Does Iran Clause Shield Firms From Sanctions?

Energy Intelligence Reproduced with permission by Energy Intelligence for Foundation for Defense of Democracies

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The US view is that there will be no such protection — the administration will not act against investments made while sanctions are suspended, but there would be no grandfathering for contracts to continue if the sanctions are snapped back. In this scenario, while companies would not be punished for agreeing deals with Iran, they would be expected to suspend their activities.

Any grandfathering commitment could see both Iran and companies rush to sign deals as soon as sanctions are lifted. Its absence, conversely, could make companies more cautious about entering, and careful to take a potential snapback into account when negotiating and drafting contracts — at least until the UN Security Council gives Iran a final all clear after 10 years, a move that would end any threat of further sanctions.

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Behnam Talebu, an Iran analyst for the Washington-based Foundation for Defense of Democracies, agreed. “Say we're in year six of the deal, Iran engages in something — and there's a snapback. … Those companies that have had contracts before those six years would be grandfathered. That's how I see it,” he told International Oil Daily.

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