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US reviewing waiver on Iranian fuel exports to Afghanistan after Taliban takeover

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
This undated file picture shows tanker trucks belonging to the National Iranian Oil Refining and Distribution Company (NIROC). (Photo by Shana news agency)

The administration of US President Joe Biden is reportedly reviewing a 2018 sanctions waiver, which allowed Afghanistan to purchase Iranian gasoline and gasoil. 

An unnamed State Department spokesperson told London-based Middle East Eye online news outlet that the waiver put in place by former president Donald Trump's administration “remains under active review” after the overthrow of the Afghan government last month.

An amendment to repeal a part of the waiver reached the House Foreign Relations Committee last month but was blocked by the committee chairman Gregory Meeks, the report said.

According to Alex Zerden, who led the Treasury Department's office at the US embassy in Kabul from 2018 to 2019, the sanctions waiver on Iranian fuel exports to Afghanistan was intended at the time to protect Kabul even as Washington was pushing ahead its “maximum pressure campaign” against Tehran. 

“There were real concerns about Iran sanctions harming Afghanistan's economy and a waiver to import Iranian fuel was seen as crucial,” Zerden noted.

Trump left the 2015 Iran nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA), in 2018 and returned the sanctions that had been lifted against Tehran as part of the agreement.

Zerden said the 2018 waiver on Iranian fuel sales to Afghanistan was intended to allow fuel traders to skip the sanctions imposed on Tehran, but not Taliban sanctions.

The Taliban have already been subject to a range of US sanctions under an executive order enacted after the 9/11 attacks.

Howard Shatz, a senior economist at the Rand Corporation, said that even if Washington wanted to enforce the sanctions, it could prove difficult. “We don't have a lot of leverage with Iran and Afghanistan,” he said.

Zerden said, "Enforcing violations of sanctions would be difficult because this occurs outside formal financial channels." 

The fuel sales take place in cash at the Iranian-Afghan border. Most of the transactions occur through Afghanistan's informal Hawala banking system.

The main Iranian fuel exports to Afghanistan are gasoline and gasoil. Iran exported about 400,000 tons of fuel to its eastern neighbor from May 2020 to May 2021, according to a report published by PetroView, an Iranian oil and gas research and consultancy platform.

Iranian fuel flows have been vital to Afghanistan in the last few years, according to traders and an Afghan government report.

Between March 2020 and March 2021, Iran accounted for $367 million of imports, mostly fuel, according to the report compiled by the Afghan Ministry of Finance, chambers of commerce and data from private enterprises.


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