Iran hampered over release of frozen oil revenues, says official

Iran hampered over release of frozen oil revenues, says official

Iran has been unable to access most of the $4.2 billion worth of frozen oil revenues meant to be released under the interim nuclear deal agreed with world powers, according to a senior adviser to president Hassan Rouhani.

But Akbar Torkan, a leading strategist in Rouhani's centrist government, said this should not undermine efforts to reach a comprehensive nuclear agreement by the deadline of July 20, which he said have been "so far so good," Financial Times reported on May 30.

The landmark deal - agreed in Geneva in November - gave Iran modest sanctions relief worth about $7bn in return for substantial reductions in its nuclear activities and greater transparency.

The International Atomic Energy Agency said last month that the scaling down of Iran's nuclear activities "are being implemented as planned".

In a rare interview with international media, Torkan told the Financial Times that sanctions had been eased from an "administrative point of view" in recent months in areas such as shipping, insurance, petrochemicals, cars and aerospace parts.

However, "complicated procedures" in financial transactions and continued US banking sanctions had hampered Iran's ability to release $4.2bn worth of oil revenues that were a key part of the interim deal.

"Iran has so far been able to withdraw less than 50 percent," he said.

Some western officials have blamed Iran for not being efficient enough to overcome bureaucratic complications and make better use of the sanctions relief.

But Torkan also played down the issue, underlining the importance of a nuclear deal to Rouhani's government. "I am not even surprised we face some difficulties. What matters is to reach a final solution [on the nuclear issue]," he said.

The six powers - the US, UK, France, Russia, China and Germany - negotiating with Iran are seeking a significant reduction in the number of centrifuges it operates, while Iran is pushing for a substantial increase in its ability to produce nuclear fuel.

On the discussions, Torkan said: "The two sides agree on the main issues. Iran's nuclear rights under the Non-Proliferation Treaty are respected, which is very important. Now, negotiations are over the size, aspects and details of Iran's nuclear program. Considering this . . . there is a lot of hope we can reach a final agreement in July."

But the negotiations are a gamble for Rouhani, who came to power last year on the promise of resolving the nuclear crisis and improving Iran's ailing economy. Should he fail, analysts believe, Iran's pragmatists could pay a huge political price.

Iran's hardliners - who are being curbed for now by Supreme Leader and ultimate decision maker Ayatollah Ali Khamenei - claim the western powers intend to extend the nuclear inspections into non-nuclear military sites, in particular to its ballistic missiles which some claim can reach Israel.

However, Torkan, who was minister of defence from 1989-93, said Iran would "never ever" negotiate over its military arrangements and nobody in the country would accept it.

Rouhani hopes a comprehensive nuclear deal can lead to a gradual lifting of international sanctions and ease Iran's economic hardship. Its inflation rate is running above 30 percent and youth unemployment stands at almost a quarter, partly due to sanctions.

US and EU sanctions over the past two years have deprived Iran of at least $60 billion worth of oil revenues, Torkan acknowledged, although he declined to give a total figure for how much sanctions had cost Iran's economy, which he said was "confidential".

Despite hopes for a nuclear deal, Torkan said Iran was also prepared for the economic consequences of failure.

"Iran's economic plan - our plan A - is based on continuation of sanctions without using foreign investments," he said. Under this scenario, economic growth would be about 2 percent and inflation about 25 percent by the end of the Iranian year in March 2015.

"But if a comprehensive deal is reached and sanctions are lifted, then we will think of plan B according to the new post-sanctions situation," Torkan said.

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