It is becoming apparent that the Obama administration does not plan on lifting certain surviving U.S. sanctions that are frustrating realization of the sanctions-lifting outlined under the nuclear accord. Instead, the Obama administration will continue to deploy representatives from the U.S. State and Treasury Departments to engage in private consultation with non-U.S., non-Iranian parties interested in re-engaging Iran. This consultation will involve not just the provision of legal and practical guidance as to the scope and application of existing U.S. sanctions targeting Iran, but will also include an intensive advocacy effort to persuade certain European banks and companies to be first-movers into Tehran.

However, this latter element does not look to be working well thus far. According to recent reports, U.S. representatives have failed to persuade certain major European banks to re-engage their Iranian counterparts and provide financial services in support of trading activities with Iran. Based on the statements of certain of these banks, too, prospects are dim that we will see a major global financial institution resume business as usual in Iran, as the legal and reputational risks outweigh whatever assurances the U.S. is offering for their cooperation in re-engaging Iran.  The issue has become so serious that Secretary of State John Kerry attended meetings with British banking executives this morning in London to work through their concerns.

Even recent breakthroughs on the sanctions issue – upon closer examination – provide further evidence of the challenges for Iran realizing economic benefits from the nuclear accord.

For instance, Iran has had immense difficulties fully accessing its formerly-restricted oil revenues trapped in overseas bank accounts, which the U.S. has estimated at around $50 billion at the inception of the nuclear accord. According to Secretary of State John Kerry, who was speaking at a conference in Washington D.C. a few weeks ago, Iran has been able to access and repatriate only $3 billion of that total amount thus far. From what I understand, a major problem is that either (a) the funds were denominated in U.S. dollars upon deposit in Iran’s account at the foreign bank and, as such, the bank is hesitant to move the funds for fear of exposure to U.S. sanctions, or (b) the funds are denominated in a currency that is less useful on international markets for Iran and Iran wants to exchange the funds for a more fungible currency, but any such exchange must pass through the U.S. dollar first.

U.S. authorities have been on a full-court press to resolve the underlying challenges by reaching out to European banks in the hopes that certain of them will handle the funds transfers. Reuters reported last week that a potential solution has been found: the Reserve Bank of India – in which a substantial sum of Iran’s oil revenues are held – would transfer Iran’s funds to both the Central Bank of Italy and the Europaische-Iranianische Handelsbank (EIH) of Germany.

While on the surface this is a success story, the real issue is that U.S. authorities evidently could not convince a single major European commercial banks to handle the funds transfers. Instead, what we have is a European central bank and an Iranian-owned, formerly U.S.-designated German bank at the rescue. As such, U.S. authorities have reached a tentative solution to a serious issue, while at the same time exposing the depths of current problems with the sanctions-lifting.

Similarly, we have recently heard that certain European banks have started to resume correspondent banking relationships with Iranian financial institutions. But it is also telling as to who these banks are: ones with no substantial presence in the United States and thus immune to the liabilities of the U.S.’s primary and secondary sanctions regimes. These are second- or third-tier European banks, according to the Iranians – not the major global financial institutions that the U.S. and Iran both had hoped would take up certain Iran-related business. Despite their best efforts, U.S. authorities continue to see unremitting reluctance on the part of major European financial institutions from engaging with Iranian banks or supporting trade-related dealings with Iran.

Will further U.S. efforts prove the straw that broke the camel’s back? As of yet, we don’t know. What we do know is that Iran continues to struggle realizing the benefits of the sanctions-lifting, as its banks remain outcast from the global financial system and the promise of significant foreign trade and investment remains thus far unconsummated. Current U.S. efforts have not yet met the challenge.