France, Germany, Russia, the UK, and the European Union in 2015.
The JCPOA was meant to de-escalate tensions between Iran and the West, but many believe Iran continued to pursue its nuclear program despite agreeing not to on paper.
“Withdrawing from the JCPOA was only the first step in ratcheting up pressure on the Iranian regime. We now have an important window to impose maximum economic pressure and degrade the Iranian regime’s ability to export violence across the region…(The bill’s) message is clear: Iran must pay a steep price for its aggressive and destabilizing behavior, and the United States will never tolerate its pursuit of nuclear weapons.”
“The ayatollahs will find it much more difficult to sponsor terrorism, launder money, and research and develop nuclear weapons and ballistic missiles without access to the global financial system.”
“In keeping with our mission of supporting the resilience and integrity of the global financial system as a global and neutral service provider, Swift is suspending certain Iranian banks’ access to the messaging system. This step, while regrettable, has been taken in the interest of the stability and integrity of the wider global financial system.”
The decision caused a stir in the EU, which has vowed to maintain diplomatic and financial relations with Iran despite the US’s abandonment of the Iran Nuclear Deal and escalating sanctions.
At the time of the Swift announcement, Russia Times reported that cutting off Iran entirely from the global payments network would have a devastating effect on the country’s economy:
“Whatever the long-term implications for the US dollar, Iran now faces a more drastic short-term problem. Without SWIFT access, the country cannot be paid for exports or pay for imports. With an economy reeling from US sanctions – applied in 19 rounds since President Trump withdrew from the Joint Comprehensive Plan of Action (JCPOA), or Iran deal, in May – Tehran might have to think outside the box to ensure its economic survival.”
Iran’s economy has been already reeling this year thanks to hyperinflation, foreign reserve shortages and persistent rumours of bank insolvency.
Swift moved to cut off the designated Iranian banks November 12th. Within days, the Russian Association of Cryptoindustry and Blockchain (RACIB) announced that it has signed a cooperative agreement with Iran’s Blockchain Lab to create a “supranational” SWIFT counterpart to help both countries skirt sanctions.
Russia, too, is under sanction by the US.
According to Yuri Pripachkin, Head of the RACIB:
“…(C)urrently the active development of the Iranian counterpart SWIFT is underway. We will communicate and cooperate in this and other areas…to circumvent sanctions restrictions. In the current geopolitical situation, it is necessary to use this potential.”
The entire third section of the “Blocking Iranian Illicit Finance Act” is dedicated to proscribing the sanctioning of all individuals, exchanges, business entities and/or “rogue regimes” determined to be transacting with any “sovereign cryptocurrency” successfully deployed by Iran.
China, the Russian Federation, the Bolivarian Republic of Venezuela, and the Republic of Turkey are all named as possible willing cooperators.
For the past year, Iranian officials and technologists have repeatedly stated that the country is developing a cryptocurrency for the express purpose of sidestepping sanctions, but that currency has yet to materialize.
Venezuela now appears to be implementing its “petro” cryptocurrency, and recently paid seniors their Christmas bonuses in the petro, despite the fact that a working public petro system has yet to be released.