Now that a
decade of UN, EU, and U.S. sanctions over Iran's nuclear program should soon be coming to an end with the
implementation of Tehran's nuclear deal with world powers, this could release
upwards of $100 billion of Iranian assets that have been frozen in the West and
pave the way for a surge in Iranian oil exports.
The lifting of
sanctions, once Iran's nuclear deal with world powers is verified through
passage of a UN Security Council resolution, will reconnect Iranian banks to
the international financial system and open its economy to a flood of funding
from around the world.
By some
estimates, there could be up to $700 billion in unfrozen accounts and sanctions
relief.
Iranian
industries that have been unable for years to upgrade their technology or
obtain new equipment will be able to do so once sanctions are lifted.
That includes
upgrades to Iran's oil, gas, and petrochemical sectors made through investments
by companies from the United States and the EU.
It also
includes the supply of technology and nuclear purposes for peaceful purposes
like power generation and research -- and purchases by Iranians of computer
software for industrial production.
EU firms will
be allowed, once again, to provide insurance and reinsurance to Iranians.
Large Iranian
firms will be allowed to sell Iranian-produced cars, steel, aluminum, and gold
on international markets.
In theory,
even small businessmen in Iran can export things like Persian carpets and
pistachios to the West -- although analysts say it will be the government and
the Iranian regime's business interests that are the first to benefit from the
economic opening.
"No U.S.
Trade Relations"
Even though
U.S. and European firms will be allowed under the laws of their own countries
to open for business in Iran, authorities in Tehran have vowed that they will
not allow Western values into the Islamic republic.
Iranian Deputy
Foreign Minister Abbas Araqchi has gone a step further, saying in early January
that the United States "cannot have trade relations with us -- and so be
it."
But Iranian
Supreme Leader Ayatollah Ali Khamenei has set an average economic growth target
of 8 percent per year during the next five years.
Some Western
diplomats and economic analysts predict that within a decade, Iran's gross
domestic product could surpass the economic powerhouses of the Middle East:
Saudi Arabia and Turkey.
Of course,
Western countries have vowed to keep a close eye on Iran to ensure it carries
out its promises under the nuclear deal -- that is, to eliminate almost all of
its enriched uranium, to drastically reduce its nuclear capacity, and to allow
regular inspections by the International Atomic Energy Agency (IAEA) to ensure
its compliance.
If Iran fails
to uphold its side of the deal, the nuclear accord will collapse and the
crippling economic sanctions could be reinstated.
Some analysts
say that could make potential foreign investors hesitate before making major
deals with Iran to be sure the nuclear deal holds.
Tehran says it
needs about $100 billion to rebuild its energy sector and another $30 billion
for its mines and steel industry.
Iran's
automobile factories also need to be upgraded, along with the country's aging
civilian and military airplanes.
The lifting of
sanctions will allow that to happen.
Western
critics note that much of Iran's aviation infrastructure is based on Russian
equipment that could be sent into Iran despite the U.S. sanctions. But the
United States has made it more difficult for Iran to upgrade its aging
airliners.Since 2000, there have been more than two dozen major air crashes
involving Iranian civilian and military aircraft -- with more than 1,000
deaths. Iranian authorities complain that U.S. sanctions imposed since the 1979
Iranian Revolution have prevented Tehran from purchasing new aircraft or spare
parts, even if only 10 percent of the parts are made in the United States.
"SWIFT" Money
Transfers
Iran's nuclear
deal includes a long list of companies and individuals involved in Tehran's
nuclear program who are to be taken off EU and U.S. blacklists -- unfreezing
their assets in the West and removing travel bans.
In the
financial sector, the lifting of sanctions will allow Iran to borrow money by
issuing government bonds on the international market.
Iranian banks
also will be able, once again, to open branch offices and accounts in EU
countries.
A UN ban that
has prevented non-Iranian financial institutions from operating offices or
accounts in Iran will come to an end.
And for the
first time in decades, U.S. financial institutions will be allowed to transfer
funds to and from Iranian banks and financial institutions -- including the
Central Bank of Iran.
One of the
most important financial aspects of the nuclear deal -- an issue that Tehran
insisted on during the negotiations -- is that Iranian banks be allowed, once
again, to obtain so-called SWIFT codes. Those are the business identification
codes given to banks around the world by the Belgium-based Society for
Worldwide Interbank Financial Telecommunication. Iran's key banks, including
the Central Bank of Iran, have been disconnected from the SWIFT network since early
2012.
Being
reconnected to the SWIFT network means Iranian banks and the firms that do
business through them will be able to transfer large amounts of money
electronically around the world.
Not all
sanctions are being lifted under the nuclear deal.
The United
States is maintaining a blacklist of Iranian firms and individuals -- including
figures in the Iranian Revolutionary Guards Corps (IRGC) -- who are sanctioned
over human rights abuses and Tehran's ballistic-missile program.
With
reporting by AP, Reuters, AFP, The Economist, and Bloomberg News
Copyright (c)
2016. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio
Liberty, 1201 Connecticut Ave NW, Ste 400, Washington DC 20036.