- Islamic Republic to gain access to $50 billion in frozen cash
- Foreign investors are keen for access to an untapped market
President Hassan Rouhani said Iran’s financial resources will “increase significantly” after its compliance with the terms of an accord to curb its nuclear program paved the way for the removal of crippling economic sanctions.
The International Atomic Energy Agency concluded on Saturday that the Islamic Republic had curbed its ability to develop an atomic weapon as required under the July accord with world powers. The U.S. and five other nations agreed to lift economic sanctions related to Iran’s nuclear program “simultaneously with the IAEA-verified implementation” of the deal.
“The shackles of sanctions have been removed and it’s time to thrive,”’ Rouhani said Sunday on Twitter. Addressing parliament later in a televised speech, he said it’s up to Iran to “seize the opportunity for an economic leap.” The U.S. dampened the celebratory atmosphere by imposing limited new sanctions on Iran over its ballistic missile activities, signaling it intends to keep a tough watch on the country’s military programs.
The United Nations verification will likely strengthen Rouhani, who was elected in 2013 on pledges to end sanctions and improve Iran’s ties with the world. It also marks a a milestone for President Barack Obama, who said this week that his policy of hard-nosed diplomacy backed by onerous penalties had succeeded in keeping the U.S. out of “another war.”
“Iran has undertaken significant steps that many people doubted would ever come to pass,” clearing the way for sanctions to end, U.S. Secretary of State John Kerry said in Vienna late Saturday. Still, he said the accord “doesn’t wipe away all of the concerns” of the international community, and “verification remains, as it always has been, the backbone of this agreement."
Ahead of the announcement Iran freed four Iranian-Americans, including Washington Post reporter Jason Rezaian, as part of a prisoner exchange with the U.S. that had been negotiated in secret for more than a year.
Saturday’s developments brought to fruition a deal struck last summer on the 18th day of last-ditch talks in Vienna, capping more than two years of wrangling between Iran and the U.S., China, Russia, Germany, France and the U.K.
Most U.S. companies will be on the sidelines because the deal lifts only those sanctions imposed on Iran to punish it for its nuclear program. It doesn’t touch the sweeping ban on U.S. trade and investment with Iran put in place by the Clinton administration in 1995.
On Sunday, the U.S. Treasury levied new sanctions against 11 entities and individuals in Iran, saying they belonged to a network that “obfuscated” the destination of “sensitive goods” used in Iran’s ballistic missile program.
Rouhani, in his speech, said Iran aims to attract at least $30 billion a year in foreign direct investment over the next five years. Iranian stocks climbed on Sunday to the highest level since August on a closing basis.
Iran’s economy may grow at 6 percent to 8 percent a year for the “foreseeable future,” Charlemagne Capital Ltd. said in an e-mailed statement to announce the formal start of an institutional fund to invest in Iranian securities. The joint fund with Turquoise Partners isn’t available to U.S. investors.
Iran is setting in motion a deal with Airbus Group SE to add 114 new and used jets for Iran Air, according to website Planespotters.net. Iran is interested in Airbus wide-body planes including A350s and the A380 double-decker, along with Boeing Co. 737 narrow-bodies and twin-aisle 777s for long-haul flying, according to an Iranian official who asked not to be identified because the details are private.
The IAEA assessment sets off a financial windfall for Iran that regional rivals Saudi Arabia and Israel, which bitterly opposed the deal, say will empower the hardliners in Tehran and further destabilize the Middle East. Tensions between mainly Shiite Muslim Iran and Sunni-ruled Saudi Arabia have escalated since the agreement was signed, helping to fuel proxy conflicts from Syria to Yemen where they back opposing sides.
Israeli Minister of Strategic Affairs Gilad Erdan said the “day the agreement with Iran is implemented is a difficult day for all the countries in the region that hoped Iran would be prevented from getting nuclear weapons.”
“Israel will continue to monitor the agreement’s implementations and won’t ignore its violations, so the world won’t be surprised again, as it was with North Korea,” he said in comments broadcast on Channel 2 television. Iran has repeatedly denied seeking nuclear weapons.
The re-engagement with Iran came almost 35 years to the day after the country freed the 52 American hostages held after the storming of the embassy in Tehran in 1979 -- an issue that still resonates in U.S. politics.
An Obama administration official told reporters Saturday on a conference call that the discussions over the freed U.S. prisoners weren’t linked to the nuclear discussions and that it was coincidental that both developments were completed Saturday. The Republican presidential candidates denounced the government’s handling of the sanctions case as they welcomed the captives’ release.
As holder of the world’s fourth-largest reserves of crude and largest of natural gas, Iran gains immediate access to about $50 billion in frozen accounts overseas, funds the government says it will use to rebuild industries and infrastructure. It also opens the door to foreign investors who are keen to enter a relatively untapped market of 77 million people.
The Obama administration has pledged to continue enforcing sanctions against Iran related to its ballistic-missile program, support for terrorism and human-rights violations. Republicans and some Democrats in the U.S. Congress opposed the nuclear agreement and have vowed to press for fresh sanctions.