US to lift sanctions on Iran

Obama administration announces plans to lift sanctions on Iran after UN agency report states Iran stuck to its side of nuclear deal

Photo by: Reuters
Photo by: Reuters

US Secretary of State John Kerry signs a series of documents to implement Iran nuclear deal in Vienna on January 16, 2016

The United States will allow foreign subsidiaries of American companies to trade with Iran as part of sanctions relief granted under an international nuclear deal, the US Treasury Department said on Saturday.

US authorities have also lifted restrictions on buying of Iranian oil by non-US entities, as well as the sale of goods and services to Iran's energy sector, the Treasury said.

The lifting of the ban on non-American trade with Iran's oil sector represents a significant opening on an embargo that had severed the West's ties to one of world's largest oil reserves. Sanctions had made Iranian exports to European Union countries - the vast majority energy-related - fall by 86 percent between 2012 and 2013, according to the European Commission.

While US firms will still be restricted from buying Iranian oil, or providing equipment to the industry, Europe will regain access to the market.

Foreign subsidiaries of US companies were allowed to operate in Iran until 2012, when Congress expanded sanctions and imposed penalties on American firms, if their foreign units traded with Iran.

The UN nuclear watchdog on Saturday said Iran had put in place all nuclear measures required under a deal reached with six world powers in July, paving the way for crippling sanctions on the Islamic Republic to be lifted within hours or days.

The announcement marks the consummation of the July 14, 2015 nuclear agreement. Under the deal, Iran agreed to shrink its atomic programme in exchange for the lifting of some EU, US and UN sanctions, which would allow billions of dollars of investment to flow into the country.

Iran's expected return to an already glutted oil market is one of the factors contributing to a global rout in oil prices, which fell below $30 a barrel this week for the first time in 12 years. Tehran says it could boost exports by 500,000 barrels per day within weeks.

TRTWorld and agencies