US, Iran meet on sanctions relief

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NEW YORK, April 22, (AFP): The United States said Friday it would buy heavy water from Iran as Secretary of State John Kerry was to meet his Iranian counterpart to discuss nuclear sanctions relief. Kerry was to meet his Foreign Minister Mohammad Javad Zarif on the sidelines of the UN as the Iran nuclear deal came under sustained attack from critics in both countries.

Hardliners in Tehran argue that President Hassan Rouhani has been tricked into surrendering control of Iran’s nuclear program without yet getting much in return. While in Washington, President Barack Obama’s critics claim he plans to allow an unreformed Iran access to the US financial system despite the sanctions still in place. Meanwhile, the State Department said the United States will buy 32 tonnes of heavy water from Iran. “This transaction provides US industry with a critical product, while also enabling Iran to sell some of its excess heavy water,” spokesman John Kirby said.

The State Department was not able to say how much Washington will pay for the Iranian heavy water, which is produced as part of the nuclear energy process. But Kirby confirmed that the purchase was designed to help Iran meet its obligations under the accord implementation process, known as the “JCPOA.” “Iran’s compliance with the JCPOA meant that this material had already been removed from Iran, ensuring it would not be used to support the development of a nuclear weapon,” he said. “Our purchase of the heavy water means that it will instead be used for critically important research and non-nuclear industrial requirements,” he added. Kerry, whose meeting with Zarif is his second in a week, is trying to walk a diplomatic tightrope between the attacks on the JCPOA from critics in Washington and Tehran.

The top US diplomat admitted this week that Iran has thus far been able to access only around $3 billion of the $55 billion the State Department estimates that it is owed. But US sanctions still exist to punish Iran for its missile program and sponsorship of Middle East “terrorist groups”

Washington officials’ hands are partly tied. Washington had hoped that European and Asian banks would free up the frozen funds and allow Rouhani’s government to show its people the benefits of international cooperation. But European officials have told AFP that their bankers fear that they could face fines or even criminal cases against their US subsidiaries if they rush in. The US scrambled expert teams — “akin to a roadshow” in spokesman Kirby’s phrase — to reassure international bankers that they can do business. But the spectacle of American officials effectively working to promote foreign business engagement with the Islamic republic has enraged Obama’s Republican opponents. Lawmakers have threatened to pass renewed bars on Iranian interaction with the US financial system, through which many dollar-denominated transactions pass.

The United States and Iran severed diplomatic relations four decades ago, and Washington has threatened new measures to restrict Tehran’s ballistic missile program. But officials also feel that the credibility of the nuclear deal, which was implemented in January, depends on Iran’s moderates being able to point to economic progress. “I fully expect that they will continue to talk about the sanctions relief process,” Kirby said, previewing Friday’s talks. Kirby said they would study “the degree to which banks, foreign and domestic, as well as institutions, foreign and domestic, are evaluating their options.”

In theory, the European Union lifted its nuclear-related sanctions against Tehran at the same time as Washington. But Iran’s Revolutionary Guards Corps, still under sanctions for its role in sponsoring attacks by Middle East militia groups, have extensive business interests. Any private sector investment or financial services provided to Iran that was eventually found to be linked to the group could expose European banks to US prosecution. “We certainly are not trying to become an obstacle in any way of foreign banks and institutions working with Iran through the sanctions relief process,” Kirby said. Tensions were further inflamed this week when the US Supreme Court ruled $2 billion of the frozen assets must be used to compensate victims of Iransponsored attacks. Iran branded this “theft.”

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