(In Tuesday story, changes firm name to Latham & Watkins fromLatham and Watkins in paragraph 12)
By Yeganeh Torbati
WASHINGTON, July 14 (Reuters) - Within hours of theannouncement of an Iran nuclear deal early on Tuesday, lawyersaround Washington were fielding calls from U.S. corporateclients eager to know what the 159-page deal would mean fortheir business prospects.
In the near term, the answer for most of them is: not verymuch.
U.S. companies face losing out to foreign competitors inIran as they wait for signs that Tuesday's historic nuclearagreement is sticking and that U.S. lawmakers are willing toloosen long-standing restrictions on trade and investment,according to corporate lawyers and company executives.
Iran's agreement with major world powers to curtail itsnuclear program in exchange for the lifting of economicsanctions opens up the world's fourth-largest oil reserves,second-largest natural gas reserves and an 80 million populationto multinationals.
But the strict, decades-old U.S. restrictions on doingbusiness with Tehran, which predate the nuclear crisis andrelate to other concerns such as terrorism support and humanrights abuses, will remain in place.
"U.S. persons and banks will still be generally prohibitedfrom all dealings with Iranian companies, including investing inIran, facilitating cleared country trade with Iran," a seniorU.S. administration official said at a briefing on Tuesday.
The deal hammered out in Vienna does open some avenues forU.S. companies to expand in Iran. U.S. firms will now be allowedto sell or lease commercial passenger aircraft to Iran, as longas they procure licenses from the U.S. government, givingcompanies such as Boeing an opportunity.
The deal also allows the U.S. government to license foreignsubsidiaries of U.S. companies to operate in Iran, which wasbanned by Congress in 2012.
A Treasury official told Reuters that decisions on licenseswould be made by the Office of Foreign Assets Control, and thatsuch subsidiaries would be subject to restrictions.
"The scope of the license has to be shaped and determined,"the official said.
U.S. executives and trade groups worry that the embargo mayforce U.S. companies to watch as European and Asian rivals movein, unless there is Congressional action to relax the rules.
"It (the deal) will not result in a green light for U.S.companies in most cases to resume business in Iran," saidWilliam McGlone, a lawyer who specializes in export controls andsanctions at Latham & Watkins in Washington.
"Democrats as well as Republicans are still very strongly infavor of maintaining primary sanctions against Iran on the Hillfor various reasons, and it's hard to see that dynamic changingin the near term."
McGlone said he spoke on Tuesday with a Fortune 50 companyexecutive who wanted to know if it could resume foreignsubsidiary dealings with Iran in place prior to 2012. Severalother sanctions lawyers told Reuters they spent much of Tuesdayanswering Iran-related queries from clients.
Even if allowed, companies are likely to be wary of rushinginto Iran due to concerns the policy could be reversed if aRepublican wins the presidency in 2016. At least threeRepublican candidates said on Tuesday they would do so.
Pro-business groups have been treading carefully on CapitolHill amid strong Republican opposition to the deal.
Republicans in Congress have long been working to sink anagreement, and several dismissed concerns that U.S. businesseswould be disadvantaged in a post-deal environment.
"I think we are a long way from that," said RepublicanSenator John Cornyn, in response to a question about U.S. firmsoperating in Iran.
Some of the most influential business lobby groups have beenlargely muted on Iran, in contrast to their more active role inpressing for an easing of sanctions against Cuba and Russia.
Business Roundtable, made up of chief executives of thelargest U.S. firms, including Boeing and Exxon Mobil Corp., told Reuters they have not been involved in the Iranissue. The Chamber of Commerce, National Association ofManufacturers, and National Retail Federation did not respond torequests for comment.
SLOW START
In the global race to tap Iran's vast energy resources, U.S.companies have already gotten off to a slow start. Iranianofficials estimate the country needs $230 billion of investmentin the petroleum sector alone, to upgrade its aging energyinfrastructure and expand oil and gas production.
However, major U.S. firms said they have not broacheddiscussions with Iran, in order not to fall foul of theirgovernment. In contrast, several European oil companies werequick to express their interest in Iran both before and afterthe deal was announced.
A spokeswoman for oil giant Shell said on Tuesdaythe company was "interested in exploring the role Shell can playin developing Iran's energy potential," within the boundaries ofthe law.
A spokeswoman for Norwegian oil services firm Aker Solutions said: "We've done business in Iran before and will beinterested in looking at new possibilities when sanctions arelifted."
Italian oil and gas group Eni also said on Tuesdayit would consider investing in Iran again if sanctions arelifted and Iran improves its contract terms.
U.S. oil giants Chevron Corp and ConocoPhillips both stressed that they act in full compliance with U.S.law, and ConocoPhillips stated it is not engaged in businessdiscussions with Iran. Exxon, the world's largest publiclytraded oil company, declined to comment.
Other U.S. firms were similarly quiet. General Motors Co. declined to comment on Tuesday on "potential futurescenarios" and said it is committed to complying with U.S.sanctions. Starbucks, the world's biggest coffee chain,said on Tuesday it had no plans to enter Iran, while Coca-Cola said it was too early to comment.
Corporate lawyers and trade groups said U.S. companies maystart to push legislators to loosen restrictions now that thedeal is signed, and as they start to see the tangible impact oflosing out.
"What's particularly difficult for American companies is ifthey are the only ones that are prohibited whereas the rest ofthe world will be trading," said Vanessa Sciarra, vice presidentof the Emergency Committee for American Trade.
"Every time you're at a disadvantage relative to yourforeign counterparts, you lose market share." (Additional reporting by Patricia Zengerle, David Morgan, andIdrees Ali in Washington, Jeffrey Dastin in New York, AnnaDriver in Houston, Joseph White in Detroit, Ernest Scheyder inNorth Dakota, Ron Bousso in London, and Terje Solsvik in Oslo;Editing by Soyoung Kim and Stuart Grudgings)
