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TOP STORIES
Lawmakers will crack down on business with Iran under
the Trump administration, warning interested companies that they
could wind up funding illicit Iranian activities and slapping
sanctions on entities linked to Iran's military, according to a
leading House Republican. That pledge comes amid efforts by the Obama
administration to persuade companies to engage with Iran, including
allowing foreign firms to do business with companies that are
"controlled in whole or in part" or "minority
owned" by sanctioned Iranian entities, such as Iran's
Revolutionary Guard Corps (IRGC). Florida congresswoman Ileana
Ros-Lehtinen said Wednesday that Congress will heavily scrutinize and
warn firms looking to do business in Iran. "You can be sure that
in the next Congress we will place an increasingly high importance on
scrutinizing those that seek to do business with Iran," Ros-Lehtinen
said during an event hosted by the advocacy group United Against
Nuclear Iran (UANI) and the Foreign Policy Initiative (FPI).
"Our message is not going to be, 'Iran is open for business.'
It's going to be, 'be careful if you do business with Iran.'"
Ros-Lehtinen said that Congress is also looking to squeeze the IRGC.
Iran hawks on and off Capitol Hill laid out their
clearest wish list to date for the next four years during a Dec. 7
briefing. Lawmakers and outside experts agreed that President-elect
Donald Trump would be unwise to rip up the nuclear deal on day one.
Barring that, however, the bipartisan group of panelists encouraged
him to challenge even minor technical violations of the deal, slap
sanctions on thousands more Iranian companies and send Iranian
vessels that challenge the US Navy to the bottom of the Persian Gulf.
"It's clear we're about to enter a new phase of Iranian
sanctions," said Rep. Ileana Ros-Lehtinen, R-Fla., the
chairwoman of the House Foreign Affairs panel on the Middle East.
"We will see a flurry of Iran-related activity early in the new
year. I think we have an opportunity to undo a lot of the problematic
concessions that we have seen over the past few years. And. I. Can't.
Wait." Ros-Lehtinen was the keynote speaker at the briefing
organized by United Against Nuclear Iran (UANI), which lobbied
against the deal in 2015, and the hawkish Foreign Policy Institute.
She laid out a three-pronged approach that consists of
"enforcing current sanctions, expanding the other non-nuclear
related sanctions and perhaps even rolling back or tightening
provisions of the JCPOA [Joint Comprehensive Plan of Action]."
Royal Dutch Shell PLC on Wednesday said it had signed
an agreement with Iran's state oil company to explore future
projects, signaling that giant energy companies are unlikely to be
deterred by President-elect Donald Trump's pledge to undo the Iran
nuclear deal. Shell is the largest company to wade back into Iran
since the U.S. and other world powers lifted sanctions in January in
exchange for Tehran putting strict limits on its nuclear program. The
British-Dutch firm follows France's Total SA, which last month signed
a $4.8 billion deal to develop a large natural-gas field in Iran and
now is negotiating an oil deal... The scope of Shell's deal remains
unclear. A Shell spokesman said the firm and the National Iranian Oil
Co. signed a memorandum of understanding to "further explore
areas of potential cooperation." The agreement is nonbinding and
doesn't come with an investment commitment, unlike Total's deal.
Earlier on Wednesday, the Iranian oil ministry said it and Shell were
examining agreements to develop two large oil fields that could give
a big boost to the country's output. Shell didn't confirm those
talks. Shell has said it would proceed with caution as it mulls
re-entering Iran... Iran's oil ministry said Shell was interested in
developing the South Azadegan and Yadavaran oil fields and the Kish
gas field.
IRAN NUCLEAR DEAL
Iranian Foreign Minister Mohammad Javad Zarif said on
Thursday it was in the interest of the United States to remain
committed to a multilateral nuclear treaty... Zarif, in Japan as part
of an Asian tour that included India and China, told a seminar in
Tokyo that while the agreement was multilateral and endorsed by the
U.N. Security Council, this did not mean it might not be violated by
the United States, which he said had a "less than
respectable" history in respecting international laws. "I'm
not basing our hope on an illusion that people will respect international
law out of their goodwill or good natures," he said. "I
believe it is in the interests of the United States as well as the
rest of the international community to respect this multilateral
agreement." Sanctions against Iran had not worked in the past
and would accomplish nothing if strengthened, especially since the
other treaty partners would be unlikely to buy into them, he said.
"Sanctions will harm us, but won't break us," he said.
REGIONAL DESTABILIZATION
British Prime Minister Theresa May and leaders from
six Gulf Arab countries agreed Wednesday to counter Iran's
"destabilizing activities," a pledge meant to calm nerves
following the nuclear deal with world powers. The decision came at
the end of a two-day summit in Bahrain of the Gulf Cooperation
Council, a regional bloc of Western-allied countries including the
tiny island nation, Kuwait, Oman, Qatar, Saudi Arabia and the United
Arab Emirates. Those Gulf nations, especially the Sunni-ruled kingdom
of Saudi Arabia, have watched with concern as Iran backed Shiite
rebels in Yemen and supported embattled Syrian President Bashar
Assad. A Saudi-led war in Yemen against the rebels continues, while a
communique issued at the end of the meeting called for an "enduring
political settlement based on transition away from the Assad
regime" in Syria. "There is no military solution to the
region's armed civil conflicts," the communique read. Concern
over Iran remains for the GCC, whose member nations have bulked up
their own militaries as a deterrent. For her part, May said that all
parties must "work together to push back against Iran's
aggressive regional actions, whether in Lebanon, Iraq, Yemen, Syria
or in the Gulf itself."
BUSINESS RISK
Financing is the main hurdle facing companies looking
at doing business in Iran, Bilfinger Chief Executive Thomas Blades
said in German newspaper Handelsblatt and he also said it would take
time for the country to regain investors' trust. "The biggest
challenge that I currently see in Iran is the financing of projects,"
Blades said in an interview published on Thursday. Many Western banks
have been reluctant to provide financing for big projects in Iran,
fearing a regulatory backlash if there is a new setback in relations
with the country. Blades said Bilfinger's response to Iran's
"bring your own money" attitude was to focus on trying to
win projects that run for only a few months rather than several
years. The engineering services group won a contract worth several
million euros in July to supply a process control system for the
upgrade of one of Iran's largest refineries.
The European Union has banned Iran's Aseman Airlines
from operating within the EU due to safety concerns, in a blow to
Tehran which is buying new jets to renew the country's ageing fleet
following the lifting of long-term sanctions. Aseman Airlines was
added to the EU's air safety list of airlines which do not meet
international safety standards, the European Commission said in a
statement on Thursday. The privately owned regional carrier is Iran's
third largest by active fleet size, according to the CAPA
consultancy. It was previously owned by Iran's civil service pension
foundation. Aseman Airlines was reported in August to be buying 20
regional jets from Japan's Mitsubishi Heavy Industries for use on
domestic routes.
SYRIA CONFLICT
An Iranian-made unmanned drone was used in an attack
on a Turkish military camp in northern Syria on Nov. 24, killing four
soldiers, a senior Turkish official has told the Hürriyet Daily News.
Turkey identified the drone as Iranian-made, but it was still not
identified whether Hezbollah, the Quds Force or another Shiite
militia group in Syria had used it, said the official, who spoke on
anonymity. FM Mevlut Cavusoglu, accompanied by National Intelligence
Agency (MİT) Chief Hakan Fidan, paid a surprise visit to Tehran early
on Nov. 26, where the Turkish delegation discussed "issues
regarding ISIL and counter-terrorism" with Iran and also raised
the issue that their findings on the attack on Turkish soldiers in
Syria indicated that an Iranian-made unmanned drone was used, the
official also said.
OPINION & ANALYSIS
The signing of the Joint Comprehensive Plan of Action
(JCPOA) was the most profound change in US relations with the Islamic
Republic of Iran (IRI) since 1979. During the next decade, Washington
must prepare for potential crises with Tehran and develop effective
strategies to deter and respond to a modernizing Iranian military as
United Nations conven¬tional weapons sanctions expire. Understanding
why and how the Islamic Republic uses force is essential for crafting
effective policies and plans for this issue. This report is based on
the findings drawn from historical case studies of Iranian conflicts
over the past 35 years and from an expert-level crisis simulation of
a potential confrontation between the United States and Iran over
significant violations of the recent nuclear agreement.
On October 28, 2016, the Department of Justice
announced the arrest and indictment of two California men, Zavik
Zargarian, 52, and Vache Nayirian, 57, accused of trafficking and
attempting to traffic to Iran more than $3 million worth of U.S. jet
fighter aircraft parts and other equipment with military uses. The
alleged violations occurred between 2009 and 2010 and were in
violation of the International Emergency Economic Powers Act (IEEPA)
and the Iranian Transactions and Sanctions Regulations (ITSR). Investigators
uncovered that the end user of the goods was likely the Iranian Air
Force. Zargarian owned a company in California, ZNC Engineering Inc.,
which is also under indictment. Zargarian and Nayirian are
naturalized U.S. citizens who were born in Iran. Nayirian owned Vana
Building and Engineering, Inc. of California which served as a
separate conduit for physically shipping goods and receiving monetary
transfers from Iran. Zargarian would pay for the procurements from
U.S. companies via check or cash. Zargarian and Nayirian have entered
not guilty pleas and trial is set for December 20, 2016... This case
provides an inside view into Iran's efforts to illicitly obtain
military equipment. It shows the extent to which Iran's Air Force
goes to obtain Western, and particularly U.S., equipment, including
the high fees for middlemen that Iran is willing to pay. It also
shows the complicated scheme and several personnel and country layers
separating Iran's Air Force from legitimate suppliers.
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