This week, the 3rd Europe-Iran Forum took place in Zurich, Switzerland with close to 400 persons in attendance, including prominent members of the European and Iranian private sector as well as a scattered but impressive array of U.S. and European government officials. The Forum is intended to serve as a networking opportunity for persons interested in re-engaging the Iranian market in the post-sanctions era.

I did not attend. But the Deputy Lead Coordinator for Iran Nuclear Deal Implementation at the U.S. Department of State, Jarrett Blanc, was in attendance and did speak before the business conference. So far as I am aware, this is the first time that a U.S. government official spoke before the conference (though I do believe that certain lower-level U.S. officials did attend the conference in years prior). The fact that Blanc spoke to the conference is evidence enough of the enormous shift in U.S. policy towards Iran generated as a result of the conclusion of the Joint Comprehensive Plan of Action (“JCPOA”).

However, I am perplexed by Blanc’s remarks before the conference – or, at least the iteration of those remarks as reported in the U.S. press. For instance, Reuters paraphrased Blanc as stating that “companies [interested in but so far shut out of the Iranian market] should tell their Iranian partners that it was not just those remaining sanctions that were holding up business deals.” Instead, Blanc said:

Many times, in the past 100 days, we have found international firms who have said to Iran: ‘Only U.S. sanctions are preventing you from doing business.’

But when we dig a little deeper, and seek to answer questions about precisely your concerns, it turns out your business decisions, not surprisingly, in fact take into account concerns well beyond sanctions.

As a result, Blanc continued, companies should express to their Iranian partners that their concerns go above and beyond the impact of surviving U.S. sanctions but also include business and reputational risk inside Iran. In Blanc’s words, companies should tell Iran: “Don’t take the easy way out, by just saying, ‘U.S. sanctions, U.S. sanctions, U.S. sanctions.’”

If this is the standard that the U.S. government is going to employ – i.e., that U.S. sanctions or lack of clarity over them are not solely at fault for the inability of Iran to receive practical value from the nuclear accord – then we now have extremely low expectations. Parsing Blanc’s words closely, he effectively admits that surviving U.S. sanctions are having a substantial effect on the business decisions of companies interested in pursuing opportunities in Iran. He just says that U.S. sanctions are not the only item having such an impact on firms’ business decisions.

It is clear that Iran has significant problems with its domestic legal environment that would factor to a considerable degree for any company interested in re-engaging the Iranian market. No one can doubt that Iran presents substantial business risk. Moreover, no one should ignore the fact that Iran curries significant reputational risk for firms returning to business as usual there.

However, in my experience, these tend to be second- or third-order problems. Most firms don’t even get to the issue of how difficult it will prove maneuvering through the Iranian market because surviving U.S. sanctions – combined with the persistent ambiguities in the scope and application of current Iran-related sanctions regulations – pose a hurdle too high for most companies to climb. As a result, most companies opt out of making the decision to re-enter Iran from the get-go – before it is even possible to entertain the challenges inherent in doing business in Iran.

Moreover, those companies that do want to engage Iran have the problem of finding banks to support their trade or investment activities. As has been reported time and again, most European financial institutions have decided to go agnostic over Iran and refused to either re-engage their Iranian counterparts or support the trading activities of their companies. In doing so, even highly-motivated companies who are prepared to figure out how to effectively maneuver through Iran’s business environment run into the trouble of finding a bank to bank their business.

As such, surviving U.S. sanctions and the overhang of those sanctions lifted by the U.S., Europe, and the global community are proving a costly impediment for firms interested in re-engaging the Iranian market. They pose the immediate problem for companies interested in returning to Iran. The Obama administration and its representatives cannot ignore this problem. Until the issue is satisfactorily resolved, moreover, it is unlikely that there will be a large influx of business into Iran – no matter what reforms the Iranians choose to undertake to improve the domestic legal environment and recover their international standing.