Since 2012, the United States and other countries have maintained an embargo on Iran that has prevented it from having any normalized trade relations with several countries. The purpose of these sanctions was to curb Iran’s nuclear Program. With the agreement of Iran to work toward this purpose, the United Sates along with several other countries agreed to lift some of its Iranian sanctions in January of 2016. The removal of sanctions now makes it possible for companies in the U.S., Europe, Asia and other areas throughout the world to begin conducting business in Iran.
It is important to note that although the U.S. has lifted the nuclear sanctions against Iran, the U.S. still has others that remain due to the human rights policies and support of terrorism that the Iran has. Essentially what this means to U. S. companies is that they are still barred from most trade and investments with Iran. This should not have any effect on European banks or business, yet in reality it does. The U.S. laws can cause many problems for European banks and businesses who choose to conduct business with Iran and then can be subject to negative consequences in the U.S.
The U.S. Treasury Department’s Office of Financial Assets has informed foreign businesses that no payments linked to Iran can be processed through any U.S. financial institution. This means that any money that is received from Iran which may be from a bank or a company is not permitted to go to any entity in the U.S. including U.S. banks or subsidiaries. All Iranian money must be kept separate by the bank from any money that will end up in the U.S. Many banks are very worried about how this will affect their ability to conduct business with Iran. The U.S has imposed extremely large fines on foreign banks that have violated U.S. sanction laws in the past. The penalties have reached into the billions for some banks that violated these sanctions.
Most U.S businesses and ordinary citizens will still be prohibited from conducting business with Iran without being authorized by the U.S. government. There will still be a trade embargo with Iran. All U.S. banks will be prohibited from all types of transactions from Iranian companies this includes investments and third country trade. The only major exception involves civil aviation. According to the Department of Treasury:
As of Implementation Day of the Joint Comprehensive Plan of Action (JCPOA), specific licenses may be issued on a case-by-case basis to authorize U.S. persons and, where there is a nexus to U.S. jurisdiction, non-U.S. persons to ( 1) export, re-export, sell, lease, or transfer to Iran commercial passenger aircraft for exclusively civil aviation end-use, (2) export, re-export, sell, lease, or transfer to Iran spare parts and components for commercial passenger aircraft, and (3) provide associated services, including warranty, maintenance, and repair services and safety-related inspections, for all the foregoing, provided that licensed items and services are used exclusively for commercial passenger aviation. Applications for specific licenses pursuant to this.
While the general public will not be affected by this for the most part, it will have an impact on the U.S. economy along with the Iranian economy. Perhaps as the economy improves in Iran they will be more likely to change their policies on terrorism and human rights. With these changes, a whole new market will open up to them in the U.S. providing a more stable and beneficial economy for everyone.
- Zarroli, Jim. “As Sanctions On Iran Are Lifted, Many U.S. Business Restrictions Remain.” NPR. NPR, 26 Jan. 2016. Web. 29 Jan. 2016. <http://www.npr.org/sections/parallels/2016/01/26/464435805/as-sanctions-on-iran-are-lifted-many-u-s-business-restrictions-remain>.
- “Resource Center.” Iran Sanctions. US Department of Treasury, 16 Jan. 16. Web. 29 Jan. 2016. <https://www.treasury.gov/resource-center/sanctions/Programs/Pages/iran.aspx>.
- U.S. Department of Treasury, Washington. “STATEMENT OF LICENSING POLICY FOR ACTIVITIES RELATED TO THE EXPORT OR RE-EXPORT TO IRAN OF COMMERCIAL PASSENGER AIRCRAFT AND RELATED PARTS AND SERVICES.” OFFICE OF FOREIGN ASSETS CONTROL Iranian Transactions and Sanctions Regulations (2016): US Department of Treasury, 16 Jan. 2016. Web. 29 Jan. 2016. <https://www.treasury.gov/resource-center/sanctions/Programs/Documents/lic_pol_statement_aircraft_jcpoa.pdf>.