As Iran slowly works its way back into the global economy, the country’s president, Hassan Rouhani, is in Europe looking to drum up excitement about investment. Some of the sanctions imposed on Iran because of its nuclear program have been lifted, which means international businesses, ones not headquartered in the United States, are free to trade with, and invest in, Iran. Many U.S. businesses want to get a slice of the pie, too, but they’re not really competing on an level playing field.
Majid Rafizadeh, a Middle East scholar at Harvard, said American restrictions have opened the door for European and Asian businesses to take hold of the Iranian market.
“It’s ironic that the U.S. pushed for the nuclear deal and lifted the sanction,” he said, “but actually American companies are the largest loser of the nuclear deal.”
Many European countries have gone further in relaxing sanctions so it’s easier for E.U. businesses to dive in. American companies can only use their foreign subsidiaries to do business in Iran and even then they need a waiver from the Treasury Department. Rafizadeh said Iranians are hungry for American products.
“If American companies, like Microsoft or Apple, were allowed to operate in Iran,” he said, “they would have really better edge over European companies.”
An edge particularly with young Iranians. Sixty percent of the country’s population is under the age of 30. They’re also well-educated and have a lot of spending power. But Suzanne Maloney, a former State Department official who’s now an Iran expert at the Brookings Institution, said American companies are still likely to tread lightly.
“I think that any American organization that has an interest in Iran is going to proceed very, very slowly,” she said.
Maloney said, in part, that’s because the Justice Department comes down hard on those who break sanctions.
“As I was always reminded when I was in the private sector, it can have direct personal consequences,” she said. “Individuals go to prison, and individuals can sustain fairly hefty fines.”
Individuals could pay millions of dollars. Businesses could be forced to pay much more. In 2014, the French bank BNP Paribas had to shell out almost $9 billion to US authorities for helping clients get around sanctions.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?