Tuesday, November 1, 2016

Eye on Iran: Frustrated Europe Hopes Clinton Win Can Spur Elusive Iran Deals

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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.


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.


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.


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.


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.


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.


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.


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.

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@uani.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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