American companies risk missing out on a “gold rush” in Iran if sanctions are lifted as expected next year under the controversial nuclear deal, experts have warned.
Companies from Asia and Europe are already flocking to do business in the emerging economy, which is set to come in from the cold should Tehran meet its obligations to not pursue a nuclear weapon.
But while the accord has been billed as a flagship of Barack Obama’s foreign diplomacy, the US might be among the last to benefit commercially. Only a small fraction of US sanctions – those related to Iran’s nuclear activities – will be suspended as part of the deal, which also allows for a “snapback” of all sanctions in the event of non-compliance.Although US companies’ foreign subsidiaries will be allowed to engage with Iran, a minefield of regulatory, transparency and legal issues could present more risk than reward in the eyes of many. Investors are also likely to be wary of the next US presidential election, with Republican candidates vowing to scrap the deal if they come to office.
Other countries, however, appear to have embraced the deal and Iran’s potential as a sleeping giant. “If you want to see optimism, you just go to Dubai airport at about 8am,” Adam Smith, a lawyer focused on international trade compliance,told the Atlantic Council thinktank in Washington recently. “Ten flights a day between Dubai and Tehran, all packed.
“It’s really quite amazing and every discussion you have with big companies, small companies, middle companies throughout the Gulf starts exactly the same way. They say, ‘Mr Smith, please have some tea. Let me tell you about my recent trip to Tehran.’ It’s exactly the same discussion every single time. Even companies that are subsidiaries of US companies: really, it’s everybody.”
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