While the lifting of sanctions may signal a broader shift in U.S.-Iranian relations, the historically fraught relationship faces many challenges.
On January 16, the United Nations the United States and the European Union lifted a regime of sanctions against Iran in response to the IAEA finding that Iran had complied with the requirements of the nuclear deal, formerly the Joint Comprehensive Plan of Action (JCPOA). This means Iran will be able to gradually increase international trade and accept foreign investment. It also enables Iranian businesses and individuals to access an estimated $100bn frozen assets held in offshore accounts.
Negotiations between Iran and the P5+1 over Iran’s nuclear program were protracted and intense. The resulting agreement gave Iran 12 months to fulfil its obligations but it did so in just seven. This indicates Tehran’s eagerness to be free from the sanctions that have crippled its economy.
However, EU sanctions targeting the Iranian Revolutionary Guard Corps (IRGC), a conservative military organisation that controls significant parts of Iran’s economy, will remain in place for eight years. US sanctions on IRGC-linked businesses will remain indefinitely because of IRGC’s support of groups including Hamas and Hezbollah, both defined as terrorist organisations by the US How these sanctions will be implemented, and what effect they will have on Iran’s economy, is so far unclear.
IRAN AND US FOREIGN POLICY
There is a perception that the Obama Administration is pursuing a foreign policy agenda in the Middle East that features a much more influential and ‘normalised’ Iran. The nuclear deal is part of that, but commentators (including former Defence Secretary Robert Gates) have claimed that the US has been ‘very weak’ in its efforts to keep Iran’s regional influence at bay.
However, both the US and Iran face substantial domestic political opposition to improved relations, and serious questions exist as to whether any such ‘détente’ can last.
While Iranian President Hassan Rouhani is relatively moderate, the Supreme Leader, Ayatollah Khamenei, and much of Iran’s political elite hold hardline anti-Western views. Deep animosity and distrust towards Western interventionism and influence pervade much of Iranian society. This is the result of a long and fraught history between the West and Iran. The CIA and British secret service orchestration of a coup against democratically elected Iranian Prime Minister Mohammed Mossadegh in 1953 is a key moment in the Iranian narrative.
The IRGC is commanded directly by the Supreme Leader and conducted a number of inflammatory and provocative exercises during the nuclear negotiations. Such moves were attempts to undermine or derail those talks. For example, just weeks before ‘implementation day’, Iran conducted ballistic missile tests. These were a signal to the Iranian public by the Government that they remain strong and independent of foreign influence.
In response, the United States implemented fresh sanctions specifically targeting 11 businesses and individuals directly involved in those Iranian ballistic missile tests and the missile program. However, these sanctions were delayed until the day after ‘implementation day’ to avoid interfering with the success of the JCPOA and to facilitate a prisoner swap (Iran released five Americans, and America pardoned or dropped charges against seven Iranians).
There is also significant strain over the deal in Washington. The Obama Administration has clashed with Congress and engaged in a very public and bitter battle with Israeli leaders over the Iran nuclear deal. While the deal looks strong now, and President Obama has the ability to implement it going forward, the Presidential elections in November could significantly alter US foreign policy in the region and worldwide.
NEW VISA RESTRICTIONS COME INTO FORCE
In January 2016 the United States changed the conditions of its ‘Visa Waiver Program’ for citizens of 38 countries, mostly European. The new rules mean that if an individual has visited Iran, Iraq, Syria or Sudan since March 1st, 2011 they are no longer eligible for the visa waiver program and have to apply for a visa before arriving in the US
This is partially a counter-terrorism initiative but it will have the affect of dissuading European businesspeople from travelling to Iran to investigate opportunities.