Reuters: Regulatory News: UPDATE 1-US senators seek to block Iran's forex exchange reserve access

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UPDATE 1-US senators seek to block Iran's forex exchange reserve access May 8th 2013, 17:54 Wed May 8, 2013 1:54pm EDT WASHINGTON May 8 (Reuters) - A bipartisan group of U.S. senators introduced legislation on Wednesday to block Iran's access to billions of dollars worth of foreign currency reserves, the latest step by Congress to try to slow the Islamic Republic's disputed nuclear program. Lawmakers in Washington say the government in Tehran taps the reserves held in banks around the world, mostly in euros, to get around U.S. and EU sanctions on oil sales that have damaged Iran's economy. Iran converts the reserves, estimated to be worth $60 billion to $100 billion, into local currencies in order to finance imports and stabilize its budget, the lawmakers say. The United States and the European Union believe that Iran is enriching uranium to levels that could be used in nuclear weapons. Tehran says the program is intended for producing power and medical supplies. If passed, the bill introduced by Senators Mark Kirk, an Illinois Republican, Joe Manchin, a West Virginia Democrat, and three others, would block such currency conversions of the reserves and be retroactive to May 9. Financial institutions around the world are "on notice" to halt all foreign currency transactions on behalf of blacklisted Iranian banks and sectors "or risk being cut off from the U.S. financial market," the lawmakers said in a statement. The bill seeks to limit the ability of the Central Bank of Iran and National Iranian Oil Company to conduct transactions in foreign currencies. The measure is expected to be attached later this month to Iran sanctions legislation in the House of Representatives that was introduced in February by Ed Royce, the chairman of that chamber's foreign affairs committee. Link this Share this Digg this Email Reprints

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