Insider news & Analysis in Iran

By INU Staff
INU - On Wednesday, CNN reported upon the extension of a controversy that was previously thought to be resolved between Air France and its employees. The union for the commercial airline’s cabin crews recently won a concession from the company over its plans to resume regular flights to Iran in the current, post-sanctions environment. Air France announced that female members of the cabin crew would be able to opt out of flights into the Islamic Republic, over concerns about the country’s laws requiring a specific dress code for women, including head coverings.

CNN indicates that the company has so far refused to back down on this point, but the ongoing controversy illustrates the tensions that many companies will face as they attempt to re-engage with Iranian markets, over the objections of international activists and policymakers.

In fact, while some people are citing their awareness of Iranian human rights abuses and other illicit behaviors in an attempt to avoid being sent into the country against their will, others are eagerly attempting to gain access to Iran, in the interest of exposing these issues. The Associated Press reports that Republican Representatives Mike Pompeo, Lee Zeldin, and Frank LoBiondo had sent an open letter to Iranian Foreign Minister Mohammad Javad Zarif on Wednesday following up on their two-month-old visa application, which they filed in person at the Iranian Interests Section in Washington, DC.

The lawmakers complained that their request to travel to the Islamic Republic was met with “ridicule and delay,” something that the AP suggests was to be expected on the basis of the “Republican fantasy trip” that Pompeo, Zeldin, and LoBiondo outlined. The three say that they are seeking a direct audience with American citizens held prisoner in Iran, as well as briefings from Iranian officials on recent ballistic missile tests and a January incident in which the Iranian Revolutionary Guard Corps seized 10 US sailors who had strayed into Iranian territorial waters and held them for about a day.

Presumably, the Republican legislators never expected their request to be granted, but were instead seeking to bring renewed attention to the issues that they believe should preclude Western governments from sending representatives to Iran without precondition. The Iranian neglect of their application arguably also illustrates the interest that Iranian officials have in limiting public scrutiny of its provocative behaviors and avoiding inquiries regarding whether those behaviors can be expected to change in the wake of sanctions relief under the Joint Comprehensive Plan of Action.

Pompeo, Zeldin, and LoBiondo’s apparent publicity stunt may help to provide their colleagues with further justification for congressional actions that seek to obstruct efforts to reengage economically with the Islamic Republic. In recent weeks, the White House has come under fire from opponents of the nuclear deal for what have been regarded as efforts to reverse a rule banning interaction between the Iranian and American financial systems.

In a report on Tuesday, The Tower emphasized that those restrictions had been imposed even before the sanctions on the Iranian nuclear program, which were suspended under the JCPOA. It quotes Mark Dubowitz of the Foundation for Defense of Democracies as saying the earlier measures “were being put in place because the Iranian financial sector represented a threat to the integrity of the global financial system.”

Iran continues to be a significant source of money laundering and corruption, with some of the country’s assets being funneled into terrorist organizations, giving the Islamic Republic a reputation as the leading state sponsor of terrorism or the world’s “central banker” for terrorist groups. Republican and some Democratic congressmen reportedly hope to avoid the worsening of this situation, as well as other illicit uses for Iranian assets, by limiting the extent to which the US and its allies are able to interact with the Iranian financial system. But recent controversies have highlighted that Congress and the president are significantly at odds over some prospective measures.

By some accounts, the White House’s efforts to promote post-JCPOA investment in Iran helped to bring about Boeing’s visit to the Islamic Republic on Monday. That visit was the first of its kind in decades, and it appeared to represent a major change in policy by US-based businesses that had previously been worried they might still fall afoul of US-led sanctions, even in spite of the nuclear deal.

Still, the ultimate significance of the visit and the long-term effects of an economic agreement between Boeing and Iran remain in doubt. Congressional scrutiny may still help to hold back the value of any such deals, if not their ability to move forward in the first place. The Daily Signal pointed out that one way in which Republicans are still limiting such reengagement is by delaying the confirmation of President Obama’s appointment to the board of the US Export-Import Bank. 

In absence of a quorum, this body is unable to approve deals that exceed 10 million dollars in value. A deal concluded early this year between Iran and French Boeing competitor Airbus was valued at approximately 25 billion dollars. Thus, as Boeing strives to gain access to the same market, it has joined in lobbying the Senate to confirm Obama’s nomination. But Republican opposition to the deal is very unlikely to waver, and may thus hold the American executive and US-based businesses back from activities that could be seen as enriching a terrorist state.

Interestingly, this obstructionism was not included in Forbes recent list of seven persistent obstacles to the reentry of international companies into the Iranian market. The list did, however, mention the lingering uncertainty about the outcome of both the American and Iranian presidential elections. Depending on this outcome, congressional Republicans could receive support from the new president, as well as additional fuel for their efforts to call attention to Iranian provocations and abuses.

Forbes also mentioned the existing banking restrictions, which remain in place despite accusations that the Obama administration is seeking to weaken or partially circumvent them. These restrictions still make it difficult for companies to do business with Iran and the US at the same time. Sanctions on Iran’s human rights abuses and support for terrorism have a similar effect, as does the threat of “snapback,” or the quick re-imposition of suspended sanctions in the event that Iran cheats on the deal.

Forbes also highlighted some of the problems that Republican lawmakers have been trying so hard to emphasize, including the levels of Iranian corruption and the influence that the Iranian Revolutionary Guard Corps – a heavily sanctioned organization – continues to exert over the Iranian economy.

Similarly, an article in Eurasia Review analyzing Iran’s probable financial future called attention to Supreme Leader Ali Khamenei’s controlling influence over the Iranian Central Bank – something that could lead the hardline cleric to obstruct Iran’s access to foreign business on his own, regardless of the efforts of the US and its allies to ease that access from their end.

This and other factors lead Eurasia Review to conclude that Iran’s financial future still remains highly uncertain. And to this we can add that as long as the Republic congressional majority and its Democratic allies, along with non-governmental political groups, keep up pressure on Western businesses, the ultimate effects of the JCPOA may continue to be held back to a great extent.

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