Exclusive: Republicans Claim Biden Is ‘Facilitating’ China’s Violations of Iran Sanctions

Conservative lawmakers are concerned that the Biden administration is failing to address China’s evasion of U.S. sanctions on Iranian oil and, worse, that officials could deliberately be turning a blind eye to the violations as a concession to Iran.

Reuters reported this week that Iran’s oil exports to China reached 3.75 million tons, or about 1 million barrels per day, which is a recent record for the period following the Trump administration’s sanctions on Iranian oil purchases that took effect in 2019. Although China never stopped importing oil from Iran, the latest numbers represent a huge increase.

The spike in oil purchases has occurred amid the backdrop of the Biden administration’s attempts to get Tehran to engage in negotiations about jumpstarting the 2015 nuclear agreement, also called the Joint Comprehensive Plan of Action (JCPOA). And yesterday, diplomats announced that the U.S. and Iran would take part in talks with JCPOA parties in Vienna next week, with the aim of discussing the steps that each side would need to take to jumpstart the agreement.

Some lawmakers don’t see the timing of the increased oil purchases as a coincidence. One congressional Republican, Representative Bryan Steil (Wis.), in a March 23 letter to Treasury Secretary Janet Yellen and Secretary of State Antony Blinken, is demanding answers about the Biden administration’s strategy to deal with these developments.

In his letter to the Biden cabinet officials, a copy of which was obtained exclusively by National Review, Steil describes the ways in which Chinese firms purchase Iranian oil. “Of these [transactions], about 75% were ‘indirect’ imports identified as oil from Oman, the United Arab Emirates (UAE), or Malaysia, which entered China mainly via ports in eastern Shandong province, home to most of China’s independent refiners.”

That pattern is typical of illicit Iranian oil purchases, said Richard Goldberg, a senior adviser at the Foundation for Defense of Democracies and a former Trump National Security Council official who worked on implementing the U.S. sanctions push.

“Ultimately as you climb the ladder and enforce sanctions, imposing sanctions on the Chinese firms involved, then finding out who’s capitalizing those firms, what banks or other companies do business with those firms, you will start finding your way to state-owned enterprises, and then put the Chinese in a very difficult position,” said Goldberg. “Doing nothing, however, is both a signal to Tehran and Beijing that it’s open season on U.S. sanctions, and it will be a signal to other actors as well who want to get into the evade U.S. sanctions business.”

Congressional Republicans are concerned that that’s exactly what is happening, as the Biden administration approaches talks that could lead to direct negotiations with the Iranian regime.

“Iranian oil exports to China fund the regime’s nuclear program, their support of terrorism, and the Islamic Revolutionary Guard Corps. I’m concerned that the Biden Administration will refuse to enforce U.S. sanctions,” Steil told National Review earlier this week. “If our greatest adversaries think they can evade U.S. sanctions without repercussions, they will continue their hostile acts. Instead of looking the other way, the United States should enforce our sanctions against Iran.”

In a Friday evening statement to NR, however, a State Department spokesperson said that the sanctions “remain in effect unless and until they are lifted as part of a diplomatic process.”

Steil’s letter to the top Biden officials is part of a broader effort by conservative lawmakers to prevent the administration from extending any form of sanctions relief to Iran. In a push coordinated through the largest group of conservatives in the House of Representatives, Republican Study Committee chairman Jim Banks (Ind.) has encouraged his RSC colleagues to investigate every potential sanctions relief effort undertaken by the Biden administration.

Refusing to enforce sanctions on the Chinese oil purchases might be one way for the administration to offer an olive branch to Tehran, he suggested. “China is openly flouting U.S. sanctions on Iran and using Iranian oil to power its military-industrial growth, and the Biden administration is doing nothing. Even worse, it appears as if they may be facilitating it,” Banks told National Review.

“Why on earth would the Biden administration be ok with this? Do they have any plan — at all — to stop Beijing’s expanded presence in the Middle East?”

The oil purchases reached new heights as Beijing and Tehran concluded a new investment pact last month. Under the agreement, the Chinese government has agreed to invest $400 billion in Iran over 25 years, while Iran will provide “heavily discounted” oil, according to the New York Times. Some analysts are skeptical that the deal, which was met with criticism in Iran, will actually result in that large an investment in the Iranian economy. While the agreement signaled a deepening of ties and a desire to resist U.S. sanctions, its primary purpose might be a more propagandistic one, as Elliott Abrams, the former U.S. special envoy for Iran, wrote at National Review Online this week.

Although a Biden official told the Financial Times on March 17 that the U.S. would enforce the sanctions prohibiting Chinese purchases of Iranian oil, Steil has not yet received a response from Yellen or Blinken to his letter, which asks whether they are aware of the situation and if they consider the oil purchases in question as sanctionable activity.

The State Department spokesperson, however, said on Friday evening that the U.S. would continue to enforce the sanctions. “We will address any effort at sanctions evasion. We will not comment on any specific bilateral discussions in this regard, though.”

The spokesperson also asserted that Beijing itself has an interest in preventing Iran from obtaining nuclear weapons.

“While competition defines our relationship with China, it has been cooperative in efforts to constrain Iran’s nuclear program, as it has no interest in seeing Iran develop a nuclear weapon and the profoundly destabilizing impact that would have in a region upon which China depends for its oil imports.” Adding that the U.S. is prepared to “engage in meaningful diplomacy with Iran to achieve a mutual return” to the JCPOA, the spokesperson said, “we will continue to engage with China and other countries to discourage them from taking steps vis-a-vis Iran that threaten our interests.”

Earlier on Friday, Chinese foreign ministry spokeswoman Hua Chunying had demanded that the U.S. “lift all illegal sanctions on Iran and stop long-arm jurisdiction.”

State’s comments to NR also followed remarks on the Sino-Iranian deal by Joey Hood, an acting secretary of state, during an interview with Al Arabiya on Thursday. “We want Iran and China to have a good, healthy, productive relationship,” Hood said. He went on to explain that the two countries’ expanding ties could help the U.S. work with China on “shared goals” such as combating climate change and limiting the Iranian nuclear program.

If the Biden administration is truly addressing these apparent violations of the Iran sanctions regime, it’s doing so quietly, as it heads into next week’s talks in Vienna. But as it simultaneously seeks China’s cooperation on climate change and negotiations with Iran, presiding over an erosion of the sanctions regime could well be the point.