Obama issued secret licence to help Iran withdraw $5.7bn from Omani bank

The administration of former US President Barack Obama secretly issued a licence in 2016 to help Iran withdraw $5.7bn held at Oman’s Bank of Muscat, according to reports.

The move was confirmed through an investigation by US Senate Republications released on Wednesday, AP said.

The licence was intended to let Iran sidestep US sanctions for a ‘brief moment’ to convert the funds through an American bank from Omani rials into dollars and then euros.

However, amid repeated assurances to the US Congress that Iran would never gain access to America’s financial system two US banks refused to participate, according to the publication.

“The Obama administration misled the American people and Congress because they were desperate to get a deal with Iran,” Republication senator and investigative panel chair Rob Portman was quoted as saying.

Republications accuse the former administration of being too eager to offer concessions to Tehran after the country was promised access to frozen overseas reserves as part of the 2016 nuclear agreement with world powers.

Gulf states including Saudi Arabia and the UAE expressed concerns at the time that the deal would allow Iran to more effectively spread its influence across the Middle East.

Read: US seeks to pacify GCC states about Iran nuclear deal

Obama administration officials told AP that the decision to grant the licence adhered to the spirit of the deal and suggested the investigation was part of efforts to justify current US President Donald Trump’s decision to withdraw from the Iran agreement last month.

Read: Saudi, UAE, Bahrain support US withdrawal from Iran deal

Iran stored billions of dollars of funds in Omani rials including the $5.7bn at Bank of Muscat.

If the Omani bank had attempted the exchange without the licence it would have been in breach of US sanctions.

As it turned out, two US banks approached to facilitate the transaction both refused citing reputational risk, AP reported. It is believed Iran found other ways to access the money.

Issuing the licence was not illegal but went beyond the Obama administration’s obligations under the nuclear deal and came in contrast to statements at the time promising Iran would not gain access to the US financial system, according to the report.

The Republican investigation also revealed that another general licence for transactions of a certain type provided they did not involve Iranian banks, rials or sanctioned individuals was also drafted by the US Treasury but never issued.

At the time, the Obama administration made assurances to lawmakers that there was no prospect of a general licence being offered to Iran.