The Trump administration is seeking to block the International Monetary Fund from providing a $5 billion emergency loan to Iran for assistance in combating the coronavirus pandemic, according to three administration officials.
US officials believe the money would not actually go towards the country’s public health crisis.
“The world’s leading state sponsor of terrorism is seeking cash to fund its adventurism abroad, not to buy medicine for Iranians,” a State Department spokesperson told CNN. “The regime’s corrupt officials have a long history of diverting funds allocated for humanitarian goods into their own pockets and to their terrorist proxies.”
Almost 4,000 Iranians have died as a result of Covid-19, and the country has reported 64,586 cases of the virus since it swept the country in February, according to Johns Hopkins statistics. Many experts believe the real statistics could be much higher.
The devastation in Iran is particularly intense because the country is already plagued by a weak economy, in part because of US sanctions, and a shortage of medical resources. The US decision to block the aid could create further friction with the European Union, which announced on March 23 that it will give Tehran 20 million Euros to combat coronavirus and will support its appeal for IMF aid.
‘We remain opposed’
Iranian Foreign Minister Javad Zarif asked for an emergency loan from the IMF almost a month ago.
“Our Central Bank requested access to this facility immediately,” Zarif tweeted of the IMF offer to dole out emergency loans to help countries battling the pandemic. “IMF/IMF Board should adhere to the Fund’s mandate, stand on right side of history & act responsibly.”
A US Treasury official pointed out that the Iranian central bank is under US sanctions and is known for financing Iran’s destabilizing activity.
“The United States is aware of Iran’s request for financing from the IMF and, as in the past, we remain opposed to funding going to Iran that could be used to foster the regime’s malign and destabilizing activities,” the Treasury official said. “Unfortunately, the Iranian central bank, which is currently under sanction, has been a key actor in financing terrorism across the region and we have no confidence that funds would be used to fight the coronavirus.”
The US will use its veto power if necessary to block the IMF assistance, officials said. Vetoing the move would require a special majority of 70% of the total voting power so the US – which accounts for about 17% of the voting power alone – would have to find a handful of member states to help them block any such vote if it does take place.
However, the IMF is generally known to avoid calling for a vote unless they know it will pass, meaning the US statements against aid for Iran send a powerful message that might be all that’s required to stop any attempt to help Tehran.
“When the US cares a lot about a particular lending program, it can stop it by blocking it politically,” David Dollar, a senior fellow at the Brookings Institution, told CNN. “The US can go to its key allies, and those countries together do have veto power.”
United Nations Secretary General António Guterres has advocated for sanctions relief during the pandemic to ensure access to essential supplies and medical support, saying that sanctions risk the health of millions.
Last week Secretary of State Mike Pompeo said that sanctions policies are always being evaluated when asked about lifting any sanctions on countries like Iran due to the pandemic. But he has also claimed that for Iran specifically the push to lift US sanctions is “about cash for regime leaders,” not fighting the pandemic.
Iran is currently under the toughest US sanctions in history – and Zarif has called those sanctions “economic terrorism” – but Pompeo emphasized that there are no limits on humanitarian efforts going into the country.
“When it comes to humanitarian assistance, medical devices, equipment, pharmaceuticals, things that people need in these difficult times, those are not sanctioned anywhere at any time that I’m aware of,” Pompeo said.