UN clears the way for lifting of Iranian sanctions

New York // The UN’s nuclear watchdog has cleared the way for the lifting of international sanctions against Iran, which will have far-reaching implications for the region and Tehran’s expanding role in it.

The International Atomic Energy Agency said on Saturday that its “inspectors on the ground verified that Iran has carried out all measures required under the [July nuclear deal] ... to enable Implementation Day to occur”.

Earlier in the day, US secretary of state John Kerry and the EU’s top diplomat, Federica Mogherini, had met with their Iranian counterpart, Javad Zarif, in separate talks in Vienna.

“Our region has been freed from [the] shadow of an unnecessary conflict that could have caused concerns for the region,” Mr Zarif said, speaking to widely-held fears that if the deal failed then the United States or its allies would resort to military measures to take out Iran’s nuclear infrastructure.

“Today is also a good day for the world. Today will prove that we can solve important problems through diplomacy.”

While the IAEA's certification was still being ironed out on Saturday afternoon, Iran released four Iranian-Americans being held in its prisons, including Jason Rezaian, the Washington Post bureau chief.

Six Iranian-Americans and one Iranian convicted in the US reportedly for violating nuclear sanctions on Iran were also freed.

Under the terms of the historic nuclear deal, Iran accepted strict curbs for up to 15 years on the aspects of its nuclear programme that could be used for building a bomb, in exchange for the lifting of all nuclear-related economic and banking sanctions by the European Union, UN economic sanctions and key US sanctions that forbade other countries from buying oil or doing business with Iran.

Most economic sanctions preventing US companies from doing business with Iran will remain in place as well as US terrorism and military sanctions.

However, the UN Security Council resolution that will go into effect only states that Iran will be “called upon” to cease all work on ballistic missiles designed to carry a nuclear warhead for eight years. Critics say the language is not binding, and Iran itself has proceeded with ballistic missile research and testing on missiles that are capable of delivering nuclear weapons but, according to Iranian officials, are not specifically designed to do so.

Iran will not be allowed to sell weapons for five years, under the terms of the resolution, but ballistic missile technology and large conventional weapons systems can be sold to Tehran with Security Council approval. US officials have said they would veto such sales.

Upon implementation, Iran will receive up to US$100 billion (Dh367bn) in frozen oil assets, though the exact figure is disputed, with US treasury officials saying it will be closer to $50bn. It is also unclear to what ends the immediate windfall will be used by Iran.

Gulf Arab countries and Israel fear that the money will go directly to the Islamic Revolutionary Guard Corps and increase an emboldened Iran’s ability to project power in the region, which may mollify Iranian hardliners who have opposed the nuclear deal. Iran’s relatively moderate elected government of President Hassan Rouhani will hope the funds will be used immediately to bolster Iran’s ragged economy, and that there will be tangible economic results ahead of important national elections next month.

The newly liquid cash may also be added to Iran’s foreign currency reserves to prop up the rial against falling oil prices, economic experts have said.

Regardless of the impact of the unfrozen assets, the longer-term implications of the deal will have profound consequences for Iran’s growing international legitimacy, economic and political relations with the world, as well as its expanding role in the Middle East and the intensifying rivalry with Saudi Arabia.

Iran, with a population of about 80 million, has a large, well-educated middle class hungry to do business with the outside world after years of crippling sanctions. They are also an untapped market for western companies at a time when the global economy is still sputtering.

Already on Saturday, Iran’s transport minister told Iranian media that Tehran plans to buy 114 passenger aircraft from European manufacturer Airbus once the sanctions are lifted, a deal that could be worth around $10bn for the company.

It is also likely to contribute to continuing strained relations between Riyadh and Washington, though it is too early to say whether the thaw between the current US and Iranian administration’s that the nuclear deal has engendered will last beyond Barack Obama’s tenure. The two countries are still strategic rivals, though have cooperated on a number of regional issues including the fight against ISIL and negotiations over ending the Syrian war.

Mr Kerry and Mr Zarif in particular have opened an unprecedented channel of communication. Its benefits were on display when Iran quickly released 10 US navy sailors captured last week after straying into Iranian waters. The regular talks between the two diplomats also gives Iran a much more direct way to try and influence US policy. “Iran understands the value of [this] new channel with the US in order to balance the information it receives from the US’s regional Arab allies,” said International Crisis Group’s senior Iran analyst Ali Vaez last week.

Critics of the White House’s relationship with Tehran say Iran knows the US needs its cooperation on Syria – now its key regional priority – and wants to preserve the nuclear deal at all costs, and has taken advantage of American reticence.

The White House pulled back from issuing new sanctions on Iran over its ballistic missile tests after days of intense discussion between Mr Kerry and Mr Zarif. Mr Zarif reportedly threatened to scuttle the prisoner swap, after months of secret, high-level negotiations, if the sanctions were put in place.

But there are few signs that this newfound cooperation between old enemies will be institutionalised further. “[Iran’s supreme leader Ali] Khamanei is in no mood to take any risks precisely because Obama has less than a year in office,” Mr Vaez said, adding that the thaw may be over “as soon as President Obama leaves office”.

Washington’s traditional Arab allies in the Gulf, who have worked with the US as a counterbalance to Iran, are watching these developments with a sense of abandonment. US assurances that it is still committed to protecting them from Iranian aggression have done little to alter the perception that wants an empowered Iran that will leave a balance of power in the region so it can focus on East Asia.

As a result, Riyadh has ramped up its pushback against what it sees as Iranian expansion in Yemen and Syria. “The consensus in Iran is no less broad that its conflict with Riyadh is a permanent feature of the regional landscape,” Mr Vaez added.

US hopes that the nuclear deal would help find an equilibrium between the two regional powers appear to have failed to be realised so far.

tkhan@thenational.ae

* With additional reporting by Agence France-Presse