Congress-White House Iran dispute a side-show for world

AP News
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Posted: Sep 14, 2015 12:21 PM
Congress-White House Iran dispute a side-show for world

VIENNA (AP) — As Congress was debating the merits of the Iran nuclear deal last week, the U.S. political world was whipping itself into a frenzy. Not so much the rest of the world — it was busy restoring relations with Tehran, selling it weapons, and inking contracts with Iranian firms.

Republicans tried last week to push through a resolution of disapproval of the nuclear deal and a second vote, also expected to fail, is scheduled for Tuesday.

But U.S. companies will be sidelined no matter how the U.S. political tussle plays out because core sanctions imposed by Washington will remain even after the nuclear-related sanctions are lifted.

These secondary sanctions are linked to U.S. charges of Iranian human rights violations, terrorism and other allegations of wrongdoing. They have the effect of banning doing business with Iran, with only few exceptions, such as supplying parts for Iran's civilian aviation sector.

"Non-U.S. companies are not in general subject to the U.S. sanctions," says William McGlone, a Washington-based lawyer specializing in sanctions law. "As long as a non-U.S company is not involved in using persons or operations in the United States, then in general those companies could proceed with their transactions."

There is a lot to miss out on for U.S. firms in Iran. The country of 80 million people generates a $400 billion economy, boasts the world's fourth-largest oil reserves, the second-biggest stores of natural gas, and has well-established manufacturing and agricultural industries.

While Iranian Supreme Leader Ayatollah Ali Khamenei says America remains the "Great Satan" and has ruled out agreements beyond the nuclear deal, his government has not wasted time in wooing the rest of the world.

At a business forum staged by Iran in Vienna a little more than a week after the July 14 nuclear deal was reached, Amir Hossein Zamania, an Iranian deputy oil minister said his country hoped for foreign partnerships for oil and gas projects that alone were worth $185 billion (nearly 170 billion euros.)

Iranian officials also pitched the mining and financial sectors and Iran's automotive industry to raptly listening participants from Austria, Germany, Spain, Italy and elsewhere — more than 3,000 participants each paying a 1,800 euro (more than $2,000) registration fee.

Austrian statistics tell the larger European Union story of business opportunities to a major Middle East market shut off for nearly a decade to most outsiders due to sanctions. Austrian exports were valued at 400 million euros (nearly $440 million) in 2004, before the sanctions started to bite. Last year, they were a little more than half that. But tiny Austria's Chamber of Commerce hopes to break the 1 billion euro ($1.1 billion) mark over the next few years.

No sanctions have yet been lifted and all can be re-imposed if Iran fails to live up to its commitments. That means many multinationals are unlikely to commit to big investments in the immediate future. But in contrast to the United States, sanctions lifting by the European Union will free up most financial and business bans imposed on Iran for companies based in the 28-nation EU. Many of them already are in the starting blocks, along with their countries' governments.

Switzerland dispatched a business delegation to Iran at the end of April, three months before the deal was finalized. French Foreign Minister Laurent Fabius met top Iranian officials in Tehran July 29, including President Hassan Rouhani. He asked Rouhani to visit Paris in November and said a French economic delegation is slated to visit Iran soon. Italy's foreign and economic development ministers last month signed an agreement in Tehran to facilitate commercial relations.

Britain reopened its embassy in Tehran last month. Spain is due to send a trade delegation to Iran early in the week headed by its foreign minister, while German Foreign Minister Frank-Walter Steinmeier plans in October to follow up on a July trip to Tehran by Economy Minister Sigmar Gabriel.

Russia, which already has the inside track in supplying Iran with nuclear technology, is also resurrecting its lucrative arms-trade. In Moscow last month, Iranian Vice-President Sorena Sattari said Tehran is in "active talks" with Russia to buy at least two types of military jets. Russian state news agencies meanwhile reported that Russia and Iran had signed a memorandum on previous plans to sell an S-300 air-defense system to Iran.

But U.S. firms will remain on the outside for some time to come.

"There is very strong political bipartisan support to maintain the core embargo on Iran," says McGlone, the lawyer. "So (sanctions relief) benefits for U.S. companies are limited."

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Associated Press reporters Greg Keller in Paris, Adam Schreck in Dubai, Nicole Winfield in Rome, Frank Jordans in Berlin, Natalya Vasilyeva in Moscow and Harold Heckle in Madrid contributed.