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TOP STORIES
After a year of disappointment, European businesses
are hoping a victory for Hillary Clinton in the U.S. election next
week may help break the logjam that has prevented large-scale Western
investments in Iran since the opening of its economy. While no one in
Europe is predicting a flurry of new deals should Clinton defeat her
Republican rival Donald Trump on Nov. 8, a win for the Democrat would
remove some of the political clouds hanging over last year's nuclear
deal between Iran and world powers. Business groups say this could
help fuel a more aggressive push into the Iranian market in 2017,
especially in the second half of the year, if a Clinton victory is
followed by the re-election of moderate Iranian President Hassan
Rouhani next May. "If Clinton and Rouhani win, then we will have
a political window of opportunity that is much bigger than we have
now," said Matthieu Etourneau, who advises French firms on the
Iranian market for MEDEF International, the French employers group.
"This is what the European banks and companies are waiting
for," he said... "We expect that 20-30 billion euros in
public contracts to be attributed by the Iranians before the end of
their fiscal year in March," Etourneau said. "What we are
telling companies is that they need a 5-10 year strategy. The market
will open up progressively."
U.S. Secretary of State John F. Kerry delivered an
impassioned defense of diplomacy Monday, asserting that the nuclear
deal he spearheaded with Iran had averted an almost-certain war and
vowing to work "to the last moment" to achieve a lasting
cease-fire in Syria. In London to accept the Chatham House Prize,
given by the prestigious think tank, Kerry said he would "rather
be caught trying" to reach seemingly impossible diplomatic
agreements than submit to the inevitability of war... The Chatham
House Prize was awarded in particular recognition of the Iran deal -
perhaps the most high-profile agreement of Kerry's four-year tenure
at State - and was given jointly to Kerry and his Iranian
counterpart, Mohammad Javad Zarif... Kerry, wearing a red poppy in
his suit lapel in a traditional British symbol of remembrance for war
veterans, said reaching the deal with Iran had required "an
orchestral" diplomatic effort that included members of the P5 +
1, a reference to the five members of the U.N. Security Council plus
Germany. He praised Zarif, who did not attend but is expected to pick
up his share of the prize at a later date, as "a patriot who
fought hard for his nation's interests."
The city of Tal Afar, a former Ottoman outpost not far
from Mosul that has a mostly ethnic Turkmen population and has been
home to a corps of Islamic State leaders, on Saturday became the
focus of a growing struggle between Turkey and Iran for influence in
northern Iraq. That is because Iraq's Shiite militias, some of which
receive support from Iran, began on Saturday to move west of Mosul, a
trajectory that would essentially cut off Islamic State fighters in
the city from their bases in Syria. The Shiite militias' move toward
Tal Afar could also draw Turkey deeper into the already complex
battlefield around Mosul. As the two-week-old campaign to reclaim
Mosul, Iraq's second largest city, from the Islamic State grinds on
in outlying villages, the role of the Shiite militias, controversial
because of their history of abuse toward the Sunni population, was
part of a delicate set of negotiations involving the Iraqi government
and the American-led coalition. Iraq's prime minister, Haider
al-Abadi, agreed to allow the militias a secondary role of sealing
off the desert areas west of Mosul, but not entering the city
itself... Turkey, with its military deployment in Iraq, has sought to
counter the influence of Iran and its militias. The competition for
influence in northern Iraq between Turkey, a Sunni power, and Iran,
the region's most powerful Shiite nation, is part of the broader
sectarian struggle tearing apart the Middle East.
SANCTIONS ENFORCEMENT
A top U.S. Treasury Department official will be in
Europe this week to discuss sanctions enforcement. Adam Szubin,
acting undersecretary of Treasury for terrorism and financial
intelligence, will be in Berlin, Rome and Paris for the week, where
he'll be meeting with his foreign counterparts to discuss keeping
sanctions pressure on Russia, ongoing violence in Syria, sanctions on
North Korea and Iran, and implementing the nuclear deal with Iran,
Treasury said.
SANCTIONS RELIEF
Three foreign banks are opening up representative
offices in Iran as the country seeks to boost investment after
reaching an international sanctions deal last year, a central bank
official said. Oman's Bank Muscat SAOG, Woori Bank of South Korea and
India's UCO Bank Ltd. are all in the process of establishing a
presence in Tehran, Central Bank Vice Governor Peyman Ghorbani said
Tuesday in an interview. He declined to give further details...
Austrian and Iranian bankers met in Vienna in September to discuss the
resumption of trade financing, people with knowledge of the plans
said at the time. Austria's top three banks, Erste Group Bank AG,
UniCredit Bank Austria AG and Raiffeisen Bank International AG would
be among the participants, according to the people, who asked not to
be identified.
Iran continues its quest for new crude buyers,
especially in Europe, but its loyal customer base will continue to
hinge on countries like India and China, whose demand for Iranian
crude has observed a steady rise this year. Iran has found interest
for its crude in some unusual places in the past few months as it
continues it diversify its list of buyers. Earlier this month it
agreed to sell 1 million barrels of crude oil to Hungary via Croatia
as it seeks to widen its post-sanctions customer base, which now
includes cargoes sold to oil major BP, France's Total, Greece's
Hellenic Petroleum, Spain's Repsol and Cepsa, Russia's Lukoil,
Poland's Grupa Lotos, Portugal's Petrogal and Italy's Saras and
Iplom. Iran said it has held talks with Bosnia and Herzegovina this
week as it hopes to expand its list of crude oil export destinations.
However, its shipments to Asia remain the pillar of its export
market.
Raiffeisen Bank International (RBI), as one of the
major banks in Austria, plans to open a branch in Iran, Austrian
Ambassador to Iran Friedrich Stift announced on Saturday. He made the
remarks in Tehran on the sidelines of a meeting between the director
of Iran's Trade Promotion Organization, Mojtaba Khosrotaj, and the
second president of the Austrian National Council, Karlheinz Kopf,
Tasnim news agency reported. Stift underscored that Austria
Import-Export Bank will secure trade with the Islamic Republic,
adding that the bank increased its line of credit up to $1 billion
from its previous level of $230 million following the recent visit
paid by the governor of the Central Bank of Iran to Austria.
So despite concerns over regulation and reputation,
that opportunity explains the caravan of container carriers that
started resuming service to Iran back in January. Mediterranean
Shipping Co. has returned, as has CMA GGM. Panalpina began planning
for a potential lifting of sanctions two years before it happened,
and now offers regular air, ocean and road services to Iran. The
Iranian port at Bandar Abbas now welcomes ships from Evergreen,
Hyundai, OOCL, Hanjin, "K" Line, KMTC, X-Press, Yang Ming,
and many more... Given the dearth of capital investment in Iran
dating back 30 years, there are also significant infrastructure building
opportunities to support the expansion in global trade. So while
companies like UK-based Seafast Logistics are forming joint ventures
with Iranian logistics providers on container shipping, break bulk,
project cargo, refrigerated goods, and air freight into and from all
Iranian ports, U.S. logistics firms can only watch...and wait for
something to change.
Managing Director of the National Iranian Tanker
Company (NITC) Sirus Kian Ersi says the NITC welcomes expansion of
relations with Greek companies. "NITC welcomes expansion of
relations with Greek companies," Ersi made the remark in a
meeting with Greek Ambassador to Tehran Georgios Ayfantis in Tehran
on Saturday. He said a Memorandum of Understanding (MoU), already
signed with Greek George Moundreas & Co. is under investigation
to secure maximum interests of the two sides." Since when an MoU
has been signed between the NITC and George Moundreas & Co., many
sessions have been held and the two sides have become acquainted with
each other's capability and activity, trying to find executive
mechanisms for mutual cooperation and attaining mutual interests.
A Fresh round of oil negotiations was conducted
between Iran's NIOC and Hungary's MOL Group over inking long-term
crude sale contracts. Executive Director for International Affairs at
National Iranian Oil Company (NIOC) Seyyed Mohsen Ghamsari made a
visit to Budapest and began a new round of talks with MOL, the
largest integrated oil and gas company from Hungary, to ink long-term
and permanent contracts for crude oil sales. During his stay in
Hungary, Iran's Ghamsari, in addition to attending a meeting with MOL
officials, made a visit to a Hungarian refinery. Other axes of talks
between Iranian and Hungarian officials in Budapest, apart from
long-term sales of crude oil, included investments in upstream and
downstream sectors of Iran's oil industry.
FOREIGN AFFAIRS
The European Union Parliament passed a resolution Oct.
25 calling for normalization of relations with Iran - a decision that
Tehran cautiously welcomed. In response to the resolution, Iranian
Foreign Ministry spokesman Bahram Qassemi said that the EU Parliament
seeks "renormalization and expansion of long-term relations with
the Islamic Republic of Iran." He added, "This shows the
positive will of the European entity for extending and deepening
all-out bilateral relations with Iran." However, the day after
the resolution passed, the chief of the Iranian judiciary's Human
Rights Council, Mohammad Javad Larijani, said, "There are a lot
of flaws in the resolution. ... The document regards Iran as a market
for the sale of European goods." ... The conservative Mizan news
agency, which belongs to the judiciary, published a report Oct. 26
under the headline, "The European Parliament's issuing of a
document for Iran's slavery."
U.S. Treasury Secretary Jack Lew visited Israel for
talks on the Iran nuclear deal and other issues. The visit on Sunday
came just weeks after the United States and Israel signed a $38
billion defense assistance deal. U.S. Ambassador to Israel Dan
Shapiro in a statement also posted on Facebook called the talks
"productive." Topics included bilateral economic issues, an
update on implementation of the Iran nuclear deal and continued
sanctions against Iran.
REGIONAL DESTABILIZATION
Iran welcomed the election of Michel Aoun as Lebanon's
new president on Monday, calling it a victory for the Shi'ite group
Hezbollah, Tehran's ally in Lebanon. Aoun, a leader of Lebanon's
Christian community, secured the post in a parliamentary vote, ending
a 29-month presidential vacuum in a deal with Sunni leader Saad
al-Hariri, who is now expected to become prime minister. "The
election of Michel Aoun as president shows new support for the
Islamic resistance (against Israel)," Ali Akbar Velayati,
Supreme Leader Ayatollah Ali Khamenei's top foreign policy adviser,
was quoted as saying by Iran's Tasnim news agency. "This is
surely a victory for Sayyed Hassan Nasrallah, the leader of
(Hezbollah and) Islamic Resistance in Lebanon." ... Iran's
President Hassan Rouhani congratulated Aoun, a former army commander,
in a phone call, an official in Rouhani's office tweeted, calling it
a victory for resistance and for ethnic tolerance in Lebanon.
A top Emirati court on Monday sentenced seven people
to up to life in prison after convicting them of forming a cell
linked to Lebanon's Iran-backed Hezbollah movement, state media said.
One Emirati national and two Lebanese men were given life sentences,
while an Iraqi and another Lebanese man were jailed for 15 years
each, according to state news agency WAM. An Egyptian woman and
another Emirati man were each jailed for 10 years, it said.
HUMAN RIGHTS
Heena Sidhu, a gold-medal sports shooter from India,
is refusing to participate in the Asian Airgun Shooting Championship,
which will be held in Tehran in December. She has withdrawn from the
event because she opposes Iranian laws that require all women - including
sports contestants - to wear a hijab. "Forcing tourists or
foreign guests to wear [a] hijab is against the spirit of the
game," she said during an interview with the Times of India.
"Since I don't like it, I have withdrawn my name. You follow your
religion and let me follow mine. I'll not participate in this
competition if you are going to force me to comply with your
religious beliefs." Sidhu also explained her decision in a
series of tweets, saying, "Im not a revolutionary. But I feel
[that] making it mandatory for even a sportsperson to wear hijab is
not in the spirit of a Sport." Sidhu is not the only competitor
recently to take a stand against the policy. Last month, American
chess champion Nazi Paikidze-Barnes vowed to skip the chess championships
being held in Iran next year.
DOMESTIC POLITICS
In Iran, the Intelligence Ministry's barring of 35
senior officials from holding government positions has once again
brought dual nationals into the spotlight. The issue was initially
raised in the ninth parliament (2012-16) as a tool to pressure
President Hassan Rouhani's administration while Iran was engaged in
nuclear negotiations with the six world powers. Since then, it has
been pursued under what is called the "infiltration
project" by parliament's National Security and Foreign Policy
Commission and the Intelligence Organization of the Islamic
Revolutionary Guard Corps (IRGC). In early October, Intelligence
Minister Mahmoud Alavi gave members of the parliamentary commission
the names of 79 individuals suspected of being dual nationals or
holding US green cards; 35 of them were later barred from holding
government positions after investigations proved that they did in
fact possess such documents.
OPINION & ANALYSIS
During the first week of September, Iranian speedboats
twice harassed U.S. Navy ships in international waters near the
Strait of Hormuz. Those boats belonged to the Islamic Revolutionary
Guard Corps (IRGC). In the same week, news emerged that the IRGC had
arrested another dual Iranian-American national during a family visit
to the country. The commander of the IRGC's Quds Force, meanwhile,
was in Aleppo, in the company of Iraqi Shiite militias currently
engaged in the siege of Syria's second-largest city. Indeed, only a
few days earlier, the IRGC announced the formation of a Shiite
liberation army composed of Shiite militias that Iran has been
nurturing across Mesopotamia and the Levant. That did not stop
France's mobile phone giant, Orange, from beginning talks with Iran's
largest mobile phone operator, Mobile Telecommunication Company of
Iran (MCI), over acquiring a stake in the Iranian company. The IRGC
controls MCI through a 50-percent-plus-one stake in its parent
company, the Telecommunication Company of Iran (TCI). In short,
whether its internal security, foreign adventures, or large corporate
ventures, the IRGC plays an outsized role in Iran's internal power
structure. Established in 1979 to consolidate the Islamic revolution
and fight its enemies, the IRGC has evolved over the years into a
full-fledged conventional army, conducting and directing terrorist
activity abroad. The Guard has also become a political power broker,
an economic conglomerate, and an agency in charge of nuclear and
ballistic-missile proliferation... This report demonstrates the
Revolutionary Guard's pervasive influence in the Iranian economy and
provides an accounting of the IRGC's nefarious activities. Without a
sober understanding of how the IRGC will exploit economic dividends
generated by the JCPOA, policymakers and the private sector cannot
establish appropriate counter-measures to prevent the enrichment of
the most dangerous elements of the Iranian regime.
After more than two years without a president in
Lebanon, the parliament convened on October 31 and elected Maronite
Christian figure Michel Aoun. The previous president, former Lebanese
Armed Forces (LAF) chief of staff Michel Suleiman, finished his
six-year term in May 2014, but the legislature was unable to reach
consensus on his successor due to sectarian divisions (mostly between
Sunnis, Shiites, and Christians) and competing foreign alignments
(whether with Sunni Saudi Arabia or Shiite Iran). Aoun has long been
a controversial figure in Lebanon. Once the country's most
anti-Syrian political figure, since 2005 he has been aligned with the
Assad regime and its principal ally in Lebanon, the Iranian-backed
Shiite militia Hezbollah. Today's decision represents a significant
victory for the ambitious octogenarian general, but it also suggests
new pragmatism among his political opponents -- the so-called March
14 coalition, which had opposed his candidacy for a decade. While
many welcome the potential end of political stagnation produced by
the presidential vacuum, the key question is whether the agreement to
elect Aoun also implies increased Iranian control.
As activity in the Red Sea has heated up this month,
debate rages on in Washington about Tehran's role in attacks against
US forces there. The Pentagon confirmed this month that the
Iranian-backed Houthi rebels in Yemen were responsible for launching
cruise missiles at the USS Mason on Oct. 9 and 12, while it still
investigates a potential third attack on Oct. 15. The confirmed
attacks, which prompted US strikes against Houthi installations on
the coast, were reportedly in retaliation for US backing of the
Saudi-led coalition aimed at expelling them from the capital. It is
not definitively known whether Iran supplied the missiles, but the
motives are clear as to why they would have supported the attack.
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