U.S., Iran reactions vary on sanctions, AML/CFT Compliance

Iran, U.S., Europe wrestle with sanctions details, AML/CFT Compliance

Economic sanctions are a powerful tool of foreign policy, and Iran has been a longtime target of Western sanctions that impact financial institutions’ AML/CFT Compliance actions. But last year’s nuclear deal with several Western nations was expected to ease the sanctions and improve the Iranian domestic economy, at least a little bit. That was the carrot part of the carrot and the stick.

It’s been a year now, and the reality of Iran’s hands-off status within the international financial and business community remains largely unchanged due to various risk concerns and a climate of uncertainty, according to the Wall Street Journal. Iran’s early-stages deal with Boeing drew lots of headlines last month, but the U.S. House of Representatives bucked the White House agenda last week by passing a measure to halt the sale.

That was after Boeing offered details in late June about its proposed deal with Iran and its assiduous efforts to negotiate the deal within the legal parameters of sanctions currently in place. Boeing Vice President Tim Keating assured U.S. Congress members that his company had dealt only with parties approved by U.S. sanctions monitors. But for House members who oppose the nuclear deal with Iran, that is not sufficient.

The Boeing discussions among U.S. politicians regarding the aircraft deal have not yet fully played out, but many continue to express opposition to any U.S./Iranian rapprochement due concerns about Iran’s actions in the region. The Obama Administration’s relations with Iran remain tense, as well, but the Administration is attempting to facilitate the easing of sanctions in order to support Iran’s current government, which made the nuclear deal.

Ironically, Iran is experiencing its own internal conflict related to the deal, the New York Times reported this week. Iranians had expected significantly more economic gains as a result of the nuclear deal, but that hasn’t happened yet. And those expectations have eroded support for the deal and President Hassan Rouhani’s government, according to the Times.

The Times notes that U.S. Secretary of State John Kerry has been meeting with European bankers and business people to encourage investment and activity to the degree that it’s now allowed, but Kerry has said that he reminded his Iranian counterparts that “businesses make investments largely by looking at risk. And if Iran continued to do what it has been doing in the region, I told [the Iranians], the risk profile of investing there would only reduce so much — even with a deal.”

The Journal reporting notes, for example, that while European companies have more opportunities for doing business with Iran based on sanctions details, they are finding it difficult ” to wall off any ‘U.S. person’ or product from a transaction with Iran.” The report notes further the challenge of identifying who and what qualify exactly as ‘U.S.’ given the international nature of business and banking.


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