Iran's landmark international nuclear deal has reached implementation stage, opening a new chapter in the country's engagement with the world economy. The International Atomic Energy Agency verified on January 16, 2016, that Iran has complied with its obligations under the Joint Comprehensive Plan of Action signed between Iran and world's superpowers in July 2015.
In connection with this historic day, all nuclear-related United Nations, European Union, and U.S. secondary sanctions, along with certain U.S. primary sanctions, have been lifted. The benefits for Iran will be immense, paving the way for its integration into global financial markets. But U.S. statutory financial sanctions that fall outside the scope of JCPOA, including those related to human rights, regional instability, terrorism, and development of ballistic missiles, will remain in place. As such, U.S. banks will continue to be restricted from virtually all dealings with Iranian entities. In addition, international banks based in Europe, Asia, the Middle East, and elsewhere will remain hesitant to conduct U.S. dollar transactions with designated Iranian banks and other entities that must be cleared through the U.S. interbank payment system, as they would risk losing access to U.S. capital markets themselves.
The next step forward is to think the unthinkable: building on the momentum of the nuclear agreement to begin bilateral negotiations between the United States and Iran to dismantle remaining financial sanctions. Without this, Iran would not be able to fully benefit from increased economic openness it has so desperately strived for.
Certainly, negotiations involving the removal of remaining U.S. financial sanctions on Iran would be complex from a legal and policy perspective. For its part, Iran's negotiating position is strengthened by the UN Security Council Resolution 2231, which endorsed the JCPOA, and now forms the key international legal framework related to its nuclear activities.
Yet U.S. sanctions are driven by foreign policy and security goals and motivated by a variety of human rights, geopolitical stability, and nuclear proliferation concerns, and have been given force through a panoply of regulations and designations administered by the U.S. Treasury Department. While some of the authorizing laws have been enacted specifically against Iran (most notably, the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010), others, such as the USA...