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U.S. to block Iran's IMF bailout request

Officials worry that Tehran will divert the money to offset U.S. sanctions and continue funding state-sponsored terrorism

Updated: April 8, 2020 - 8:44am

The United States will block Iran’s request to the International Monetary Fund for $5 billion in emergency funding to help fight the coronavirus.

The Trump administration maintains that Tehran has access to a considerable stockpile of billion-dollar accounts that it should use to fight the virus outbreak. U.S. officials predict that if the aid request was approved, Tehran would use the additional funding to offset the damage being done to their economy by U.S. sanctions, or to finance militant attacks in the Middle East.

The pandemic is taking a particularly rough toll on Iran, adding further damage to its economy in the wake sanctions resulting from the administration’s “maximum pressure campaign.”

The U.S. is the biggest contributor to the IMF, giving it a large say in approving requests for aid and bailouts. As a technical matter, IMF member nations could overrule any U.S. desires with a majority vote, but that outcome is unlikely.

According to the State Department, Iran has sufficient funds available to fight the coronavirus outbreak, including billions of dollars stockpiled from oil and gas revenue in its National Development Fund.

State Department officials have also suggested that Tehran might re-allocate money its spending on military operations in Syria and Iraq toward the coronavirus outbreak at home.

During the previous administration, Iran was caught issuing fraudulent invoices for humanitarian spending, which is exempted from much IMF scrutiny, to skirt sanctions.