While Congress argues over Iran, Europe rushes to do business there

GMT 18:37 2015 Saturday ,22 August

Arab Today, arab today While Congress argues over Iran, Europe rushes to do business there

Iranian FM Mohammad Javad Zarif(R)
Washington - MENA

A German government plane packed with the nation's economic elite touched down in Tehran, though the ink was barely dry on a landmark agreement with Iran to limit its nuclear program before, The Washington Post reported.

They were just the first in a rush of European ministers and businesspeople flocking to a market that is poised to reopen after years of grinding sanctions.

Upscale Tehran hotels are packed and tables at trendy restaurants are scarce as foreigners jostle for bargains, even amid uncertainty over whether President Obama can overcome congressional opposition to the deal.

The steady stream of visitors to Tehran is the latest sign of the Atlantic-wide divide between the United States and Europe, where there is scant opposition to the pact that aims to crimp Iran's nuclear ambitions. Obama and Secretary of State John F. Kerry have warned detractors that they would be unable to reimpose a multinational trade embargo if Congress rejected the plans. The five other countries that helped broker the deal have also told Congress that they will not return to the negotiating table.

The high-level trips show that US leaders can't even keep Europeans from booking tickets to Tehran ahead of the congressional vote, which needs to take place by Sept. 17.

Any Western business deals with Iran are still riddled with legal uncertainties, leaving companies tiptoeing for now. Multinational firms that do business in the United States don't want to be targeted by US sanctions if Congress ultimately rejects the agreement. The Treasury Department also has powerful sway over the international finance system, making it difficult for money to flow to and from Iran and crimping even deals that are legal under the current sanctions regime.

That doesn’t even touch on what would happen if Iran were found to be violating the deal, triggering “snapback” sanctions that could gobble up whatever Western money is invested there.

But despite the concerns, some initial agreements are being signed — with government stamps of approval.

Italian bank Mediobanca signed a memorandum of understanding in Tehran this month to finance deals between Italian and Iranian businesses. The loans would be guaranteed by Italy's state-run export credit company, which has estimated that removing sanctions could increase Italian exports to Iran by $3.3 billion by the end of 2018.

Many analysts say European policymakers would have little patience for a US rejection of the agreement, which was finalized after years of painstaking negotiations led by the Obama administration. Europe never sundered ties with Iran as completely as the United States did.

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