Implications of the US Removal of Financial Sanctions on Iran amid Ongoing Vienna Negotiations


The Biden administration recently removed sanctions on three former Iranian government officials and two commercial companies involved in  trading  petrochemicals. This move  came before the sixth round of the Vienna negotiations commenced and it  triggered a strong response from the Republicans who questioned the timing and motives behind the move. The Biden administration remains under pressure to revive the nuclear deal and the recent delisting signals Washington’s intent to make certain concessions, with the delisting  described as a “normal practice.”  

The US Treasury’s Office of Foreign Assets Control (OFAC) in its statement announced that the  delisting was based on a “verified change in behavior or status on the part of  the sanctioned parties.” Those delisted included Ahmed Ghalebani, a managing director of the  National Iranian Oil Company, Farzad Bazargan, a managing director of Hong Kong Intertrade company, and Mohammad Moinie, a commercial director of Naftiran Intertrade Company Sarl.   Several US lawmakers protested against the delisting and expressed deep concerns. Republican lawmaker and member of the House of Foreign Affairs Claudia Tenney led a group of US lawmakers to write a letter to US Secretary of State Antony Blinken. In the letter, the US lawmakers argued that the delisting undermined the Biden administration’s vow to consult Congress regarding Iran and not to act unilaterally. Republican leaders also questioned the basis on which the Department of Treasury decided to remove the Iranian sanction violators given that Tehran continues to support terrorism in the region, expand its nuclear program, and violate US sanctions on exports of oil and petrochemicals. Iran has long relied on ghost ships to ensure its commercial shipments and recently the United States seized Iranian crude oil that was being transported illegally. Iran disguised the shipment by labelling it as “Basra light crude” from neighboring Iraq.

This OFAC decision can be seen as an indication of the Biden administration’s intent to ensure the Vienna negotiations proceed smoothly. Iranian President Hassan Rouhani has already  stressed that  Iran needs the sanctions to be lifted in order for it to stick to the  negotiations and sanctions relief remains  a major point of contention in the stalled Vienna negotiations.  Iran is desperate for the sanctions to be lifted  to revive its deteriorating economy especially as Iranian President-elect Ebrahim Raisi has emphasised the importance of fixing the economy throughout his election campaign. Iran’s chief negotiator Abbas Araghchi had earlier said that a final deal was unlikely to be agreed upon before the presidential election, however, Iran’s position regarding the Vienna negotiations will not change. Ebrahim Raisi in his first  press conference  ruled out negotiations on Iran’s regional behavior and its ballistic missile program. He agreed for Iran to return to the nuclear deal but declined a possible meeting with  President Joe Biden. As Iran’s economy is heavily dependent on its energy resources, Raisi will certainly work towards more sanctions relief to revive its economy. OFAC’s decision to delist while imposing new sanctions on Sa’id al Jamal indicates Washington’s cautious approach with it wanting to  strike a balance between its desire to revive the nuclear deal and allay the concerns of its regional allies. 

The Biden administration finds itself in a difficult situation as extending sanctions relief for Iran will be strongly challenged by the Republicans, especially as Iran continues to fund its proxy militias with the revenues generated largely from the sale of its oil assets. This makes it extremely difficult for the United States and Iran to arrive at a mutually agreeable position regarding comprehensive sanctions relief.

Washington’s primary concern at the moment seems to be largely confined to the nuclear issue. US Department of State spokesperson Ned Price in a press briefing said that the Biden administration considers addressing Iran’s regional behavior and human rights abuses as a “follow-on agreement” that enables a “longer and stronger nuclear deal.” OFAC’s decision to delist also indicates Washington’s key priority to gain momentum in the ongoing negotiations, however, the concessions the United States is willing to make at this stage remain unclear especially as Blinken has said that even if Iran was to return to the nuclear deal, “hundreds of sanctions will remain in place.”

Editorial Team