July 17, 2015 | Quote

Iran Risks Will Curb Investor Enthusiasm Even as Sanctions Ease

The end of economic sanctions on Iran under this week’s nuclear deal has been portrayed as a gold-rush opportunity in an oil-rich Gulf state, but returning to business as usual won’t be as easy as the burst of enthusiasm suggests.

Investors who wait months for sanctions to be lifted will then have to gamble that they won’t run afoul of enduring blacklists or the vow by the U.S. and other world powers that sanctions will “snap back” into place if Iran fails to live up to commitments to restrict its nuclear program.

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“Foreign businesses will be slower to return than Iran expects because of compliance, reputational and counterparty risks,” said Mark Dubowitz, executive director of the Foundation for Defense of Democracies in Washington, who helped devise U.S. sanctions.

“No company wants to wake up to a front-page story that its business partner is Iran’s Islamic Revolutionary Guard Corps or that the new U.S. president has re-imposed tough sanctions,” Dubowitz said.

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Issues:

Iran Iran Sanctions