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US: Iran 'not open for business'

This picture released by the United Nations photo service shows US Under Secretary of State for Political Affairs Wendy Sherman on November 25, 2013 in Geneva
This picture released by the United Nations photo service shows US Under Secretary of State for Political Affairs Wendy Sherman on November 25, 2013 in Geneva

US officials declared Tuesday that Iran is "not open for business" and vowed to scrutinize companies heading to the Islamic republic since it entered a temporary nuclear agreement.

Testifying before skeptical lawmakers, President Barack Obama's administration detailed initial sanctions relief to Iran, including the transfer of $550 million in frozen oil revenues as part of a six-month nuclear agreement.

But Wendy Sherman, who is spearheading the diplomacy with Tehran, said that the United States was warning the growing number of business delegations traveling to Iran that sweeping sanctions remained in place.

"Tehran is not open for business because our sanctions relief is quite temporary, quite limited and quite targeted," Sherman, the under secretary of state for political affairs, told the Senate Foreign Relations Committee.

"It doesn't matter whether the countries are friend or foe -- if they evade our sanctions, we will sanction them," she said.

Sherman said that Secretary of State John Kerry spoke to Foreign Minister Laurent Fabius about a major French delegation that is visiting Tehran, telling him that the trip -- while from the private sector -- was "not helpful" in sending the message that "it is not business as usual."

The delegation from the French employers' union Medef is the largest from Europe since the November nuclear accord and includes representatives from major companies such as Total, Lafarge and Peugeot.

Addressing the delegation, Deputy Oil Minister Ali Majedi encouraged foreign companies to return.

David Cohen, the Treasury Department official in charge of the sanctions, acknowledged "a slight uptick" in Iran's economic indicators but said that the United States would "vigorously" enforce sanctions.

"The Iranian economy is operating at significantly reduced levels and will continue to massively underperform for the foreseeable future," Cohen said.

US Treasury Undersecretary for Terrorism and Financing David Cohen, testifies on May 15, 2013 on Capitol Hill in Washington, DC
US Treasury Undersecretary for Terrorism and Financing David Cohen, testifies before the US Senate Foreign Affairs Committee on May 15, 2013 on Capitol Hill in Washington, DC

The November agreement between Iran and six powers -- Britain, China, France, Germany, Russia and the United States -- required Tehran to scale back its nuclear activities in return for the limited sanctions relief.

The Obama administration has presented the deal as a way to a peaceful solution to address longstanding concerns with Iran but has said that it is not taking for granted that diplomacy will succeed.

Iran insists that its nuclear program is for peaceful purposes. The clerical regime has particularly tense relations with Israel, whose Prime Minister Benjamin Netanyahu has criticized the negotiated deal.

The US Congress, where support for Israel runs deep, has looked at ramping up sanctions on Iran despite the accord, but Obama has threatened to veto any bid to derail the ongoing diplomacy.

Senator Robert Menendez, chairman of the Senate Foreign Relations Committee who has distanced himself from fellow Democrat Obama on Iran, demanded that any final deal with Tehran include the dismantling of "large portions of its nuclear infrastructure."

"We have placed our incredibly effective international sanctions regime on the line without clearly defining the parameters of what we expect in a final agreement," Menendez said.

Senator Jim Risch, a Republican, said that he was "disgusted" by the diplomatic effort.

"I hope you will prove me dead wrong, but I don't think (you) will, given the history of these people," Risch said of Iran as he criticized its imprisonment of at least two US citizens.

But Senator Tim Kaine, a Democrat, said that sanctions brought Iran to negotiations, and it was now important to try "aggressive diplomacy."

Sanctions have "crippled the economy, but if anything it has also, by making Iran isolated, accelerated their path to try to develop nuclear technology for whatever purpose," Kaine said.

"So if we're going to stop that nuclear program and that quest for nuclear weapons, we have to either do it diplomatically or do it militarily," he said.

Kaine warned that he would support war if Iran pursued a nuclear weapon despite the deal.

"We may have to undertake that significant step, but we shouldn't do it if we leave diplomatic avenues unexplored," he said.