What Lifting Iran's Sanctions Means For U.S. Businesses

Transcript

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The Iran nuclear deal will still be debated at the United Nations. Lawmakers in the U.S. will still weigh in. But already, Western companies are smelling opportunity. After all, Iran is a largely untapped market for them. It has a population of nearly 80 million people, more than half under the age of 30. But as NPR's John Ydstie reports, despite the lifting of some sanctions, most U.S. firms and individuals will still be barred from doing business with Iran.

JOHN YDSTIE, BYLINE: William McGlone is a Washington lawyer, a partner in the firm Latham & Watkins and a specialist in trade law and economic sanctions. He's gotten lots of phone calls from business clients since news of the deal broke. He says he's been forced to give them a bit of a cold shower.

WILLIAM MCGLONE: There's this expectation, or assumption, in the business community that the sanctions are being lifted, when, in fact, the U.S. legal framework is scheduled to remain in place.

YDSTIE: That's because only a small fraction of the U.S. sanctions - the ones related to Iran's nuclear activities - will be suspended as part of this deal. That will leave in place sanctions related to terrorism and human rights enacted by Congress beginning in 1995. And McGlone says those sanctions include strict prohibitions.

MCGLONE: As a general rule of thumb, any U.S.-based business or any U.S. person, unless specifically authorized, will be precluded from doing any business in Iran.

YDSTIE: Including U.S. oil companies, banks and consumer-goods firms. A senior Obama administration official put it this way in a briefing with reporters. We are not removing our trade embargo on Iran, he said. And he continued; U.S. persons and banks will still be generally prohibited from all dealings with Iranian companies, including investing in Iran or facilitating third-country trade with Iran. There is one big exception, the civil aviation industry. Once inspectors have certified that Iran is complying with the agreement, likely sometime late this year, companies such as Boeing will be able to sell civilian aircraft and parts to Iran. Industry officials say that could mean sales of 400 aircraft worth $20 billion in the next decade. A Boeing spokesman said the company is reviewing the agreement, but until the U.S. government gives further direction, the company won't comment. So outside of civil aviation, exceptions for foods and medicines, which the U.S. has previously allowed to be traded and some potential loosening of restrictions on the foreign subsidiaries of U.S. firms, U.S. companies will still be frozen out of Iran's market. But for European companies, it's a different story.

VANESSA SCIARRA: I think the practical reality is the Europeans will be there first.

YDSTIE: That's Vanessa Sciarra, vice president of the Emergency Committee for American Trade. Sciarra points out that Europe's sanctions are far less extensive and long-standing than U.S. sanctions and will be lifted quickly. European oil producers have said they're eager to return to doing business with Iran's oil industry. French automakers are also anxious to return to Iran. Despite the frustration at seeing their European competitors get a head start, Sciarra says many U.S. businesses are still hopeful.

SCIARRA: Cautiously optimistic.

YDSTIE: She says many of her member firms hope and believe this deal is just the beginning of a broader opening. And they'll lobby hard to remove the extensive array of U.S. sanctions. Lawyer William McGlone is skeptical.

MCGLONE: At least as of now, I think it's prudent to assume that there's still very strong bipartisan political support for maintaining the core of the longstanding U.S. sanctions against Iran.

YDSTIE: McGlone says he thinks there would have to be a sea change in U.S. politics before the core U.S. sanctions against Iran are lifted. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.