The clock is winding down on the final days of nuclear-related sanctions against Iran and towards the announcement of what is called Implementation Day, the moment when the Islamic Republic will be open for business once more.

The final obstacle is the requirement under the Joint Comprehensive Plan of Action (JCPOA) signed in July that Iran demonstrates it is complying with the demand that its nuclear capacities should be drastically reduced.

This includes a sharp reduction in the number of centrifuges needed to concentrate nuclear material.

International Atomic Energy Agency (IAEA) director-general Yukiyama Amano told the UN general assembly on 18 November that the agency is on track to deliver its final assessment of Iran’s compliance with the JCPOA to the IAEA’s board of governors by 15 December.

Approval of the assessment by the governors is the final condition for the relaxation of nuclear-related sanctions against Iran.

Quick approval

Analysts say the board could approve the assessment on the day it is submitted. Sanctions could be off before the new year starts.

“Much work remains to be done, but I believe the significant progress made on the Iran nuclear issue represents a real success for diplomacy,” said Amano.

A confidential IAEA report to its board governors seen by reporters on the same day said Iran had disconnected almost a quarter of its uranium-enriching centrifuges in less than a month.

It says Tehran had moved about 4,500 centrifuges from their positions at the Fordow and Natanz enrichment sites between 18 October and 15 November.

Under the July deal, Iran agreed to reduce its number of installed centrifuges to about 6,100, from 19,000. Of the remaining 6,100, only about 5,100 will be used to enrich uranium.

Uranium stockpile

As a result of the cut in uranium enrichment, the country’s stockpile of low-enriched uranium increased by 460.2 kilogrammes in the past three months to 8,306kg.

The nuclear deal calls for the stockpile to be cut to no more than 300kg. This suggests the IAEA board’s approval of the assessment cannot be assumed, although it is looking increasingly likely.

The JCPOA, agreed between China, France, Germany, Russia, the UK and the US on the one hand and Iran on the other, states that the relaxation of sanctions will be automatically and simultaneously triggered as soon as the IAEA board gives the green light.

This will end UN and EU sanctions, including a crippling European oil embargo, and what are termed secondary US sanctions, which extend Washington’s capacity to penalise non-US companies and individuals for doing business with Iran.

Continued restrictions

Lawyers say primary sanctions related to US efforts to penalise Iran for its human rights record and efforts to develop ballistic missile capacity will continue to restrict many companies’ ability to do business in the country.

US firms and individuals, and non-US companies with American employees and activities in the US could be subject to stiff penalties for trading with the Islamic Republic.

But there has been a quickening pace of trade-related activities involving Iran since the summer.

This will be reflected this week when Russia’s President Vladimir Putin visits Iran for the Gas Exporting Countries Forum.

It will be his first visit for seven years and he is due to meet Supreme Leader Ayatollah Khamenei and President Hassan Rouhani. Putin is expected to discuss developments in Iran and oil market trends.

Superjet deal

This follows reports that Iran is interested in buying 100 Sukhoi Superjet 100 regional aircraft, manufactured by Russia’s United Aircraft Corporation.

“…One of [Iran’s] flagship companies was negotiating… about the delivery within the next five years…” Russia’s Deputy Prime Minister Dmitryi Rogozin was quoted as saying by the Russiya 24 television channel on 19 November, at the end of a two-day visit to Tehran.

Russian news agency Tass quoted Rogozin as saying Russia will “discuss partial localisation of production in Iran” if the order is placed.

During his visit, Rogozin visited aerospace manufacturing facilities in Isfahan and suggested they were capable of handling the project. Sputnik news agency reported an unidentified Iranian official as saying Tehran could buy satellite equipment and Superjet 100s worth a total of $21bn.

The Islamic Republic and Russia agreed a joint aircraft engine production programme during the MAKS-2015 airshow in Moscow on 25-30 August.

Iran’s Vice-President Sorena Sattari was reported as saying during the airshow that his country was negotiating a deal for at least two types of military aircraft and Russian rocket carriers to launch satellites.

Military purchases

Iran could be one of the first potential foreign buyers of the Ilyushin Il-76MD-90A (Il-476) turboprop military transport aircraft, which is due to come into service in 2017.

The CEO of Russian state-owned defence firm Rostec was quoted by Ria Novosti, Russia’s international news agency, as saying on 9 November that Moscow was committed to supplying S-300 missiles agreed in a deal originally signed in 2007.

Russia refused on the grounds that the deal was covered by the fourth round of the UN nuclear sanctions against Iran, which banned hi-tech weapons sales to Iran.

Tehran subsequently filed a complaint with the International Court of Arbitration in Geneva. In April, Putin lifted the ban.

On 18 November, the deputy co-chairman of the Russian-Iranian inter-governmental commission, Mehdi Mohtashemi, said Tehran had approved Moscow’s proposal for a joint investment bank with initial capital of $500m.

Russia’s Energy Minister Alexander Novak said earlier in November that bilateral trade between the two countries could reach some $10bn in the short term, compared with $1.6bn in 2014.

Other investors

Other countries are stepping up their drive to win business in the Middle East’s second-largest economy.

Iran Shipbuilding & Offshore Industries Complex Company’s (ISOICO’s) managing director Hamid Rezaian was reported as saying on 22 November that deals had been agreed for building ships with South Korea’s Hyundai Heavy Industries (HHI) and Germany’s Nordic Yards Wismar.

“We have held numerous negotiations with the world’s big companies and now we intend to choose the best partner from among them,” Iranian news agency Tasnim quoted Rezaian as saying.

Preliminary agreements are understood to have been reached with HHI and a memorandum of understanding signed with Nordic Yards. Talks about shipbuilding projects have also been held with Italian and Chinese firms.

Iran has the largest shipbuilding industry in the Middle East. It owns and operates 42 oil very large crude carriers (VLCCs), each with 2 million barrels of oil capacity.

Trade delegations from practically every major EU country have been received in Tehran since July.

The Iranian response is beginning to develop, although analysts say the country is unprepared to deal with the deluge of offers it is likely to receive the moment sanctions are relaxed.

Bank reform

Central Bank of Iran governor Valiollah Seif told a conference in Frankfurt on 19 November that Tehran is preparing the most comprehensive reform of its banking industry since it was nationalised after the 1979 revolution.

He said plans include lifting the 40 per cent foreign ownership ceiling in companies outside free zones; setting up cross-border joint venture investment banks; providing guarantees for foreign investors through the Iran Investment & Technical & Economic Assistance Organisation for both the principal and the return on income and adopting a regulatory framework that is consistent with Basel III.

The government is also pushing ahead with an economic stimulus package to counter the sharp contraction in output since international sanctions were tightened in 2012.

It includes a Central Bank of Iran consumer loan programme that fuelled the sales of more than 100,000 motor vehicles in a single week earlier in November.

This part of the package has been suspended, but analysts say it shows there is a huge repressed demand for practically everything that will be unleashed once sanctions come off.

Iran’s greatest influence will be in the oil market. Oil minister Bijan Zanganeh has repeatedly affirmed that Tehran will seek to restore its oil production to the level before sanctions of about 4.2 million barrels a day (b/d).

Oil hike

Zanganeh said exports, which now average about 1.1 million b/d and will rise by about 500,000 b/d as soon as sanctions end, will be increased by a further 500,000 b/d by the summer and by a similar amount by the end of the year.

The prospect of a large increase in Iranian oil production at a time of a global oil glut has kept Brent crude prices depressed. Iranian officials say the economy, hardened by years of war and sanctions, is better equipped to deal with the consequences than other Gulf states.

The only nation failing to respond to the imminent opening of the Iranian market is the US.

Majorities in both the House of Representatives and the Senate oppose the JCPOA. All leading candidates for the Republican Party nomination for the US presidency in 2016 say they will scrap the deal.

But there is no stopping the drive everywhere else to do business with the Islamic Republic, an economy with a population of more than 80 million people and the world’s greatest natural reserves.

The first significant contract placed as part of the plan to relax sanctions was signed on 15 November for the conversion of the Arak heavy water reactor. The winners will be companies from China, France, Germany, Russia and the UK.

It is the beginning of one of the world’s biggest current business stories.