Following the Money: How Much of Iran Deal’s Sanctions Relief Will Fund Terror?

Beyond the recently reached nuclear deal’s implications for Iran’s nuclear program itself, much of the fear about the agreement centers on how the substantial sanctions relief it provides to the Islamic Republic might open the floodgates to increased Iranian exporting of terrorism.

Barring an override (two-thirds of both the House and Senate) of a presidential veto of the deal’s rejection by the U.S. Congress—if Congress even nixes the deal to begin with—the agreement is likely to be implemented. In exchange for Iran scaling back or transforming the operations of its nuclear plants and limiting nuclear enrichment, among other key stipulations, international financial sanctions that are currently placed on the Islamic Republic will be gradually phased out. Many critics fear that this economic boost to Iran will give the country more chances to fund terror groups like Hezbollah and Hamas, while taking other actions to further destabilize the Middle East. A January report by the Congressional Research Service noted that about $100 billion in hard currency is currently inaccessible by Iran due to the compliance of foreign banks with American-imposed sanctions. Other estimates point to a figure as high as $150 billion.

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“It is clear to me that the sanctions will be thoroughly gutted,” Jonathan Schanzer, a former terrorism finance analyst at the U.S. Department of the Treasury and vice president for research at the Foundation for the Defense of Democracies think tank, told JNS.org.

“There will be little way of financial pressure that the U.S. and its allies will have after the implementation of the deal,” and there is “no way to assure the public that Iran will not spend that money on terrorism or destabilizing the region,” said Schanzer.

Making matters worse, Schanzer explained, “the banking system is about to relax its sanctions against Iran, so they will be allowed back onto the SWIFT financial messaging system,” referring to the international telecommunications system that enables financial institutions worldwide to send and receive information about transactions.

“The Central Bank of Iran will be delisted so the channels for moving those funds to dangerous actors will be cleared,” Schanzer said.

Schanzer argues that even if only 10 percent of the sanctions relief is used by Iran for bankrolling terror, that is still billions of dollars, which is a “staggering sum and a very good reason why Hamas, Islamic Jihad, Hezbollah, Syrian President Bashar al-Assad, and the Houthis in Yemen are all salivating over this deal.”

“One might argue that the Iranian people will be better off, but it is undeniable that Iran’s terror proxies will be better off as well,” Schanzer said.

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