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Or sign-in if you have an account.Iran was heavily sanctioned following the 1979 revolution, but the White House is now reversing this as part of a deal to end the war. Photo by Mandel NGAN/AFP via Getty ImagesThe Trump administration’s effort to unwind decades of sanctions as part of a deal to end the war with Iran has created a head-spinning situation for governments, banks and other companies as they contemplate a shifting patchwork of new permissions and old restrictions.Enjoy the latest local, national and international news.Exclusive articles by Conrad Black, Barbara Kay and others. 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Plus, special edition NP Platformed and First Reading newsletters and virtual events.Unlimited online access to National Post.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles including the New York Times Crossword.Support local journalism.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorFollowing the revolution in 1979, Iran became one of the most sanctioned nations on Earth over its nuclear program and support for regional militias. But the White House is now orchestrating a stunning reversal as part of a broader deal to open the Strait of Hormuz, lower global energy prices and end its unpopular war.It’s hardly been a linear process. On Friday, U.S. President Donald Trump accused Iran of violating a fragile ceasefire and U.S. Central Command launched fresh strikes on Iranian targets. There are also continuing disagreements that could unravel the deal.Columnist Jesse Kline keeps you up to date with what’s happening in Israel and the effects of antisemitism on life here in Canada. Friday mornings.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Channel Israel will soon be in your inbox.We encountered an issue signing you up. Please try againStill, the pace and scale of the effort has stunned longtime sanctions observers. The U.S. has already authorized the sale of Iranian oil and fuels and pledged to unlock billions in frozen funds.The 14-point memorandum of understanding signed by Trump and Iranian President Masoud Pezeshkian on June 17 includes the removal of all U.S. sanctions on Iran on “an agreed upon schedule.” It also directs the Treasury Department to issue waivers for existing sanctions for 60 days as technical negotiations unfold.The disorienting change will be tricky to implement in a way that appeals to risk-averse U.S. financial institutions and other firms, according to former Treasury officials, sanctions attorneys and industry sources monitoring the process.“You want to be 100 per cent sure that you’re within compliance,” said Adam Smith, a former senior adviser to the director of the Treasury’s Office of Foreign Assets Control, which oversees U.S. sanctions. “One-off transactions that close within the 60 days could work, but there may be challenges finding banks and other intermediaries willing to process transactions.”Amid the uncertainty, some Iran hawks are pushing the administration to shift from cash payments for Iranian oil sales to one requiring funds be placed in an escrow account where U.S. officials can ensure it doesn’t go to proxy groups such as Hezbollah or Hamas, according to people familiar with the matter.Trump has suggested publicly that Iran’s money may go into escrow accounts controlled by the U.S., or that Tehran can only spend it on U.S. farm goods — ideas that were not in the MOU and which Iran has mocked and rejected.The idea of using the frozen funds to purchase U.S. agricultural goods was first discussed about a month ago during an Oval Office meeting with Trump, Vice-President JD Vance and other advisers on Iran, according to a person familiar with the matter.It was seen as a way to insulate the White House from the criticism Republicans levelled at the Obama administration for delivering Iran “pallets of cash,” the person said, adding they believed Iran had little choice but to accept such a mechanism.Treasury Secretary Scott Bessent said on Wednesday that Iran will invoice its oil sales in U.S. dollars. The comments marked a departure from Washington’s longstanding goal of locking Tehran out of the U.S. financial system.To make that work, the U.S. would need to enlist some of the biggest U.S. or U.S.-linked banks, which have been hesitant to handle any transactions that risk violating sanctions, according to a former Treasury official.The first step came Monday, when Treasury issued General License X, which allowed oil sales to be conducted in “U.S. dollar-denominated funds.”In addition to the license, companies are likely to request clear guidance from Treasury — such as comfort letters or fact sheets that are regularly issued for thorny cases — in order to reassure compliance departments it’s okay to participate in these sorts of transactions, according to a person with knowledge of the assurances the oil industry is planning to seek.Firms are looking for the kind of guidance issued for Venezuela after the U.S. captured then-president Nicolas Maduro in January, the person said.“Financial institutions are typically more risk adverse than are their clients when we see sanctions programs unwind,” said Michael Huneke, a trade and national security lawyer at Morgan, Lewis & Bockius LLP. “I would expect them to be very cautious here as well.”Rushing in and risking a possible violation is not an appealing gamble. BNP Paribas paid a nearly $1 billion settlement to the U.S. in 2014 for allegedly violating sanctions on Iran and Sudan. Other banks also paid steep fines.Successive U.S. administrations, along with Congress, have levied hundreds of sanctions on Iran over the years, creating layers of restrictions designed to be difficult to remove in one fell swoop.A 2015 law called the Iran Nuclear Agreement Review Act mandates that Congress review and approve any nuclear agreement reached with Iran. It was passed following the signing of the 2015 Joint Comprehensive Plan of Action, which was implemented during the administration of then-President Barack Obama — an agreement Trump repeatedly assailed before pulling out of it in 2018.Some hawkish U.S. lawmakers believe the administration may circumvent the law by saying the Iran MOU is not a nuclear agreement, even though it deals squarely with the issue, according to a person familiar with the matter.If that happens, they are likely to place additional pressure on banks and companies doing business with Iran, reminding them of their obligations under U.S. law, the person said, requesting anonymity to discuss internal deliberations.The person pointed to a 2012 law called the Iran Threat Reduction and Syria Human Rights Act that requires companies that list on U.S. stock exchanges to report certain Iran-related activities to the Securities and Exchange Commission, potentially exposing themselves to future congressional scrutiny should the deal fall apart.“General License X is unprecedented in the relief it offers Iran,” said Chris Kennedy, economic statecraft lead at Bloomberg Economics. However, relying on waivers rather than new legislation means that “over the longer term, the Trump administration will face an uphill battle delivering on its promise to permanently remove sanctions on Iran.” Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.