Eye on Iran: Iran Says European Banks Still Wary of US Sanctions Threat
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AFP: "Big European banks remain reluctant to work in Iran four months after the lifting of international sanctions under a landmark nuclear deal with world powers, an Iranian official said Sunday. 'Major European banks have not yet started their interactions with Iranian banks, but some medium- and small-sized financial institutions have established relations, including opening letters of credit,' deputy foreign minister Abbas Araghchi told state broadcaster IRIB. He accused 'extremist lobbies' in the United States, Israel and Saudi Arabia of stirring up animosity towards Iran to prevent it from reaping the benefits of the landmark nuclear deal signed last July." http://t.uani.com/1TVUklW
Bloomberg: "Iran must tackle problems in its banking system and bolster anti-money laundering and terrorism-financing laws if it wants to reconnect to the global economy, the second-ranked official at the International Monetary Fund said in an interview in Tehran. 'The best thing the government can do, and the banks can do, is to bring those standards up to international levels and try to reassure foreign partners, banks and otherwise that Iran's banks are safe to deal with,' David Lipton, Managing Director Christine Lagarde's deputy at the Washington-based lender, said on Tuesday. Though most sanctions were lifted following Iran's nuclear deal with world powers, European lenders have said doing business is risky while other U.S. trade restrictions remain in place... 'Lenders here have to acknowledge that foreign banks will make decisions based on their assessments of risk management,' Lipton, a former special assistant to U.S. President Barack Obama, said in the interview. He's the first IMF senior management official to visit Iran since the 1979 revolution, according to the Islamic Republic's central bank." http://t.uani.com/1W00tkt
San Antonio Express-News: "Gov. Greg Abbott on Monday rebuffed a month-old request from the federal government that Texas review its Iran sanctions in light of the nuclear agreement negotiated by the United States with other world powers. Instead, Abbott said he remains determined to increase Texas' sanctions against Iran, as he outlined in January when he visited Israel and met with Prime Minister Benjamin Netanyahu. 'Because the Iran deal is fundamentally flawed and does not permanently dismantle Iran's nuclear capability, Texas will maintain its sanctions against Iran. Further, because your administration has recklessly and unilaterally removed critical sanctions, I have called on the Texas Legislature to strengthen the Iran sanctions that Texas already has in place,' Abbott wrote Monday. Current state law prohibits pension funds from making investments in Iran. Abbott wants to expand that to prohibit local governments from investing in Iran or entities doing business with Iran and to require all state entities to follow the state's divestiture policy... Abbott, in a letter to President Barack Obama, instead slammed the deal and said that as a staunch supporter of Israel, 'I am committed to doing everything in my power to oppose this misguided deal with Iran. Accordingly, not only will we not withdraw our sanctions, but we will strengthen them to ensure Texas taxpayer dollars are not used to aid and abet Iran.'" http://t.uani.com/1YyL8VY
U.S.-Iran Relations
AFP: "Iran's parliament Tuesday voted through a law obliging the government to demand damages from the United States for 63 years of 'hostile action and crimes', state television reported. 'The government has the duty to take the necessary measures seeking compensation for material and moral damages caused by the United States' to the country and Iranians over the past 63 years, the text reads. It cites 'material or moral damage' caused by the U.S. during the coup against nationalist leader Mohammad Mossadegh (1953), in the Iran-Iraq war (1980-1988), in the destruction of oil platforms in the Gulf and in espionage against the Islamic republic. Parliament did not specify a sum, but Vice President Majid Ansari said during the debate that 'Iranian courts have already ruled that the U.S. pay $50 billion in damages for its hostile actions' towards the country. The law was passed by the conservative-dominated outgoing parliament in response to a U.S. Supreme Court decision last month. On April 20, the U.S. body ruled that Iran must hand nearly $2 billion in frozen central bank assets to the survivors and relatives of those killed in attacks it has been accused of organizing. These attacks include the 1983 bombing of a U.S. Marine barracks in Beirut and the 1996 Khobar Towers bombing in Saudi Arabia. The ruling affects around 1,000 Americans." http://t.uani.com/1XwNHcO
The Hill: "A Republican congressman said the classified details surrounding Iran's treatment of U.S. sailors captured earlier this year are disturbing. 'I think that when the details actually come out, most Americans are going to be kind of taken aback by the entire incident, both how Iran handled it and how we handled it,' Rep. Randy Forbes (R-Va.), a member of the House Armed Services Committee, told The Washington Free Beacon. 'I think that's going to be huge cause for concern for most Americans. That's why I've encouraged members of Congress to get that briefing so they do know exactly what did take place.' Forbes said the Obama administration is withholding information about how the 10 U.S. sailors were treated when they were captured earlier this year after drifting into Iranian territorial waters in the Persian Gulf. The sailors were detained by Iran for 15 hours. Forbes said it could be as long as a year before that information is released, noting he had a 'full classified briefing' from military officials. 'I think clearly there were violations of international and maritime law that took place here,' Forbes said, according to the news outlet. 'We did almost nothing in response, in fact, to have Secretary [of State John] Kerry actually thank them for releasing our sailors after they way they captured them, I think was a slap in the sailors' face.' Following the incident, Kerry thanked Iran for what he called a 'quick and appropriate response' to return the American sailors. Forbes told the Free Beacon he is advocating for increased sanctions on Tehran for its treatment of the U.S. sailors and other aggressions against U.S. forces." http://t.uani.com/1WBjeLH
Free Beacon: "A senior Iranian military commander claimed that U.S. officials are quietly encouraging the Islamic Republic to keep its illicit ballistic missile tests a secret so as not to raise concerns in the region, according to Persian language comments. Amir Ali Hajizadeh, commander of the Iranian Revolutionary Guard Corps' Aerospace and Missile Force, said in recent remarks that the Obama administration does not want Iran to publicize its ongoing missile tests, which have raised questions about the Islamic Republic's commitment to last summer's comprehensive nuclear agreement. 'At this time, the Americans are telling [us]: Don't talk about missile affairs, and if you conduct a test or maneuver, don't mention it,' Hajizadeh was quoted as saying during a recent Persian-language speech that was translated by the Middle East Media Research Institute... Iran, he said, 'must face them down firmly, and we must act. If we do not, we will witness daily their exaggerated and evil demands.' 'They are clearly deluding themselves. Nothing like this will ever happen,' he added." http://t.uani.com/1XiEHrf
Tasnim (Iran): "The US Navy's decision to expel the commander of a squadron whose sailors were captured by the IRGC after straying into the Iranian territorial waters in January signifies that Washington has conceded defeat, a top Iranian general said. Speaking to Tasnim, Head of the Strategic Center of the General Staff of Iran's Armed Forces Brigadier General Ahmad Vahidi said Americans sacked the commander to make up for the disgrace they faced after the Islamic Revolution Guards Corps (IRGC) captured US sailors in the Persian Gulf. The commander's dismissal was a concession to defeat, he stressed. The Iranian general went on to say that Americans suffered a psychological defeat after the IRGC's great job. Back in January, the IRGC Navy captured 10 US Navy sailors near Farsi island inside Iran's territorial waters in the Persian Gulf, but released them a day later following an apology and after technical and operational investigations indicated that the intrusion was unintentional." http://t.uani.com/1XfB6dC
Congressional Action
Politico: "Ben Rhodes, the famed White House spinmeister, is entangled in a growing fight with congressional Republicans - the latest fallout from his bombshell magazine profile two weeks ago. On Monday, three Republican senators called on President Barack Obama to fire his deputy national security adviser, saying Rhodes had been 'disrespectful,' 'deceptive' and dishonest' in how he had sold the Iran nuclear deal to the public. The White House, meanwhile, said Rhodes will not testify about the deal before a House committee, calling it a 'separation of powers' issue. The ruckus over Rhodes follows a New York Times Magazine profile of the former aspiring fiction writer. The piece implied that Rhodes and his colleagues had misled Americans about the nuclear deal by creating an 'echo chamber' of allies who promoted the administration's talking points and emphasized a timeline that suggested negotiations began later than they really did. House Oversight Committee Chairman Jason Chaffetz invited Rhodes to appear before his panel on Tuesday for a session titled 'White House Narratives on the Iran Nuclear Deal.' But in a letter to Chaffetz, White House counsel W. Neil Eggleston writes that Rhodes will not appear before the committee because it would raise 'significant constitutional concerns.' 'The appearance of a senior presidential adviser before Congress threatens the independence and the autonomy of the president, as well as his ability to receive candid advice and counsel in the discharge of his constitutional duties,' Eggleston writes... In a separate letter to Obama, Senate Majority Whip John Cornyn (R-Texas), Sen. Mark Kirk (R-Ill.) and Sen. John Barrasso (R-Wyo.) also cite the magazine article as they call for Rhodes' dismissal." http://t.uani.com/1XiFp7V
Business Risk
Reuters: "A Swedish firm is looking to launch the first initial public offering to raise capital for investments in Iran since international sanctions on Tehran were lifted. But the precautions it takes to demonstrate that its dealings are legitimate show that the undertaking, even on this small scale, is time-consuming and costly. Although global trade sanctions against Iran were lifted in January in return for Tehran curbing its nuclear program, the United States still forbids its own nationals and firms to do business in Iran, and prohibits dealings with a list of Specially Designated Nationals (SDNs) deemed to engage in undesirable or terrorist activity. For those reasons, Pomegranate Investment AB, set up in Sweden in 2014, is entering the Iranian market cautiously. Chief executive Florian Hellmich told Reuters on a visit to London on Monday that the firm, which has raised 80 million euros ($91 million) from European investors since 2014 in anticipation of sanctions easing, hopes to launch its IPO in Sweden within 12 months, for investments in Iran's consumer technology sector... The main challenge for any international company, however, is vetting Iranian partners to ensure they are not on the U.S. blacklist.'We have learned to operate in a sanctions environment, which means we have had to engage in a high amount of KYC ('Know Your Customer'): legal due diligence of all our partners, including the banks we do business with,' Hellmich said on a visit to London... 'We have engaged an armada of lawyers who have been advising us in terms of disclaimers and due diligence. Again it comes back to the cost of doing business. It is time-consuming,' Hellmich said." http://t.uani.com/1suzCBe
Bloomberg: "When Air France-KLM resumed regular flights to Iran last month after an eight-year hiatus, gay flight attendants urged Chief Executive Officer Frederic Gagey to let them take a pass, given that homosexuality can get you executed in the Islamic Republic. 'It's inconceivable to force someone to go to a country where his kind are condemned to death for who they are,' stated their online petition, signed by almost 30,000 people... The brutal killing in Bangladesh last month of a gay activist employed by a U.S. aid agency and increased commerce with Iran following its nuclear deal framework have lent urgency to how companies interact with restrictive governments. Increasingly, it is chief executives instead of politicians who are faced with protecting the rights, and lives, of LGBT employees." http://t.uani.com/25aCqEO
Tasnim (Iran): "An Iranian deputy foreign minister said hardline lobbies in the United States as well as the Israeli regime and certain regional states are inciting Iranophobia as a means to prevent Iran from reaping the benefits of the Joint Comprehensive Plan of Action (JCPOA). Speaking to Iran's state TV on Saturday, Iran's Deputy Foreign Minister for Legal and International Affairs Seyed Abbas Araqchi said a wave of Iranophobia has been created by hardline American lobbyists, Tel Aviv and certain regional countries, including Saudi Arabia, to prevent Iran from benefiting from the advantages of the post-sanctions era and the nuclear agreement, known as the Joint Comprehensive Plan of Action (JCPOA). Saying that major European banks are still tentative to return to Iran's market, he stressed that their hesitation has its origins in the anti-Iran moves that have sacred off financial entities to rekindle ties with the Islamic Republic's banks." http://t.uani.com/1Tii98O
Fars (Iran): "Iranian Deputy Foreign Minister Majid Takht Ravanchi strongly criticized the European banks for not seizing the opportunities created after the implementation of the joint Comprehensive Plan of Action (JCPOA), also known as the nuclear deal, to boost their cooperation with Tehran. 'The basis of our cooperation with the European countries, including Italy, is joint venture and transfer of technology within the framework of the resistance economy: the European banks are burning the opportunities through their fussy behavior,' Takht Ravanchi said on Monday, addressing the Joint Iran-Italy Trade Conference." http://t.uani.com/1WAZSX3
Sanctions Relief
JTA: "The United States is obliged to make clear that certain sanctions no longer apply to non-American banks when dealing with Iran, the U.S. Treasury secretary said. 'When Iran took the actions that it took, we took the actions that we committed to take, which is to lift nuclear sanctions,' Jacob Lew said Monday at the Anti-Defamation League's annual leadership conference. 'It was imperative that we be clear what that meant.' Lew was asked at the conference to respond to Stuart Levey, a former undersecretary of the Treasury who was charged with implementing the sanctions. Levey, the top lawyer for HSBC, a British bank, said last week that the Obama administration is sending European banks mixed messages... 'It's also important that Iran understands that there remain sanctions on terrorism and the issues we've described,' Lew said." http://t.uani.com/1NwI4sW
Hindu: "Prime Minister Narendra Modi will be on a two-day visit to Iran beginning May 22, 2016 as India looks at stepping up engagement with the sanctions-free energy-rich nation. India is looking at doubling oil imports from the Persian Gulf nation, which a few years back was its second-biggest oil supplier, as well as getting rights to develop a giant gas field. Also on cards is a deal on developing the Chabahar port. 'At the invitation of the President of the Islamic Republic of Iran, Dr Hassan Rouhani, Prime Minister Narendra Modi will pay an official visit to Iran on May 22-23, 2016,' the Ministry of External Affairs said announcing the visit. During the visit, Mr. Modi will call on the Supreme Leader of Iran and will hold talks on a wide range of subjects of mutual interest with Mr. Rouhani... In the run-up to Mr. Modi's visit, Road Transport and Highways Minister Nitin Gadkari, Oil Minister Dharmendra Pradhan and External Affairs Minister Sushma Swaraj had visited Tehran." http://t.uani.com/27vjyPz
Press TV (Iran): "Iran has begun negotiations with Airbus to finalize the first major deal for purchase of passenger planes since 1979, a senior Iranian official says. The two sides signed a preliminary agreement worth more than $27 billion in January for Iran's purchase of 118 planes from Airbus during a landmark trip to Paris by President Hassan Rouhani. 'We started negotiations with Airbus to sign the contract three days ago, and we hope to reach a conclusion and ink the deal,' Deputy Transport Minister Asghar Fakhrieh-Kashan said on Monday. However, no date has been set for the signing, he said, adding the contract is a 500-page document including a large number of items which will take time to sort out... The official also said 80 percent of financial issues have been resolved and negotiations are underway to resolve the remaining problems. The orders are being made in the form of hire purchase under which a company will be founded to buy the plane from Airbus so that domestic companies are not involved." http://t.uani.com/1XuS2gH
Press TV (Iran): "Croatian President Kolinda Grabar-Kitarovic plans to make an official visit to Iran to hold talks with senior officials on a range of issues. Heading a high-ranking politico-economic delegation, the Croatian president will start her three-day visit to Tehran on Tuesday at the invitation of Iranian President Hassan Rouhani, Iranian president's deputy chief of staff for communications and information, Parviz Esmaeili, said on Monday. He added that Rouhani will officially welcome Grabar-Kitarovic on Wednesday and the two presidents will then begin talks. In the presence of the Iranian and Croatian presidents, senior officials of the two countries will sign several agreements and memoranda of understanding for bolstering cooperation, Esmaeili said. Later in the day, the Iranian president and his Croatian counterpart will also attend a joint press conference, he noted. The Iranian official said Grabar-Kitarovic will on Wednesday attend a meeting of Iranian and Croatian economic activists and representatives of private sectors and meet senior officials. He added that the Croatian leader will wrap up her visit and leave Tehran on Thursday." http://t.uani.com/1suAOok
Financial Tribune (Iran): "Australia's federal government will provide $5.3 million over the next four years for reopening its trade office in Iran. The office, which closed in 2010, will be located within the Australian Embassy in Tehran and operated by Austrade-the Australian government's trade, investment and education promotion agency, also known as Australian Trade Commission. It will seek trade opportunities for Australian businesses and foster closer commercial and investment ties, Export Dynamic, an Australian-owned content provider for local exporters, reported. Aussie Trade Minister Steven Ciobo, who announced the reopening plans earlier this year, says Iran has significant economic potential for Australian exporters. 'It is a large regional economy with a GDP of around $400 billion, a population of 80 million people and has some of the world's largest reserves of oil and gas,' he said. Australia's trade with Iran was about $350 million a year under sanctions and this is expected to rise significantly following the implementation of the nuclear deal in January." http://t.uani.com/1YvZPJk
Human Rights
NYT: "Iran's judiciary unleashed one of its periodic crackdowns on social media permissiveness on Sunday, announcing the arrest of eight people involved in online modeling without a mandatory head scarf and questioning another woman, a former model, live on state television on Sunday. A blogger, Mehdi Abutorabi, 53, who managed a publishing tool called Persian Blog, was also detained, the semiofficial student news agency ISNA reported Monday. The former model, Elham Arab, 26, had been something of an Instagram star, posting pictures of herself in bridal gowns with eye-catching, dyed-blond hair. But on Sunday, months after her Instagram account had been shut down, she wore a pious black scarf and matching gloves as she was questioned by two prosecutors during a live television program. In sharp contrast to the happy and glamorous images of herself posted online, Ms. Arab spoke of her 'bitter experiences' in Iran's technically illegal modeling industry and warned young women to think twice before posting pictures of themselves online. 'You can be certain that no man would want to marry a model whose fame has come by losing her honor,' she said... But the main culprit was not Ms. Arab, Tehran's public prosecutor, Abbas Jafar-Dolatabadi, concluded on the television program. No, the main offender was 'the enemy,' Iran's household label for the West and its unwanted influences. 'The enemy is investing in order to create a generation without any willpower,' the prosecutor said of social media. 'We must refrain from any actions that run counter to the values of the establishment.' ... On the same program, Iran's prosecutor for cybercrimes, Javad Babaei, announced the arrest of the eight people, apparently in connection with online modeling. His unit is focusing on Instagram, which is not blocked in Iran. 'Sterilizing popular cyberspaces is on our agenda,' he said, criticizing the introduction of broadband in the country 'without considering the consequences.'" http://t.uani.com/1OB3q8L
Vanity Fair: "The Iranian Revolutionary Guards Corp, an agency tasked with policing domestic culture and heading off the influence of other nations, is concerned about the social-media popularity of Kim Kardashian. A new report from Iran Wire highlights just how deep the Guards' distaste for Kardashian runs. A spokesman for the group's Organized Cyberspace Crimes Unit accused Kardashian of working for Instagram as part of a complicated ploy to 'target young people and women,' ostensibly corrupting them with aspirational photos depicting a lifestyle that's at odds with Islam. (Kardashian's paternal grandparents immigrated to the United States from Armenia, which shares a border with Iran.) While the idea of Kardashian as a secret agent might be absurd, the whole ordeal is no laughing matter: one famous Iranian entertainer was recently featured in what appears to be a forced confession, and the Revolutionary Guards say they have warned 170 individuals, 29 of whom are being targeted for prosecution. 'Ms. Kim Kardashian is a popular fashion model so Instagram's C.E.O. tells her, Make this native,' the spokesman, Mostafa Alizadeh, said on an Iranian news program. 'There is no doubt that financial support is involved as well. We are taking this very seriously.'" http://t.uani.com/1YyLI6b
Opinion & Analysis
Brian Caplen in The Banker: "The West's policy on Iran is totally confusing and will not restart investment. For starters, the deal negotiated in January for sanctions on Iran to be lifted in return for the scaling back of nuclear activities still leaves many sanctions in place. Anyone doing business with companies related to Iran's Revolutionary Guard Corsp (IRGC), for example, could still be breaking both US and EU sanctions. But with the IRGC embroiled in many economic activities in the country, how could a bank ever be sure its due diligence was correct? Then there is the strange situation whereby many of the edicts prohibiting American banks from doing Iranian business are still in place, such as the treasury department's listing of the Iranian financial sector as a money-laundering risk, as well as Financial Action Task Force (FATF) measures. This led to the farcical situation on May 12 when US secretary of state John Kerry met with European bankers to try to persuade them that they could safely do business with Iran even though American banks cannot. He has said previously: 'There are now opportunities for foreign banks to do business with Iran... unfortunately, there seems to be some confusion among some foreign banks and we want to try to clarify that.' Perhaps Mr Kerry has forgotten that US authorities have fined leading European banks such as HSBC, Standard Chartered and BNP Paribas billions of dollars for breaking sanctions against various countries, including Iran. Perhaps he has forgotten that even if the state department says Iran business is OK, it does not mean that the US's plethora of regulatory bodies and legal arms will necessarily go along with that view. Perhaps he has forgotten that he will not be in office in six months' time and that Donald Trump, if elected president, has promised to renegotiate the Iran deal. Small wonder that HSBC's chief legal officer Stuart Levey, writing in the Wall Street Journal, says: 'HSBC has no intention of doing any new business involving Iran. Governments can lift sanctions but the private sector is still responsible for managing its own risk and no doubt will be held accountable if it falls short.' Then there is the no small matter that the American lobby group United Against Nuclear Iran, led by Mark Wallace, a former US ambassador to the UN, is trying to block the deal and discourage big companies from investing in Iran. Meanwhile, the Iranians are complaining that since the deal was agreed not much has changed and that financial transactions are as difficult as ever. With disillusionment in Tehran and a change of administration in Washington, there is every prospect the deal could unravel." http://t.uani.com/1OxHqX9
Hagar Hajjar Chemali in HuffPost: "There is a lot of complaining these days about businesses and banks being reluctant to welcome Tehran with open arms and invoices. UK officials point the finger at the United States for British banks being hesitant to enter the Iranian market, and the vice president of the European Parliament's Delegation for Relations with the United States recently told the New York Times that 'Europe is being taken hostage by American policy.' Ayatollah Khameini accused the United States of creating 'Iranophobia.' (Ha, of course I have Iranophobia - but I didn't need the United States to create it.) Businesses and banks aren't avoiding Iran because of the United States; they are apprehensive because they're swimming at their own risk. They are afraid that dealing with Iran - a country that actively supports terrorism and lacks even the most basic anti-money laundering/counter-terrorist financing (AML/CFT) controls - could land them into troubled waters and undermine their reputations. And quite frankly, they're right. The only move that could help bring on the business is for Tehran to change its foreign policy and improve its financial transparency measures. Europe and Iran claim that the United States is not living up to its end of the bargain of the Joint Comprehensive Plan of Action. From the start of the nuclear negotiations, however, the United States was clear: these negotiations were focused specifically on preventing Iran from obtaining a nuclear weapon, and the success of those talks would result in the lifting of nuclear-related sanctions. And from the beginning, the United States stressed that sanctions related to Iran's support for terrorism, human rights abuses, and destabilizing regional activity would remain. The USA PATRIOT Act Section 311 action against Iran as a jurisdiction - the key regulation that prevents U.S. businesses and banks from dealing with Iran - remains in place and the United States never implied it would be withdrawn. But that's how the United States wants to do (or not do) business with Iran. If European businesses and banks want to do business in a jurisdiction, the government of which actively sponsors terrorism and is deficient on internationally accepted AML/CFT measures, then they should be our guests (they should also probably invest in iron-clad compliance systems). But if they don't, then it's neither the United States' fault nor is it up to the United States to ask them to do so. Notably, HSBC Holdings Chief Legal Officer and former Treasury Under Secretary for Terrorism and Financial Intelligence Stuart Levey recently argued in an op-ed in the Wall Street Journal that HSBC would make its decisions based on financial risk. Though that may be in part due to U.S. regulations, it's ultimately because Iran's support for terrorism, its deceptive practices, and lack of a transparent legal and regulatory business framework inherently make it a high-risk client... The only step that could help businesses and banks run to Tehran isn't a change in U.S. regulations or pleas by the United States - it's a change in Iran's own foreign policy and an improvement in its AML/CFT deficiencies." http://t.uani.com/1WBk8YJ
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Tue, 05/17/2016 - 14:20