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Are US Sanctions an Obstacle to a Nuclear Agreement?

Thursday, December 11, 2014

Peter Jenkins

In ‘Iran should accept US Presidential Waiver’, posted on Iran Review on 27 November, Dr. Kaveh Afrasiabi cast doubt on the validity of points I had made earlier that week in a LobeLog post. In my post I suggested that a major obstacle to the reaching of a comprehensive agreement on 24 November had been the inability of US negotiators to convince Iranian negotiators that President Obama could guarantee the repeal or amendment of sanctions legislation by Congress, or that a future President would exercise waiver authorities.

I hope Iran Review readers may be interested to read comments on Dr. Afrasiabi’s arguments that I have received from two authoritative sources.

Dan Joyner, a US-educated law professor, writes:

“I’ve read Dr. Afrasiabi’s piece, and his legal conclusions are largely erroneous. He appears to think that the deal will be done in a legally binding way – i.e. in the form of a treaty. This will certainly not happen. If the deal is done it will be, like the JPOA, memorialized in a legally non-binding manner, in order to avoid the necessity of having it approved by the legislatures in each respective country. So there will be no international legal assurances upon which private parties can rely.

I think your original Lobelog article stated the matter correctly when it said that any waiver of sanctions enacted by President Obama could easily be reversed by the next president through simple executive action. Therefore the sanctions relief under the deal would be tenuous.”

Sir Richard Dalton, British Ambassador to Iran a decade ago and a member of the council of the British-Iranian Chamber of Commerce, writes:

“Dr. Afrasiabi is over-optimistic. The picture in the weeks after a deal is signed will be a varied one: e.g.

1. Big firms that have business in the US will be advised by their lawyers on how tight the wording of the agreement is in relation to sanctions suspension and then will invite Boards to decide whether to plunge into Iran.  Some will take the risk and go the whole way, some will make exploratory contacts but wait to see if they get any commercial interest in Iran for their products/services before deciding whether to sort out the legal assurance they need.  Some will simply say it is all too difficult and give the Iranian market low priority.

2. Small firms with no exposure to the US will have far fewer problems and they may well flood in, hoping that finance for contracts can be fixed if they are successful.

3. Major Western banks will be very shy, and I would not expect them to change current policy of denying all facilities however minor JUST for a nuclear agreement that provides for suspension, not lift of sanctions. The more adventurous would wait at least until the agreement had some months of successful implementation by the P5+1, IAEA and Iran behind it, and then might dip a toe in the water.

4. Much depends on how well organized and determined Western firms are, and whether they are ready, for example, to try to revive financing arrangements through the banks that were the last to be chopped out of Iran business (Turkish Banks and EH Bank in Hamburg for example) or to set up new vehicles e.g. in the Gulf.”

*Peter Jenkins was a British career diplomat for 33 years, following studies at the Universities of Cambridge and Harvard. He served in Vienna (twice), Washington, Paris, Brasilia and Geneva. He specialized in global economic and security issues. His last assignment (2001-06) was that of UK Ambassador to the IAEA and UN (Vienna). Since 2006 he has represented the Renewable Energy and Energy Efficiency Partnership, advised the Director of IIASA and set up a partnership, ADRgAmbassadors, with former diplomatic colleagues, to offer the corporate sector dispute resolution and solutions to cross-border problems. He was an associate fellow of the Geneva Centre for Security Policy from 2010 to 2012. He writes and speaks on nuclear and trade policy issues.

More By Peter Jenkins:

*An Acceptable Nuclear Deal With Iran: http://www.iranreview.org/content/Documents/An-Acceptable-Nuclear-Deal-With-Iran.htm

*With Rouhani as President, Time for US to Try New Approach on Iran: http://www.iranreview.org/content/Documents/With-Rouhani-as-President-Time-for-US-to-Try-New-Approach-on-Iran.htm

*These views represent those of the author and are not necessarily Iran Review's viewpoints.

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