The Daily beast has reported that the US administration began easing sanctions against Iran as soon as Hassan Rohani was elected the Islamic Republic's new president in June, months prior to the current round of talks being held in Geneva.
According to the report, the ease in sanctions began even before Iranian President Hassan Rohani and US President Barack Obama held their historic phone call in September. Israeli officials have expressed concerns that an alleviation of sanctions would boost the Iranian economy, thus rendering the sanctions current achievements obsolete.
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The report was published as a new deal between Iran and world powers is expected to be announced Friday. As part of the anticipated deal, Iran would make concessions to its nuclear program in return for an alleviation of sanctions currently crippling its economy.
According to the Daily Beast, a review of US Treasury Department notices revealed that the government has almost completely halted its "financial blacklisting of entities and people that help Iran evade international sanctions."
A corner stone of the West's policy against Iran was isolating its banks from international markets – thus effectively cutting it off from financial interaction with the world. As a response, Iran began setting up large numbers of straw corporations to serve as a channel for routine business transactions, specifically for trading in oil.
This led to a constant need to update the list of blacklisted companies on the US and West's part. According to the Daily Beast, in the six weeks before Rohani's elections some 100 new people, companies, aircraft, and sea vessels were added to the offender's list. Since June, however, when Rouhani was elected, the Treasury Department had only issued two designation notices identifying six people and four companies as violating Iranian sanctions.
The report cites a number of additional causes, including the fact that the regime change has also led to a massive change in personnel which hinders the US's ability to adequately update its blacklist.
Quoting Mark Dubowitz, the director of the Foundation for the Defense of Democracies, which the Daily Beast claims has worked with officials on formulating the sanctions against Iran, the report claimed that the alleged ease in blacklist designation has allowed Iran to profite from the sale of roughly 35 million barrels of oil.
Israel has decided to pursue a firm line on what appears to be an imminent deal between Iran and world powers and is seeking to give off the impression of a major crisis, just hours before US Secretary of State John Kerry arrives in Geneva to participate in nuclear talks.
State officials fear a diplomatic snow ball effect and the possibility that a deal between Iran and the West would undermine the sanctions regime. Israel is satisfied with the impact of sanctions on the Iranian economy and senior officials are said to have expressed a desire to bring the Iranians "on their knees."
The main concern is that a nuclear deal will allow firms in Europe, China and the rest of the world to re-access the Iranian market and revitalize the Islamic Republic's failing economy. "It would be very hard to turn the clock," one state official said.
"Israel would not like to see a situation where Iran lowers its profile for a couple of months, gets an economic boost and then reverts to its old ways several months later. A relief in sanctions would change the whole atmosphere, both in Iran and in the international community."
The concerns seem well placed as reports emerged that Iran has told Western powers that it wants them to consider easing oil and banking sanctions during the first phase of any interim nuclear deal they agree to, an Iranian delegate at talks between Tehran and six world powers said on Friday.
"We have announced to the West that in the first phase the issue of banking and oil sanctions must be considered," Majid Takht-Ravanchi, a member of Iran's negotiating team in Geneva, was quoted as saying by Iran's Mehr news agency.
Prime Minister Benjamin Netanyahu and Secretary of State John Kerry held a brief meeting on Friday which apparently raised already high tenions between the US and Israel. However, state officials noted that to describe the situation as a "crisis" would be to overstate it. It was further stressed that security relations between Jerusalem and Washington have never been stronger.
However, state officials fear that the West's determination to reach an agreement with Iran would result in a premature deal that could not guarantee that the Iranians meet their end of the bargain. "There are strong disagreements," one official said.
"That is why it was decided to take a firm line that will convey to the world that we will not allow an agreement that will allow the Iranians to deceive the international community. The sanctions played their part and they must not be curtailed. The Iranians are on their knees and they need to be pressured to realize that they must stop uranium enrichment. We have a huge opportunity and that is why we shouldn't rush an agreement."
Reuters contributed to this report
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