March 24, 2013
The amendment to the budget resolution passed early Saturday morning authorizes funding to "to prevent Iran from directly or indirectly accessing the European Central Bank’s Target2 settlement platform and to block Iran’s access to its euro-denominated foreign exchange holdings."
While the overall budget -- the first passed by the Senate in four years -- barely squeaked through by just 50-49, the money transfer amendment had the support of the entire body.
The amendment, sponsored by Sens. Mark Kirk (R-Ill.) and Joe Manchin (D-W. Va.) comes after a letter in February from a bipartisan slate of 36 senators urging European authorities to authorize such a shutout.
Obama administration officials say they too are pressing their European counterparts on the matter.
The senators allege that Iran uses the system to launder euro in its accounts, allowing it to alleviate tough U.S. and European sanctions aimed at forcing the regime to be more transparent about its nuclear program.
Mark Dubowitz, who directs the Foundation for Defense of Democracies, a group that advised the senators who drafted the amendment, said blocking such transfers would help force Iran's hand.
"With Iran just over a year from reaching an undetectable nuclear bomb, Europe is in a position to deny access to the critical foreign exchange reserves that Tehran needs to forestall economic collapse," Dubowitz told JTA. "The bipartisan amendment is another message to the European Central Bank that Congress is united in encouraging the ECB to block Iran's access to tens of billions of Iranian euros in overseas banks."
The funding authorization does not specify programs or an amount, other than to say any such funding must not add to the national deficit -- in other words, must be compensated for by cuts elsewhere.
