Sanctions Relief & What It Really Means

For the past few days, Iran has repeatedly made front-page news on many of the world’s most influential newspapers. After Iran’s landmark nuclear deal last year with the P5+1 countries, it was a matter of time before US, EU and UN sanctions against Iran were removed and Iran could start benefiting from its re-entry into the international community and world markets. And on January 16, the long-awaited day came at last when international sanctions were lifted, a move that unfroze billions of dollars worth of Iranian assets and allowed Iranian oil to be sold internationally for the first time in decades. However, just a day later, the excitement was slightly doused at the news that the US had imposed fresh sanctions on 11 Iranian individuals and entities that were linked to a recent ballistic missile program.

Sarosh Zaiwalla, a trained lawyer specializing in international arbitration, has represented many Iranian companies that have been blacklisted by international sanctions. His clients have included Bank Mellat, Bank Tejarat, Iran's national shipping and oil companies and many others. He spoke to IranWire about what the removal of Iranian sanctions will mean for Iran’s people and companies, the latest US sanctions and what he foresaw for Iran’s future.

The past few days have been a turbulent time for Iran. What’s been going on?

Most of the nuclear sanctions on Iran were lifted, which have been a major hindrance to the country for a very long time. However, some other new sanctions were reinstated, although these are only very narrow sanctions and related to institutions that were found to have been involved in the nuclear manufacturing program. Only the US imposed these new ones.

Have EU and UN sanctions been lifted completely? Who were they targeting?

EU and UN sanctions are now entirely gone. These sanctions were targeting people, companies and government officials that were involved in nuclear proliferation activities in Iran. For instance, two of my clients that were alleged to have been involved were Bank Mellat and Bank Tejarat. The allegation against them was that some of their client accounts were involved in nuclear proliferation activity by supplying materials that would be used to manufacture a nuclear bomb.

Why is sanctions relief important and what will it mean for the Iranian people and Iranian businesses? What will it mean for foreign investors?

Iran needed to be brought back into the international community after its exclusion for nearly 40 years. Sanctions relief will have a tremendous effect on the Iranian people as I think it will prove to be a turning point with regards to making Iran more open to discussing its human rights record. Secondly, from a commercial point of view, it will give Iranian businesses an opportunity to once again trade with overseas companies. Thirdly, it will once more allow the Iranian people to travel freely across the world without any restrictions.

In terms of foreign investors, there will be a huge effect and that’s already apparent. A recent client of mine who comes from Germany has told me on numerous occasions that he now considers Iran to be an attractive option for investment, which I know he didn’t before.

Many foreign companies have already flocked to Iran but it’s worth mentioning that they face many obstacles there. One of the main ones is the legal situation in Iran. If Iran really wants to invite large-scale investment, they must ensure that they bring in laws that allows international arbitration to be enforced. Any investor who’s intending to give loads of money will always be concerned with the safety of his or her investment. In fact, in the past few months, the Iranian government has said that foreign investors must work with a local Iranian partner if they’re going to invest in joint venture projects. My firm has received a lot of requests from overseas companies asking for help to find a reliable local Iranian partner.

What’s the situation with US sanctions? Will these sanctions affect any companies that aren’t American?

Only a small number of companies and people are affected by the US sanctions and they’re people and entities that were linked to the ballistic-missile program. But these sanctions only affect US companies. It won’t affect other international companies.

Sanctions relief has made billions of frozen assets available to Iran. How will this make a difference in the country?

It’s going to change the landscape in Iran enormously because that money is now available for Iran to purchase foreign material, foreign equipment and foreign consultancy expertise for its gas and oil projects. During sanctions-time, Iran became quite self-sufficient in terms of equipment, importing from China and other countries that were relaxed about sanctions. But they struggled not having access to consultancy experts from Britain and other European countries. That’ll change now and it’ll have a big impact.

What do you foresee for the future in terms of Iran and sanctions?

I think things will sort themselves out relatively quickly with US sanctions. I say that because having been to Iran several times over the past few years, I saw firsthand how Iran was very much sick and tired of sanctions. For this reason, I think the Iranian government will be very careful not to give any opportunity to the EU or the UN to snapback on sanctions. Things will improve and Iran will rejoin the international community and that in turn will improve the human rights situation. It will teach people in Iran that there’s nothing wrong with human rights and that it allows people to live with dignity.

It’s very important to remember that Iran is a country with an ancient culture and if you go to them with the barrel of a gun, they’ll react badly. But if you go to Iran and speak calmly and respectfully, they’ll give you more than you deserve. If Iran can interact with the international community, its human rights situation will naturally improve.

I’m very optimistic about Iran’s future and the lifting of sanctions. I’m confident that as it opens up its borders, it will start to take the human rights situation more seriously.

Related articles:

Iran’s Very Own Sanctions Lawyer

Iran, the Deal and Implementation Day

What the lifting of sanctions means to me: 10 ordinary Iranians speak out