US Bars 14 Iraqi Banks From Dollar Trade With Iran

Former chief of the Iranian parliament's national security and foreign policy committee Heshmatollah Falahatpisheh said Wednesday that “What exists between Iran and the United States now is similar to the 'red telephone line' that existed between the United States and the Soviet Union during the Cold War.” 

He added, “I proposed a similar suggestion in the parliament to establish a direct hotline of communication between Iran and the United States to manage the tensions.” 

Established in 1963, the Moscow–Washington hotline links the Pentagon with the Kremlin. Although the hotline was never a telephone line, and no red phones were used, in popular culture it is known as the "red telephone.” 

His remarks come after recent reports that the two sides were striving to reach an unofficial unwritten agreement to prevent escalation. However, many US lawmakers from both sides of the aisle have called on the Biden administration to come clean about its dealings with the Iranian regime, particularly after the US special envoy Robert Malley was dismissed last month, with Congress in the dark. 

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Falahatpisheh said that in a situation when reviving the JCPOA (Joint Comprehensive Plan of Action) seems practically unattainable, this kind of communication is the best possible outcome Iran and the United States could achieved. 

“What is referred to as the 'unwritten agreement' is essentially the formation of this hotline for communication. Iran and the United States have not reached a formal agreement, but they are managing the existing tensions in their relationship,” he said. 

He underlined that “The establishment of this hot line does not imply anything specific except that the two countries have direct and indirect (mostly secretive) interactions with each other at any given time, discussing tensions and preventing crises from escalating.” He made it clear that “there is no written agreement taking shape.” 

The Biden administration says that it continues contacts with Tehran, but no nuclear or prisoner release agreement is imminent.

According to Falahatpisheh, Washington’s lax enforcement of sanctions on Iran's oil exports and Tehran’s tendency to avoid tensions in the Persian Gulf are the outcomes of such a mechanism to manage differences.

But some events could be seen as contradicting this scenario. The US military announced in early July that it intervened to prevent Iranian naval vessels from seizing two commercial ships in the Persian Gulf.

Pentagon announced on Monday that it was sending more warplanes and an additional warship to the region, mainly to provide maritime security.

Meanwhile, US lawmakers are intensifying efforts to restrict the Biden administration in its interactions with the Iranian regime. 

On Monday, Michael McCaul (R-TX), the chairman of the US House foreign affairs committee, threatened a subpoena if the administration does not brief Congress on the circumstances of Rob Malley’s dismissal, noting that the State Department has been less than candid with his security clearance investigation. 

However, the administration still sounds reluctant to divulge any information as White House Press Secretary Karine Jean-Pierre dodged questions about the investigation on Tuesday. 

Moreover, on the backdrop of a flurry of Congressional initiatives and letters to the administration, eight Republican Senators wrote to Secretary of State Antony Blinken and the Secretary of the Treasury Janet Yellen, demanding more serious enforcement of US sanctions on Iran. 

The senators raised the issue of China’s increasing oil imports from Iran, while US sanctions prohibit third parties from buying Iranian oil and oil products. “Despite sanctions, the People's Republic of China (PRC) has purchased roughly $47 billion in Iranian oil since President Biden took office,” the letter says. 

Despite the push by lawmakers, Washington has made a change in the way Iraq pays Iran for electricity. According to an exclusive report by Reuters, the Biden administration on Tuesday moved to let Iraq pay Iran for electricity via non-Iraqi banks. 

Abbas Shahsavani, the head of the air health and climate change group in the Ministry of Health, disclosed the alarming information three days after the meteorological organization had already warned about the dangers of dust storms in five provinces.

Shahsavani further elaborated that, in addition to the eastern, southeastern, western, and southwestern provinces, the central regions, including Fars, Qom, and Arak have also been affected by the harmful storms.

"Dust storms significantly impact the health of our citizens," stated Shahsavani, highlighting the increasing hospitalizations and instances of heart and respiratory diseases caused by the adverse weather conditions. Moreover, human vision is also negatively affected by these storms.

One particular city, Zabol, located in Sistan-Baluchestan province, was identified as the most polluted city last year due to dust storms. The annual average concentration of suspended particles in Zabol exceeded the standards set by the World Health Organization by 16-fold, as reported by Shahsavani.

The causes of the dust storms were attributed to drought and climate change in Sistan- Baluchestan, leading to intensified winds for approximately 120 days each year.

Desertification also plays a significant role, with approximately one million hectares being added to Iran's deserts each year. This process is driven by the drying of wetlands, transforming them into "fine dust centers," according to Vahid Jafarian, the Director General of Desert Affairs of the Natural Resources Organization.

Many news websites in Tehran said that Albusaidi visited Iran for a crucial diplomatic mission, as part of Oman’s traditional mediating role with the United States.

In recent months, US officials have travelled to Oman and held indirect talks with Iranian counterparts, presumably over the fate of American dual nationals held hostage in Tehran. Reports have suggested that the US is willing to allow $7 billion of Iranian funds frozen in South Korea to be released in exchange for the freedom of these prisoners.

Tejarat News, a business website in Tehran said that the currency market is awaiting positive news from the visit of the Omani top diplomat to sell off US dollars. Iran’s rial is near an all-time low against the US currency due to a very high inflation rate said to be at least 70 percent.

On Wednesday, the rial was trading slightly higher at around 486,000 to the US dollar.

Iran’s economy has been starved of most of its oil export revenues since 2018 when the United States pulled of the 2015 JCPOA nuclear deal and imposed sanctions.

The Biden administration, which disagreed with its predecessor over the decision, has unsuccessfully tried to revive the accord as Iran has violated the deal and dangerously increased uranium enrichment.

Despite the secret diplomatic contacts, the Biden administration insists there are no imminent deals with Tehran.

According to an exclusive report by Reuters, the Biden administration on Tuesday moved to let Iraq pay Iran for electricity via non-Iraqi banks, a US official said, a step Washington hopes may keep Tehran from forcing unpopular power cuts during the sweltering Iraqi summer.

Secretary of State Antony Blinken signed a 120-day national security waiver allowing Iraq - heavily dependent on Iranian electricity - to deposit such payments into non-Iraqi banks in third countries instead of into restricted accounts in Iraq, said the official who spoke on condition of anonymity.

Reuters, apparently quoting the official, said that funds put into the non-Iraqi banks, like those deposited into Iraqi banks, will also be restricted, still requiring US permission for Iran to get access to them and only for spending on humanitarian goods.

Tehran has in the past pushed Baghdad to secure US permission to release such funds by cutting Iranian natural gas exports to Iraq, limiting Iraq's ability to generate power, and forcing deeply unpopular electricity cuts.

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Reuters said the change came at the request of the Iraqi government, apparently in the hopes that this might transfer some of the pressure that Iran has exerted on Baghdad to other countries.

But it is not clear if the change is not the result of an Iranian plan to gradually weaken the impact of US banking sanctions on its dealings with Iraq. Iran’s next move could be pressure on Iraq to ask the United States to lift all restrictions on the funds, enabling Tehran to withdraw cash dollars. The current Iraqi government has closer ties with Tehran than its predecessor.

"We have to help the Iraqis with this perennial pressure from the Iranians to access the money," the US official told Reuters.

"The Iraqis have requested, and now we have agreed, to expand the waiver," said the US official, adding that this might help ensure better compliance with the US requirement that any disbursements be for humanitarian purposes.

"It also helps the Iraqis, at least somewhat, to have an argument to make (to Iran) that they are not in control of the money that they have paid (into non-Iraqi accounts)," he added.

If this was a change resulting purely from an Iraqi-US agreement, it is not clear whether Iran might ease up on Iraq as a result. Tehran could decide it has greater leverage over Iraq than over other nations and continue to exert pressure.

Last week it was reported that Iraq was willing to barter oil with Iran instead of cash payments, which could also violate US sanctions.

Iraq exports at least four times more oil than Iran, with more than $100 billion annual revenues, but with its inefficient government and corruption it has not been able to tap its own natural gas to produce electricity.

Iran is under extensive US economic sanctions reimposed in 2018 after then-US President Donald Trump abandoned the nuclear deal that Tehran struck with major powers Britain, China, France, Germany, Russia and the United States in 2015.

Trump believed his policy of "maximum pressure" on Iran would force it to accept more stringent restrictions to its nuclear program, which the United States, European powers and Israel fear may be designed to obtain a nuclear weapon.

As a result of Trump's withdrawal from the deal and US President Joe Biden's failure to revive it, Iran could make the fissile material for one bomb in 12 days or so, according to U.S. estimates, down from a year when the accord was in force.

With exclusive reporting by Reuters

The official also said he sees a window of opportunity by the end of 2023 to try to negotiate a de-escalatory nuclear deal with Iran.

"We may have a small window of opportunity to try to resume discussions with them on (a) return to the JCPOA or at least to an agreement of de-escalation … before the end of the year,” the official told reporters in Washington, speaking on condition of anonymity.

In June, sources told Reuters there were three reasons to keep the sanctions in place: Russia's use of Iranian drones against Ukraine; the possibility Iran might transfer ballistic missiles to Russia; and depriving Iran of the nuclear deal's benefits given Tehran has violated the accord, albeit only after the United States did so first.

The United States has denied any movement toward a full or a partial deal with Iran.

Keeping the sanctions would reflect Western efforts to prevent Iran from developing nuclear weapons and the means to deliver them despite the collapse of the 2015 deal, which then-US President Donald Trump abandoned in 2018.

The crux of that pact, which Iran made with Britain, China, France, Germany, Russia and the US, limited Tehran's nuclear program to make it harder for it to get fissile material for a bomb in return for relief from economic sanctions.

As a result of Trump's withdrawal from the deal and US President Joe Biden's failure to revive it, Iran could make the fissile material for one bomb in 12 days or so, according to US estimates, down from a year when the accord was in force.

Reporting by Reuters