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Source: FT

Oct 11, 2023

Janet Yellen warns Iran that nothing is ‘off the table’ for sanctions

Washington ‘constantly’ looking at sanctions policy against Tehran, Hamas and Hizbollah, US Treasury secretary says

By Colby Smith in Marrakech and Felicia Schwartz in Brussels

Janet Yellen has warned Iran that nothing is “off the table” if Tehran is linked to this week’s militant attacks on Israel, even as the US Treasury secretary stressed that no decisions had been taken on economic sanctions. Speaking at a press conference on Wednesday in Marrakech, Yellen said the US is “constantly looking at” its sanctions policy against Iran, Hamas and Hizbollah.

Washington would be “using information that comes available” to adjust its approach, as she condemned the assault on Israel in the “strongest possible terms”. “I wouldn’t take anything off the table in terms of future possible actions, but I certainly don’t want to get ahead of where we are on that,” she told reporters, responding to a question on what the US planned to do with $6bn in frozen Iranian oil assets that it released in September.

As part of a prisoner swap between Iran and the US last month, the US transferred the $6bn from South Korea to an account in Qatar in an effort to ease tensions with Iran. Speaking at the IMF and World Bank annual meetings on Wednesday, Yellen said the funds have “not been touched” and remain in Qatar to be used purely for humanitarian purposes.

Yellen’s remarks come after US national security adviser Jake Sullivan said on Tuesday that Iran was “complicit in this attack” as Hamas’s main backer. While Sullivan said the US does not have information to confirm Tehran was directly responsible for planning or directing the assault, it was still looking into the question and seeking to establish facts.

Yellen’s comments come as the death toll mounts in both Israel and Gaza. Israel has reported 1,200 fatalities from the weekend’s deadly incursion by Hamas and Palestinian authorities have reported 950 deaths from the Israeli military’s subsequent bombardment of the Gaza Strip. Separately, Israel has said it has retrieved the bodies of 1,500 Hamas fighters. Pressure is mounting on the Biden administration to take further action to help Israel.

On Tuesday, Tim Scott, a senator for South Carolina, who serves as the top-ranking Republican on the Senate Banking Committee, called on Yellen to testify “as soon as possible” about gaps in US sanctions policy against Iran, including the $6bn recently transferred.  “In the face of evil, we must use every tool, weapon, and economic sanction available to provide for our nation’s security and the security of Israel,” Scott said.

“The American people and Israel, our closest ally in the Middle East, deserve transparency and answers.” Critics of the Biden administration’s approach to Tehran say that it has been lax in enforcing oil sanctions as part of its efforts to return to talks with Iran over its nuclear programme. Yellen said that the US had “not in any way relaxed our sanctions on Iranian oil and we have sanctions on Hamas and Hizbollah”.

She also stressed that her focus right now is on the “human beings that have been affected by these barbaric attacks on Israel”, but noted that she is monitoring the potential economic impact of the crisis.  “I’m not really thinking of that as a major likely driver of the global economic outlook,” she added.

In 2018 the then-US President Donald Trump pulled the US out of the Iran deal and imposed hundreds of sanctions on Tehran, while Iran responded by aggressively increasing its nuclear activity. The prisoner exchange and the moving of the $6bn in funds were seen by diplomats as confidence-building measures that could help create conditions for future negotiations between the US and Iran.

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