Group Seeks Suspension of Iran From I.M.F.

The New York Times on May 1, 2012 released the following:

“By RICK GLADSTONE

An American advocacy group that has successfully pushed to isolate Iran economically through sanctions and business boycotts opened a new front in that effort on Tuesday, seeking to pressure the International Monetary Fund to withdraw all its holdings in Iran’s central bank or to suspend Iranian membership.

The advocacy group, United Against Nuclear Iran, also castigated the fund’s managing director, Christine Lagarde, over what it called her inappropriate compliments for Iran’s central bank, known as Bank Markazi, and its governor, Mahmoud Bahmani, at the meetings of the International Monetary Fund and World Bank in Washington last month. Ms. Lagarde had described the Iranian government’s effort to eliminate costly economic subsidies as a constructive step worthy of emulation, and the compliments were widely reported in Iran’s state-run media.

“The I.M.F. should not be hosting Iranian delegations in the U.S. and elsewhere, and Ms. Lagarde should stop lavishing praise on Iran and Bank Markazi,” the chief executive of United Against Nuclear Iran, Mark D. Wallace, said in a statement announcing its new effort.

Iran is one of the earliest members of the 188-nation I.M.F., founded in the aftermath of World War II to help strengthen monetary cooperation and stability through lending and economic data-gathering. Although Iran has not done any financial transactions with the I.M.F. since January 1984, according to the I.M.F. Web site, membership is regarded as a valued symbol of international legitimacy and respect.

In a letter to Ms. Lagarde dated April 26, Mr. Wallace, a former American diplomat at the United Nations, said the I.M.F. should close what he described as an I.M.F. account worth more than $1 billion held in the central bank, which has been penalized by the United States and European Union. Mr. Wallace said the bank had been shown to be untrustworthy, violating the I.M.F.’s own standards and safeguards.

“I don’t have a grudge with the good people of the I.M.F.,” Mr. Wallace said in a telephone interview. But, he said, “it can’t be business as usual anymore.”

William Murray, a spokesman for the I.M.F. in Washington, said in a statement that the fund’s holdings in Iran’s central bank are part of the arrangements made with any member, and that the account is denominated in Iranian currency, not dollars.

“There is nothing in the E.U. or U.S. sanctions regimes that is inconsistent with these arrangements,” he said. As for the call for Iran’s suspension, Mr. Murray said, “This is a matter that is best taken up with the fund’s member countries. We have no comment.”

Under Article 26 of the I.M.F. Articles of Agreement, suspension of an I.M.F. member’s voting rights requires approval from a 70 percent majority of the total voting power among the other members, which is weighted partly according to their economic size.

A Treasury Department spokesman in Washington, John Sullivan, said that both the United States and the European Union regarded the I.M.F. as exempt from American and European sanctions on Iran’s central bank.

There was no immediate comment from Iran. But the effort by Mr. Wallace’s group to pressure the I.M.F. could represent a new challenge to Iran, coming as all sides in the protracted dispute over Iran’s uranium enrichment program have been toning down inflammatory rhetoric in recent weeks and speaking with a measure of optimism about a possible diplomatic resolution.

Talks held in Turkey last month were described as positive by Iran and the group of six world powers seeking to stop Iran from enriching uranium that could be used to make nuclear weapons. But Iranian officials have also said the Western sanctions should be eased as a sign of good will, and have hinted their mood could darken if new efforts to isolate Iran were introduced. Talks are set to resume in Baghdad on May 23.”

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Douglas McNabb – McNabb Associates, P.C.’s
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