Iran Sets Next Year’s Budget Irrespective of Geneva Deal Outcomes

TEHRAN (Tasnim) – An Iranian vice-president announced Wednesday that the country’s overall budget for the next Iranian year (starts on 21 March 2014) has been devised without taking into consideration the achievable revenues brought by the Geneva nuclear deal.

Iran Sets Next Year’s Budget Irrespective of Geneva Deal Outcomes

Speaking to reporters on the sidelines of a weekly session of the cabinet on Wednesday, Mohammad Baqer Nobakht made clear that the national budget for the next Iranian year “has not been set relying on the achievements of the Geneva deal at all.”

He also noted that the petrodollars in the next year’s budget make up almost an equal share compared to that of the previous year.

The share of oil revenues in the budget does not include the income from the Geneva nuclear deal, Nobakht added.

On November 24, 2013, Iran and the Group 5+1 (the five permanent UN Security Council members plus Germany) signed a six-month deal on Tehran’s nuclear program in Geneva after several rounds of tight negotiations.

Based on the interim deal (the Joint Plan of Action), the world powers agreed to suspend some non-essential sanctions and to impose no new nuclear-related bans in return for Tehran's decision to suspend its 20% enrichment for a period of six months.

Such relief would include suspension of some restrictions on trade in gold, precious metals and petrochemicals, and in the auto industry. The deal allows third-country purchases of Iranian oil to remain at current levels. Some $4.2 billion in oil revenues would be allowed to be transferred to Iran.

Some sanctions reliefs have started on the first day of the six-month agreement's implementation --January 20 -- and some will be withheld until its final day.

The other side is committed to releasing $4.2 billion in Iranian frozen assets in eight tranches and Iran, in return, will oxidize its 20% enriched uranium in balanced steps.

Meanwhile, Iran’s deputy foreign minister for legal and international affairs and one of the country’s top nuclear negotiators, Abbas Araqchi, said on Tuesday that the country will be able to handle the petrodollars from the slightly more than one million barrels per day in oil exports within the six-month period, thanks to the partial lifting of the sanctions following the Geneva deal.

He said the oil export under the interim deal is expected to generate some $15 billion in revenues for Iran.

He also added that Tehran will use Japanese, South Korean and Swiss banks to handle the international trade exempted from western sanctions under the Geneva deal.

Based on the Joint Plan of Action, the G5+1 agreed Iran could set up a financial channel to pay for the import of goods already exempt from western sanctions.

The same designated banks will be used to handle the income Iran receives from the partial easing of EU and US sanctions within the next six months.

Araqchi said the move would facilitate some 18 billion dollars a year in food and medical imports that are not themselves subject to western sanctions, but which Iran has struggled to make payment for because of the western banking sanctions.

It would also handle Iran's petrochemical exports, now fully exempted from western sanctions, which were previously running at just over $8 billion a year but which Araqchi said could now rise to $20 billion a year.

And finally, it would be used to manage some $4.2 billion in frozen assets that the European Union and the US are to release in stages during the next six months, he added.

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