Iranian nuke deal won’t lead to immediate windfall, think tank asserts

Iranian nuke deal won’t lead to immediate windfall, think tank asserts
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Despite fears from some critics, a nuclear deal with Iran would not leave the Islamic nation immediately flush with tens of billions of new dollars, according to a new think tank analysis.

The Center for New American Security appeared to back up the White House’s prognostications for the result on a deal with Iran on Tuesday, saying that businesses would be hesitant to rush into Iran until the nation complies with the terms of the deal.

The analysis could lead to support for the Obama administration’s possible deal, which is due by the end of the month. 

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At the same time, the think tank report warned, the lack of an immediate cash influx could cause some consternation in Iran.

“A nuclear deal with Iran will not initiate an unchecked windfall of capital into Iran, a factor that may undermine Iran’s confidence in a deal and the incentive structure for its adherence,” authors Elizabeth Rosenberg and Sara Vakhshouri wrote.

“The maintenance of some sanctions on Iran, even in a best-case scenario for nuclear diplomacy, and the threat of re-imposing tough economic sanctions if Iran circumvents the deal will serve concomitantly to temper what would otherwise be enthusiastic and potentially ubiquitous investment into Iran.”

The administration is eyeing a June 30 deadline for reaching the terms on a final deal to squelch Iran’s nuclear ambitions in exchange for rolling back international sanctions on the nation’s financial, energy and other markets. That final deal comes after a preliminary outline of an agreement was reached in April.

If a deal is reached, sanctions could begin rolling back around the end of the year.

That could mean $25 billion in new oil revenue for Iran, the authors predicted, while also giving the country up to $50 billion in foreign exchange reserves currently held in escrow abroad.

Critics of the administration have worried that the deal would immediately empower Iranian leadership, without assuring that the nation would back off its nuclear ambitions.

However, the new cash wouldn’t come immediately, the think tank concluded.

European nations may be quicker to roll back their sanctions, but even once the U.S. acts the nations will retain the ability to “snap” the sanctions back into place, if Iran isn’t meeting its obligations.

“While officials can agree to rescind or suspend sanctions by certain dates, many international investors will remain cautious about engaging Iran, moving slowly to avoid the risk of losing investments or becoming the target of sanctions if a nuclear deal collapses and sanctions are re-imposed,” the study's authors wrote.