Monday, February 29, 2016

Eye on Iran: Iran Briefly Overstepped a Limit Set by Nuclear Deal, IAEA Says






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Reuters: "Iran briefly exceeded a limit set by a deal with major powers under which sanctions against it were lifted, the U.N. nuclear watchdog said on Friday, but Tehran then came back within the permitted bounds. Under its July deal with the United States, Russia, China, France, Britain and Germany, Iran is allowed to have 130 tonnes of heavy water, a moderator in reactors like the one it has disabled at Arak and a chemical it produces itself. 'On 17 February, the agency verified that Iran's stock of heavy water had reached 130.9 metric tonnes,' the International Atomic Energy Agency (IAEA), which polices the deal, said in a regular report on Iran's nuclear program sent to its member states. By Wednesday, however, 20 tonnes of heavy water had been shipped out of the country, bringing the stock back under the threshold of 130 tonnes, apparently in keeping with a soft limit under the terms of the July 14 deal, which is formally called the Joint Comprehensive Plan of Action (JCPOA). 'All excess heavy water which is beyond Iran's needs will be made available for export to the international market,' one of the annexes in the deal stipulates, adding: 'Iran's needs are estimated to be 130 metric tonnes.' In Washington, a U.S. official who spoke on condition of anonymity played down the incident. 'Iran briefly exceeded its 130 metric ton heavy water stockpile limit under the JCPOA by less than one ton. The IAEA has now verified that Iran has shipped out 20 metric tons and is back well under this limit,' said the U.S. official. 'Iran made no effort to hide anything it was doing from the IAEA. Because of the enhanced monitoring and verification provisions in the JCPOA, the IAEA immediately became aware of this issue and raised it with Iran, and Iran fixed it,' he said." http://t.uani.com/1nbIRTf

Reuters: "President Hassan Rouhani and his allies won big gains in elections that could deepen Iran's engagement with the world after his government ended years of sanctions by agreeing to curb its nuclear program. The outcome in the results for Tehran on Monday was a blow to the conservative Islamic establishment, although it retains decisive power due to Iran's unwieldy dual system of clerical and republican rule. Most of the lawmakers who did not make it to the new parliament strongly opposed the nuclear deal, including Mehdi Koochakzadeh, who called Foreign Minister Mohammad Javad Zarif 'a traitor', and Roohollah Hosseinian, who threatened to bury the negotiators under cement for agreeing to concessions to world powers. 'This election can be a turning point in the history of the Islamic Republic,' said an editorial in reformist newspaper Mardom-Salari, whose managing editor, Mostafa Kavakebian, won a parliamentary seat in Tehran. 'The biggest achievement of this election is the return of reformists to the ruling system ... so they won't be called seditionists or infiltrators anymore,' he said, referring to hardliners who accused reformists of links to the West. Rouhani and allied centrists and reformers won 15 out of the 16 Tehran seats in the 88-member Assembly of Experts, which is tasked with choosing the country's next supreme leader, final election results for Tehran showed. Two prominent conservatives, including the speaker of the powerful clerical body, were among those ousted in the capital. Candidates on the reformist list also took all 30 parliamentary seats in the Tehran constituency, up from just two previously, final results released by Interior Minister Abdolreza Rahmani Fazli showed. Beyond the capital, their gains were more limited, with conservatives keeping hold of many seats in both bodies." http://t.uani.com/1pkXh5f

Reuters: "In his first comments since the elections, Iran's deeply anti-Western Supreme Leader Ayatollah Ali Khamenei, praised the high turnout but made no direct comment on the results. However in a statement he appeared to set out the values he would like to see in the newly elected bodies, suggesting they should not be influenced by the West. 'Advancement doesn't mean getting absorbed by global arrogance', he said, using a term for the United States. A more toughly worded comment came from hardline judiciary chief Ayatollah Sadeq Emoli Larijani, who accused reformists of working with 'American and English media outlets' to block hardliners from winning seats the experts assembly. 'Is this type of coordination with foreigners in order to push out these figures from the Assembly of Experts in the interests of the regime?' he said in a statement. The Islamic Revolutionary Guards Corps, a powerful hardline paramilitary organisation close to Khamenei, issued a statement praising the turnout and implicitly accepting the results, but it too described the anti-U.S. stance it would like to see. 'The election winners will do their best to protect Iran's dignity, power and independence; resolve the main issues for society and the people; and defeat the global arrogance by their awareness and wisdom,' it said, referring to the United States." http://t.uani.com/1RfuYf8

U.S.-Iran Relations

AP: "Ten terrorist attack victims who won financial claims against Iran can seize a $2.8 million judgment owed to that country's defense ministry, a federal appeals court said Friday. The 9th U.S. Circuit Court of Appeals ruled the seizure would not violate agreements between Iran and the United States to resolve the Iran hostage crisis. The court also said the money, which has grown to more than $9.4 million with interest and attorneys' fees, was among assets that had been frozen by an executive order... The victims include survivors of a 1997 suicide bombing in Jerusalem. A lower court judge determined that Iran provided training and other material assistance to the bombers and ordered Iran to pay the victims damages ranging from $2.5 million to $15 million, according to the 9th Circuit ruling. Another victim is the son of former Iranian prime minister Shapoir Bakhtiar, who opposed Iran's Islamic regime and was murdered at his home in France in 1991. Iran won the $2.8 million judgment in 1997 against an American defense company that had agreed to sell it an air combat system. The sale, however, was disrupted by the 1979 Iranian revolution, and Iran sought reimbursement. The 9th Circuit has previously ruled that a separate group of terrorist attack victims who won financial judgments against Iran could go after $17 million owed to an Iranian bank." http://t.uani.com/1Uu5mAv

Reuters: "Iran's judiciary signaled on Saturday that Iranian-American businessman Siamak Namazi, detained since October in a case being watched internationally, had not been given access to a lawyer... Five Iranian-American groups have written to U.S. Secretary of State John Kerry urging him to work to release Namazi, who they said was 'left behind' after the prisoner swap. Namazi was detained by Iran's Islamic Revolutionary Guard Corps while in Iran visiting family. Officials have yet to announce charges against him. Namazi's 80-year-old father Baquer Namazi was arrested on Monday after traveling to Iran to try to visit his son in Evin prison. On Saturday, judiciary spokesman Gholamhossein Mohseni Ejei mentioned the case in answer to international media reports that Siamak Namazi had been denied access to a lawyer, Tasnim news agency reported. He was quoted as saying: 'According to the criminal code, lawyers should be approved by the head of the judiciary in security cases ... therefore if a lawyer is presented according to these rules he will be accepted, whether on this case or any other.' 'There is one law for all accused,' Ejei added. Iran does not recognize dual nationality. Last week, the younger Namazi's attorney and family said he had been denied access to his lawyer, Mahmoud Alizadeh Tabatabaei. Tabatabaei said he was representing Namazi but had not been informed of the charges his client faces." http://t.uani.com/24wXRgw

Sanctions Relief

Reuters: "South Korean steelmaker POSCO said on Monday that it has signed an initial agreement to help build a $1.6 billion steel mill in Iran, looking to tap rising demand in the Middle Eastern country as other markets falter. The lifting of economic sanctions earlier this year on Iran's disputed nuclear programme is expected to revive the biggest steel market in the Middle East at a time when appetite in major consumer China is slowing. POSCO and its affiliates plan to take 8 percent of the project to build the 1.6 million-tonne steel plant with Iran's Pars Kohan Diarparsian Steel (PKP) in the port city of Chabahar, POSCO said in a statement. The world's sixth-biggest steel producer aims to break ground on the plant next year, with a plan to add facilities producing cold-rolled and galvanized steel in 2019, a POSCO spokesman said... South Korean steelmakers controlled over half the Iranian market before the Western sanctions were imposed, according to POSCO's research centre. As part of the deal, POSCO plans to transfer to Iran its so-called FINEX technology, which it touts as being more environmentally-friendly and cost-efficient than standard steelmaking methods. POSCO's construction unit, POSCO Engineering & Construction, also plans to build a plant to generate power as part of the project, using gas created by the steel factory. The construction unit also expects to construct desalination facilities to produce 60,000 tonnes of water a day." http://t.uani.com/1RfoooR

Reuters: "Asian imports of Iranian oil held steady in January from a year earlier, as most of Iran's biggest crude buyers restrained their purchases until right before sanctions were lifted last month as part of an agreement on Tehran's disputed nuclear program. Iran's rehabilitation in the international commercial system is likely to start feeding through to official buyer's data from March after loading for exports surged this month and in late January, according to data obtained earlier by Reuters. Imports by Iran's four biggest buyers - China, India, Japan and South Korea - came to 981,000 barrels per day (bpd) in January, down 0.1 percent from a year earlier, government and tanker-tracking data show." http://t.uani.com/1ThI3uI

Reuters: "Switzerland said on Saturday it had agreed on a 'road map' for building business, financial and other links with Iran after Swiss President Johann Schneider-Ammann met his counterpart Hassan Rouhani in Tehran. 'The aim is to relaunch various dialogues between Switzerland and Iran,' Switzerland's department of Economic Affairs, Education and Research said in a statement. 'These include an economic and financial dialogue and a human rights and justice dialogue; a dialogue on migration issues is already underway.'" http://t.uani.com/1RA7F26

PressTV (Iran): "Iran said on Sunday that it had signed a basic agreement with South Korea to attract funds worth a total value of €5 billion for its development projects. The agreement was signed between Iran's Finance Minister Ali Tayyeb-Nia and the visiting South Korean Minister of Trade, Industry and Energy Joo Hyung-hwan. Tayyeb-Nia told reporters that similar agreements have been previously signed with South Korea including one with the country's Exim Bank to provide a total of €8 billion to Iran to implement its development projects. The Iranian minister further emphasized that South Korea is expected to provide Iran with loans worth a total of $15 billion based on the agreements that have been sealed so far. Tayyeb-Nia also said Minister Joo had told him that South Korea wants to invest in Iran's auto industry as well as its tourism sector and its oil and gas projects. In a separate development, Valiollah Seif, the governor of the Central Bank of Iran (CBI), has been quoted by the media as saying that Iran and South Korea have agreed to create a joint bank account to settle the outstanding payments for Iran's oil sales to South Korea." http://t.uani.com/1T484xd

PressTV (Iran): "An Iranian container ship is heading to Europe for the first time in five years, marking Tehran's return to international markets after the lifting of sanctions, an official says.  Chairman of the Islamic Republic of Iran Shipping Lines (IRISL) Mohammad Saeidi said he expects the ship, carrying a cargo of petrochemical products, to call at European ports in the 'next few days.' 'This is a big event as we managed to revive shipping to Europe after five years, thanks to the efforts of our management and staff, and unlock the sea transportation lock to Europe,' he said, quoted by the Mehr news agency. 'Fortunately, with the lifting of sanctions and implementation of the JCPOA (nuclear agreement) over the past five months...we managed to reopen the sea link and shipping routes to Europe,' he added. IRISL has successfully lobbied with Germany and Italy to establish a joint shipping company to cover northern and southern Europe with their services, Saeidi added." http://t.uani.com/1RAa78S

PressTV (Iran): "Iran said on Sunday that the world's second largest shipping company MSC from Switzerland will soon expand its services to the country's ports. Iran's Ministry of Roads and Urban Development in a statement said an agreement had been signed with the MSC by means of which the global shipping giant will increase calls to Iran's Bandar Abbas, Chabahar and Bandar Imam ports. The agreement - that has been signed with the Ports and Maritime Organization Iran - will also facilitate the shipment of Iranian goods from international ports to the country through MSC. This came at a time that Swiss President Johann Schneider-Ammann is in Iran on a landmark three-day visit. The media reported in January that the MSC had started calling at the country's southern ports after a hiatus of six years. This came after an MSC container ship has docked at Shahid Rajaie port in the Persian Gulf coastal city of Bandar Abbas." http://t.uani.com/1LqlL6X

Terrorism

AFP: "The Palestinian Authority on Sunday said Iran's direct financial assistance to the families of Palestinians killed in a five-month wave of violence would be unacceptable. Tehran announced last week assistance would be offered to families of Palestinians killed in the wave of violence that erupted in October, but the PA says such aid must follow official channels. Palestinian presidency spokesman Nabil Abu Rudeina, cited by local media, said bypassing the authority in handing out such funds would constitute illegal interference in internal Palestinian affairs. Iran should 'send this money through official channels to the (PA's) Martyrs and Prisoners Foundation rather than relying on informal and circuitous routes,' Abu Rudeina said. Iran's ambassador to Lebanon, Mohammad Fathali, said Wednesday that Tehran would offer $7,000 to the families of each Palestinian killed in what he called the 'Jerusalem intifada.'" http://t.uani.com/1QGvMZS

Iran-Saudi Tensions

Reuters: "Hezbollah indicated there would be no apology to Saudi Arabia over Lebanon's decision not to condemn attacks on Saudi diplomatic missions in Iran, signaling no quick end to a crisis seen as a risk to Lebanese economic and political stability. The Lebanese central bank governor in an interview with Reuters meanwhile urged the government to mend ties with Saudi Arabia, but said reports on potential financial repercussions of the crisis were overblown and there was no risk to the currency. The crisis came to a head last week when Saudi Arabia halted a $3 billion aid package for the Lebanese army in response to the government's failure to sign up to statements condemning attacks on Saudi diplomatic missions in Iran. The row reflects the wider conflict between Iran and Saudi Arabia. Lebanon has been an arena for that struggle for the last decade during which Saudi Arabia's Lebanese allies have struggled to confront the growing power of Iran-backed Hezbollah." http://t.uani.com/1TMFJvh

Domestic Politics

AFP: "Iranian hardliners suffered another election setback Monday with two leading conservatives ejected from the top clerical body, handing another victory to moderate President Hassan Rouhani, whose reformist allies made gains. The public's rejection of ayatollahs Mohammad Yazdi and Mohammad Taghi Mesbah-Yazdi when picking the powerful Assembly of Experts came as final results were also awaited for parliamentary polls after voting on Friday... State television reported that Yazdi, the current chair of the assembly, and Mesbah-Yazdi, a figure openly hostile to reformists and close to former hardline president Mahmoud Ahmadinejad, had failed to be re-elected. On Sunday they had been placed 17th and 19th in the assembly ballot for Tehran, but only 16 places were up for grabs in the capital... Yazdi, Mesbah-Yazdi and a third hardliner in the assembly, Ayatollah Ahmad Jannati, were targeted by Rouhani supporters in the election campaign, with the public being urged not to back them. However Jannati, chair of another influential body in Iran, the Guardian Council, which must approve all election results and which barred thousands of candidates from contesting the polls, scraped re-election, taking 16th place, the last seat available in Tehran. Rouhani was re-elected to the assembly in third place in Tehran, with his ally and former two-term president Ayatollah Akbar Hashemi Rafsanjani in first position." http://t.uani.com/1QgbIQS

Reuters: "Iran's hardline judiciary chief on Sunday accused reformists of working with Westerners to block hardliners from winning seats in Friday's elections for the Assembly of Experts, an influential leadership body. In a statement, Ayatollah Sadeq Amoli Larijani said reformists had coordinated with 'American and English media outlets' to prevent what he called some servants of the people from entering the assembly, which has the task of selecting the country's most powerful figure, the supreme leader. 'Is this type of coordination with foreigners in order to push out these figures from the Assembly of Experts in the interests of the regime?' the statement, carried on several news agencies, said." http://t.uani.com/1VMYjBl

Reuters: "Iran's hardline Revolutionary Guards on Sunday said the winners of Friday's elections would protect the Islamic Republic against foreign enemies, and the high turnout was evidence of broad popular support of the ruling system. 'There is no doubt that the election winners will do their best to protect Iran's dignity, power and independence; resolve the main issues for society and the people; and defeat the global arrogance (United States) by their awareness and wisdom,' the Guards said in a statement carried on the Tasnim news agency." http://t.uani.com/1QngMnS

Opinion & Analysis

WSJ Editorial: "One of the Obama Administration's hopes for its nuclear deal with Iran was that it would empower regime moderates. So it's no surprise that the deal's cheerleaders are proclaiming Friday's election results as a triumph for the Islamic Republic's 'moderate' and 'reformist' factions. That depends on the meaning of the word 'moderate.' At stake Friday were seats in the Majlis, or Parliament, and the Assembly of Experts, the body that will select Iran's next Supreme Leader. Like all Iranian elections, the vote was a carefully stage-managed process. Iranians picked from among candidates prescreened for ideological orthodoxy by the unelected Guardian Council and various security agencies. The Guardians disqualified 6,000, or nearly half, of the original candidates to the Majlis. Of the 801 candidates to the Assembly of Experts, only a quarter, or 161, made it to the ballot. Most of the disqualified candidates belonged to the reformist and moderate factions of the regime. Imagine U.S. midterm elections in which the White House was able to ban all Tea Party or even nonprogressive Democratic candidates from the ballot. Western media are nonetheless describing the results as an 'embarrassing defeat' for the regime's hard-liners and the moderates' 'best nationwide electoral showing in more than a decade,' as the Associated Press put it. Of particular note are the results in the capital, Tehran, a national barometer where on Sunday it appeared that candidates on the moderate list had swept all 30 seats in the Majlis. Some moderates. Consider Mostafa Kavakebian. The General Secretary of Iran's Democratic Party, Mr. Kavakebian is projected to enter the Majlis as a member for Tehran. In a 2008 speech he said: 'The people who currently reside in Israel aren't humans, and this region is comprised of a group of soldiers and occupiers who openly wage war on the people.' Another moderate is Kazem Jalali, who previously served as the spokesman for the National Security and Foreign Affairs Committee of the Majlis and is projected to have won a seat. In 2011 Mr. Jalali said his committee 'demands the harshest punishment'-meaning the death penalty-for Mir Hossein Mousavi and Mehdi Karroubi, the two leaders of the pro-democracy Green Movement that was bloodily suppressed after stolen elections in 2009. Those two leaders are still under house arrest. As for new Assembly of Experts, many of the 'moderates' projected to have won seats were also listed on the hard-liners' lists, since the ratio of candidates to seats was well below two. The winners include Mohammad Reyshahry, a former Intelligence Minister believed to have helped spearhead the 1988 summary execution of thousands of leftists; Ghorbanali Dorri-Najafabadi, another former Intelligence Minister believed to have directed the 'chain murders' of the late 1990s; and Ayatollah Yousef Tabatabainejad, a fierce opponent of women's rights who has called Israel 'a cancerous tumor.' The political reality in Iran is that the Ayatollahs, backed by the Revolutionary Guards, remain firmly in control." http://t.uani.com/1LPRJ7n

Eli Lake in Bloomberg: "If you are following the Iranian elections, prepare to be dazzled. According to major news outlets from the BBC to the Associated Press, the reformists beat the hardliners. But wait. Didn't Iran's Guardian Council disqualify most of the reformists back in January? Of course it did, but thanks to the magic of Iranian politics, many of yesterday's hardliners are today's reformist. Take Kazem Jalali. Until this month, Jalali was one of those hardliners whom President Barack Obama had hoped to marginalize with the Iran nuclear deal. Jalali has, for example, called for sentencing to death the two leaders of the Green Movement, who are currently under house arrest. And yet, he ran on the list endorsed by the reformists in Friday's election. Two former intelligence ministers, accused by Iran's democratic opposition of having dissidents murdered, Mohammad Mohammadi Reyshahri and Ghorbanali Dorri-Najafabadi, also ran on the list endorsed by Iran's moderate president for the Assembly of Experts, the panel that is charged with selecting the next supreme leader. The initial Iranian reform movement of the late 1990s sought to allow more social freedoms and political opposition of the unelected side of Iran's government, such as the office of the Supreme Leader and the Guardian Council. Over time however, the changes supported by the reformists like Mohammed Khatami, who was president between 1997 and 2005, were stymied by these unelected institutions. When the next generation of reform politicians ran for office in 2009 under the banner of the green movement, the unelected part of the state arrested their supporters when they demonstrated what they saw as a stolen election. On Friday, many of the hardliners that opposed the reformists in the late 1990s and in 2009 are running under this banner. As Saeed Ghasseminejad, an expert on Iranian politics at the Foundation for Defense of Democracies, recently said: 'Putting a reformist or moderate label on hardliners does not make them reformist or moderate.' In some cases, the transformation happened so quickly that the candidates themselves were surprised. Caitlin Shayda Pendleton, an analyst with the American Enterprise Institute's Critical Threats Project, wrote last week, two of the candidates on Rouhani's list for the Assembly of Experts told reporters they weren't asked to be included among the alleged reformists. These include Ayatollah Ali Movahedi Kermani, who defended the Guardian Council's vetting process against the reformists; as well as Ayatollah Mohammad-Ali Taskhiri, who told reporters 'I believe that the correct way is Principalist, and the way of others, like Reformists or moderates, is the incorrect way.' As Pendleton wrote on Sunday, 'Many (but far from all) candidates described as Reformists in both the parliamentary and Assembly of Experts elections are actually Moderates who were endorsed by Reformist leaders as a fallback after the Guardian Council disqualified most of the Reformists trying to run.' The headlines however tell a different story. The Guardian, for example, says: 'Iranian elections deal blow to hardliners as reformists make gains.' The BBC concludes: 'Reformists win all 30 Tehran seats.' And on it goes... The logic here is that at the very least, voters could protest the most reactionary hardliners in favor of the slightly less reactionary hardliners. This is hardly a victory for democratic change in Iran. And that is what is important for Westerners trying to make sense of Iran's elections. While Iranian politicians have to make the best of a bad hand, we don't. Western journalists and analysts don't need to confer legitimacy on illegitimate elections, nor should we call hardliners 'reformists.' At the very least, it's important to hold out a higher standard for the day real reformers are allowed to compete fairly for power in Iran. And yet many of Iran's alleged supporters in the West have gone along with the spin. Trita Parsi, an Iranian-Swedish activist whose U.S. organization played a key role in lobbying for the Iran nuclear deal, wrote on Sunday evening that critics of Friday's election didn't misread what he euphemistically called the 'flaws in the Iranian political system.' Rather these critics 'misread the strength of the Iranian society and the sophistication of the Iranian electorate, who once again have shown that they have the maturity and wisdom to change their society peacefully from within, without any support or interference from the outside.' It's quite something when an Iranian who claims to support the opening of Iran's society praises the 'maturity and wisdom' of an electorate offered 'reformists' who support the disqualification of reformers. But this is the magic of Iran's elections. In the end, Iran's supreme leader doesn't need to defend their legitimacy. He has plenty in the West eager to do it for him." http://t.uani.com/1XViC0I

Aaron David Miller in LAT: "Iranians go to the polls Friday to elect a new parliament and Assembly of Experts, the body that - at least on paper - chooses the next supreme leader. The world is watching to see if the reformist camp will gain ground, but expectations aren't high. That's just as well. Reality, not idealized hopes or fantasies, needs to guide our view of what's possible when it comes to liberalizing and democratizing authoritarian societies. And that goes double when it comes to thinking that external factors, such as the nuclear agreement Iran and world powers completed last year, will produce significant internal change in the Islamic Republic. Indeed, for the foreseeable future, that accord may have the opposite effect. Here's why: America may have gotten what it needed with the nuclear accord, but Iran got what it wanted - an accord that would consolidate the government's power, not undermine it. The United States obtained a slower, smaller, more easily monitored, time-limited Iran nuclear program that preempted an Israeli military strike and made a U.S. strike unnecessary. Iran got access to billions of dollars in frozen assets, the prospect of billions more in trade deals with Europe and Asia, and the capacity to develop nukes down the road if it wants to. An improved economy co-opts pressure for change in Iran, even though it is the elites, not the broader public, that will be the primary beneficiaries. In all, the nuclear deal has created the perception and reality that Iran has come in from the cold. None of this favors Iran's pragmatists and centrists, let alone its reformers. In fact, as Ali Vaez of the International Crisis Group notes, in Iran historically 'external loosening' is balanced with 'internal stiffening.' That is what happened after the 1988 cease-fire in the war with Iraq, and after the 2003 nuclear agreement with Britain, France and Germany, when the powerful Guardian Council disqualified reformist candidates in the next elections and conservatives regained their parliamentary majority. A step forward in a highly authoritarian and ideological system can easily produce a few steps back, or at least to the side. Indeed, fear of rapid change in Iran compounds the worries of hard-liners who for reasons of ideology and commercial or financial self-interest see threats to their interests in a more open society." http://t.uani.com/1QQdjAj

Roshanak Taghavi in FP: "Speaking with Kaveh in 2014, all this seemed like an eternity ago. Hassan Rouhani had been president for almost a year, and Iran and the group of six world powers - the United States, France, Britain, China, Russia, and Germany - had inked an interim nuclear agreement in Geneva. For the first time in years, Kaveh no longer felt hopeless about the future of his country. Members of the business community, like him, believed Rouhani had the political grit necessary to fight corruption and bring economic change. The prospects of a nuclear deal had them revitalized, he told me. Kaveh had become a senior executive at a private aviation firm and was especially excited because sanctions for aviation had been relaxed; his company had launched talks with a European firm to buy new airplanes. International delegations were trickling in for business talks, and there was even talk of trade with America, Kaveh said excitedly. Two years later, in 2016, Kaveh's attitude has again shifted. Although there are glimmers of hope on the horizon of the Iranian economy, he tells me true change will take longer than he once thought. An aesthetic shift is underway in Iran, with refurbished mansions opening as five-star hotels in historic cities like Kashan and luxury boutiques such as Bulgari and Roberto Cavalli now dotting northern Tehran. Hotels in the Iranian capital are constantly booked with business travelers looking for investment opportunities. Inflation, which peaked at 40 percent as Rouhani took office in 2013, is on the decline and today stands at about 13 percent. But the economy still suffers from deeply ingrained systemic problems that will take years to overcome. Youth unemployment is more than 25 percent, and though Tehran is peppered with new high-rises and construction projects, many remain incomplete, as the country endures the sector's longest slowdown in recent history. Prices for basic foodstuffs remain high; the currency remains weak and is expected to depreciate further by summer as the government promotes exports. In the run-up to this week's parliamentary elections, Rouhani has tried to inject a sense of hope among a population disappointed by the lack of immediate economic improvement many thought would come with the historic nuclear accord. But the fact is that many Iranians' expectations for change greatly outpaced the economic reality: The Iran deal finalized last July will allow the country to harness its vast economic potential in the long term, but average Iranians won't feel change in their daily lives for some time to come. 'We knew in the business sector ... it would take five to 10 years to rebuild what was devastated during the embargo period,' said Alireza Azimzadeh, whose legal advisory firm, Persia Associates, facilitates negotiations between international companies and local Iranian firms. 'We've had so many [business] meetings that sometimes we're overwhelmed. But the population at large isn't directly involved like us, so they don't feel that.' ... But Iranian politics aren't the only thing holding up massive foreign investment in Iran - American politics are playing a role, too. Game-changing investments can't materialize until foreign banks feel comfortable facilitating long-term financing and transactions. But for that to happen, Western European banks will need their home governments to get reassurance from the U.S. Treasury Department that they won't be penalized or cut off from the U.S. banking system for working with Iran, says Nigel Kushner, chief executive of W Legal, a law firm specializing in international sanctions compliance. And that will largely depend on Washington's assessment of how Tehran is adhering to its nuclear commitments. In the last decade, European banks have paid billions in fines and settlements for violating U.S. sanctions on Iran, Cuba, and Sudan. In 2014, France's BNP Paribas paid a record $8.9 billion in fines and was hit with a yearlong ban from conducting U.S. dollar transactions for its oil and gas trade-finance unit. Kushner predicts a large British bank may enter Iran within the next three to six months, if the United States confirms to the British government that the bank won't be penalized. For the time being, only a handful of small European banks are facilitating money transfers for Iran-related trade. Iran's national Melli Bank is reportedly able to transfer funds to its branch in London, but Iran's Central Bank has yet to find a bank willing to engage with it to facilitate transactions. So while Iran has enjoyed higher oil sales to new customers since Europe's oil embargo was lifted, collecting those revenues and more than $4 billion in old oil debts remains difficult, a senior Iranian oil official told Foreign Policy. 'London-based Iranian banks who are subsidiaries of Iranian parent banks are akin to a restaurant that has opened for business and can only serve Coca Cola,' said Kushner. 'They are open for business, but there's little they can do because they do not yet have a correspondent bank they can work with, and they don't have a bank they can exchange euros or sterling with in any meaningful way.' It also remains to be seen how the U.S. Treasury Department will ultimately proceed in its dealings with Iran. Will Iran be allowed the same conventional financial freedoms most other countries have, or will the United States encourage transactions through centralized channels on a case-by-case basis? 'The expectations were super high going in among all the parties,' said Erich Ferrari, a Washington-based lawyer specializing in U.S. sanctions compliance. 'Those have been mollified.' Rouhani and Oil Minister Bijan Zangeneh have sought to dilute the presence of IRGC-led companies and subcontractors in Iran's petroleum industry. They replaced many National Iranian Oil Company (NIOC) executives aligned with former Oil Minister Rostam Ghasemi, who led Khatam al-Anbiya before joining NIOC, and have publicly lambasted IRGC-affiliated firms and subcontractors for taking over so many civilian projects without a proper tender. They also criticized Khatam al-Anbiya for the slow progression of key projects, such as the development of the world's largest natural gas field, South Pars, which Iran shares with Qatar. Yet the white-collar corruption that became an endemic part of business in Iran hasn't changed. In 2015, Transparency International ranked Iran's public sector equally corrupt as war-embattled Ukraine, worse than key trading partners Russia and Pakistan, but brighter than Venezuela, Iraq, and Nigeria. Some officials and businessmen fear that Rouhani, looking to win a second term in office, no longer has the political will to fight for serious reform. 'In order to fight [corruption], you have to bring in new investors to replace them. Mr. Zangeneh originally tried to stop [Khatam al-Anbiya's] operations in South Pars, but later on he let it go because he didn't have an alternative,' said a former senior official of the Iranian Central Bank, speaking by phone from Tehran on condition of anonymity. 'He thought by stopping the projects, other local private players or big international players would come. But they didn't.'"http://t.uani.com/1nbOgd9
       

Eye on Iran is a periodic news summary from United Against Nuclear Iran (UANI) a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Eye on Iran is not intended as a comprehensive media clips summary but rather a selection of media elements with discreet analysis in a PDA friendly format. For more information please email Press@UnitedAgainstNuclearIran.com

United Against Nuclear Iran (UANI) is a non-partisan, broad-based coalition that is united in a commitment to prevent Iran from fulfilling its ambition to become a regional super-power possessing nuclear weapons.  UANI is an issue-based coalition in which each coalition member will have its own interests as well as the collective goal of advancing an Iran free of nuclear weapons.

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