Looks like the economic sanctions we put on Iran to "persuade" them to abandon their nuclear ambitions aren't so persuasive after all. The full force of the sanctions is being blunted by a "loophole" that allows Iran to convert their increasingly worthless money (rials) into euros, which they can then use to more easily conduct foreign financial transactions.
Via: The Foundry
European Union Loophole Allows Iran to Circumvent Full Force of Sanctions
A technical loophole is allowing the theocratic regime in Iran to skirt the full force of economic sanctions meant to compel the country to give up its nuclear ambitions.
A recent letter from a bipartisan group of U.S. Senators to the presidents of the European Council and European Central Bank has shed light on a problem that has given Iran a backdoor way to gain access to foreign currency reserves, which it desperately needs to help stabilize a teetering economy, according to media reports.
At issue is the Iranian use of the European Central Bank’s Trans-European Automated Real-time Gross Settlement Express Transfer System—also known as Target 2. This allows Iran to convert Iranian rials into euros. With euros in hand, Iran has far more latitude to conduct foreign transactions than it otherwise could with their increasingly worthless currency.
The Senators urged the European Central Bank to immediately block Iranian access to Target 2.
The news couldn’t have come at a worse time, as Iran continues to advance its nuclear program and Chuck Hagel takes over at the Pentagon. While the U.S. and European allies hope that economic sanctions will help persuade Iran to abandon its nuclear program, Monday’s revelation casts doubt on the effectiveness of these efforts. Read more...