THE VIEW FROM TEHRANS TWILIGHT ZONE THE VIEW FROM TEHRAN’S TWILIGHT ZONE: Iran’s Continued Illicit Finance Activities and Their Implications A day after meeting with Treasury Secretary Jack Lew, the Governor of Iran’s Central Bank, Valiollah Seif, spoke at the Council on Foreign Relations where he warned that failure to do more to integrate Iranian banks into the international economy could jeopardize the Iran deal.1 The onus, he stressed, is on Washington and its allies to reassure banks that doing business in Iran is fine. But it’s not, and that is entirely Iran’s own fault. If Seif it to be believed, Iran has no menacing intentions toward any other countries, never pursued a nuclear weapon, was not driven to the negotiation table by the power of biting sanctions, and has every right to expect Washington to go well beyond the terms of the Iran deal to ensure Iran’s full reintegration into the international economy. But, Seif complained, that reintegration is not happening. In his words: “Let me give you a snapshot of what has happened since three months ago, the date of implementation of the [Iran deal]: almost 2 nothing.” And, without discounting Treasury’s efforts to help Iranian banks to date, he insisted these efforts have proved to be insufficient. “Unless serious efforts are made by our partners to make the [Iran deal] work, in my view, they have not honored their obligations.”3 Just two days earlier, senior Treasury official Adam Szubin reiterated in no uncertain terms that Washington is not standing in the way of permissible business activities involving Iran.4 But according to Seif, the reason Iran has not seen the benefits it expected under the deal is not due to 5 the risks that remain to doing business in Iran such as rampant corruption and a banking sector that is out of step with international banking norms, it is the result of the administration not honoring its obligations under the deal.6 Under Iran’s reading of the deal, Seif stressed, “effective implementation of the agreement [must be done] in such a way that Iran’s economic and business 7 activities will be facilitated.” If not, he warned the deal "breaks up on its own terms." In fact, Seif made clear Iran expects the administration to provide benefits well beyond what is offered in the Iran deal itself, including access to the U.S. financial system and the ability to dollarize foreign currency transactions through U.S.-based banks in what is called “U-turn transactions.” U.S. officials explicitly insist neither of these demands will be met, but that has not stopped Seif from demanding that the U.S. even go so far as to change its laws, if necessary, to make them happen.8 1 ‘A Conversation with Valiollah Seif’, Council on Foreign Relations, 15 April 2016, available at: http://www.cfr.org/global/conversation-valiollah- seif/p37733, last visited: 11 May 2016. 2 Ibid. 3 Ibid. 4 ‘Remarks by Acting Under Secretary Adam Szubin at the Foundation for Defense of Democracies Annual Forum’, US Treasury, 13 April 2016, available at: https://www.treasury.gov/press-center/press-releases/Pages/jl0419.aspx, last visited: 11 May 2016. 5 ‘Poll: Banks Most Corrupt Institutions in Iran’, United States Institute of Peace, 21 January 2016, available at: http://iranprimer.usip.org/blog/2016/jan/21/poll-banks-most-corrupt-institutions-iran, last visited: 11 May 2016 6 Clawson, P.,’ ‘Iran Locks Itself Out of the International Financial System While Blaming Washington’, The Washington Institute, 5 April 2016, available at: http://www.washingtoninstitute.org/policy-analysis/view/iran-locks-itself-out-of-the-international-financial-system-while-blaming-w, last visited: 11 May 2016. 7 ‘A Conversation with Valiollah Seif’, Council on Foreign Relations, 15 April 2016, available at: http://www.cfr.org/global/conversation-valiollah-seif/p37733, last visited: 11 May 2016. 8 ‘Remarks by Acting Under Secretary Adam Szubin at the Foundation for Defense of Democracies Annual Forum’, US Treasury, 13 April 2016, available at: https://www.treasury.gov/press-center/press-releases/Pages/jl0419.aspx, last visited: 11 May 2016. 1