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June 3, 2014 11:13 am

Chairman of House Foreign Affairs Committee Royce Questions Kerry Over Reported Iran-Russia Sanctions-Busting Oil-for-Goods Deal

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U.S. Representative Ed Royce, (R-CA), Chairman of the House Foreign Affairs Committee. Photo: U.S. Congress.

U.S. Representative Ed Royce, (R-CA), Chairman of the House Foreign Affairs Committee. Photo: U.S. Congress.

Ed Royce, Chairman of the U.S. House of Representatives Foreign Affairs Committee, on Monday sent a formal letter to U.S. Secretary of State John Kerry after reports that Iran and Russia were close to reaching a deal that would provide the Islamic Republic with arms or nuclear facilities in exchange for its oil, what he called a “sanctions-busting scheme.”

In the letter to Kerry, Royce wrote: “I am deeply concerned that Iran is attempting to circumvent November’s interim nuclear accord through a $20 billion barter agreement with Russia.”

“Reports indicate that Iranian and Russian officials have discussed an illicit oil-for-goods contract that could undermine the sanctions regime and weaken American negotiating leverage,” Royce said. “These efforts to evade sanctions undermine Iran’s agreement with the P5+1 and cast serious doubt on Iranian intentions.”

Royce said the interim agreement, called the ‘Joint Plan of Action,’ allows Iran to maintain its average level of oil exports to existing customers in six countries at roughly one million barrels per day, with Russia not included on the list “Thus, it is very troubling that a potential agreement with Russia could allow Iran to increase its oil exports by nearly 500,000 additional barrels per day,” Royce said.

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“Even more alarming are reports that Russia may provide Iran with arms or new nuclear facilities. Given that simple commodity exports are unlikely to total $20 billion, some experts worry that Russia might even offer the S-300 missile defense system to fulfill the contract,” he said. “It would be a serious mistake for the Administration to ignore any agreement in which Russia enables illegitimate Iranian activity through nuclear construction or the supply of advanced weaponry.”

Royce cited Kerry’s own comments made during testimony before the Senate Foreign Relations Committee, where he said that an oil-for-goods deal would “raise serious concerns” and “be inconsistent with the terms” of the interim agreement Iran reached with world powers. “On several occasions, State Department officials also acknowledged that such a deal ‘could potentially trigger U.S. sanctions,'” Royce said.

He directed four questions to Kerry:

“Has Iran reached an agreement to provide oil to Russia in exchange for food, arms, nuclear facilities, or other goods and services? Which specific sanctions or provisions of the JPOA would a proposed barter deal violate?”

“Russian Deputy Foreign Minister Sergey Ryabkov recently confirmed that ‘Russia plans to expand its trade with Iran and it rejects American threats about…more sanctions.’ What specific actions have the Department or our allies taken to deter a potential deal and address Russia’s flagrant response to engaging in prohibited trade with Iran?”

“You testified that an oil-for-goods contract ‘could trigger U.S. sanctions.’  What specific designation and enforcement steps does the Department plan to take if Iran and Russia consummate an agreement?”

Royce concluded his letter to Kerry: “If this sanctions-busting scheme moves forward, it would present a clear violation of Iran’s obligations and would undermine the rationale behind the current negotiations. Consequently, any illegal barter deal between Iran and Russia must be met with a compelling response.”

“I look forward to working with you to reinforce our sanctions regime and permanently eliminate the Iranian nuclear threat,” Royce said.

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