Alibaba Group Holding Ltd (NYSE: BABA) and eBay Inc (NASDAQ: EBAY) may find themselves playing an unlikely role in an international nuclear weapons agreement, according to a new report by Bloomberg. Iran and other world powers came to an agreement on the framework for a potential agreement last month, but the details of the deal must still be finalized by June 30.
Terms Of The Deal
The general terms of the agreement would include an easing of international sanctions on Iran, which have weighed on the Iranian economy in recent years. The United States first imposed sanctions on Iran in 1979, but the United Nations has had its own set of sanctions in place since it passed Resolution 1696 in 2006 in response to Iran’s refusal to suspend its uranium enrichment program.
In exchange for an easing of sanctions, Iran will likely agree to cut back on its uranium enrichment program. However, the United Nations will be responsible for monitoring and enforcing the terms of an agreement, and that’s where Alibaba and eBay come in.
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UN officials have long suspected that Iran has used online market places such as eBay and Alibaba to obtain banned supplies for its nuclear program.
In fact, Iran’s President Hassan Rouhani boasted as recently as last year that Iran has proudly worked around international sanctions in recent years. “Of course we bypass sanctions. We are proud that we bypass sanctions because the sanctions are illegal,” Rouhani said in a speech.
Better Controls Needed
Though both eBay and Alibaba have a strict set of listing guidelines limiting the types of products that can be listed on their platforms, the companies’ monitoring tools and trade controls aren't as effective as they could be.
According to U.K. group Project Alpha, the Iranian government may have imported as much as $250 million in banned equipment in the past decade, and much of those transactions took place online.
Regardless of the specifics of the deal with Iran, the UN will likely be working closely with online marketplaces to ensure that Iran doesn't undermine the terms of the deal in the future.
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