Wednesday, January 20, 2016

Eye on Iran: Iran's Elite Guards to Gain Regional, Economic Power in Post-Sanctions Era








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Reuters: "Iran's Revolutionary Guards did well under international sanctions, and the elite military force is destined to become still richer now they've been lifted. Iran's clerical rulers have supported economic growth of the Guards, rewarding the group for sanctions-busting as well as suppressing dissent at home and helping Tehran's allies abroad - notably Syrian President Bashar al-Assad. Now the country is expecting an economic boom in the post-sanctions era and the Iranian Revolutionary Guards Corps (IRGC), will be a beneficiary. Likewise, the leadership will ensure it is well funded to continue the effort in the regional crisis, including the Syrian civil war. The Guards aren't entirely off the hook, even though the United States, European Union and United Nations lifted most sanctions on Saturday under a deal with world powers where Tehran agreed to curbs on its nuclear program. Washington has noted that 'U.S. statutory sanctions focused on Iran's support for terrorism, human rights abuses, and missile activities will remain in effect', and these will be enforced against certain members and actions of the Guards. But the Guards have long proved successful in defending their economic interests, including in recent years when the sanctions were at their tightest, effectively excluding Iran from the global financial and trading system. 'Even under very difficult economic circumstances, the funds for the IRGC's activities, whether domestic or overseas, remained intact,' said a former official close to the government of pragmatist President Hassan Rouhani... Iran - the dominant Shi'ite Muslim power which is in rivalry with Saudi Arabia and the United States' other Sunni Arab friends - has fought decades of sectarian proxy wars in Syria, Lebanon, Iraq and Yemen. Tehran is not about to end these activities just because its relations with the West have thawed with the nuclear deal. On the contrary, it hopes the economy, freed from the sanctions, will create new wealth that can be used for these ends. One senior security official signaled financing would grow for the Guards and its overseas arm, the Qods force. 'The IRGC and the Qods Force are Iran's key assets in the region, where we are determined to back our allies and those oppressed nations,' said the official. 'All parts of the establishment have reached a consensus on this. If you are a rich person, you can help your friends more, right?' ... Another senior official confirmed that a flourishing economy, which is currently 60 percent dependent on oil exports, would mean extra cash for the Guards' foreign activities. 'It is very clear that our leaders will not hesitate to allocate more funds to the IRGC when needed. More money means more funds for the IRGC,' said the official... Iran refuses to reveal their market share. But an Economy Ministry official said the Guards have been involved in a wide range of industries, including energy, tourism, auto production, telecommunications and construction. 'There are many IRGC-affiliated companies that are involved in various sectors. The Guards helped different sectors to resist the unfair sanctions imposed on Iran for decades.' ... As the U.S. and EU sanctions on Iran's oil and finance sectors in 2012 started to bite, the Guards responded by setting up complex operations involving the likes of Dubai and Turkey. 'The IRGC started to buy hundreds of small and medium-size companies around the country to use as front companies,' said a trader involved in importing parts for the oil industry. 'These companies partnered with some foreign companies to bypass sanctions. Most of the time cash was delivered to a foreign account in a neighboring country.' ... The IRGC-affiliated front companies have benefited the establishment's support through lower insurance, shipping and banking commission costs when importing equipment and technology. And as foreign firms enter the Iranian market, they will need a local partner - which for large-scale projects will often mean a firm controlled by the Guards." http://t.uani.com/1UbH0ZU

WSJ:
"Days after Iran secured relief from economic sanctions under a contentious nuclear deal, the country's powerful hard-liners are moving to sideline more moderate leaders who stand to gain from a historic opening with the West. Almost two-thirds of the 12,000 candidates who applied to run in next month's parliamentary elections were either disqualified by Iran's Guardian Council or withdrew. The 12-member council vets political candidates and all legislation passed by parliament. It is made up of six judges elected by parliament and six clerics appointed by Supreme Leader Ayatollah Ali Khamenei, who has the final word on virtually all important state matters... So-called reformists-those favoring more political and economic freedom and improved relations with the outside world-say their camp was overwhelmingly targeted, with one saying barely 1% had been approved. The disqualifications are poised to escalate long-standing tensions between conservatives and moderates, showing how a broader battle is taking shape over Iran's future. They could also complicate Western hopes that the nuclear deal will lead to a broader thaw in relations with Iran and spur collaboration on solving regional problems, including wars in Syria and Yemen... The council also has shown signs of trying to check reformist impulses in the Assembly of Experts, a clerical body that chooses the supreme leader. The councilrecently said a grandson of Ayatollah Ruhollah Khomeini, the Islamic Republic's founding figure, might be excluded from running for the 88-member assembly. It said Hassan Khomeini, who identifies with the reformist camp, had missed a required Islamic law examination... There have been other recent signs of hard-line pressure against artists and young people, with a filmmaker and two poets sentenced to long prison terms and hundreds of lashes in October on antigovernment activism and morality charges." http://t.uani.com/1S4mUS7

Reuters: "Three U.S. citizens who disappeared last week in Baghdad were kidnapped and are being held by an Iranian-backed Shi'ite militia, two Iraqi intelligence and two U.S. government sources said on Tuesday. Unknown gunmen seized the three on Friday from a private residence in the southeastern Dora district of Baghdad, Iraqi officials say. They are the first Americans to be abducted in Iraq since the withdrawal of U.S. troops in 2011. The U.S. sources said Washington had no reason to believe Tehran was involved in the kidnapping and did not believe the trio were being held in Iran, which borders Iraq. 'They were abducted because they are Americans, not for personal or financial reasons,' one of the Iraqi sources in Baghdad said. The three men are employed by a small company that is doing work for General Dynamics Corp, under a larger contract with the U.S. Army, according to a source familiar with the matter. The Iraqi government has struggled to rein in the Shi'ite militias, many of which fought the U.S. military following the 2003 invasion and have previously been accused of killing and abducting American nationals... Asked about the kidnapping at the daily U.S. State Department news briefing on Tuesday, spokesman John Kirby said: 'The picture is becoming a little bit more clear in terms of what might have happened.' He provided no details. Kirby declined to say whether Secretary of State John Kerry had contacted Iranian Foreign Minister Javad Zarif about the kidnapping." http://t.uani.com/1KqYw6P

Nuclear Program & Agreement

Business Insider: "Former US defense secretary Robert Gates isn't optimistic that the landmark July 2015 nuclear deal with Iran will lead the country to halt any of its disruptive policies in the Middle East or its support for terrorist groups. In an interview with Business Insider, Gates, who spent nearly 27 years in the CIA and was the only cabinet secretary to have served under Barack Obama and George W. Bush, said that he didn't believe the nuclear deal would have a moderating impact on Iranian behavior or lead Tehran to become a more responsible international actor. 'The notion that betting that this regime is going to temper its behavior in the region because of this nuclear deal I think is mistaken,' Gates told Business Insider. 'I think that will not happen.' ... Overall, Gates doesn't think that Iran's long-term behavior will change that much after the nuclear deal, or that the deal can overcome the now 36-year-old regime's religiously motivated ideology or temper its regional ambitions. 'This is a country that has a long history under the revolutionary government,' says Gates. He recalled his involvement in the 'very first official US meeting' with members of the Islamic Republic of Iran's government, when Zbigniew Brzezinski, then the US national-security adviser, met with high-ranking regime officials in Algiers, Algeria, just three days before the 1979 US embassy seizure. 'As I like to tell people, that began my now more than three-decades-long quest for the elusive Iranian moderate,' says Gates... Gates also doesn't expect Iran's geopolitical objectives to change as the result of the nuclear deal. He told Business Insider that he believes Iran will still harbor ambitions of building a nuclear weapon even as the deal is implemented. 'My view is that the belief that Iran over time is going to evolve into a regular nation state and abandon its theological revolutionary underpinnings, its aspirations in the region, or even its aspirations for nuclear weapons is unrealistic,' Gates said... Overall, Gates thinks that the nuclear deal only creates a greater urgency for the US counterbalancing Iranian moves in the Middle East. 'It seems to me that agreement needs to be paralleled by a very aggressive American strategy of working with our allies, both Arab and Israeli in the region to counter Iranian meddling, support of terrorism, and other activities,' Gates said. He continued: 'We need the same kind of strong-minded strategy in dealing with Iran in its behavior in the region that other countries are looking for, and there's no reason for that to be contradictory to the' nuclear agreement." http://t.uani.com/1RSUpIO

AP: "New U.S. sanctions over Iran's ballistic missile testing are an example of an American 'addiction to coercion' despite improved relations and a historic nuclear deal, Iran's foreign minister said in an interview Wednesday. Foreign Minister Mohammad Javad Zarif, in Davos for the World Economic Forum, said the ballistic program was part of Iran's right to legitimate self-defense, and said the prospect of restoring U.S.-Iranian diplomatic relations remains 'far away' despite the nuclear deal. His comments to The Associated Press came after the U.S. on Sunday imposed sanctions against 11 individuals and entities involved in Iran's ballistic missile program as a result of Tehran's firing of a medium-range ballistic missile, one day after the Obama administration lifted economic penalties against Iran over its nuclear program. 'We believe these sanctions are uncalled for. We believe the sanctions are illegal. They violate basic principles. The Iranian missile program is a legitimate defense program,' Zarif said. 'It shows that the United States has an addiction which has been very difficult for it to overcome,' Zarif said. Washington, he said, suffers from an 'addiction to pressure, addiction to coercion, addiction to sanctions.' The United States insists Iran's ballistic missile tests violated U.N. sanctions - sanctions that will remain in effect for at least eight more years under the terms of the nuclear accord. The U.S. administration has long argued that the nuclear deal does not cover other elements of Iran's allegedly bad behavior and that Washington will continue to press Iran to change its ways and punish it when necessary." http://t.uani.com/1P5AC6g

NYT: "President Obama and Secretary of State John Kerry have a simple explanation for their surprising success in getting Iran to dismantle much of its nuclear infrastructure, ship out 98 percent of its nuclear fuel and release five American prisoners: Patient diplomacy, backed by escalating economic sanctions, accomplished more than military action ever could have. When the final history of this remarkable encounter between Washington and Tehran is written, the story is likely to be far more complex. Yes, diplomacy and economic pressure were critical, but even several of Mr. Obama's top aides doubted as recently as a year ago that, in the end, Iran's mullahs and generals would actually dismantle a program in which they had invested both national pride and billions of dollars. Those aides had good reason for skepticism: While all comparisons between North Korea and Iran are fraught, if economic pressure alone could do the trick, Pyongyang would have given up its nuclear program two decades ago. But Mr. Obama's strategy had a major coercive element as well. This included covert actions that repeatedly, if briefly, set back the nuclear program and convinced Iranian elites that its secrecy had been compromised... What Mr. Obama does not say - because he cannot without describing classified programs - is that many of his own aides believe that an American covert sabotage program that began in the Clinton administration and steadily escalated over the next 15 years also played a critical role in persuading the Iranians to cash in the program." http://t.uani.com/1UbBMNV

Reuters: "The lifting of sanctions on Iran as a result of its nuclear deal with world powers will be a harmful development if it uses the extra money to fund 'nefarious activities', Saudi Arabia's Foreign Minister Adel al-Jubeir told Reuters on Tuesday. Asked in an exclusive interview if Saudi Arabia had discussed seeking a nuclear bomb in the event Iran managed to obtain one despite its atomic deal, he said Saudi Arabia would do 'whatever we need to do in order to protect our people'... Jubeir's comments were the first to directly address the lifting of sanctions on Iran, Riyadh's bitterest regional rival, although Saudi Arabia has previously welcomed Iran's nuclear deal so long as it included a tough inspections regime. But in private, officials have voiced concern that the deal would allow Iran greater scope to back militias and other allies across the region thanks to the extra funds it can access after sanctions are lifted and because of the reduced diplomatic pressure. 'It depends on where these funds go. If they go to support the nefarious activities of the Iranian regime, this will be a negative and it will generate a pushback. If they go towards improving the living standards of the Iranian people then it will be something that would be welcome,' Jubeir said." http://t.uani.com/1ZBi5Av

U.S.-Iran Prisoner Swap

Fars (Iran): "Commander of Iran's Basij (volunteer) Force Brigadier General Mohammad Reza Naqdi said the US agreed to release $1.7 of Iran's frozen funds in a bid to buy freedom of its spies held by Tehran.
The US agreed to repay Iran a $400 million debt and $1.3 billion in interest dating to the Islamic revolution. 'The annulment of sanctions against Iran's Bank Sepah and reclaiming of $1.7mln of Iran's frozen assets after 36 years showed that the US doesn't understand anything but the language of force,' Naqdi said, addressing Basij forces in Tehran on Wednesday. 'This money was returned for the freedom of the US spy and it was not related to the (nuclear) negotiations,' he added." http://t.uani.com/1PF8cME

Politico: "As part of a prisoner swap with Iran, President Barack Obama granted clemency to seven men of Iranian origin either facing criminal charges in U.S. courts or already serving time in U.S. prison, an American official confirmed Saturday... Obama appeared to have granted rare, pre-trial pardons to three men awaiting trial in Houston for violating U.S. export laws by shipping high-tech equipment to Iran: Bahram Mechanic and Tooraj Faridi of Houston and Khosrow Afghahi of Los Angeles. On Saturday, prosecutors moved to drop charges against Matin Sadeghi, a fugitive in the same case who was being sought in a wanted poster available on the FBI website. A court filing said the move was undertaken 'based on significant foreign policy interests of the United States.' Until Saturday, Obama had never granted a pre-trial pardon to anyone, nor had his predecessor, President George W. Bush... 'It's really unusual,' said former Justice Department pardon attorney Margaret Love... One reason to grant a pardon, rather than simply dismiss charges, is that the pardon provides an assurance that the charges will never be refiled. It's possible the Iranians insisted on such certainty. 'That's the reason you would do a full pardon,' Love said. 'If the charges are dropped, you can be recharged.' ... A U.S. official confirmed charges were dropped in cases involving 14 individuals. The moves will allow those individuals to travel more freely outside Iran. 'The United States also removed any Interpol red notices and dismissed any charges against 14 Iranians for whom it was assessed that extradition requests were unlikely to be successful,' the official said." http://t.uani.com/1Wu2rXF

Reuters: "The family of former FBI agent Robert Levinson, who went missing in Iran eight years ago, said on Tuesday it was 'desperate for answers' on his whereabouts and expressed frustration at the information it had received from the Obama administration. Levinson, who disappeared while visiting Iran's Kish Island in 2007, was not among the five American prisoners released by the Iranian government on Saturday as part of a prisoner swap with Washington. His family said in a statement over the weekend that they were 'devastated,' adding: 'We are happy for the other families. But once again, Bob Levinson has been left behind.' In a speech on Sunday celebrating the release of the Americans, Obama said the U.S. government would 'not rest' until Levinson was found. U.S. Secretary of State John Kerry said in a Twitter post that Iran had agreed to deeper coordination to locate Levinson. Levinson's son, Dan, told CNN on Tuesday the family 'can only hope that they (U.S. officials) are really doing everything they can.' He said that for years 'President Obama has promised that, Secretary Kerry has promised that, but it hasn't ... given us results.' U.S. officials believe that Levinson, who suffered from diabetes, died in captivity after meeting with an American-born Islamic militant on Kish Island. Iranian officials have repeatedly denied knowledge of his disappearance or whereabouts. Robert Levinson's wife, Christine, told CNN on Tuesday that she had tried since November to arrange face-to-face meetings with high-level administration officials, including Obama, Kerry and national security advisor Susan Rice. 'We're desperate for answers, and we're really going to push hard, and we're not going to go away,' Christine Levinson said. She said the family had received one phone call from a member of the Obama administration after the American prisoners' release apologizing that they had not been warned ahead of time. In a separate interview on Fox News, Christine Levinson said, 'we need the United States government to work harder to bring him home.'" http://t.uani.com/20eDfXa

AP: "U.S. officials believe Robert Levinson may no longer be in Iran, a White House spokesman said Tuesday, vowing that the U.S. would keep up the search for the former FBI agent who disappeared from an Iranian resort nearly nine years ago. White House spokesman Josh Earnest said the U.S. has received assurance from the Iranian government it would search for Levinson. The commitment came amid broader negotiations over the return of several other Americans detained in Iran. 'We're going to hold the Iranians to that commitment,' Earnest told reporters at the White House. Levinson's relatives said Monday they're happy for the families of prisoners released from Iranian custody but wished government officials had warned them he would not be among them. 'We had to learn it from the TV ourselves, and that's very disappointing and heartbreaking,' said Robert Levinson's wife, Christine... His son, Dan Levinson, told The Associated Press that it felt like 'once again, he's been left behind' and that the US can't give up on bringing his father back." http://t.uani.com/1RzUctR

U.S.-Iran Relations

Reuters: "Iran's Supreme Leader Ayatollah Ali Khamenei on Wednesday thanked the Revolutionary Guards for briefly detaining U.S. sailors last week... 'I didn't have the opportunity to thank the young soldiers in the Revolutionary Guards. What they did in the Persian Gulf was right,' Khamenei also said. Ten U.S. sailors, who were aboard two patrol craft, were detained for 15 hours by Iran's Islamic Revolutionary Guard Corps (IRGC) on Jan. 12 when they inadvertently entered Iranian territorial waters. 'The politician should do the same and stop the enemies with full power if they cross the line anywhere,' Khamenei said." http://t.uani.com/1PhmIjr

Sanctions Relief

Al-Monitor: "Amid a flurry of diplomatic activity with Iran over the weekend that saw US prisoners freed, the nuclear deal go into effect and sanctions lifted, the United States permitted the removal of two Iranian banks from a United Nations sanctions list, US officials said Jan. 19. The delisting of the Iranian banks - Bank Sepah and Bank Sepah International - occurred at the UN Security Council on Jan. 17 at the request of Venezuela. The United States decided not to block the request, US officials said. 'We saw this as something we could do as a confidence-building measure and a goodwill gesture,' a US administration official, speaking on condition of anonymity, told Al-Monitor Jan. 19. In the course of two separate tracks of negotiations with the Iranians - on the nuclear issue and the humanitarian release of detained citizens - Iran had sought the delisting of the banks from UN Security Council sanctions. But the issue was not resolved by the time negotiations for the final Iran nuclear deal reached agreement in July 2014. The United States had already determined that it would remove secondary sanctions on the banks, the US official said. 'We already made the decision to delist this bank as part of US secondary sanctions as part of the nuclear deal,' the official said. The United States would 'agree not to oppose the delisting at the UN, which Iran very much wanted.'" http://t.uani.com/1Phm9pO

AFP: "Iran will receive $32 billion of unfrozen assets after sanctions were lifted under its nuclear deal, the central bank said Tuesday, in a boost to an economy sapped by years of isolation. The unblocking of funds, which had been held in foreign banks, comes after the UN atomic watchdog confirmed at the weekend that Iran had complied with measures in the July atomic accord. The assets will be kept 'in centralised and safe accounts' abroad, central bank chief Valiollah Seif was quoted by state television as saying, adding that the money could be used to pay for imports. Seif said that $28 billion (25.8 billion euros) would go to the central bank and $4 billion 'will be transferred to the state treasury as the share of the government'. Iran hopes that steps to ease its isolation, including the re-admission of its banks to the SWIFT system of international transactions, will inject new vigour into the economy. But opening up to the world cannot completely fix the economy, President Hassan Rouhani said Tuesday in a televised speech, warning that the 'difficult road has just begun'. 'Today is just the start for an innocent human who was kept chained unjustly by the hands and feet for 12 years,' he said. 'Sanctions are gone but there is a long way between sanctions and development,' he said, speaking to an economics conference in Tehran. 'Today, our main problem is unemployment and recession, the lack of a booming economy and many structural and economic deficiencies,' he added." http://t.uani.com/1RzSQ28

WSJ: "The removal of sanctions on Iran could unleash a wave of aircraft deals as the Persian Gulf country seeks to renew one of the world's oldest plane fleets... 'Decades of sanctions have affected a carrier's ability to source spare parts and new aircraft, resulting in an average fleet age of 22 years for Iranian airlines, twice the international average,' airline consultancy OAG Aviation Worldwide Ltd. said in a new report. Iran's transport minister, Abbas Akhoundi, on the eve of the lifting of sanctions, told a semiofficial Iranian media outlet that the country had struck a deal with Airbus Group SE to acquire 114 planes once the trade restrictions were removed. The removal of sanctions would unfreeze tens of billions of dollars in Iranian oil revenue. On Saturday, Airbus said it could enter into business with Iranian airlines in compliance with all international laws once sanctions are eased. The company wouldn't address whether it was negotiating with Iran about potentially striking a deal, citing its policy not to discuss talks with existing or potentially new customers. Airbus Chief Executive Tom Enders said Sunday that Iran was 'a huge market' whose carriers could place 400 to 500 plane orders in the coming years. Paulo César de Souza e Silva, who heads the commercial-airplane unit of Brazilian plane maker Embraer SA, said 'there is a huge opportunity for us there,' adding that Iran has many old 100-seat planes that need to be replaced. Embraer plans to engage with potential Iranian buyers, he said, but is still checking that all obstacles to deal-making have been removed... One of the challenges for Iran could become getting planes quickly. Airbus and Boeing Co. are sold out for years on some of their most popular models. That could drive the country's airlines to rent planes from aircraft lessors. 'Iran is certainly a big growth market and a natural home for leasing equipment,' said Aengus Kelly, chief executive of AerCap Holdings NV, one of the world's largest plane-leasing companies... The initial demand beneficiaries are expected to be foreign airlines. Air France-KLM SA last month announced plans to resume flights to and from Tehran starting in April. Lufthansa AG's Eurowings budget airline plans to commence a Tehran service and sister carrier Austrian Airlines is also boosting services. Emirates Airline, the world's largest international carrier by traffic, last year boosted Iran service by adding flights to Mashhad. British Airways is considering the addition of a Tehran service, said Willie Walsh, chief executive of BA parent International Consolidated Airlines Group SA. 'I am hopeful it will form part of the BA future in the very near future,' he said at the Dublin airline event, calling the lifting of sanctions 'a great opportunity.'" http://t.uani.com/1OwqGRZ

AP: "With many barriers to dealing with Iran suddenly lifted as part of a deal to curb its nuclear activities, some European companies are ready to seize business opportunities in a tempting market of 78.5 million people. At first glance, the allure is obvious - the second-largest economy in the Middle East-North Africa region after Saudi Arabia; the second most populous country after Egypt; and with lots of infrastructure and vehicles way overdue for an upgrade after years of sanctions... But those that take the plunge face serious risks from the remaining sanctions relating to other issues, from geopolitical uncertainty and from red tape and corruption... Although Iran is a big market, it has big problems. It ranked 119th out of 189 economies in the World Bank's ease-of-doing-business index, which measures obstacles posed by bureaucracy, slow public services and taxation. It finished 136th of 175 countries in the corruption perceptions index compiled by Transparency International. Moreover, Iran is deeply involved in the violence convulsing the Middle East through its local supporters in Iraq and Syria, and tensions have risen sharply recently with regional rival Saudi Arabia. Disruption from conflict and politics is always a possibility. Industrial companies must be wary of yet more sanctions that bar the import of dual-use goods that could be used to make nuclear weapons. Germany's VDMA industrial machinery association warns that firms themselves will need to understand the complex rules, and not rely on government help." http://t.uani.com/1P5zsIc

Reuters: "Italy's RINA expects to start verifying safety and environmental standards for Iranian ships including oil tankers in a matter of weeks, the classification society said, stealing a lead on rivals as business interest in Iran heats up. Without verification from such bodies, ships are unable to call at international ports or secure insurance. RINA said it had signed an agreement this week with Iran's Asia Classification Society, enabling the Genoa-headquartered group to provide services to Iranian shipping firms. Under Iranian regulations, international players have to team up with local counterparts when providing cover for Iranian flagged vessels. 'We hope that in a maximum of one month, we should have the first vessels coming into our class,' Paolo Moretti, general manager with RINA's marine division, told Reuters on Tuesday. Moretti said RINA was already looking to provide classification cover for Iran's top tanker operator NITC as well as its leading container and dry cargo shipping group IRISL... Classification societies cut ties with Iran after tough sanctions were imposed in 2012. Britain's Lloyd's Register said on Monday it was working on resuming services, while Norwegian-headquartered DNV GL said it was considering 're-entering the Iranian market'. France's Bureau Veritas said separately it planned to give Iranian ship owners 'full support to assist their re-entry into global service', without providing further details. Moretti said RINA did not have previous operations with Iran unlike other classification societies, adding that it was building relationships with Iranian shipping companies 'pretty quickly'. 'RINA was not one of the companies who left the country,' he said. 'We are a new beginner.' He said RINA would have its Iranian operation up and running by the end of the month and aimed to also offer other services such as testing oil pipes. 'RINA Iran ... will focus not only on the marine side, but on oil and gas, energy, power generation, infrastructure and business assurance,' he said." http://t.uani.com/1OwrTIO

Reuters: "A multitude of business regulations -- 182,000 by one minister's count -- stands in the way of a rapid flow of foreign investment into Iran after the lifting of nuclear sanctions ended its long isolation from global commerce. Other factors that could stall investment include residual sanctions, a shortage of project finance, and political risks ranging from protectionism to the potential collapse of the nuclear deal, lawyers and consultants say. Some foreign firms have already signed letters of intent with Iran since the international sanctions imposed over its nuclear programme were lifted on Saturday and many more want to trade with its market of about 80 million people. But major foreign investment will take at least six months to arrive, experts say, as companies navigate the web of bureaucracy, opaque ownership structures and powerful Iranian lobbies that bristle at foreign competition. 'Iran has been under sanctions so a lot of international business practices are not as common there as they are in other emerging markets,' said Farhad Alavi, managing partner at Washington-based Akrivis Law Group... Many foreign businesses, however, are hesitant to take on long-term commitments in a market that is still fraught with political risk. A diplomatic incident between Iran and the United States could still undermine the nuclear deal, causing sanctions to 'snap back' and exposing investors. Elections due to be held soon in both countries could erode the political will protecting the agreement. 'Particularly when we have a new (president in the) White House in 2017, there is a concern in the back of (investors') minds: how far will a new U.S. president want to safeguard this deal?' said Ellie Geranmayeh, Middle East and North Africa policy fellow at the European Council on Foreign Relations... 'As with other markets affected by international sanctions and having complex corporate structures, there is a requirement to do enhanced due diligence to understand whether the ultimate owners of the business are sanctioned,' Control Risks' Parvulescu said... Iran's shadow economy has been a breeding ground for corruption and nepotism, and foreign companies will be wary of approaches by local 'fixers' who would pay bribes on their behalf. Under that scenario, the investor would be at fault under extra-territorial legislation such as the UK Bribery Act... Banks will be especially wary of not violating the remaining sanctions because they faced hefty fines in the past, lawyers said. By extension, investors across all sectors might struggle to access the financing options needed to make significant investments. 'There can be no meaningful improvement in investment into the Iranian economy until some robust banks agree to raise their head above the parapet and finance it,' said Nigel Kushner, chief executive of W Legal and a director of the British Iranian Chamber of Commerce." http://t.uani.com/1V8xRBo

Reuters: "Gulf banks including Dubai's largest lender Emirates NBD are already meeting prospective clients and taking legal advice about entering Iran's financial system now that many international sanctions have been lifted. European banks are more cautious with some, including Deutsche Bank, remembering past fines from regulators for breaking sanctions, though Commerzbank said it was reviewing its policy of not doing business in Iran... Regional banks are likely to lead the way on business deals. Banks from the UAE, Oman, Qatar and Kuwait have spent months drawing up plans for entering the Iranian market, two sources familiar with the matter said. 'Regional institutions will test the water and other foreign banks will watch to see what happens,' said Stuart Jones Jr., an executive director at EY and a former U.S. Treasury attaché to the Middle East. 'There are certain regional institutions taking legal advice to manage very real risks associated with doing business with Iran.' Emirates NBD (ENBD), Dubai's largest lender, has in recent months met with the Iranian business community in Dubai and discussed potential banking opportunities involving Iran once sanctions lifted, the two sources said. ENBD said its lawyers were reviewing the sanctions changes but would not be making any changes to its policies yet. 'Any re-engagement with Iran will take place in several stages and will require updates to policies, procedures, systems and controls as well as ongoing communication with regulators and correspondent banks,' the bank said in a statement, adding it did not currently have any material assets or liabilities in Iran. ENBD and Qatar National Bank (QNB), the Middle East's largest bank, have representative offices in Tehran, but ENBD's has not been operational since 2008... State Bank of India also has an Iran representative office." http://t.uani.com/1NkiHmP

Reuters: "Turkish exports could rise between 8 and 10 percent with the end of sanctions on neighbouring Iran following its nuclear deal with world powers, the head of the Turkish Exporters' Assembly (TIM) said on Wednesday. Key sectors for Turkish companies in Iran are automotive, clothing, textiles, machinery and chemicals, TIM chairman Mehmet Buyukeksi said at a news conference... Buyukeksi said Turkish and Iranian companies, especially those in the automotive business, could now form joint ventures to enter Central Asian markets... Among Turkish companies interested in Iran is mobile operator Turkcell, which said this week it is looking for acquisition opportunities to expand regionally and that Iran could be a target market." http://t.uani.com/1KqXMyw

Reuters: "Reliance Industries expects to maintain high margins for its main oil refining business after strong demand pushed it to a seven-year high and helped it post a better-than-expected 39 percent profit rise in the December quarter. The oil-to-telecoms conglomerate is also evaluating buying crude from Iran, its Chief Financial Officer V. Srikanth said, as the Islamic Republic re-opens for business after the lifting of international sanctions. Reliance hopes that negotiations at this stage could lead to favourable terms for crude purchase from Iran, he said, but gave no details. Reliance and other Indian refiners had stopped imports from Iran due to sanctions." http://t.uani.com/1S4ra47

Terrorism

Free Beacon: "A new Iranian-backed terror group is making inroads in the Gaza Strip and West Bank, where it operates underground with the potential capacity to deliver devastating attacks to Israel, according to regional experts who have been investigating the organization's rise. The group, which goes by the name Harakat al-Sabireen, was established around May 2014 but has begun in recent months to boost its public profile on social media and brag about its plots to wage jihad against Israel, according to information gathered by regional analysts and provided to the Washington Free Beacon. Al-Sabireen is believed to receive $10 million a year from Iran via funds that are smuggled through a large network of tunnels built by terrorists to facilitate illicit travel beneath the Gaza Strip, according to estimates disseminated in the Arab language press." http://t.uani.com/1QmQ52W

Iraq Crisis

WSJ: "Sunni lawmakers walked out of Iraq's parliament on Tuesday to protest what they described as unchecked sectarian attacks in Diyala province after Islamic State was expelled from the area a year ago. The parliament members, led by Speaker Salim al-Jubouri, said they are angry over the government's inability to restrain mostly Shiite, Iran-backed militias who they accuse of burning at least seven Sunni mosques and killing at least 23 people in the city of Muqdadiya a week ago... Despite Mr. Abadi's defense, it is clear that Baghdad holds less sway in Diyala than the Iran-backed militias, said Kirk Sowell, a Jordan-based political risk analyst who publishes Inside Iraqi Politics. The region's most powerful militia is the Badr Corps, an Iran-backed group, one of whose leaders is the minister of the interior. Hadi al-Ameri, Badr Corps' leader, was made the head of the province's security in 2014 and a Badr leader won Diyala's governorship last May, sparking a walkout of Sunni representatives. 'Iran is ruling Diyala as a kind of Iranian satrap through Ameri,' said Mr. Sowell. 'He's basically the military governor.'" http://t.uani.com/1OwqXo3

Human Rights

ICHRI: "Imprisoned journalist Saeed Razavi Faghih has been threatened with retribution for writing letters complaining about abuse inside Rajaee Shahr Prison and could be facing new trumped-up charges. 'About a month ago one of the prison authorities threatened my brother and some other prisoners that he would teach them a good lesson for writing letters of protest from inside prison. The fact is that they are being warned. This is the most frustrating situation for a prisoner, especially one who's sick,' said Massoud Razavai Faghih. Speaking to the International Campaign for Human Rights in Iran, Massoud added that the stressful atmosphere inside prison had exacerbated his brother's poor health, which has deteriorated since his heart bypass surgery in January 2015. In November 2015, Saeed and another inmate were knifed in the face while trying to mediate a dispute with other prisoners. 'The head of Imam Khomeini Hospital and the heart specialists there have said that prison conditions are like poison for Saeed. If something happens to him [and he dies], I will consider it murder and it's very clear who will be responsible,' Massoud Razavi Faghih added. Saeed Razavai Faghih, a journalist who wrote for several reformist publications and former student activist who is now serving his second consecutive prison sentence, may now have to stay there yet longer." http://t.uani.com/1T4xSI0

Foreign Affairs

AFP: "Saudi Arabia on Tuesday accused Iran of a nearly four-decade record of 'sedition, unrest and chaos,' as the international community tried to calm tensions between the regional rivals... 'Since the Iranian revolution in 1979, Iran has established a record of spreading sedition, unrest and chaos in the region,' the Saudi Press Agency (SPA) quoted an unnamed senior foreign ministry official as saying. 'During the same period, the kingdom has maintained a policy of restraint in spite of having suffered -- as have neighbouring countries -- the consequences of Iran's continued aggressive policies.' The official said Iranian policy was based primarily on the idea of exporting revolution. 'Iran recruits militias in Iraq, Lebanon, Syria, and Yemen', the official said, further accusing Iran of supporting 'terrorism' and carrying out assassinations. SPA published a 58-point 'fact sheet', prepared by the foreign ministry, 'to illustrate Iran's aggressive policies' and to refute 'the persistent lies' from Tehran, including an article by Iran's Foreign Minister Mohammad Javad Zarif in The New York Times last week." http://t.uani.com/1V8B7ga

Opinion & Analysis

Bret Stephens in WSJ: "There is so much to detest about Saudi Arabia. The kingdom forbids women from driving and bars its doors to desperate Syrian refugees. For years its sybaritic leaders purchased their legitimacy by underwriting, and exporting, a bigoted and brutal version of Sunni Islam. Crude oil aside, it's difficult to find much of value produced by the desert kingdom. More recently, the Saudis have increased tensions with Iran by executing, over U.S. objections, a prominent radical Shiite cleric while waging a brutal war against Iran's Shiite proxies in Yemen. So why should the U.S. feel obliged to take sides with the country that Israeli diplomat Dore Gold once called 'Hatred's Kingdom,' especially when the administration is also trying to pursue further opening with Tehran? That's a question that suddenly seems to be on Washington's liberal foreign-policy minds, as if they've just discovered that we don't exactly share Saudi moral values. Some on the right also seem to think that, with the U.S. leading the world in energy production, we no longer have much use for the Saudi alliance. So let's remind ourselves why it would be a bad-make that very bad-idea for the U.S. to abandon the House of Saud, especially when it is under increasing economic strain from falling oil prices and feels acutely threatened by a resurgent Iran. Despite fond White House hopes that the nuclear deal would moderate Iran's behavior, Tehran hard-liners wasted no time this week disqualifying thousands of moderate candidates from running in next month's parliamentary elections, and an Iranian-backed militia appears to be responsible for the recent kidnapping of three Americans in Iraq. No wonder the Saudis are nervous. The nuclear deal guarantees Iran a $100 billion sanctions windfall that will offset its losses from falling oil prices while doing nothing to stop its regional imperialism. Russia's military support for the Assad regime in Syria, along with its sale of advanced weaponry to Tehran, means that Riyadh's regional enemies now enjoy the protection of a major nuclear power. Armed Iranian proxies are active in Lebanon, Syria and Yemen, and dominate much of southern Iraq. Restive Shiite populations in Saudi Arabia's oil-rich Eastern Province and neighboring Bahrain provide further openings for Iranian subversion on the Arabian peninsula. Add to this an American president who is ambivalent about the House of Saud the way Jimmy Carter was about the Shah of Iran, and no wonder Riyadh is acting the way it is. If the administration is now unhappy about the Saudi war in Yemen or its execution of Shiite radicals, it has only itself to blame. All this means that the right U.S. policy toward the Saudis is to hold them close and demonstrate serious support, lest they be tempted to continue freelancing their foreign policy in ways we might not like... Much worse would be a scenario in which the monarchy collapsed. The generally depressing results of the Arab Spring don't inspire much hope of a peaceful democratic transition, and Saudi Arabia's internal sectarian and tribal divisions could lead to an outcome similar to Syria's. Islamic State and other jihadist groups would flourish. Iran would seek to extend its reach in the Arabian peninsula. The kingdom's plentiful stores of advanced Western military equipment would also fall into dangerous hands... Foreign alliances are not like wardrobes: You cannot change them on the tide of fashion. America's 71-year alliance with the kingdom is one we abandon at our peril." http://t.uani.com/1Qe9Ibq

Eli Lake in Bloomberg: "Iran's hardliners have had themselves quite an 'implementation week.' As the U.S. and Iran ironed out the final details of a prisoner exchange and coordinated the implementation of the complex nuclear deal, the Islamic Republic's deep state went on a spree. First they boarded two U.S. Navy boats at gunpoint. Then they tried to detain the mother and wife of one of the hostages they were releasing. Topping that, on Sunday Iran's hardliners voted to disqualify nearly all of President Hassan Rouhani's political allies from running in next month's parliamentary elections. The disqualifications are a blow to President Barack Obama and European leaders who had hoped the accord would benefit Iran's moderate (by comparison) president. Much of U.S. strategy in the nuclear talks has been aimed at strengthening perceived moderates in the hopes of weakening perceived hardliners. This was Obama's argument to Congress when he urged Democrats to oppose sanctions on Iran. Privately, U.S. officials have pointed to February's elections as a chance for Iranians to give the nuclear deal popular legitimacy inside Iran. Now it looks like Iranians won't have this chance. Amin Tarzi, the director of Middle East studies at Marine Corps University, told me Tuesday that 'the vast majority of Rouhani's candidates have been disqualified.' While Rouhani himself has said he will appeal these decisions, Tarzi does not anticipate most of these disqualifications will be overturned. 'Because of Khamenei's health, the factions in Iran that are loyal to the Revolutionary Guard do not want to take the chance that the next supreme leader will not be one of them,' Tarzi told me. 'They don't want Rouhani and his faction to benefit from the fruits of the nuclear deal. The gloves are off now.' This is particularly bad news for Secretary of State John Kerry. Kerry is hoping that Rouhani's foreign minister, Javad Zarif, will have the flexibility to reach a political agreement to stop the fighting in Syria in Obama's final year. But a parliamentary election that empowers radicals will not help. If anything, it will embolden the elements in Iran's state that want to humiliate the U.S. and their domestic rivals who struck the bargain with the Great Satan in the first place. Karim Sadjadpour, a senior associate at the Carnegie Endowment for International Peace and an expert on Iran, told me the U.S. should not be surprised by the disqualifications. 'Implementation of the nuclear deal was expedited in order to try and help moderate factions in the Majles and Assembly of Experts elections,' Sadjapour said. 'What people repeatedly fail to understand is Iranian elections are heavily rigged in advance. The Venn diagram of politicians who are genuinely popular and permitted by the Guardian Council to run is extremely small.' ... Nonetheless Sadjapour said it is too soon to say whether the nuclear deal would help to open up Iranian society in the long run. 'A decade from now it's plausible that the nuclear deal will have played an important role in facilitating political change in Iran,' Sadjapour said. 'But the forces of darkness in Iran are deeply entrenched and aren't going to step aside without a fight.' Those forces have been on a roll since Iran agreed in July to the nuclear accord. Since then, Iran has tested two ballistic missiles, detained two Iranian-Americans, allowed mobs to sack the Saudi Embassy, boarded two U.S. Navy boats in distress and now disqualified Rouhani's allies from running for the parliament. This dynamic played out on Twitter on Tuesday. The account of Iran's supreme leader, Ayatollah Ali Khamenei, tweeted the following message to Rouhani: 'Removal of economic sanctions alone is not enough for boosting economy and improving lives of people.' In an open letter to Rouhani sent over the weekend, Khamenei warned of Western efforts to infiltrate Iranian society through democratic 'color revolutions.' This message stands in contrast to Obama's more hopeful words about the nuclear deal. On Sunday the president said: 'Following the nuclear deal, you -- especially young Iranians -- have the opportunity to begin building new ties with the world. We have a rare chance to pursue a new path -- a different, better future that delivers progress for both our peoples and the wider world.' It's a very nice thought. But as this weekend's electoral disqualifications show, Iran's clerics still won't give Iran's people a chance to choose this 'different, better future.'" http://t.uani.com/1OFPi8N
       

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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