US said to weigh gradually unfreezing Iranian assets

Move would allow Washington to pursue diplomatic solution without unraveling sanctions regime, administration official says

The Iranian Central Bank in Tehran. (CC BY-SA Ensie & Matthias, Flickr)
The Iranian Central Bank in Tehran. (CC BY-SA Ensie & Matthias, Flickr)

Coming off a round of talks with Iranian representatives this week, Washington is reportedly weighing a proposal that would alleviate some of the sanctions-generated pressure on Tehran, giving the Islamic Republic access to billions of dollars’ worth of frozen funds in exchange for concessions on its nuclear program.

The plan calls for a graduated unfreezing of Iranian oversees assets without rescinding the sanctions themselves, affording US President Barack Obama the capacity to respond to offers made by Iran in the course of negotiations without undoing the years-long effort to put the existing sanctions regime into place, a unnamed senior official in the Obama administration told The New York Times late Thursday.

The official reportedly likened the plan – said to still be in debate in the White House and the State Department – to a “financial spigot,” which could be opened and closed at will.

Negotiations this week between world powers and Iran ended on an upbeat note, with a new round of discussions set for November, but Tehran has yet to put any concrete offers on the table regarding its controversial nuclear program, and US lawmakers are pushing ahead with new sanctions initiatives.

Demands grew in Congress for a speedy escalation of sanctions against Iran as the two days of nuclear talks ended, setting up a potential foreign policy clash with the Obama administration while it seeks a diplomatic end to the standoff.

Members of both parties have overwhelmingly backed tougher economic pressure on Iran in recent years amid concern it is closing in on nuclear weapons capability. The United States and other world powers fear Iran is trying to develop nuclear weapons, while the Islamic republic says its program is for peaceful energy production.

This week’s meetings in part focused on how to scale back its enrichment of material that can be used to generate power or nuclear warhead material.

The Senate Banking Committee is expected to draft new sanctions that largely mirror a House bill that passed overwhelmingly by a 400-20 vote in July and blacklisted Iran’s mining and construction sectors. It also called for all Iranian oil sales to end by 2015.

According to The New York Times report, former officials in the administration have implored Congress to give the negotiations a chance and push off the new sanctions proposals by a few weeks.

“We should remember that the existing sanctions are already having a devastating impact and provide substantial incentive for the Iranians to show the necessary flexibility,” Robert Einhorn, a former official who helped draft sanctions on Iran, was quoted as saying.

The Associated Press contributed to this report.

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