UK Release of Iranian Tanker Was 'Mistake,' US Will Not Ease Iran Sanctions, Treasury Official Says

A top Treasury Department official criticized Britain's decision to release an Iranian oil tanker and defended the U.S.’s maximum pressure sanctions campaign against Iran, saying the U.S. will not ease Iran sanctions ahead of a potential meeting between the two countries. Gibraltar's decision to release the Iranian oil tanker Adrian Darya 1, previously named Grace 1, was an “expensive mistake,” said Marshall Billingslea, Treasury’s assistant secretary for terrorist financing. Gibraltar seized the ship in July after suspecting it of transporting oil to Syria, but later released the tanker after Iran promised it would not ship oil to Syria, which would violate international sanctions. Despite the promises, the ship delivered oil to Syria (see 1909110042).

“This is something that never should have happened,” Billingslea said, speaking during a Sept. 13 event hosted by the Atlantic Council. “Our allies should not need reminding that Iran cannot be trusted.” Billingslea said the U.S. hopes Britain and Gibraltar learn from the mistake. “It was regrettable that Gibraltar let the vessel go on the basis of Iranian promises,” he said. “Hopefully there won’t be a repeat.”

Billingslea repeated statements made by Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin that the U.S. will not ease sanctions on Iran, even as President Donald Trump has reportedly considered lifting some measures to encourage a meeting with Iranian President Hassan Rouhani (see 1909110039).

“[Trump] is prepared to meet, but we are not easing up,” Billingslea said. “He will negotiate from a position of strength.” Billingslea also said the resignation of former national security adviser John Bolton will not impact the U.S.’s maximum pressure campaign on Iran. “We are implementing the president’s policies,” he said. “The president is the one who has directed us on this course, and we will maintain this pressure campaign.”

Billingslea also touched on Trump’s Sept. 10 executive order (see 1909100048) that expanded terrorism-related sanctions authorities for both the State and Treasury departments, calling the move a “really big deal.” Billingslea said the order was the first modernization of “financial counterterrorism authorities” since 9/11 and will help Treasury sanction foreign terrorists “without having to specifically associate a given leader of a terrorist organization to a given specific terrorist attack.” He also said the order gave Treasury the ability to impose secondary sanctions on foreign banks that facilitate payments for terrorists, a power he called “crucial.”

Billingslea said the U.S. already has received tips from the U.S.’s $15 million offer for information that leads to disruption of Iran’s military and Hizballah (see 1909040055). “Leads are now coming in from South America, West Africa and Lebanon itself,” Billingslea said, calling on companies to reach out with information and “we will reward you for it.”

The “vast majority” of international companies have heeded U.S. warnings to end business with Iran, especially in Europe, Billingslea said. “It wasn't actually a tough call for many of them,” he said. “It’s a non-transparent, highly corrupt business environment in Iran, and most of the big European players had already decided it wasn't worth the candle.”

Billingslea also said Treasury has directly warned companies about doing business in Iran, even entities in countries that do not agree with U.S. foreign policy, including China. “We’ve had the same dialogue with Chinese companies that we’ve had with Turkish companies, Indian companies, British companies -- you name it,” he said. But while companies have mostly stopped doing business in Iran, there are still U.S. allies who are pushing back on the U.S.’s maximum pressure campaign, Billingslea said.

“We have a number of [North Atlantic Treaty Organization] allies who completely understand our security concerns. But we do have a difference of opinion with some -- but by no means all -- of the Europeans on the right way forward on the diplomatic front,” he said. “We’ll continue to work together.”