Washington recently agreed to back the lifting of international sanctions on two Iranian state banks, the Wall Street Journal reported over the weekend. Bank Sepah and its London-based subsidiary, Bank Sepah International, both implicated in financing Iran's ballistic missile program, were blacklisted under the U.N. Security Council resolutions that imposed sanctions on Iran over its nuclear program. Bank Sepah is Iran's oldest bank and one of its three largest in terms of assets. Bank Sepah International played a key role in facilitating Iran's international trade before sanctions were imposed. According to the report, a senior State Department official and a representative of the Iranian government met in Geneva in January and signed three "tightly scripted agreements: one in which the U.S. committed to dropping criminal charges against 21 Iranian nationals, and Tehran committed to releasing several Americans imprisoned in Iran, which was followed by the controversial transfer of $1.7 billion in cash to Iran; the second saw Washington agree to transfer $400 million in cash to Tehran, as well as set up two subsequent cash payments totaling $1.3 billion, to settle a decades-old legal dispute over a failed arms deal; and a third in which the Obama administration said it would support lifting sanctions over Bank Sepah and Bank Sepah International." A senior U.S. official told the Wall Street Journal: "Lifting the sanctions on Sepah was part of the package. The timing of all this isn't coincidental. Everything was linked to some degree." Iranian media said Tehran had demanded the banks be removed from the sanctions list as part of a deal to release the prisoners. Under the nuclear deal reached between Iran and world powers in July 2015, the Obama administration agreed to lift Treasury Department sanctions on Bank Sepah, but U.N. penalties imposed on it were to remain in place until 2023. Once the deal was signed, however, negotiations began on the status of the two banks, as Tehran argued they were "critical" to the country's economic recovery. A senior administration official said removing the banks from the sanctions list was "in the spirit" of the commitment made by world powers to provide Iran with sanctions relief. Administration critics said the move rewards Iran, which has defiantly held 10 ballistic missile tests after the nuclear deal was signed. The U.N. Security Council has condemned Iran's actions but has made no move to penalize it. "By agreeing to remove U.N. and EU sanctions eight years early on Iran's main missile financing bank, the administration effectively greenlighted their nuclear warhead-capable ballistic missile program," Mark Dubowitz, of the Foundation for Defense of Democracies, a Washington think tank, told the Wall Street Journal. An Obama administration official said, "We have the ability to quickly reimpose U.S. sanctions if Bank Sepah, or any other entity, engages in activities that remain sanctionable."
