Rep. Chris Smith (R-NJ), Ranking Member of the global human rights subcommittee, issued the following statement today on an effort by European states to help serious human rights abusers in Iran evade U.S. sanctions:

“I am very concerned by recent reports that Iran, together with some of our European allies, plan to have a non-U.S. dollar currency mechanism—known as ‘INSTEX’, or ‘Instrument in Support of Trade Exchanges’—up and running soon. It would allow European companies to do business with Iran while avoiding existing U.S. sanctions on the regime.

“Iran continues its race to the bottom on human rights and threatens key U.S. strategic partners and allies in the region, especially Israel. The European states in question—notably Germany, France, and the United Kingdom—should know better than to aid and abet Tehran.

“By helping Iran circumvent the U.S. sanctions regime, the Europeans are actively degrading the primacy of the U.S. dollar in order to help foreign firms.

“Instead, the Western world must stand for global human rights, and against rogue states such as Iran.”

Smith has long warned about asymmetric attacks against the primacy of the dollar, notably exhibited in an August, 2018 statement by German Foreign Minister Heiko Maas, who proposed a system independent of the dollar through which to conduct financial transactions.

At a hearing of the Foreign Affairs Committee in September 2018, Smith asked officials from the State and Treasury Departments to address China’s all-out assault on the U.S. dollar in Africa. At the hearing, officials said that the maintenance of corresponding banking ties between U.S. banks and their African counterparts is the “best line of defense” against the assault of the dollar.

Recently, at a hearing of the House Foreign Affairs Committee, Rep. Smith underscored the dangers of INSTEX, stating:

“With regards to INSTEX, many of us are very concerned about the roundabout efforts that are being made by many, including Germany, France, and the UK, to undermine our ability to sanction. Whether it be Global Magnitsky or whether it be our efforts against Tehran, when you find some other way of circumventing what the U.S. is doing with, often, the very strong support of the Congress, I think it undermines our ability to promote an Iranian sanctions regime.”