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Trade barriers remain despite lifting of Iran sanctions

Tom Fontaine
| Sunday, Jan. 24, 2016, 10:30 p.m.
A handout picture provided by the office of Iranian President Hassan Rouhani shows him delivering a speech to provincial governors in Tehran on January 21, 2016.
AFP/Getty Images
A handout picture provided by the office of Iranian President Hassan Rouhani shows him delivering a speech to provincial governors in Tehran on January 21, 2016.
Iranian minister of transportation Abbas Ahmad Akhoundi (R) speaks during the CAPA 2016 Iran Aviation Summit in the capital Tehran, on January 24, 2016.
AFP/Getty Images
Iranian minister of transportation Abbas Ahmad Akhoundi (R) speaks during the CAPA 2016 Iran Aviation Summit in the capital Tehran, on January 24, 2016.
Iranian President Hasan Rouhani speaks at his first news conference since taking office at the presidency compound in Tehran, Iran, on Tuesday, Aug. 6, 2013.
Iranian President Hasan Rouhani speaks at his first news conference since taking office at the presidency compound in Tehran, Iran, on Tuesday, Aug. 6, 2013.

The lifting of sanctions related to the landmark Iran nuclear deal won't result in a rush of Americans looking to do business in or with the Middle Eastern country, experts say.

A slew of sanctions remains, along with questions about Iran's ability to comply with terms of the nuclear agreement, corruption in Iran and instability across the region. The 2016 presidential election in the United States also fuels uncertainty about the future of U.S.-Iranian relations.

“The faucet is open a little bit. It's not on full blast,” said Kaveh Miremadi, a Washington-based sanctions attorney.

By maintaining many economic sanctions, Miremadi said, the U.S. government appears to be trying to “leverage the size of the U.S. economy to slow down the flow of money into Iran. They want them to feel some benefit, but they don't want to give up all of their bargaining chips for future negotiations.”

In addition to freeing up billions of dollars in cash for Iran in exchange for the country curbing its nuclear program, the deal that took effect a week ago removes some business barriers between the United States and Iran.

The deal allows several items to be imported from Iran, including carpets, caviar and pistachios. A ban on the signature Iranian items took effect in 2010.

American companies such as Boeing would be able to export commercial airplanes and airplane parts to Iran, allowing the state-run Iran Air to modernize its fleet. The airline said last week that the country plans to buy 114 planes from France's Airbus.

Before the sanctions lifted, American companies had been able to do business in Iran by obtaining special licenses through the Treasury Department's Office of Foreign Assets Control. It's unknown whether the office will expand the granting of such licenses.

“They said they will continue to authorize the exporting of food, medicine and medical devices,” three sectors that received permission to ship and sell goods in Iran before the nuclear deal took effect, Miremadi said.

The deal also allows foreign subsidiaries of U.S. companies to do business in Iran, but Patrick Clawson of the Washington Institute for Near East Policy said it would be a “real challenge for most U.S. companies to use a foreign subsidiary.”

A foreign subsidiary's operations would need to be “completely walled off” from the U.S. parent company, so that U.S. businesses and business people are not involved with the business activities in Iran, Clawson said.

“It's meant for the largest and most sophisticated players,” Miremadi said, noting he has received several calls over the past week from “high net-worth individuals that wanted to explore the possibility of setting up or purchasing a foreign entity with a business plan for Iran.”

Hewlett-Packard Sarl, a Switzerland-based subsidiary of the computer products giant, circulated draft agreements with Iranian distributors in November in order to sell its products there, while Apple has been reaching out to distributors since 2014 but has concerns about Iran's lax intellectual property laws, The Wall Street Journal reported.

“There's a lot of risk associated with going into Iran, even for foreign companies,” Miremadi said.

Businesses that violate terms of sanctions are subject to fines, some of them steep. Germany-based Deutsche Bank agreed last year to pay $258 million to U.S. banking regulators for violating sanctions against Iran and other countries, The Associated Press reported.

“I think it's in our interest to do business with Iran. It's better to have those kinds of relations, because you generally don't attack your trading partners. I believe strongly in the power of commercial diplomacy,” said Simin Yazdgerdi Curtis, president and CEO of the Pittsburgh-based American Middle East Institute.

Curtis intends to travel to Tehran next month in a trip that will send American classical musicians to Iran for the first time since the Iranian Revolution. An Ohio-based string quartet will perform some of the compositions of an Iranian-born composer who is a Carnegie Mellon University music professor.

Tom Fontaine is a Tribune-Review staff writer. Reach him at 412-320-7847 or tfontaine@tribweb.com.

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