Janet Yellen warns Iran that nothing is ‘off the table’ for sanctions

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Janet Yellen has warned Iran that nothing is “off the table” if Tehran is linked to this week’s militant attacks on Israel, even as the US Treasury secretary stressed no decisions had been taken on economic sanctions.

Speaking at a press conference on Wednesday in Marrakech, Yellen said the US was “constantly looking at” its sanctions policy against Iran, Hamas and Hizbollah. Washington would be “using information that comes available” to adjust its approach, she added, as she condemned the assault on Israel in the “strongest possible terms”.

“I wouldn’t take anything off the table in terms of future possible actions, but I certainly don’t want to get ahead of where we are on that,” she told reporters, responding to a question on what the US planned to do with $6bn in frozen Iranian oil assets that it released in September.

As part of a prisoner swap between Iran and the US last month, the US transferred the $6bn from South Korea to an account in Qatar in an effort to ease tensions with Iran.

Speaking at the IMF and World Bank annual meetings on Wednesday, Yellen said the funds had “not been touched” and remained in Qatar to be used purely for humanitarian purposes.

Yellen’s remarks come after US national security adviser Jake Sullivan said on Tuesday that Iran was “complicit in this attack” as a backer of Hamas. While he said the US did not have information to confirm Tehran was directly responsible for planning or directing the assault, it was still looking into the question and seeking to establish facts.

Yellen’s comments come as the death toll mounts in Israel and Gaza. Israel has reported 1,200 fatalities from the weekend’s deadly incursion by Hamas and Palestinian authorities have reported 1,055 deaths from the Israeli military’s subsequent bombardment of the Gaza Strip. Separately, Israel has said it has retrieved the bodies of 1,500 Hamas fighters.

Pressure is mounting on the Joe Biden administration to take further action to help Israel. On Tuesday, Tim Scott, a senator for South Carolina, who serves as the top-ranking Republican on the Senate Banking Committee, called on Yellen to testify “as soon as possible” about gaps in US sanctions policy against Iran, including the $6bn recently transferred.

“In the face of evil, we must use every tool, weapon, and economic sanction available to provide for our nation’s security and the security of Israel,” Scott said. “The American people and Israel, our closest ally in the Middle East, deserve transparency and answers.”

Several Democratic senators facing tough re-election contests next year have also called on the administration to freeze Iranian assets, including Jon Tester of Montana, Joe Manchin of West Virginia, Bob Casey of Pennsylvania and Tammy Baldwin of Wisconsin.

“Until I have full confidence that Iran did not play a role in these barbaric terrorist attacks on the Israeli people, the United States should freeze the $6bn dollars in Iranian assets,” Baldwin said in a statement on Wednesday.

Critics of the Biden administration’s approach to Tehran say it has been lax in enforcing oil sanctions as part of its efforts to return to talks with Iran over its nuclear programme.

Yellen said the US had “not in any way relaxed our sanctions on Iranian oil and we have sanctions on Hamas and Hizbollah”.

She stressed her focus right now was on the “human beings that have been affected by these barbaric attacks on Israel”, but noted she was monitoring the potential economic impact of the crisis.

“I’m not really thinking of that as a major likely driver of the global economic outlook,” she added.

In 2018 the then-US president Donald Trump pulled the US out of the Iran deal and imposed hundreds of sanctions on Tehran, while Iran responded by aggressively increasing its nuclear activity.

The prisoner exchange and the moving of the $6bn in funds were seen by diplomats as confidence-building measures that could help create conditions for future negotiations between the US and Iran.

Additional reporting by Lauren Fedor in Washington