Trump's U-Turn on Iran Sanctions Would Unravel Decades of Curbs
An Iranian Navy officer stands behind a portrait of late Supreme Leader Ayatollah Ali Khamenei during a nightly pro-government rally to mark the IRIS Dena, a Moudge-class frigate in the Southern Fleet of the Islamic Republic of Iran Navy, in northern Tehran, on June 25, 2026. The Dena frigate was reported to have been targeted and sunk by the United States Navy in the waters of the Indian Ocean, with the incident occurring near the coast of Sri Lanka. (Photo by Morteza Nikoubazl/NurPhoto via Getty Images) · Bloomberg · NurPhoto via Getty Images
Daniel Flatley, Magdalena Del Valle, Jennifer A. Dlouhy and Jeff Mason
Sun, June 28, 2026
(Bloomberg) -- The Trump administration's effort to unwind decades of sanctions as part of a deal to end the war with Iran has created a head-spinning situation for governments, banks and other companies as they contemplate a shifting patchwork of new permissions and old restrictions.
Following the revolution in 1979, Iran became one of the most sanctioned nations on Earth over its nuclear program and support for regional militias. But the White House is now orchestrating a stunning reversal as part of a broader deal to open the Strait of Hormuz, lower global energy prices and end its unpopular war.
It's hardly been a linear process. On Friday, President Donald Trump accused Iran of violating a fragile ceasefire and US Central Command launched fresh strikes on Iranian targets. There's also continuing disagreements that could unravel the deal.
Still, the pace and scale of the effort has stunned longtime sanctions observers. The US has already authorized the sale of Iranian oil and fuels and pledged to unlock billions in frozen funds.
The 14-point memorandum of understanding signed by Trump and Iranian President Masoud Pezeshkian on June 17 includes the removal of all US sanctions on Iran on "an agreed upon schedule." It also directs the Treasury Department to issue waivers for existing sanctions for 60 days as technical negotiations unfold.
The disorienting change will be tricky to implement in a way that appeals to risk-averse US financial institutions and other firms, according to former Treasury officials, sanctions attorneys and industry sources monitoring the process.
"You want to be 100% sure that you're within compliance," said Adam Smith, a former senior adviser to the director of the Treasury's Office of Foreign Assets Control, which oversees US sanctions. "One-off transactions that close within the 60 days could work but there may be challenges finding banks and other intermediaries willing to process transactions."
Amid the uncertainty, some Iran hawks are pushing the administration to shift from cash payments for Iranian oil sales to one requiring funds be placed in an escrow account where US officials can ensure it doesn't go to proxy groups such as Hezbollah or Hamas, according to people familiar with the matter.
Sun, June 28, 2026
(Bloomberg) -- The Trump administration's effort to unwind decades of sanctions as part of a deal to end the war with Iran has created a head-spinning situation for governments, banks and other companies as they contemplate a shifting patchwork of new permissions and old restrictions.
Following the revolution in 1979, Iran became one of the most sanctioned nations on Earth over its nuclear program and support for regional militias. But the White House is now orchestrating a stunning reversal as part of a broader deal to open the Strait of Hormuz, lower global energy prices and end its unpopular war.
It's hardly been a linear process. On Friday, President Donald Trump accused Iran of violating a fragile ceasefire and US Central Command launched fresh strikes on Iranian targets. There's also continuing disagreements that could unravel the deal.
Still, the pace and scale of the effort has stunned longtime sanctions observers. The US has already authorized the sale of Iranian oil and fuels and pledged to unlock billions in frozen funds.
The 14-point memorandum of understanding signed by Trump and Iranian President Masoud Pezeshkian on June 17 includes the removal of all US sanctions on Iran on "an agreed upon schedule." It also directs the Treasury Department to issue waivers for existing sanctions for 60 days as technical negotiations unfold.
The disorienting change will be tricky to implement in a way that appeals to risk-averse US financial institutions and other firms, according to former Treasury officials, sanctions attorneys and industry sources monitoring the process.
"You want to be 100% sure that you're within compliance," said Adam Smith, a former senior adviser to the director of the Treasury's Office of Foreign Assets Control, which oversees US sanctions. "One-off transactions that close within the 60 days could work but there may be challenges finding banks and other intermediaries willing to process transactions."
Amid the uncertainty, some Iran hawks are pushing the administration to shift from cash payments for Iranian oil sales to one requiring funds be placed in an escrow account where US officials can ensure it doesn't go to proxy groups such as Hezbollah or Hamas, according to people familiar with the matter.
Trump has suggested publicly Iran's money may go into escrow accounts controlled by the US, or that Tehran can only spend it on US farm goods — ideas that were not in the MOU and which Iran has mocked and rejected.
The idea of using the frozen funds to purchase US agricultural goods was first discussed about a month ago during an Oval Office meeting with Trump, Vice President JD Vance and other advisers on Iran, according to a person familiar with the matter.
It was seen as a way to insulate the White House from the criticism Republicans leveled at the Obama administration for delivering Iran "pallets of cash," the person said, adding they believed Iran had little choice but to accept such a mechanism.
Treasury Secretary Scott Bessent said on Wednesday Iran will invoice its oil sales in US dollars. The comments marked a departure from Washington's longstanding goal of locking Tehran out of the US financial system.
To make that work, the US would need to enlist some of the biggest US or US-linked banks, which have been hesitant to handle any transactions that risk violating sanctions, according to a former Treasury official.
The first step came Monday when Treasury issued General License X, which allowed oil sales to be conducted in "US dollar-denominated funds."
In addition to the license, companies are likely to request clear guidance from Treasury — such as comfort letters or fact sheets that are regularly issued for thorny cases — in order to reassure compliance departments it's okay to participate in these sorts of transactions, according to a person with knowledge of the assurances the oil industry is planning to seek.
Firms are looking for the kind of guidance issued for Venezuela after the US captured then-president Nicolas Maduro in January, the person said.
"Financial institutions are typically more risk adverse than are their clients when we see sanctions programs unwind," said Michael Huneke, a trade and national security lawyer at Morgan, Lewis & Bockius LLP. "I would expect them to be very cautious here as well."
Rushing in and risking a possible violation is not an appealing gamble. BNP Paribas paid a nearly $1 billion settlement to the US in 2014 for allegedly violating sanctions on Iran and Sudan. Other banks also paid steep fines.
Successive US administrations, along with Congress, have levied hundreds of sanctions on Iran over the years, creating layers of restrictions designed to be difficult to remove in one fell swoop.
A 2015 law called the Iran Nuclear Agreement Review Act mandates that Congress review and approve any nuclear agreement reached with Iran. It was passed following the signing of the 2015 Joint Comprehensive Plan of Action, which was implemented during the administration of then-President Barack Obama — an agreement Trump repeatedly assailed before pulling out of it in 2018.
Some hawkish US lawmakers believe the administration may circumvent the law by saying the Iran MOU is not a nuclear agreement, even though it deals squarely with the issue, according to a person familiar with the matter.
If that happens, they are likely to place additional pressure on banks and companies doing business with Iran, reminding them of their obligations under US law, the person said, requesting anonymity to discuss internal deliberations.
The person pointed to a 2012 law called the Iran Threat Reduction and Syria Human Rights Act that requires companies that list on US stock exchanges to report certain Iran-related activities to the Securities and Exchange Commission, potentially exposing themselves to future congressional scrutiny should the deal fall apart.
"General License X is unprecedented in the relief it offers Iran," said Chris Kennedy, economic statecraft lead at Bloomberg Economics. However, relying on waivers rather than new legislation means that "over the longer term, the Trump administration will face an uphill battle delivering on its promise to permanently remove sanctions on Iran."
Iran Says $12 Billion to Be Unfrozen Ahead of Rubio’s Gulf Tour
Eltaf Najafizada and Omar Tamo
Tue, June 23, 2026
(Bloomberg) -- Iran said $12 billion of its frozen funds were set to be released as part of ongoing talks with the US, with the two sides broadly signaling progress in negotiations to formally end their war.
Plenty of tensions remain, including over Israel's war against Iran-backed Hezbollah in Lebanon, and the US is yet to confirm how much Tehran will get in unfrozen funds.
Iran will get two installments of $6 billion each, the country's semi-official Mehr news agency reported, citing Deputy Foreign Minister Kazem Gharibabadi.
The unfreezing of funds — as well as the US waiving sanctions on Iranian oil exports and pledging to help set up a $300 billion rehabilitation fund for Iran — has provoked criticism of President Donald Trump. Iran hawks fear the Islamic Republic will use the money to rebuild its armed forces and continue its support of militant groups such as Hezbollah.
JD Vance, Trump's vice president and the lead negotiator for the US, on Monday said Iran would buy American soy, wheat and corn with the funds it receives.
Meanwhile, Secretary of State Marco Rubio is expected to land in the United Arab Emirates on Tuesday, as the US seeks to reassure regional allies the agreement it signed last week with Iran is good for their security and economies.
Rubio will also travel to Kuwait and Bahrain this week.
The Strait of Hormuz will be among the topics of discussion for Rubio. Traffic through the vital waterway is increasing, pointing to growing confidence among shipowners and traders about sending vessels through as tensions ease.
In talks in Switzerland since Sunday, the US and Iran have agreed to set up technical working groups to deal with issues such as unwinding sanctions on the Islamic Republic and curbing its enrichment of uranium. Vance and Iran's lead negotiator, Parliament Speaker Mohammad Bagher Ghalibaf, left Switzerland on Monday, though lower-level delegates are continuing discussions this week.
The sides continue to give differing details of what exactly has been agreed and what is being negotiated. The White House needs to appease Iran hawks, while Iran is presenting the deal to its people as a capitulation by Washington. The Islamic Republic's military and infrastructure were battered by US and Israeli bombing from late February, but its closure of the Strait of Hormuz caused energy prices to soar and hurt Trump's standing among Americans and allied countries.
Oil prices nudged lower on Tuesday, with Brent down 0.6% to below $78 a barrel. It's down from a high of around $125 in late April but still above pre-war levels, reflecting that it will take months for oil and liquefied natural gas flows through Hormuz to return to normal.
Ghalibaf said on his return from the talks that the Strait of Hormuz would never return to its pre-war state and Iran would administer the waterway in accordance with international law, the state-run Islamic Republic News Agency reported.
Vance said negotiators had "set up the mechanism" to ensure the strait remains open. When speaking earlier to reporters, he did not answer directly when asked if the US wanted Israel to withdraw troops from southern Lebanon.
Israel's ambassador to the United Nations, Danny Danon, told Bloomberg TV that "unfortunately, it's not the case" when asked if the Lebanese military can confront the Hezbollah militia on its own. "We are capable of fighting Hezbollah, but we are not eager to stay in Lebanon," Danon added.
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