US Treasury official: Firms not signing new deals in Iran after pact

Authorities estimated the sanctions relief would be worth up to $7bn for the Tehran regime

The top US Treasury Department official responsible for sanctions said on Wednesday there is no evidence that any companies are taking advantage of a preliminary nuclear agreement with Iran by reaching new deals in Iran.

"We have not seen companies anywhere - Europe, the Gulf, Asia - trying to take advantage of this ... narrow opening, the quite limited suspensions of the sanctions to get into the Iranian market, enter into business deals that would otherwise be sanctionable," Treasury Under Secretary David Cohen said at a US Senate hearing.

Cohen noted that authorities estimated when the preliminary agreement was reached that the sanctions relief would be worth a maximum of $6bn to $7bn for Iran. He said that estimate seems to be holding more than two months after the pact came into force in January.

"Nothing that we have seen leads us to question that estimate. If anything, that estimate is probably on the high side," Cohen said.

The sanctions that Washington announced in early February against a range of international entities sent a message that the United States would "come down like a ton of bricks" over sanctions violations, he said.

"We did that, and I think that sent a very strong message," he said.

Some US lawmakers have worried that the preliminary "Joint Plan of Action" would go too far in reopening the Iranian market. They have cited visits by foreign delegations to Tehran as evidence that the sanctions regime was collapsing.

"I'm concerned there are some folks, our allies and our adversaries, who view Iran as potentially open for business," Senator Chris Coons, a Delaware Democrat, said as he questioned Cohen.

Reuters reported on Wednesday that Iran and Russia have made progress for an oil-for-goods deal that sources said could be worth up to $20 billion and enable Tehran to boost vital energy exports in defiance of western sanctions.

Asked about the report at the hearing, Cohen said Washington would be ready to impose penalties over any deal that violated international sanctions regimes.

"We have been crystal clear to the Russians that any such deal is not only contrary to the spirit of the P5 plus 1 negotiations that we're involved in, but would also be plainly sanctionable under a number of different authorities that we have," he said.

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