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Iran Oil-Swap Proposal Prompts Questions on U.S. Sanctions Strategy

By Diane Barnes

Global Security Newswire

Iranian Revolutionary Guard speedboats pass an oil tanker off the coast of southern Iran in 2012. U.S. House Foreign Affairs Committee Chairman Ed Royce (R-Calif.) on Monday urged the Obama administration to explain how it would respond if Iran and Russia finalize a "sanctions-busting" oil deal. Iranian Revolutionary Guard speedboats pass an oil tanker off the coast of southern Iran in 2012. U.S. House Foreign Affairs Committee Chairman Ed Royce (R-Calif.) on Monday urged the Obama administration to explain how it would respond if Iran and Russia finalize a "sanctions-busting" oil deal. (Atta Kenare/AFP/Getty Images)

A senior U.S. lawmaker wants the Obama administration to explain how it would respond if Iran and Russia finalize a "sanctions-busting" oil deal.

U.S. House Foreign Affairs Committee Chairman Ed Royce (R-Calif.) said the potential "oil-for-goods" plan would circumvent international efforts to squeeze concessions from Iran on its bomb-usable nuclear activities. In a Monday letter, he asked Secretary of State John Kerry to identify what "designation and enforcement steps" the administration would pursue if the potential $20 billion arrangement takes effect.

Negotiators for Russia, the United States and four other countries are offering Iran relief from economic pressure if the Middle Eastern nation significantly dials back its contested atomic efforts. Tehran denies it is seeking a nuclear-bomb capacity, and so far has not offered curbs sufficient to satisfy Washington and its allies.

Royce said the proposal for Iran to trade oil for nonmonetary goods from Russia "would present a clear violation of Iran's obligations and would undermine the rationale behind the current negotiations." Treasury Secretary Jack Lew in April said Washington could penalize groups or individuals that engage in trade under the possible pact, but he did not specify what legal authorities would permit such action.

The lawmaker also asked for a rundown of steps by Washington or its partners "to deter a potential deal."

The United States contends that a six-month interim accord obligates Iran to cap its average daily oil exports to six key oil-importing nations at about a million barrels. Royce said the list does not include Russia, potentially enabling a barter deal to boost Tehran's daily oil sales by up to half a million additional barrels.

Royce also aired concern over indications that Moscow may supply Iran with arms or nuclear systems under the proposed arrangement.

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