One of President Biden's campaign promises — reviving the 2015 Iran nuclear deal — is at a standstill. Iran has been ramping up its nuclear program and demanding that Biden lift economic sanctions imposed to deprive the regime of cash.
The nuclear deal between world powers and Iran was based on lifting the crippling international sanctions — like blocking billions in dollars of Iranian oil sales — in return for Iran limiting its nuclear program.
Ardavan Amir-Aslani, an Iranian French lawyer who advises foreign companies wanting to do business in Iran, recalls when the deal was signed there was great optimism it would create investment opportunities there.
"The bet was that through these investment opportunities, the return of Iran into the civilized diplomatic society, the return of Iran to the financial markets," he says, the hope was with all this newfound prosperity, "Iran would change dramatically its behavior."
"That was the bet. However, Trump didn't allow that to happen," he adds.
In 2018, President Donald Trump pulled the U.S. out of the nuclear deal and began reimposing sanctions on Iran. Amir-Aslani, who at the time was representing French carmakers Citroën and Peugeot, says the impact was immediate.
"All of these world-class corporations wanted to go into Iran. But with Trump's withdrawal, all of them left within 24 hours," he says.
Amir-Aslani says Peugeot left behind for $450 million in Iran that it couldn't recover, French oil company Total left $50 million. He says major projects, such as oil terminal and airport revamps, were abandoned.
The Trump administration threatened international companies would be cut off from the U.S. financial system if they dealt with Iran's economy — everything from manufacturing to steel and aluminum companies to banks. Iran's economy, which had experienced a brief surge after the deal, plummeted. Inflation and living costs soared.
Richard Goldberg, an official on the National Security Council during the Trump administration, now with the Foundation for Defense of Democracies, says the sanctions have been an effective tool and the Biden administration shouldn't rush to ease them just yet.
"If you're in a negotiation, it's all about leverage," he says. "If you give up that leverage from the beginning, you're never going to quite be able to get to that final deal with the best outcomes you're looking for."
But if Biden is too inflexible, Iran won't believe he's interested in talks, says Amir-Aslani.
"In Tehran, people are going to say there is no difference between Biden and Trump because Biden, despite his promises, has kept the Trump sanctions in place," he says.
In February, the U.S. agreed to informal talks with Iran hosted by the European Union but Iran rejected the offer. Iran wants all the sanctions lifted — there are more than 1,500.
There are half-measures Biden can take to show Iran he's serious, says Djavad Salehi-Isfahani, an economics professor at Virginia Tech and a nonresident senior fellow at the Brookings Institution. The U.S. could start easing some of the many sanctions, he says, and the Treasury Department could turn a blind eye to companies dealing with Iran.
"The moment they can ascertain something is going to happen, I think the businesses in every country are going to hear, get a memo that from now on, it's OK to do A, B and C," he says. "The fact that there's not going to be a billion dollar fine at the other end for a company, I think that's really the key."
The U.S. could also allow access to oil revenues that are frozen in foreign countries, says Salehi-Isfahani.
Iran has been pressuring South Korea for payment of $7 billion worth of oil. Earlier this year, in a move widely seen as trying to force the issue, Iran seized a South Korean tanker in the Persian Gulf. Salehi-Isfahani says there's reportedly movement to unlock some of those funds.
"What I'm told is that some telephone calls were made to Koreans and if they wanted to release 1 billion of the 7 billion they owe to Iran, the U.S. would look the other way," he says.
That's the kind of move foreign businesses are looking for when thinking about Iran again, says Omid Gholamifar, the Tehran-based CEO of Serkland Invest, a Swedish firm. His company has invested about $60 million into four major Iranian companies focusing on consumer markets such as pharmaceuticals and beverages, which are allowed under U.S. sanctions.
EU countries as well as China, Russia and the United Kingdom remain in the Iran deal.
Gholamifar recently took part in a European-Iranian virtual business forum looking at opportunities if the sanctions are lifted. There were about 2,000 participants.
"There is a sense of optimism. I think everybody who was at the forum by definition believes that things are going in the right direction and that there is a huge opportunity to capitalize on," he says.
Gholamifar says even if the U.S. lifts many of the sanctions, companies will likely be nervous investing in Iran. But he points out Iran has a young, talented and educated workforce, and a lot of raw materials.
"Now, I want to be absolutely clear on this, I always say this doesn't mean that Iran is perfect or that Iran is risk free," he says. "Everything might still go wrong."