Home News Economy Criticism of Zuma’s Visit to Tehran Calls Attention to Economic Obstacles

Criticism of Zuma’s Visit to Tehran Calls Attention to Economic Obstacles

Jacob Zuma

Zuma was reportedly accompanied by a number of ministers and a delegation of South African business leaders and was aimed at exploring prospects for trade and investment. At least eight agreements were signed during Zuma’s time in Tehran, where he also spoke favorably about the 1979 Islamic revolution.

The political group Untied Against a Nuclear Iran, which is a prominent Western voice of opposition to Iran’s theocratic regime as well as its nuclear program, issued a statement in response to Zuma’s visit, which was carried by Business Wire on Monday. In lieu of simply criticizing the visit, UANI evidently strove to undermine Zuma’s motivations by emphasizing the obstacles that still stand in the way of investment in the Islamic Republic.

In this way, the statement was strongly reminiscent of recent controversies that have been spearheaded by Iranian Supreme Leader Ali Khamenei, who has used the limited effects of sanctions relief in order to ramp up his regime’s anti-Western rhetoric. Khamenei and his fellow officials have accused the US of violating the spirit of the nuclear agreement by failing to actively encourage businesses from the European Union and other US-allied countries to reestablish their economic relations with Iran.

It is understood most international banks are still hesitant to begin conducting transactions in the Iranian rial out of fear that they may still fall afoul of sanctions enforcement. The UANI statement took care to effectively advertise this fear to the Zuma government, saying, “An environment of risk and uncertainty looms large for the shareholders and executives of companies considering doing business with Tehran.”

On the other hand, the White House has been making some effort in recent weeks to assuage Iranian concerns about the lack of support for the country’s reentry into international markets. It has, for instance, dispatched diplomats to discuss the Iran nuclear agreement with the executives of international businesses, in order to convey the idea that they have little to fear from the US government unless they violate the non-nuclear sanctions that still remain in place on Iran.

But many members of Congress, whose views are more closely aligned with the views of UANI than with those of the Obama administration, have taken issue with some of these efforts and have tried to push back against them. An article that appeared at BSC Comment on Monday once again detailed the lawmakers’ denunciation of the administration’s “concessions.” It quoted Republican Speaker of the House Paul Ryan as saying, for instance, that White House efforts to partially open the American financial system to the Islamic Republic could “directly subsidize Iran’s nuclear program.”

Ryan and his congressional colleagues have also expressed concern that the administration would not be able to guarantee that financial transactions or assets released to Iran under the nuclear agreement would not end up in the hands of terrorist organizations. In fact, Secretary of State John Kerry, one of the leading architects of the deal, has even acknowledge that there is a chance that some portion of the sanctions relief will reach such Iran-affiliated groups, which include Hezbollah and various other Shiite militias.

Meanwhile, Iranian officials have shown no sign of willingness to acknowledge the regime’s culpability for the past activities of these groups. Kerry’s Iranian counterpart, Foreign Minister Javad Zarif has now threatened to take the United States to international court over a US Supreme Court ruling that holds back some Iranian assets as reparations for victims of terror.

The ruling was announced on Thursday and upheld a two year-old decision by a lower court, which found that two billion dollars’ worth of frozen Iranian assets could be seized to pay the families of victims of Iranian-sponsored terrorist acts, including the 1983 bombing of the US Marine barracks in Beirut. Iran has simply denied responsibility for such incidents, although its connections to Hezbollah and other perpetrators are well documented.

Agence France-Presse quotes Zarif as saying about the Supreme Court decision, “We hold the U.S. administration responsible for preservation of Iranian funds and if they are plundered, we will lodge a complaint with the [International Court of Justice] for reparation.”

By avoiding the terrorist issue, such remarks serve to further underscore the obstacles that stand in the way of foreign investment in Iran. Whereas Zarif and Khamenei have held the US responsible for not facilitating the reentry of foreign companies, the Fayette Advocate points out that many US officials and European experts agree that the Islamic Republic has made such reentry difficult because it has not improved the environment of Iranian-Western relations.

Despite the fact that the nuclear negotiations that led to last summer’s agreement began well over two years ago, neither the Iranian government in general nor supposedly moderate President Hassan Rouhani in particular have made any noticeable moves to reform Iran’s laws regarding money laundering and the support for terrorist organizations.

The UANI statement on Zuma’s visit points out that American legislation still considers the entire Iranian financial system to be of “primary money laundering concern.” But the statement also appears to recognize that such warnings cannot immediately halt the interest in investing in the Islamic Republic. Therefore it ends by advising Zuma, and presumably anyone who makes a similar state visit in the near future to recognize that they have a “special responsibility to focus [their] efforts on pressuring Tehran to halt its destabilizing and provocative behavior rather than prematurely rewarding the Iranian regime with lucrative business opportunities.”