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Targeting Tehran's Euros

(Wall Street Journal Europe) Mark Dubowitz and Jonathan Schanzer - U.S. financial sanctions have already curtailed much of Iran's dollar-denominated business. In response, Tehran has transferred billions of dollars in foreign exchange reserves into euros. Target2 is the European Central Bank's proprietary electronic interbank payment system. The ECB's own guidelines bar access to Target2 by those engaged in "money laundering and the financing of terrorism, proliferation-sensitive nuclear activities and the development of nuclear weapons delivery systems." This describes the Iranian regime to the letter. However, numerous Iranian banks, and foreign banks handling euro transactions on behalf of Iran, can still access the Target2 system. Now some ECB officials have indicated that they are prepared to bar Iran from the system. The U.S. Congress is prepared to use an upcoming Iran sanctions bill to give European regulators a legislative push to do what they know is right. Mr. Dubowitz is executive director of the Foundation for Defense of Democracies. Mr. Schanzer, a former U.S. Treasury terrorism finance analyst, is vice president for research at FDD.
2013-02-19 00:00:00
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