There has been a lot of guesswork regarding the potential (often assumed to be “certain”) unraveling of the international sanctions regime against Iran once it reaches an agreement with the so-called P5+1 (United States, United Kingdom, France, China, Russia and Germany).
The flood of foreign businessmen traveling to Iran and the many articles out in the press lead us to believe that a deal is not only imminent and that it will be a boon. Maybe so – arguably most serious experts in the sanctions field are having a difficult time gauging what will happen with reasonable accuracy and when it will happen. What can be clear is that the lights will not turn green on Tuesday (July 7, the parties’ self-imposed deadline), even if a deal is reached.
An Associated Press article today points to a phased deal wherein there will be no document signing this week by the parties, but wherein the parties will formally implement an agreement by the end of 2015. Therefore, even if all the sanctions are to be removed (which is almost fundamentally impossible), it will be quite some time. The other question that nobody seems to want to answer is the issue of unilateral U.S. sanctions relief. Most of what has been lifted/suspended pertained to U.S. sanctions on third country activities in or with Iran (for example, investment by non-U.S. companies in Iran’s petrochemical industry). Almost all economic activity in or with Iran is off limits for U.S. persons (and foreign subsidiaries owned or controlled by U.S. persons). U.S. authorities have been exceptionally cryptic about what, if anything will be lifted or suspended on that front. So long as nothing happens in that realm, the opportunities for U.S. companies will remain limited (although less restricted areas, such as medical exports, may become logistically easier with more third country companies like banks and shippers coming in to fill challenges such as banking and shipping).
Notably, President Obama has considerable (but not often discussed) leeway on many unilateral sanctions with Iran, especially in the space of U.S. Department of the Treasury regulations, namely those administered by the Office of Foreign Assets Control (OFAC). If the United States and Iran are having some bilateral discussions, expect to see some parts of the Iranian Transactions and Sanctions Regulations, 31 CFR Part 560 become relaxed or new general licenses (basically broad authorizations for certain activities subject to some terms and conditions) allowing U.S. companies and persons some more wiggle room. Time will tell.