After N pact, wooing Iran big

While European oil and oil field rehabilitation firms have been deploying executives to Tehran in the battle for lucrative deals once economic sanctions imposed on Iran are lifted, British Foreign Secretary Philip Hammond reopened his country's embassy and met with President Hassan Rouhani, heralding political reconciliation. 

The embassy had been closed after being ransacked by protesters in 2011 due to London's support for tightening the punitive sanctions regime.  Britain responded by closing the Iranian embassy in London.

German Economy Minister Sigmar Gabriel visited Tehran last month, the first senior Western figure to journey there since the signing of the July 14 accord over Iran's nuclear programme. The minister's plane was packed with businessmen eager to scout commercial opportunities in a country of 80 million blockaded by the West for the past 34 years.

By dispatching a plane load of potential deal makers, Germany declared that Iran is open for business – even if clinching deals means waiting for the lifting of sanctions. Just in case the message has not been taken in by all those involved in the business of sanctions-lifting, German Foreign Minister Frank-Walter Seinmeir announced plans to travel to Tehran in October.  The German-Iranian Chamber of Commerce has been sending weekly plane loads of businessmen to Tehran.

Since Gabriel visited, his French and Italian counterparts have turned up in Tehran.  Spain, Sweden and Poland plan to send ministerial missions this fall while Austrian President Heinz Fischer is set to become the first European head of state to travel to Tehran since the signing of the agreement in Vienna. Prime Minister Narendra Modi has accepted an invitation to visit Tehran.

French Foreign Minister Laurent Fabuis invited Rouhani to France in November for a meeting with President Francios Hollande.  French companies Airbus and car makers Peugeot Citroen and Renault are determined to renew connections with local producers disrupted by sanctions.

These flying pilgrimages to Tehran are, however, taking place at a time the nuclear agreement is under increasing challenge from Israel’s rightist government led by Benjamin Netanyahu, his allies in the US Republican and Democratic parties, Saudi lobbyists and reactionaries in Iran. 

It is significant that of the six powers – the five permanent Security Council members plus Germany – involved in the protracted negotiations with Iran, Britain, France, and Germany have made it clear that they want to see the agreement honoured and implemented.  Russia and China agree. This leaves the US the sole potential spoiler.

If US spoilers defeat the Obama administration by garnering enough no votes in Congress, some of the other five governm-ents involved in negotiations co-uld break with Washington over sanctions, encouraging more countries, including India, to follow suit, eroding the punitive re-gime. This could involve “violating” financial and oil sanctions which the US treasury is in a strong position to enforce by imposing fines on companies doi-ng business in US and abroad.

This, of course, would stir up a great deal of bad feeling among the US allies and prompt companies to seek new, innovative means to get round sanctions. Governments and firms are eager to launch projects that could be financed by the $100-150 billion of Iranian funds frozen in foreign banks.

Lifting of sanctions
While in Tehran, Hammond said that sanctions could be lifted next spring if the deal is endorsed by the Congress in Octo-ber and Iran meets its comm-itments to reduce stockpiles of uranium and numbers of centrifuges. He also urged British firms to prepare commercial agreements with the Iranian public and private sectors so that work could begin as soon as sanctions come to an end.

Ignoring such pronouncements and anticipating the deal will go through in spite of Washington’s nay-sayers, Switzerland lifted key sanctions on Iran on August 13, including a ban on  purchase and sale of precious metals to entities connected to the Iranian government and the requirement to report to trade in Iranian petrochemicals to sanctions enforcing bodies.

Italy’s Mediobanca has signed a memorandum of understanding with Tehran to finance deals between Italian and Iranian firms. These loans would be guaranteed by Italy's public export credit company, which has estimated that post-sanctions Italian exports to Iran could increase by $3.3 billion by the end of 2018. Italy’s Fata engineering firm has secured a $543 million contract with Iran’s Ghadir Investment Company to build a power plant.

Claudio Descalzi, chief executive of Italy’s Eni oil multinational, has said his company will purchase oil from Iran once sanctions are lifted. Washington's spoilers are oblivious to these high level visits by European politicians and the pressure they should exert on US legislators who dance to the tune of the Israeli lobby.

While the White House has invested a great deal of time and effort trying to ensure that Democratic party legislators adhere to President Obama’s pro-deal line, at least four have joined the rival Republican dominated anti-deal camp which has blanketed media with advertisements blasting the accord.