Will interim agreement boost humanitarian trade with Iran?
Under terms of the deal to be implemented starting Jan. 20, the P5+1 promise to facilitate the establishment of a channel for humanitarian and other legal trade with Iran, but European banks are unlikely to rush back into relationships with Iran and US banks remain off-limits.
The US government has promised to “provide comfort” to Western companies selling humanitarian and other allowed goods to Iran but has offered few details about how it will carry out its pledge to help establish a new “financial channel” to facilitate such transactions.
Under the terms of the Nov. 24 accord, which is to be implemented starting Jan. 20, Iran will be able to sell petrochemicals, import parts for its automotive industry and sell oil primarily to Asian countries at current reduced levels of about 1 million barrels a day. Iran will also get access to $4.2 billion in previous oil earnings bottled up in banks in importing countries, to be doled out in monthly increments starting with $550 million on Feb. 1.
But with sanctions remaining on the Iranian Central Bank and two dozen other Iranian financial institutions, it is unclear how readily Iran can use these funds to purchase Western goods and services.
A senior administration official, queried by Al-Monitor on Sunday, Jan. 12, said that Iran will not be allowed to re-establish accounts with American banks even though several Iranian banks have not been sanctioned by the US government and it is legal for American companies to sell Iran food, medicine and medical devices.
