asdasdasdasdasdasdasdasdasdasd
◢ The bazaar of today is not the bazaar of forty years ago, and no longer plays the same role as a key actor in Iran’s popular political mobilizations. The recent bazaar closures reflect primarily the economic self-interest of bazaar elite, who sense an opportunity to put the brakes on reforms that threaten their unique capacities for lucrative arbitrage. Protests are being co-opted as a political tool at the expense of genuine civil society mobilization.
◢ Iran is facing the end of a four month extension given by the Financial Action Task Force (FATF) for the reform of the country’s AML/CFT regulations. Iran will be hoping for a further extension of the suspension of countermeasures at the June plenary of the FATF. Some FATF members have sought to characterize such extensions as exceptional. However, extensions are a common procedure, and FATF ought to treat Iran’s case in fair recognition of this fact.
◢ In a wide ranging essay, Iranian Foreign Minister Mohammad Javad Zarif outlines the Iranian view of a “broken” U.S. foreign policy and details Iran’s 15 demands in response to the 12 demands issued by U.S. Secretary of State Mike Pompeo after the withdrawal from the JCPOA.
◢ A few days ahead of an international meeting in which Iran’s efforts to improve anti-money laundering and counter-terrorist financing (AML/CFT) standards will be reviewed, Ayatollah Ali Khamenei appeared to pour cold water on the reform process. Yet, it is premature to assume that Iran’s consultations with the Financial Action Task Force (FATF) are suddenly over after two years of close coordination. As the FATF’s plenary meeting approaches, the stakes are high for Iran, which is seeking another extension for implementation of its action plan.
◢ Ireland’s Workplace Relations Commission has fined an unnamed bank EUR 20,000 for discrimination against an Iranian couple. The ruling points to a growing case precedent in Europe on acts of sanctions over-compliance which lead to discrimination of Iranian persons or individuals and businesses who maintain financial links to Iran.
◢ The US Treasury Office of Foreign Asset Control on Thursday announced a new round of targeted sanctions designations, including sanctions on Dena Airways, the company which operates the Iran’s presidential aircraft used by Hassan Rouhani for official travel. The new sanctions follow the designation of Iran’s central bank governor, Valliollah Seif, and reflect a further targeting of the Rouhani administration.
◢ Air France recently announced the reduction of its flights from Paris to Tehran after first switching the service on the route to its subsidiary airline JOON. At a time of uncertainty surrounding the future of the Iran nuclear deal, the reduction of flights led to speculation that the move may have been influenced by the return of sanctions. But a look to the current competitive environment shows other significant changes to the market to which Air France was forced to react.
◢ In a new open letter, over 150 global academic and cultural leaders have called upon the European Union to “discharge its international obligations” and ensure that “Iran and its people enjoy the full economic and political dividends” of the nuclear deal, despite President Trump’s unilateral withdrawal from the agreement earlier this month.
◢ Europe’s Commissioner for Climate Action and Energy, Miguel Arias Cañete is set to travel to Tehran this weekend. Cañete’s visit will include discussions on possible new payment mechanisms designed to allow Europe to repatriate oil revenues to Iran’s central bank despite despite Trump’s withdrawal from the nuclear deal, offering a vital lifeline for the Iranian economy as sanctions begin to bite.
◢ On Tuesday, French officials convened a briefing for French business on possible responses to Trump’s reimposition of secondary sanctions. French Minister of Economy Bruno Le Maire reportedly cited the French parable that “money is the nerve of war” to describe what is at stake. He may be more correct than he realizes, as the Trump administration gears-up for an economic war on Iran.
◢ Speaking on Thursday at the Center for Strategic and International Studies, a Washington D.C. think tank, Total CEO Patrick Pouyanné faced several questions about his company’s recently announced decision to wind down operations in Iran following the reapplication of secondary sanctions by the Trump administration. Pouyanné warned that the “Atlantic allies” risk giving “all the Middle East region to China and Russia.”
◢ In the years when Iran was under broad international sanctions, the country saw shortages in key foodstuffs and life-saving medicines. Despite attestations to the contrary, international sanctions hurt the Iranian people in cruel ways. As Iranians prepare for the return of U.S. sanctions, concerning ambiguity in OFAC’s new sanctions guidance may undermine the longstanding exemptions for humanitarian trade and the carve-outs for the Iranian banks which facilitate these sales.
◢ On 8 May 2018, U.S. President Trump announced that the United States “will withdraw from the Iran nuclear deal” and that the United States “will be instituting the highest level of economic sanctions”. At the same time, U.S. authorities announced that U.S. sanctions would be re-instated, at the latest by 4 November 2018. What does this mean for companies who have ties to Iran or who do business in Iran?
◢ The E3 should now acknowledge that its negotiating tactic of accommodation and comprise with Trump has failed. If Europe is to have any influence forthcoming US policy on Iran, European governments should quickly shift tack, unifying behind a more assertive diplomatic strategy aimed at deterring the worst-case scenario of renewed Iranian nuclear program and more instability and violence in a region close to its borders.
◢ President Trump has violated the Joint Comprehensive Plan of Action and withdrawn from a landmark arms control agreement that enjoyed broad international support. Crucially, he did so more decisively than many expected. It is this decisiveness which may offer a sliver lining for Iran and Europe, who will find it easier to coordinate a robust response in the face of such a definitive action by Trump.
◢ European leaders have been assiduous in lobbying Washington on the nuclear deal. But Europe must step up its diplomacy to ensure it does not lose Tehran in the process and should further make a strong case to the Iranian government and public as to why the nuclear deal can continue to serve Iran’s security and economic interest even without the US.
◢ Forced to respond by Iran’s recent currency crisis, the Central Bank of Iran is approaching regulatory reform in the financial sector with new energy. A critical deadline to meet standards set by the Financial Action Task Force is forthcoming in June. Iran needs to demonstrate progress in tackling financial crime estimated to include at least USD 27 billion in transactions annually.
◢ With the United States looking set to withdraw from the Iran nuclear deal, the question now becomes how that withdrawal will take place. The European Union and Iran will face complex decisions about legal and diplomatic responses. Even though U.S. policy will be come more clear in the aftermath of May 12, the overall uncertainty facing businesses is likely set to increase.
◢ The forthcoming visits to Washington by French President Emmanuel Macron and German Chancellor Angela Merkel come at a time of great importance for the Iran nuclear deal, regional security, and transatlantic relations. European policymakers are considering credible ways to signal that the EU is willing to take action if confronted with U.S. withdrawal from the deal, but a significant resolve will be needed.
◢ The last Iranian year, which ended in March, saw several interesting developments for Iranian energy, both domestically and internationally. Despite persistent challenges, Iran is keen to build on the momentum of last year’s developments. In doing so, the question of whether the Trump administration will stay in the JCPOA and renew sanctions waivers on May 12 will have great importance.
