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Implementing the Iran Nuclear Deal: Balancing Proliferation Finance Risk and Economic OpportunityEmil Dall, Andrea Berger and Tom Keatinge
Occasional Papers, 19 December 2016
Centre for Financial Crime and Security Studies, Iran's Nuclear Programme, Iran, Proliferation and Nuclear Policy, Proliferation and Nuclear Policy, Europe, Middle East and North Africa
Almost a year after the Iran Nuclear Deal came into effect, not all aspects of the agreement (and the non-proliferation objective it serves) are fully operational. Notwithstanding the complications which may be created by the election of Donald Trump, the issue of Iran’s access to the financial system is now proving to be a critical component of the overall health of the deal. These dynamics have wider repercussions, including on the global discussion over counter-proliferation finance initiatives.
This paper considers how financial institutions have approached the lifting of Iran sanctions. It highlights how financial institutions of different sizes, capability and global reach have approached re-engagement with Iran. While some have sought new business opportunities with Iran, others have refused to re-engage, much to the frustration of Iranian and Western leaders who recognise that the deal must yield economic benefits if Tehran is to remain committed to it.
The paper also identifies a concerning trend: the majority of financial institutions globally have yet to develop measures to adequately counter proliferation finance. With the majority of UN and EU sanctions against Iran now gone, as well as US secondary sanctions affecting non-US companies doing business with Iran, it is becoming more difficult to mobilise and direct a concerted global effort to counter proliferation financing.
The paper highlights the need to update international standards on counter-proliferation finance in order to ensure that attention on proliferation financing does not disappear in the slipstream of the Iran agreement, especially at a time when proliferation remains a significant threat.
Banner image: The foreign ministers from Iran and the countries of the P5+1, as well as the High Representative of the EU for Foreign Affairs and Security Policy, after agreeing the Iran Nuclear deal, 14 July 2015. Courtesy of Dragan Tatic/Wikimedia.