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Mainstream, VOL52, No. 22, May 24, 2014

Washington-Tehran Negotiations: Edging Out America’s Business Rivals from Iran

Friday 23 May 2014, by Benjamin Todd


With a view to reducing the tension around Tehran’s nuclear programme, the US has lately engaged itself in negotiations with Iran. There has been some progress in these negotiations no doubt, but the West has not yet given indication of any substantial dilution of the sanctions on Iran. What comes out from the attitude of the US and its European allies is that they have unilaterally imposed the sanctions regime not with the primary purpose of limiting Iran’s access to nuclear technologies and materials but with the intention to prepare the ground for their corporations to move in and edge out the latter’s business rivals from the Iranian market.

It is by now clear that the Western sanctions limiting cooperation with Iran discriminate against the Asian States. Through the use of the advanced banking system as also dollar and euro as the international reserve currencies, the Western states can manipulate in controlling trade between Iran and other countries. This was established by the developments of last two years: trade bodies of South and South-West Asia were literally forced out of the Iranian market on the ground that there was an urgent need to toughen sanctions against Iran.

Nonetheless, while adopting such measures Washington left for itself the opportunity to cooperate with Tehran. It is noteworthy that the Comprehensive Iran Sanctions, Accountability Divestment Act (CISADA) allows American business firms to invest in the Iranian economy provided these investments are “vitally impor-tant for US national security” and also if those do not “significally contribute to the enhance-ment of Iran’s nuclear ability”. These clauses have evidentaly broad interpretation due to which, notwithstanding the prevailing limita-tions, JP Morgan Fund is already participating in various projects on Iranian territory and California Pension Funds has been permitted to invest about $ 300 million directly into the oil and gas projects in South Iran.

However, the Washington-initiated global sanctions don’t prevent the US from exporting goods and services into Iran. Thus in May 2012 America’s Lawrence Will Plaza Physic Inc. concluded a nuclear research treaty with Iran’s Free Islamic University. Tehran gets regular supply of US engineering products (as, for example, Cummins engines) and wheat without any bank-induced restrictions as are placed in the case of other foreign exporters; the latter can’t evade the limitations on payment transactions. What is more, such evasion could invite severe sanctions from the side of the US Government.

Anti-Iran restrictions benefit the Europeans too. Hence the black-list of Iran’s industrial compa-nies by Europe includes the National Iranian Oil Company (NIDC), National Iranian Gas Company (NIGC), National Iranian Tanker Company (NITC) but not the National Iranian Petrochemical Company (NIPC) which did not at any point terminate its supply to Europe where there is a consistent demand for its production.

Several European companies did not end their cooperation with Iran in the realm of mining and smelting. These companies are Italian Tenova and Danieli, Danish Schmidt, Finnish-German Ototek, Australia’s ITOK Group.

Within the unilateral sanctions regime the Western countries evolved quite a visible mechanism of unfair competition. The multiple exceptions to the rules have not been made on humanitarian grounds but to restrict other states from entering the Iranian market and consolidating their positions there.

Therefore, recent activation of negotiations to broaden cooperation with Iran, initiated by the large American and European corporations, has one objective: to legalise their presence in the Iranian market. In case the sanctions are partially lifted, these corporations are keen to secure strategic advantage over their business rivals, principally those from the Asian region. 

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