CBI Confederation of British Industry : Two sanctions forward, one sanction back: the Iran nuclear deal

The 2015 agreement, spearheaded by President Obama and Secretary of State John Kerry, was hailed in the President's State of the Union address as a 'smarter approach', which allowed 'a global coalition, with sanctions and principled diplomacy, to prevent a nuclear-armed Iran'. Just days later, on January 16th 2016, U.S. and EU sanctions on Tehran were lifted in response to the IAEA's findings.

Obama signed an executive order that amongst other things, unfreezes Iranian assets held in the international financial system worth between $50-150 billion, providing a sizable boost to the Iranian economy. At the same time, the Treasury unfroze the assets of hundreds of individual Iranians and EU foreign policy chief Frederica Mogherini announced that both national and multilateral sanctions were to be lifted, ultimately reducing the cost of doing business with Iran.

A widely anticipated impact of the deal coming to fruition, is a marked increase in oil exports. Tehran had said it would increase sales by 500,000 barrels as soon as sanctions were lifted. Unsurprisingly, following Implementation Day, the oil price slumped to $28 per barrel, reminiscent of the 2003 low. Although painful for oil producers, American businesses and consumers alike will be expecting lower gas prices.

Inevitably, the deal has proved a point of debate for Republican presidential candidates. Ted Cruz, and Marco Rubio, both U.S. Senators, have stated that they would reverse the deal and reintroduce sanctions. But frontrunner Donald Trump has taken a different approach, despite his opposition to the deal, arguing that he would 'police' the deal so tightly that Iran would be unable to break the agreed conditions.

Although an important milestone, just one day after the international sanctions were lifted the U.S. Treasury put in place sanctions preventing 11 entities and individuals affiliated with Iran's ballistic missile programme from making use of the U.S. banking system. This was a reaction to the testing of a ballistic missile in October 2015, which defies a UN ban. Indeed, Implementation Day marks a significant opportunity for both Iran and the international business community. However, the challenges of maintaining this new era of diplomacy with Iran remain at the forefront of U.S. politics.