Iran sanctions shift tests banks as Trump seeks broad relief

The Trump administration is moving to relax long-running U.S. sanctions on Iran under a ceasefire deal, a shift that Bloomberg reports could reshape oil sales, dollar payments and frozen funds. The effort matters for banks and companies because decades of Iran restrictions remain layered across U.S. law, even as Washington offers new permissions.

Bloomberg reported that President Donald Trump and Iranian President Masoud Pezeshkian signed a 14-point memorandum of understanding on June 17. The document calls for all U.S. sanctions on Iran to be removed on an agreed schedule and directs the Treasury Department to issue 60-day waivers while technical talks continue, according to Bloomberg.

The administration has already authorized sales of Iranian oil and fuels and pledged to release billions in frozen funds, Bloomberg reported. The broader aim, according to Bloomberg, is to reopen the Strait of Hormuz, reduce global energy prices and end the war with Iran.

A ceasefire under strain

The process remains unstable. Bloomberg reported that Trump accused Iran on Friday of breaching a fragile ceasefire, and U.S. Central Command announced new strikes on Iranian targets. Separate disagreements over ships moving through the Strait of Hormuz also threaten the agreement, according to Bloomberg.

Iran has faced extensive sanctions since the 1979 revolution over its nuclear program and backing for regional militias, Bloomberg reported. That history leaves companies facing a complicated mix of fresh waivers, older statutory limits and possible future penalties.

Adam Smith, a former senior adviser to the director of the Treasury Department’s Office of Foreign Assets Control, told Bloomberg that companies will want certainty before touching Iran-related business. Smith said one-time transactions completed within the 60-day waiver window may be workable, but banks and other intermediaries could be hard to find.

Dollar payments and escrow ideas

Treasury Secretary Scott Bessent said Wednesday that Iran will invoice oil sales in U.S. dollars, Bloomberg reported. That would mark a sharp change from Washington’s past effort to keep Tehran away from the U.S. financial system.

The Treasury Department issued General License X on Monday, allowing Iranian oil sales to use U.S. dollar-denominated funds, according to Bloomberg. A former Treasury official told Bloomberg that making such transactions work would require participation by large U.S. or U.S.-linked banks, many of which have been reluctant to handle Iran-related payments.

Some administration allies who favor a harder line on Iran are pushing for oil proceeds to be placed in escrow accounts so U.S. officials can monitor whether funds reach groups such as Hezbollah or Hamas, people familiar with the matter told Bloomberg. Trump has publicly raised the possibility of U.S.-controlled escrow accounts or limiting Iran’s spending to U.S. farm goods, ideas Bloomberg reported were not included in the MOU and have been rejected and mocked by Iran.

A person familiar with the matter told Bloomberg that the farm-goods idea came up about a month ago in an Oval Office meeting with Trump, Vice President JD Vance and other advisers. The person said advisers saw it as a way to avoid Republican criticism similar to attacks on the Obama administration over cash delivered to Iran.

Legal hurdles remain

Companies are expected to seek more Treasury guidance, including comfort letters or fact sheets, before entering the market, a person familiar with oil industry plans told Bloomberg. Michael Huneke, a trade and national security lawyer at Morgan, Lewis & Bockius LLP, told Bloomberg that financial institutions tend to be more cautious than clients when sanctions are eased.

Past penalties add to the caution. Bloomberg noted that BNP Paribas paid almost $1 billion in a 2014 U.S. settlement over alleged violations of Iran and Sudan sanctions, while other banks also faced large fines.

Congress could also become a barrier. Bloomberg reported that the 2015 Iran Nuclear Agreement Review Act requires lawmakers to review and approve nuclear agreements with Iran, while some hawkish lawmakers believe the administration may argue the MOU is not a nuclear deal.

Chris Kennedy, economic statecraft lead at Bloomberg Economics, told Bloomberg that General License X offers Iran unprecedented relief. He said reliance on waivers rather than legislation means the administration faces a difficult path if it wants to remove sanctions permanently.

This story draws on original reporting from Fortune.