U.S. already has sophisticated tools to track and respond if Iran diverts funds towards regional aggression

Moreover, the negotiated end of nuclear-related sanctions against Iran does not mean the United States will stop monitoring where Iran spends its money. Even if negotiations produce a deal, U.S. terrorism-related sanctions against Iran will remain in place. Some of these sanctions bar certain identified individuals and entities from accessing the U.S. financial system, while others deny Iran wholesale access to the U.S. economy. Some specific Iranian banks and entities will remain sanctioned, and new ones can be added if their conduct violates the terms of U.S. sanctions, such as Executive Order 13224, under which Iran’s state-owned Bank Saderat was sanctioned in 2007.

Moreover, since 9/11, the international banking system has adopted new standards and helped create intergovernmental groups like the Financial Action Task Force to crack down on money laundering and terrorism financing. Banks monitor their business far more aggressively now than ever before to detect and prevent such activities, in part by using the best practices and guidelines developed by FATF. Banks are also under greater scrutiny by their national regulators — and, in fact, by the U.S. Treasury Department — to keep their systems from being used by terrorists and their financiers for illicit acts.

If need be, Washington and its partners can always augment sanctions to deal with specific Iranian threats, such as Iran’s conventional arms market. These could be modeled on an existing authority, like sanctions covering the manufacture, shipping, and financing of weapons of mass destruction. Rather than completely abandoning sanctions as part of the nuclear deal, the United States could use them as an effective deterrent in this regional context. Care, however, will have to be taken to avoid giving Iran a pretext to argue that the United States is undermining the very sanctions relief that made a nuclear deal possible in the first place.