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TOP STORIES
When world powers agreed in 2015 to lift sanctions on
Iran in return for curbs on its nuclear program, the deal's
supporters in the United States, Europe and Tehran hoped renewed
trade and investment could boost Iran's private sector and weaken the
state's hold on the economy. But a Reuters review of business accords
reached since then shows that the Iranian winners so far are mostly
companies owned or controlled by the state, including Iran's Supreme
Leader, Ayatollah Ali Khamenei. Of nearly 110 agreements worth at
least $80 billion that have been struck since the deal was reached in
July 2015, 90 have been with companies owned or controlled by Iranian
state entities, the Reuters analysis shows... In Iran, Khamenei and
other anti-Western hardliners have repeatedly criticized it because
they are concerned it would open the door to Western involvement in
Iran's economy... No matter what hardliners have said about the
nuclear pact, though, the Reuters analysis shows that businesses
which answer ultimately to the Supreme Leader stand to gain from
it... The state dominates Iran's economy, so state-controlled firms
were always likely to win most business after sanctions were lifted.
Iranian officials estimate that the private sector makes up only 20
percent of Iran's economy. In Iran, "you make money if you're
close to the centers of power," said Ali Ansari, an Iran scholar
at the University of St. Andrews in Scotland. "The economy
hasn't been restructured or reorganized. You're recycling wealth through
the elite." ... Counter to the hopes of supporters of the
nuclear accord, the initial wave of investment looks likely to
further strengthen the power of the state, including Khamenei, whose
power far surpasses Rouhani's.
The Royal Bank of Scotland has rebuffed efforts by the
British government, a major shareholder, to coax the lender into
facilitating trade with Iran as it seeks to avoid risky business,
sources with knowledge of the discussions say. In recent months
British officials have sought to boost business ties with Iran - a
year on from the lifting of international sanctions - as Britain
tries to forge new trade ties following June's vote to leave the
European Union. The sources said Britain's finance ministry had tried
to use the government's influence with RBS and to a lesser extent
Lloyds, in which it holds a minority stake, to help speed up trade
finance with Iran, including clearing services for Iranian banks in
pounds... A Lloyds spokesman said it was a UK-focused retail and
commercial bank, adding that it was "mindful that Iran remains a
higher risk country with which to do business". "We
therefore consider all requests on a case-by-case basis in order to
protect the bank and our customers," the spokesman said... Major
global lenders like HSBC which have large operations in Britain have
reiterated they have no intention of doing any new business involving
Iran, questioning why the United States has encouraged them to do so
when U.S. financial firms are restricted.
A historic high-rise building in the heart of Iran's
capital caught fire and later collapsed Thursday, killing at least 30
firefighters and leaving their stunned colleagues and bystanders
weeping in the streets. The disaster at the 17-story Plasco building,
inadvertently shown live on state television, came after authorities
said they repeatedly warned tenants about blocking stairwells with
fabric from cramped garment workshops on its upper floors.
Firefighters, soldiers and other emergency responders dug through the
debris into the night, looking for survivors. While it was not clear
how many people were in the steel-and-concrete building, witnesses
said many had slipped through a police cordon while the fire burned
to go back inside for their belongings... Thursday's disaster stunned
the city. Firefighters openly wept on the streets, holding each other
for support. Dozens of people lined up to donate blood.
IRAN NUCLEAR DEAL
President-elect Donald Trump asked approximately 50
senior administration officials to stay in their roles, including a
Treasury Department official who helped craft the Iran nuclear
agreement. Trump asked Adam Szubin, acting undersecretary for
terrorism and financial intelligence at the Treasury Department, and
the other officials to continue in their roles to "ensure the
continuity of government," incoming White House press secretary
Sean Spicer said Thursday, according to The Hill. The Hill and
Reuters quoted a Treasury officials as saying Szubin would run the
department until Trump's team is in place and then would leave
government.
SANCTIONS RELIEF
Since Iran agreed to curb its nuclear program, foreign
companies have sealed at least nine deals with companies in which
entities controlled by Supreme Leader Ayatollah Ali Khamenei,
including Setad Ejraiye Farman-e Hazrat-e Emam, have large or
majority stakes. Financial terms have not been disclosed on all. Here
are those deals whose terms are public.
The Central Bank of Iran has published a report
detailing the achievements of the country's nuclear accord with world
powers in the banking and monetary sectors, as the country marks the
first anniversary of the implementation of the landmark deal. The
document indicates that since imports constitute a significant share
of the country's balance of payments, banking sanctions had derailed
the course of imports due to payment disruptions "in a way that
the main mechanism of payments in foreign trade changed to payment
orders from letters of credit", Dolat.ir reported... "After
the implementation of JCPOA, access to the country's foreign exchange
reserves was eased and a majority of the assets of the central bank
outside the country were released," reads the report.
"After the deal was implemented, more than $9.9 billion of the
central bank's frozen oil money were released and repatriated from
the UAE, Britain, India, Greece, Italy and Norway." The bank
adds that after the adoption of the interim agreement, $12 billion of
its blocked assets were freed from Japan, South Korea and India in
the form of installments.
TERRORISM
Secluded in his hideaway in Pakistan, Osama bin Laden
suspected Iranian officials might implant tracking devices in his
sons, according to a document released Thursday in a batch of
materials seized in a 2011 raid that killed the al-Qaida leader.
"If they inject you with a shot, this shot might be loaded with
a tiny chip," bin Laden wrote in an undated letter to his sons,
Uthman and Mohammed, who were being allowed to leave Iran. "The
syringe size may be normal, but the needle is expected to be larger
than normal size. The chip size may be as long as a seed of grain but
very thin and smooth." In its final hours, the Obama
administration released the last of three installments of documents
belonging bin Laden that were collected during the raid on his
compound in Abbottabad, Pakistan.
OPINION & ANALYSIS
While Tehran is saber-rattling and threatening our
allies in the region, the response from Washington, unfortunately,
has remained muted. Time and again, the Obama administration has
ignored the comprehensive nature of the Iranian threat and
soft-pedaled non-nuclear sanctions seemingly out of fear that Iran
would walk away from the nuclear deal. As a result, and much to the
worry of America's traditional allies, Iran's leaders have become
more emboldened and its footprint continues to grow across the region.
In the past, we have spoken publicly about the flaws of the Joint
Comprehensive Plan of Action (JCPOA), which in the end has not halted
but only delayed Iran's path to a bomb-and at the considerable price
of abandoning Western leverage against Iran. To respond effectively,
the Donald Trump administration should not rip up the deal on day
one-that would make U.S. actions and not destabilizing and
threatening Iranian behaviors the issue. We need to isolate Iran, not
ourselves. But we must raise the costs of continued Iranian
intransigence, and to that end, the incoming Trump administration
should adopt a more expansive strategy towards Tehran: namely by
addressing those vital issues beyond the scope of the agreement,
specifically Iran's chronic regional meddling.
The North American International Auto Show - the
premier industry assembly for auto aficionados and manufacturers - is
in full swing this month in Detroit. Six thousand miles away, a far
different auto show involving many of the same manufacturers is
unfolding in Iran. For the Iranian regime, the auto industry is more
than a massive source of revenue for the Islamic Revolutionary Guard
Corps (IRGC), a terrorist organization sanctioned by the United
States and the international community. It also provides the
country's rulers with access to advanced foreign technologies and
dual-use products for its military and security forces through
foreign business agreements. Some of the same companies proudly
showing off their dazzling, shiny wares at the auto show in Detroit,
including Fiat-Chrysler and Daimler, are in the middle of negotiating
deals in Iran that are being brokered with Iranian counterparts
closely linked to the IRGC.
One of the foremost foreign policy challenges for the
Trump administration will be defining its approach toward Iran and
the JCPOA-the momentous nuclear deal-and devising a comprehensive
policy in this regard, taking into account the serious flaws in the
deal itself, as well as Iran's troubling behavior following the
deal's announcement and implementation. The impulse to scrap the
deal-as Trump promised on the campaign trail-is understandable, but
at this point renouncing the deal would be a lose-lose proposition.
Iran has already pocketed over $100 billion in sanctions relief, and
the decision would cause friction with the other P5+1 states. Iran
would presumably be free to resume its program with no restrictions,
because all UN Security Council Resolutions demanding suspension of
uranium enrichment activities have been replaced by Resolution 2231,
which endorses the JCPOA. In addition, all ills emanating from the
flawed nuclear deal would thereafter be attributed to this decision
rather than to the very real issues surrounding the deal and its
implementation. Demanding renegotiation of the deal is also perilous.
Even assuming that consensus among the P5+1 could be reached on this,
which is doubtful, renegotiation would take years, and what leverage
would the international powers have to work with to pressure Iran,
after having lifted the sanctions? Indeed, at this point, making the
best of the bad situation that has been created with the JCPOA would
counsel against both renouncement and renegotiation of the deal.
However, much can be achieved simply by changing the U.S. approach to
the deal and to Iran, and by altering the rhetoric.
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