Iran's State-Linked Conglomerates

October 17, 2016

Author: 

Kenneth Katzman

Author's Title: 

Specialist in Middle Eastern Affairs

Publication: 

CRS Insight

Issue Overview

The Joint Comprehensive Plan of Action (JCPOA) multilateral nuclear agreement with Iran, which took effect on January 16, 2016, has raised questions about the economic and political effects of sanctions relief provided under the agreement. Although Iran has a substantial private sector composed, at least in part, of large import-export trading houses, several years of sanctions have enabled regime leaders and institutions to acquire control of significant portions of the economy. The question for the Administration and Congress is whether sanctions relief will benefit primarily the state-linked conglomerates—and by extension, regime hardliners—or would provide space for Iran's private sector and entrepreneurs to expand their roles in the economy. Legislation to require Administration reporting on the assets of regime-linked financial conglomerates, H.R. 5461, passed the House on September 21, 2016 by a vote of 282-143. The Administration has stated an intent to veto the bill on the grounds that its provisions might cause Iran to make its financial sector less transparent.

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