European Companies poised for Iran Gold Rush but will Hill Keep US Out?

By Charles Recknagel | ( RFE/ RL)

Many of the punishing UN, U.S., and EU financial and energy sanctions imposed on Iran in recent years to pressure Tehran to curb its nuclear activities are to be suspended or lifted in the wake of the deal struck in Vienna on July 14.

But many other sanctions, particularly those imposed unilaterally by the United States years before the nuclear crisis, appear likely to remain in place for the indefinite future.

Those U.S. measures are decades-old U.S. bans on doing business with Iran that relate to concerns over state-sponsored terrorism, human rights abuses, and ballistic-missile development.

The wide-ranging sanctions, some of which date back to the Islamic Revolution and the U.S.-Iran hostage crisis of 1979-80, include:

— Restrictions on U.S. foreign aid to Iran, a ban on arms transfers, and export controls for items that could have military as well as peaceful uses

— Prohibitions on U.S. individuals and banks from dealings with Iranian companies, including investing in Iran and facilitating third-country trade with Iran

— One key exception under the Vienna deal will be to allow U.S. aerospace companies to sell or lease commercial passenger aircraft to rejuvenate Iran’s aging passenger-aircraft fleet. Iran has been barred from buying new U.S. planes or spare parts since immediately after the Islamic Revolution, though many of its passenger planes were manufactured by U.S.-based Boeing before that time.
The UN ban on the transfer of missile technology to Iran would continue for eight years under the deal signed on July 14.The UN ban on the transfer of missile technology to Iran would continue for eight years under the deal signed on July 14.

The UN also will maintain two key sanctions on Iran for the immediate future:

— A UN weapons embargo is to stay in place for five years.

— A UN ban on buying missile technology will remain in place for eight years.

The European Union has yet to make clear if it will keep some of its regime of sanctions, most of which date to the recent years of the nuclear standoff and cut off Iranian oil exports to Europe and Iranian access to European banking systems.

Early indications are that Brussels will now move quickly to suspend its sanctions as European and other corporations are widely reported to be seeking ways to resume business with Iran.

The mixed picture on sanctions relief for Iran means that Tehran should immediately regain access to European and Asian oil markets and to billions of dollars’ worth of its oil revenues from past sales that the nuclear-related sanctions froze in international banks. But if and when it might get full sanctions relief, including resuming trade with the United States, the world’s largest economy, remains highly uncertain.

That issue is now tied up in a looming political struggle between the White House and the deal’s opponents in Congress who feel President Barack Obama’s administration has gone too far in making concessions to Tehran to win a nuclear deal.

The accord in Vienna comes with the majority of the Congress, dominated by Republicans, having expressed a desire to toughen sanctions on Iran, not weaken them, to get a negotiated end to the nuclear standoff.

In one measure of U.S. legislators’ wariness, Obama was pressured into signing a compromise bargain earlier this year under which Congress has 60 days to review the nuclear deal before any sanctions may be lifted. Obama has vowed to veto any legislation that threatens the deal, and opponents would need a two-thirds majority in Congress to override a veto — widely considered unlikely but which would almost certainly deepen lawmakers’ resistance to any wider sanctions relief beyond the Vienna deal.
IAEA Director-General Yukiya AmanoIAEA Director-General Yukiya Amano

A protracted showdown with Congress over sanctions could still see the administration try to broaden sanctions relief to enable U.S. corporations to do business in Iran by exercising the president’s executive powers. They include the authority to unilaterally discard any sanctions imposed by himself or previous presidents as well as to decide at what level to enforce those imposed previously by the Congress.

However, any lax enforcement of sanctions previously imposed by the legislature, or of any new sanctions the legislature might yet pass, would almost certainly be met with congressional action accusing the president of failing to enforce the law, creating yet another showdown.

The volatile atmosphere in Washington makes it hard to predict the prospects for any wider relief from U.S. sanctions in the future, a topic that Obama has not addressed publicly. Instead, he has emphasized that the immediate partial relief from sanctions agreed under the Vienna accord will be phased in and is very much conditional upon Iranian compliance with the deal.

Under the Vienna agreement, Iran will only begin to get sanctions relief after the UN’s nuclear watchdog, the International Atomic Energy Agency (IAEA), certifies that Tehran has met key benchmarks in rolling back its controversial nuclear activities. If Iran does not, there is a “snapback” procedure for reimposing the sanctions through a majority vote by an international advisory board set up to arbitrate any disputes arising from the Vienna deal. The board is composed of the six world powers — the United States, Russia, China, Britain, France, and Germany — plus Iran.


Copyright (c) 2015. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave NW, Ste 400, Washington DC 20036.


Related video added by Juan Cole:

Euronews: “Iran optimistic of leap in growth once out from under sanctions”

One response

  1. There are ~200 countries on this blue marble that barely clings to life in the void of space. The USA congress controls JUST ONE of those countries. All the rest are perfectly free to do whatever they want with Iran no matter how much the congress critters belch up hot air.

    Sure, congress can somewhat control the global SWIFT banking network, BUT China has been extremely unhappy about that (along with many other countries), so China is bringing on-line an entirely separate banking system that the USA has zero control over nor even any ability to track transactions. Chinese bankers will be able to “launder” financial transactions between Iran and other countries (for a small fee per transaction) and the USA will have no ability to do anything about it.

    Even USA companies can have an account at the Chinese bank and could conceivably clandestinely trade with Iran.

    Note though, that smuggling and money laundering have been successfully done for thousands of years and no matter how oppressive countries have been, the smuggling and money laundering continued on.

    A fine example of this is, several months ago, Iran was able to buy and import FOUR brand new American-made helicopters and spare parts. It was done using fake companies and multiple trans-shipments. The USA company got its full price and lots of plausible deniability and Iran got what it wanted by paying a little extra in transaction service fees.

    Now, most countries on earth will either sell their own products to Iranian customers or will buy USA products through fake companies and resell them to Iran for a nice profit. Even countries that may be reluctant to “officially” drop all sanctions on Iran will simply close their eyes to any actual trade. As a result, most countries on earth will trade with Iran and the USA will be stuck with the same stupid, completely useless policy it has had with Cuba for over 50 years, except that Iran, unlike Cuba, has lots of valuable stuff to trade to other countries. In particular, oil and gas to decrease Russia’s monopoly over Europe.

    This is “free enterprise” at its finest and republicans should be thrilled when USA products might be resold to Iran.

    BTW – Congress could try to use brute force to keep the non-USA sanctions in place, but all that will lead to is a massive trade war where the USA will lose very badly. There are lots of countries on this earth just looking for any plausible excuse to kick USA companies out of their countries so the local businesses can thrive without the USA competition. If congress goes too far, it could lead to a massive shift in global trade with the USA losing out.

    The USA is NOT the only country on earth with intelligent , creative, productive people and giving the non-USA entrepreneurs a chance to take business away from USA companies is a foolish thing to do because the change in trading patterns could become “permanent,” harming the USA.

    Basically the USA congress is going to once again be caught between the ideologues that want to “punish” Iran for wanting to remove all traces of the brutal British and USA colonial rule and the practical USA business people that can count the potential profit dollars in the Iranian market. It will be fun to watch as the two sides battle it out. I suspect that by early 2017, many of the congressional ideologues are going to be unemployed and the business people will be counting the dollars of profit from trade with Iran.

Comments are closed.