Iran Sanctions: The woes caused by the JCPOA

Iran Sanctions: The Woes caused by the JCPOA

We hear many reports that the Iranians are complaining that the expected windfall resulting from the JCPOA is still wanting.  

These complaints are not without merit – see for instance the threats to the Boeing deal with Iran to buy U.S. airliners. These complaints have also been registered in the UN Secretary-General’s report concerning the implementation of UNSC Resolution 2231 (12-07-2016) – that implements the JCPOA. Although there’s plenty on the issues regarding Iran’s infractions of the deal (see report para. IV regarding the missile launches). The CRS report on Iran Sanctions also makes interesting reading. 

Despite these ramblings, wiser opinion makers have indicated that Iran’s woes are more complex than the sour-grapes of certain sections of the U.S. Congress. The enforcement of terrorism and human rights related sanctions, not to mention the enforcement of U.S. secondary sanctions, make Western companies, especially financial institutions, skittish to engage with Iran. 

One point which is causing sufficient woes, is the fact that Iran’s economy and financial system is itself an impediment for foreign companies to engage with Iran.

The public statement of the Financial Action Task Force (FATF), the global standard setting body for anti-money laundering and combating the financing of terrorism (AML/CFT), is rather poignant in this regard. An interesting question is whether U.S. persons can help Iran – e.g. render technical assistance – to enhance the FATF guidelines. Although I can’t imagine whether U.S. help would be welcomed concerning CFT. 

Also interesting in this regard are the recently published OFAC enforcement actions against sanctions violations regarding medical products – HyperBranch Medical Technology, Inc. and Alcon Laboratories, Inc., Alcon Pharmaceuticals Ltd., and Alcon Management, SA. Despite the mitigating factors cited by OFAC, the enforcement actions indicate OFAC’s will to enforce U.S. Iran sanctions. 

Does this mean that parties are dragging their feet? Well, possibly, but it probably has to do more with the fact that the JCPOA is a compromise – good or bad – for all parties. Iran got the deal which it negotiated; it knew that the U.S. would still enforce it’s secondary sanctions. However, the U.S. should focus on reaping benefits out of the deal instead of attempting to sideline it.  

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