Is Easing Iran Sanctions The Right Move?

Much of the criticism of the interim nuclear deal reached with Iran Sunday has focused on the sanctions relief Iran will receive over the next six months if it follows through on restricting its nuclear program. Although the only irreversible relief being offered is a gradual release of $4.2 billion in frozen Iranian revenue, critics warn that the "architecture of the sanctions regime has been undermined." Analysts say all the important sanctions hampering Iran's economy remain in place, but the announcement of the deal itself is having a psychological impact on markets. Asian energy importers will be looking to benefit, as will Turkey and Dubai.

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This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.

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And I'm Audie Cornish. Much has been made of what the U.S. gets out of the deal it helped to broker with Iran. The big headline: Iran has agreed to enrich uranium only at low levels and to neutralize its stockpile of more highly enriched uranium. Well, we begin this hour by exploring what Iran gets out of the deal, namely relief from crippling sanctions, up to $7 billion worth.

Critics of the deal argue that any such relief compromises the entire architecture of the sanctions, a view the Obama administration rejects. Here's NPR's Peter Kenyon with a report on what this deal does and does not do for Iran.

PETER KENYON, BYLINE: Beyond giving Iran access to $4.2 billion of its own money from oil sales frozen in overseas bank accounts, the agreement envisions EU sanctions on gold and precious metals being temporarily lifted. That will allow countries like Turkey that had been paying for Iranian crude purchases in gold to resume doing so.

Oil importing countries like China won't have to keep reducing their Iranian crude imports. Some Iranian airlines will also get repairs done needed for safety and transactions involving humanitarian goods will be facilitated. Those who argue that the sanctions relief in this deal will sound the starters pistol in a race to evade or lift all the sanctions rely largely on a market psychology argument.

According to this theory, once countries and businesses see any sanctions being eased, they'll push for any edge they can find to get back into the Iranian market ahead of the competition. Analyst Ray Takeyh with the Council on Foreign Relations says that kind of thinking may bring financial benefits to Iran beyond the limited steps outlined in the agreement.

For instance, will some banks consider approving more transactions with Iran now, despite ongoing banking sanctions? Takeyh says possibly, but only on the margins.

RAY TAKEYH: Now if you're a small bank in Malaysia that, you know, has very limited commerce with the United States, if any at all, you might be more attracted to the Iranian market at this stage. But if there's any sort of activity taking place along their lines, it's likely to come from the Asian markets and it's likely to come from more peripheral than established institutions.

KENYON: Another benefit to Iran in this agreement is a promise that there will be no new sanctions imposed in the six-month period. That promise now confronts a U.S. Congress full of bipartisan fervor to do just that. Speaking at an event organized by the Wilson Center, veteran arms control expert Gary Samore said he believes Congress will ultimately decide not to play the spoiler by passing more sanctions now.

GARY SAMORE: Because if they did that, it would blow the agreement out of the water. We would be held responsible, the Iranians would be off the hook and our entire international coalition, which has been, frankly, the strength of our position both politically and in terms of imposing sanction, it could very easily collapse. And I just don't think Congress is going to, you know, shoot the country in the foot.

KENYON: But Samore added that Congress is very likely to consider sanctions that might take effect after six months, which could cause problems if the negotiators feel enough progress has been made to justify extending the initial period. Most analysts agree that it's too early to know if this modest breakthrough will lead to changes in Iran's approach to other issues.

But Trita Parsi, head of the National Iranian American Council, says the fact that sanctions are not being eased, however modestly because of compromise and diplomacy, represents a different kind of breakthrough inside Iran where the prevailing wisdom has long been that only a defiant hard line can work.

TRITA PARSI: The problem that has existed in the past is that Iranian moderation has rarely been rewarded. Now it has. So now they have something to hang their hat on. They have something that the population will appreciate and this will break the paradigm in which the belief has been it's only the hard line, inflexible approach that is going to yield results.

KENYON: Negotiators have six months to find out if that view is wishful thinking or if this agreement really is a first step to something larger. Peter Kenyon, NPR News, Istanbul.

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