The US secretary of state, John Kerry, was expected to arrive in Vienna on Saturday for talks with his Iranian and European counterparts ahead of the so-called “implementation day” ending sanctions on Tehran.
A state department spokesperson has confirmed that Kerry was travelling to the Austrian capital on Saturday to hold meetings with Iran’s foreign minister, Mohammad Javad Zarif, and the EU foreign policy chief, Federica Mogherini. They were expected to announce an end to the sanctions regime as early as Saturday after the International Atomic Energy Agency (IAEA) formally verifies that Tehran has fulfilled all its obligations under the landmark nuclear accord between western powers and Iran.
“As we’ve said, all parties have continued making steady progress towards implementation day of the JCPOA (joint comprehensive plan of action), which will ensure the exclusively peaceful nature of Iran’s nuclear programme,” deputy spokesman Mark Toner said in an email statement provided to the media.
The mood in Tehran is upbeat but many remain cautious as the US and the EU prepare to dismantle an intricate network of punitive measures against Iran, reconnecting it to the global economy after 10 years of isolation and unlocking billions of dollars worth of trade.
'We're desperate to see change': Tehran upbeat as sanctions due to end this weekend
Read moreThe west has already put in place the essential legislation for the lifting of sanctions. The announcement of the implementation day will bring that into effect. Iranian banks will soon re-establish connections with the European financial system and private firms will be able to pursue business opportunities without fear of western punishment.
Under an extensive web of financial restrictions, Iran was subject to economic isolation as well as an oil embargo. The lifting of sanctions will pave the way for Iran to add an extra half a million barrels per day to its crude exports, which will affect the global oil market currently already struck by oversupply. Iran is also expected to add another half a million barrels per day within six months, bringing its crude exports back to pre-sanctions level.
European companies will be able to resume business with Iran but American companies are still hampered by the existing terrorism, human rights and ballistic missiles-related sanctions that will remain in place. Foreign companies dealing with Iran will no longer be punished by the US.
Meanwhile, Iran’s banking sector, previously cut off from the outside world, will gain access to Swift services, which facilitate international transactions. Around $30bn of a total of $100bn in frozen assets will be released to Iran.
“Implementation day is demonstration of how persistent, high-level engagement is a critical ingredient for successful policies between Iran and the international community,” said Reza Marashi of the National Iranian American Council (NIAC), who closely followed the nuclear talks.
“Direct diplomacy between secretary of state John Kerry and foreign minister Javad Zarif was the linchpin of this peaceful outcome,” he said. “In the absence of US-Iran dialogue, accidents like [the recent capture of US sailors] could have quickly escalated. Thanks to the Iran nuclear deal, a sustained diplomatic channel now exists to de-escalate. The entire Middle East will benefit if this is the new normal.”
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Read moreHossein Rassam, a London-based Iranian analyst, said the lifting of sanctions would bring two years of intensive diplomacy to fruition. “Significance of the post-implemenation day period is that sectors of the Iranian economy such as trade and oil can, after many years, experience relative normalcy,” he said.
John Forrest, head of international trade in London at law firm DLA Piper, said “as a significant and diverse emerging market, Iran presents substantial opportunities for European businesses, especially those engaged in the oil and gas and wider energy sector, manufacturing companies, retail and consumer goods suppliers and the food and drink and sector, and financial institutions and wider financial services companies”.
But he said while all nuclear-related sanctions on Iran will be lifted, other sanctions such as those related to human rights and terrorism will remain in place, most notably in the US, meaning that companies would still have to comply with those restrictions.
“From a practical perspective, it remains to be seen whether EU sanctions relief will be held back should banks continue to take a cautious approach to processing Iranian payment transactions,” he said.
“Whilst the EU piece of the puzzle is clear, as it has already published relevant legislation amending existing sanctions measures to pave the way for early EU termination, there remains a lack of clarity with regards to the US.”