PARIS — Before the ink was even dry on the Iran nuclear deal, European leaders and executives were heading to the airport to restart trade with an Iranian market described in almost feverish terms as “an El Dorado” and potential “bonanza.”
Germany sent a delegation five days after the signing of the accord in Vienna on July 14. The French foreign minister, Laurent Fabius, arrived in Tehran on Wednesday. Italian government ministers will get there on Tuesday. Business leaders are to follow soon. They will include 70 to 80 top executives of France’s largest companies in September.
Despite the hints of a gold rush, however, the probable opening of Iran’s market holds substantial risks for businesses, and makes it more complicated diplomatically to pull back anew if Iran again pursues the capacity to make a bomb.
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Perhaps most important, the United States — virtually alone — is largely missing as an economic player. The nuclear agreement does little to lift a raft of American sanctions stemming from Washington’s listing of Iran as a state sponsor of terrorism and violator of human rights.
Europe has far lower bars, raising the prospect that the United States and its allies will quickly have vastly divergent levels of investment in Iran that could make the Europeans reluctant to reimpose sanctions if the deal is violated.
In addition to the hard-won terms of the accord, the lure of the Iran market was no doubt one factor that European nations and the United States weighed in deciding to support a deal.
In interviews with more than 20 government officials, business executives and analysts in Europe, the United States and Iran, the business opportunities in Iran were described as seductive but uncertain — made more so by the United States’ decision to leave many of its sanctions in place.
“It’s not every day a big potential market with an emerging middle class comes onto the scene,” said Philip Gordon, the White House coordinator for the Middle East for the last two years and now at the Council on Foreign Relations.
But he cautioned, “Countries are going to take a deep breath before they walk back into Iran.”
Particularly worrying for the Europeans are the agreement’s so-called snapback provisions. They could allow Washington, or any signatory, to quickly reimpose sanctions for all in case of a perceived Iranian violation, even after businesses have committed billions of euros.
While the deal contains a grandfather clause protecting investments made before any complaints of violations, there is much uncertainty about how it would work in practice.
No sanctions have been lifted yet — that is most likely at least six months away. But even given the risks, the Europeans have decided that the pros outweigh the cons, and have quickly begun laying the groundwork for business. They are starting far ahead of the United States, because European governments have maintained relations with Iran during the more than three decades since the Americans severed ties over the 1979 hostage crisis.
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For the Europeans, the nuclear agreement has the potential to reopen a rare market of some 75 million people that was long prized before European nations joined the broader sanctions against Iran in 2012.
As recently as 2011, the European Union imported 17 billion euros, or $18.7 billion, in Iranian goods and exported €10.5 billion, according to the European Union’s Directorate-General for Trade.
“The Europeans have done their homework,” said Ellie Geranmayeh of the European Council on Foreign Relations. “Politically, there is no diplomatic freeze between European member states and Iran.”
“For the past 35 years, the Europeans have had a contact base in Iran,” she added. “They are not reinventing the wheel.”
Some United States sanctions will be lifted under the nuclear accord. The most important are known as “secondary sanctions,” meaning penalties imposed on foreign entities that did business with Iran.
Such sanctions have been used to fine banks, including BNP Paribas, a French bank that was hit with an $8.9 billion penalty in June 2014 for conducting banned transactions with Iran, Sudan and Cuba.
The only American exceptions to the trade sanctions are for civilian aircraft — a boon to companies like Boeing — and for overseas subsidiaries of American companies. Those subsidiaries can apply for a license to do business with Iran.
Even with those exceptions, only a small group of companies will benefit, lawyers and policy experts say, and American businesses could ultimately push for more sanction relaxation in order to better compete with their European counterparts.
“We have lots of clients calling us and saying, ‘When can we go to Iran?’ ” said Stephen J. McHale, a partner at Squire Patton Boggs, a law firm in Washington with a large trade practice.
“The answer is, ‘You can’t,’ and even if you fall into the small category of those who can, it will be at least six months and it will be quite difficult for you as a U.S. person or business,” Mr. McHale said.
European companies that are trying to figure out how to do business with Iran say they are particularly worried about the snapback provision because they are unsure how it will work. If a business is committing hundreds of millions, if not billions, of euros to multiyear projects that involve building infrastructure and making capital investments, it wants some assurance that sanctions will not terminate those projects.
“Oil companies will need long-term financing from banks to go into Iran, and they need certainty,” said Harry Tchilinguirian, the global head of commodity markets strategy for BNP Paribas.
“What happens in the case of the sanctions snapback? What kind of collateral do you ask for in the case of snapback?” he added.
Mr. Gordon of the Council on Foreign Relations suggested that the drafters purposely left room for interpretation in the snapback provision. He noted that not all sanctions would necessarily be reapplied.
The accord stipulates, for instance, that renewed sanctions would “not apply with retroactive effect” to contracts signed before a potential violation is flagged. European companies and governments could argue that contracts signed now would be excluded from any future sanctions.
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The State Department did not respond to requests for clarification.
Fereydoun Khavand, a French-Iranian professor of economics and law at L’Université Paris Descartes, said Iran’s first priority would be to modernize its oil exploration and exploitation infrastructure, potentially to the tune of $185 billion in new investments, according to recent statements by Iranian officials.
Other areas are petrochemicals and tourism. Iran is negotiating with Accor, a French hotel chain, among others, to build new hotels to expand tourism, said several business experts.
Peugeot, one of France’s premier car companies, confirmed last week that it was well along in discussions with a presanctions partner, the Iranian auto company Khodro, to build cars in Iran and transfer French technology. Iran had been Peugeot’s second-largest market outside France before the economic sanctions.
SEB, a French appliance maker, has been “in the starting blocks” for the last year, waiting for the deal to go through, said Frédéric Verwaerde, a senior executive vice president.
The company, which had been active in Iran since the 1950s, did as much as 50 million euros of business a year in Iran before the sanctions.
“Iran could be the size of Turkey or Spain” as a market for household goods, Mr. Verwaerde said, noting that it has a large middle class, educated women who want high-quality European brands, and a tradition of entertaining at home.
In Germany, the petrochemical company BASF and the industrial giant Siemens, which helped to build one of Iran’s first railroads in the 1920s and 1930s, are looking to return. The same goes for ThyssenKrupp, a German steel and machine conglomerate, which had done business in Iran for more than 30 years until the sanctions.
Oil companies like Total, Royal Dutch Shell and British Petroleum also want to return. But they are balancing the allure of potential profits against the future uncertainties, said Mr. Tchilinguirian, the BNP Paribas executive.
“What you are seeing is corporate oil diplomacy taking place,” he said. “That doesn’t mean we’ll have an immediate breakthrough.”
This article was written by forThe New York Times on AUG.1, 2015.