1. The Trump admin is quietly considering using powers granted to the Treasury Department under the Patriot Act to dramatically cut #Iran's last links to the global financial system, in a move likely intended to hobble #INSTEX, as @TylerCullis explains.
bourseandbazaar.com/articles/2019/…

2. Back in 2011, the Obama admin used Section 311 powers to designate Iran as a “primary money laundering concern." But it never issued the "Final Rule" requiring banks to take onerous "special measures" in order to deal with Iran. Other sanctions on banks were deemed sufficient.

3. Now, the rule is back on the agenda. @TylerCullis warns that if the "Final Rule" is issued, "European banks that maintain accounts on behalf of Iranian financial institutions are likely to take steps to shutter such accounts so as to sustain their own accounts at US banks."

4. There are probably fewer than 10 European financial institutions that maintain correspondent banking ties with Iran. These banks only conduct exempted or humanitarian trade with Iran. If there is concern over non-EU banks, those could be targeted without using Section 311.

5. Those advocating for the Trump administration to finalize the rule are notably the same characters claiming that the US should sanction the Iranian counterpart to INSTEX, the trade mechanism established by the E3 governments to support humanitarian trade with Iran.

6. Additionally, it is remarkable that the admin would consider such a move before safeguarding humanitarian trade. Not only has INSTEX been threatened by officials but the Swiss channel for humanitarian trade is still not operable after months of dialogue with Treasury.

7. I've even been told by UN staff that longstanding exemptions for UN operations in Iran are no longer considered sufficient. UN agency heads have been forced to keep operations going in Iran by bringing cash into the country while they engage in a protracted dialogue with OFAC.

8. Admin officials give lip-service to their support humanitarian trade with Iran. But all of their efforts are focused on the imposition of even more draconian measures of Iran's few and fragile banking links. No effort is being made to protect trade in food and medicine.

9. Meanwhile, Europe, which has a different assessment of systemic risk in Iran regarding money laundering + terrorist financing (namely that these risks are manageable with strong due diligence + subject to a domestic reform effort) has done almost nothing to pushback on the US.

10. As @TylerCullis concludes, "If Europe has any self-regard for its economic sovereignty, it will be sure to publicly and privately warn Washington of the consequences of imposing the fifth special measure."

If Section 311 authorities are fully utilized, it may kill the JCPOA.