Trump Policy Uncertainty Clouds Iranian-Americans' Investment PlansBy
Dual citizens seeking to divest with nuclear pact still intact
U.S. sanctions lawyers say investment interest has dried up
After international sanctions on Iran were relaxed last year, Iranian-Americans started looking to invest money in their homeland. With Donald Trump in the White House, many are planning to pull it out.
“For the first part of last year we were getting a lot of calls from people looking to explore business opportunities in Iran,” said Erich Ferrari, a U.S. sanctions lawyer based in Washington. “That has pretty much stopped since the election. We have in the last month or so been getting a lot of requests for licensing to sell property or to move assets.”
Optimism among the estimated 1 million Americans of Iranian descent has dimmed given Trump’s labeling of Iran’s 2015 nuclear deal with world powers as a “disaster” and his vow to deal aggressively with the Islamic Republic. A recent Iranian missile test triggered a warning from Washington that it was putting the country “on notice.”
Shahla Zarinejad used to plan to split her time between her home in Hartford, Connecticut, and her hometown, Tehran, after she retired. Now she’s wondering whether to put her apartment in the Iranian capital up for sale.
“There is so much uncertainty around what Trump may do,” said Zarinejad, a 71-year-old librarian who, like many Iranian-Americans, emigrated after the 1979 Islamic Revolution. “If the U.S. provokes Iran, I may not be able to travel there until things calm down.”
Trump’s election has further complicated an already difficult business climate, because the nuclear deal didn’t end all U.S. restrictions on commercial activities with Iran. Some agricultural commodities and medical devices, as well as all civil aviation safety equipment and services, still require Office of Foreign Assets Control licensing. International banks have shied from financing projects because they’re afraid of running afoul of remaining U.S. sanctions. Some forms of divesting also require OFAC licensing, as in the case of property Iranians acquired after becoming U.S. citizens.
Amid the uncertainty about Trump’s policies, sanctions lawyer Farhad Alavi, a managing partner at the Akrivis Law Group in Washington, is also getting requests from clients to pull assets from Iran more swiftly.
“Some are concerned that their OFAC license would be invalidated by Trump and fear that they would not be able to divest,” Alavi said. There is also a concern that with the dollar strengthening, “their money would be worth less, so they want to get it out sooner,” he said.
The level of foreign investment is one yardstick Iranians will use to gauge the success of the nuclear pact as they head to presidential elections on May 19. President Hassan Rouhani, who is expected to seek a second term, championed ending Iran’s isolation through the accord.
The climate for investing in Iran is starkly different for Iranians who live in European countries that want to tap a market of 80 million people that reopened after the agreement. Companies in France, Sweden and Germany have moved swiftly to sign aviation, automotive and infrastructure deals with Iran.
In separating politics from trade, Europe “has reached a good business model with Iran,” said Ali Dadpay, a professor of economics at St. Edwards University in Austin, Texas, who studies Iran.
Unlike the U.S., which severed diplomatic ties with Iran in 1980 after revolutionaries seized the American Embassy there, European nations have had relations and economic interactions with Iran in past decades and are “realistic about the opportunities and potentials,” Dadpay said. “The U.S. didn’t have that and as a result even the potential is not well recognized.”
The Iranian government doesn’t publish official data on investments by Iranians living abroad, he said.
Some Iranian-Americans say Trump’s animus toward their native land has hurt their personal and business lives, with the travel ban on citizens from the Islamic Republic and five other countries making it tougher to keep ties with relatives and businesses abroad.
Shohreh Maboudi Arbabzadeh, 57, who has been living in the U.S. since she was a teenager, said her Buffalo, N.Y.-based medical spa has been targeted on Facebook since Trump was elected, by aggressors who have called her a “terrorist.”
“Those who wanted to work with Iran are slowing down because of Trump,” said Maboudi Arbabzadeh, who had explored consulting businesses in Iran. “As an American born in Iran, my business was attacked. Now imagine they were to find out I want to deal with Iran.”
She sees a significant opportunity being lost in the current climate of uncertainty.
The atmosphere was “more positive” after the nuclear deal, but “in 2017, having this guy as president of the U.S., a lot has changed again,” she said. “That opening is gone, forget about it.”