US sets sights on ECB's Target2 over Iran sanctions

US sets sights on ECB's Target2 over Iran sanctions

US lawmakers are putting together a bill designed to make it harder for Iranian firms to use the European Central Bank's Target2 cross-border payments system, according to press reports.

Sanctions have effectively cut off Iran from America's financial system and prevented the country's firms from carrying out bank transactions in dollars.

Draft legislation is now being put together by Congress designed to make it as difficult for Tehran to carry out business in euros.

A congressional aide has told Reuters that the planned law would impose financial penalties on any entity that uses Target2 to do business with Iran.

The ECB told Reuters that "no illegitimate transactions are cleared in Target2 but any sanctions are EU sanctions and not an ECB competence."

Last year, under pressure from the EU, Swift took the unprecedented step of cutting off its financial messaging network to Iranian banks.

Lawmakers target ECB to stop Iran from using euros - Reuters

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