Washington to block Iran's request for IMF coronavirus loan

Trump administration to block Iran's request for IMF coronavirus loan
3 min read
10 April, 2020
The administration sees its reasoning as wholly justified – the pandemic provides a perfect cover for Iran to secure the assets it needs to purse its regional ambitions.
Iran’s central bank remains under US sanctions [Getty]
US President Donald Trump is making active efforts to ensure the International Monetary Fund does not grant Iran a $5 billion emergency loan for its fight against the coronavirus pandemic, senior officials confirmed on Thursday.

The administration believes its reasoning to be wholly justified – the pandemic provides a perfect cover for Iran to secure the assets it needs to purse its regional ambitions.

"The world's leading state sponsor of terrorism is seeking cash to fund its adventurism abroad, not to buy medicines 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.", the spokesperson added.

While many speculate that the numbers of infections to be far higher, the Islamic Republic is battling the Middle East's deadliest coronavirus outbreak, which it says has killed close to 4,000 people and infected more than 64,500.

The dire situation in Iran is compounded both a weak economy, reeling from the impact of crippling US sanctions, and an intrinsic shortage of medical supplies.

Iranian President Hasan Rouhani appealed to the IMF to give his country its first IMF loan in half a century on Wednesday, Foreign Minister Javad Zarif asked for the assistane nearly a month ago.

"Our Central Bank requested access to this facility immediately," Zarif tweeted.

"IMF/IMF Board should adhere to the Fund's mandate, stand on right side of history & act responsibly," he added.

Iran's central bank remains under US sanctions.

Opposition to accessing an IMF loan was justified by a treasury official on the grounds that the bank had a history of being ''a key actor in financing terrorism across the region'' and the risks that more funding could "foster the regime's malign and destabilising activities", the official told CNN.

Officials say the US will leverage its 17 percent vetoing power to block the IMF assistance, to secure the support of member states and attain the requisite majority, which stands at 70 percent.

US President Donald Trump's administration has waged a campaign of "maximum pressure" on Iran since Washington withdrew from a landmark nuclear deal in 2018.

Iran has repeatedly called on the Trump administration to reverse its sanctions policy, which has been opposed even by some US allies, particularly since the Covid-19 pandemic hit.

Medicines and medical equipment are technically exempt from the US sanctions but purchases are frequently blocked by the unwillingness of banks to process them for fear of incurring large penalties in the US.

Agencies contributed to this report.

Read also: New EU trade mechanism Instex offers hope as sanctions-hit Iran battles coronavirus

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