With the lifting of sanctions under the nuclear agreement between the world’s major powers and Iran soon to occur, changes to a major U.S. visa program for visa-free entry to the United States could complicate plans by business leaders considering new investments in, or resumption of business dealings with, Iran. Specifically, their subsequent travel plans to the United States and continued eligibility for visa-free entry may be impacted.

In the wake of the terrorist attacks in Paris and San Bernardino, California, Congress has denied certain travelers, including those to Iran in the last five years, from being eligible to participate in the U.S. Visa Waiver Program (VWP), which allows visa free entry to the United States to visitors from certain eligible countries. In the year-end spending bill signed into law by President Obama, the eligibility criteria for VWP were amended to prohibit individuals who have been present in Iraq, Syria, Iran, or Sudan (or other countries designated by the U.S. government as supporting terrorism or “of concern”) at any time on or after March 1, 2011, from participating in the VWP.

The VWP, administered by the Department of Homeland Security (DHS), allows eligible citizens or nationals of countries which have met U.S. security requirements to travel to the United States without visas as tourists or business visitors for a stay up to 90 days.

Prospective VWP travelers undergo counterterrorism screening and must receive approval through DHS’ Electronic System for Travel Authorization (ESTA). Through the ESTA registration process, DHS evaluates whether individuals are eligible to travel to the United States before they are allowed to board a carrier bound for the United States. Those who register with ESTA can seek entry to the United States as visitors under VWP without having to apply for a visitor visa at a U.S. consulate.

As a result of the new eligibility requirements, however, travelers to Iran — even those from visa waiver countries — may subsequently be unable to rely on visa free travel to the U.S. For example, travelers from the European Union, who previously would have been able to receive approval through ESTA to travel to the U.S. under VWP without a visa, may now have to apply at a U.S. Embassy for a U.S. non-immigrant visa before traveling to the United States as business visitors. This would effectively mean that various European, Japanese and other business people who visit Iran may have to apply for US visas (business visitor or tourist) at a U.S. consulate before they can enter the United States at any point in the future.

Iranian officials have asserted that the new VWP eligibility criterion violates the nuclear agreement, arguing that it amounts to a tax or sanction on international businessmen seeking to invest in the Iranian market. On Sunday, January 10, the Speaker of Iran’s parliament said that new US visa regulations amounted to “harassment” and threatened reciprocal steps if the changes are implemented.

U.S. officials, however, have indicated that the recent changes in visa requirements will not prevent the U.S. from meeting its commitments under the nuclear agreement. Most notably, on December 19,  Secretary of State John Kerry wrote a letter to his Iranian counterpart in which he asserted that the changes to the VWP could be “waived.”  On December 28, Secretary Kerry stated, “It is not the policy of the United States to prevent permissible business activities with Iran.” 

The legislation does contain a waiver, but Congressional leaders dispute it can be used as broadly as the Administration envisions. It is still to be determined how this waiver dispute will play out.