Iranian nuclear agreement creates unclear picture for trade sanctions
15 July 2015
The much-heralded nuclear agreement with Iran clears the way for lifting some devastating trade sanctions which have virtually crippled the country’s economy but many others are set to remain.
Most of the sanctions now expected to be lifted are those imposed by EU countries as many US sanctions pre-date the Iranian nuclear issue.
Under the terms of the agreement, Iran will submit to limitations on, and inspections of, its nuclear program in exchange for an end to trade sanctions that have led to economic hardship.
But, although Iranian oil and other goods, will return to the global market and banks and companies can renew business with the Islamic Republic, the deal between Iran and the P5+1 means that several key restrictions, particularly those related to terrorism, weapons programme and human rights, will remain.
Many U.S. sanctions against Iran date from 1979, when president Carter seized Iranian property in the US after a mob overtook the U.S. Embassy in Tehran and took more than 60 Americans hostage.
After Hezbollah, a Lebananse group backed by Iran, bombed a Beirut marine compound in 1983, killing 241 Americans, president Reagan added Iran to the list of State Sponsors of Terrorism, according to a report by the Belfer Center for Science and International Affairs at the Harvard Kennedy School in Massachusetts.
Inclusion on that list automatically results in bans on arms sales and foreign assistance to a country, and experts believe that Iran is almost certain to remain on that list, even after the nuclear agreement.
In 1995, new sanctions banned all U.S. investment in Iran, including in the oil sector, and banned exporting US goods to Iran. These sanctions are expected to remain with exceptions including the sale of civilian aircraft to Iran and the US import of goods including pistachios, caviar and carpets.
Relief from sanctions will come mainly from the EU where they were more closely linked to the nuclear issue. In 2012, the EU started a full embargo on Iranian oil, froze the assets of Iran’s central bank and cut off many Iranian banks’ access to the international financial system.
Under Tuesday's deal, EU members agreed to lift sanctions in finance, banking and insurance; oil and gas; shipping and transport; and other sectors, while also unfreezing the assets of Iranian banks, including the Central Bank of Iran, individuals and other organisations, according to the deal’s Annex on sanctions.
Major multilateral sanctions against Iran started in 2006 when the UN Security Council issued a resolution that banned exporting or providing equipment and technology to Iran that could help contribute to its development of a nuclear weapon.
The US committed to “effectuate the termination of all nuclear-related sanctions,” but it specified a key limitation as a stipulation of this process. This is that now the sanctions on doing business with Iran “would not apply to non-U.S. persons.” In other words, Americans were still subject to them, even if they could be skirted by going through third-parties, such as Europe.
Two other key restrictions that remain are embargoes on exporting arms and missiles to Iran, which will remain intact for five years and eight years respectively, and apply to all UN members.
Please see link to the nuclear agreement's Annex on sanctions.
For more information on countries sanctions, embargoes and restrictions, click here.
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