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Western firms in rush for Iran trade

13 February 2015 9:09

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Multinational companies are jockeying for position as nuclear talks between Iran and international negotiators shift to high gear amid hopes of a final deal.

“I am already seeing a rush to market by US and EU companies and no one wants to be left behind,” says Nigel Kushner, a director of British-Iranian Chamber of Commerce.

“There is certainly an element of competition between US and EU exporters and EU companies may feel they have strength in numbers by unifying,” he said in remarks published by The Wall Street Journal.

Kushner is the chief executive of W Legal Ltd., a law firm that specializes in sanctions.

Iran’s lucrative, untapped market has always offered a mouth-watering prospect to foreign firms, but a web of US-led sanctions has kept them at bay.

The Europeans now “fear their American rivals will be able to move first once sanctions are lifted”, The Journal wrote.

“Their main concern is that European companies face often-complicated national regimes to approve exports to Iran while their US counterparts operate with a unified, clearer export approval process,” it said.

Europeans feel sacrificed

US trade with Iran rose to $315 million in 2013 from $234 million in 2011, according to US Census Bureau data. During the same period, European trade fell to 6 billion euros ($8.2 billion) from 28 billion euros, European Commission figures show.

US company World Eco Energy has signed a preliminary agreement to invest $1.175 billion to generate electricity in Iran by turning solid waste into power.

Last October, US aerospace giant Boeing booked its first sales to Iran since the 1979 Islamic Revolution. American energy giants Halliburton and ExxonMobil have been testing the waters for work in Iran. Dell Inc. and General Electric Co. have approached potential Iranian distributors to sell personal computers and power-generation equipment.

Apple has been reported to be exploring the Iranian market for possible sales of iPhone should sanctions ease.

The Europeans are complaining. According to Marietje Schaake, a Dutch member of the EU parliament, the European Union needs to address concerns with the US.

“American sanctions vis-a-vis Iran have had undesired extra-territorial impact on EU business,” Schaake, who was in Iran in December, has told Bloomberg.

Wary of lagging behind, the Europeans have rolled up sleeves, forming a European-Iranian Business Alliance with the Iranian chambers of commerce.

The group intends to raise with the EU the hurdles which European exporters face in finding banks to handle their transactions with Iran.

Exporters say when banks refuse Iran transactions, EU governments cite it a commercial decision.

But in practice, “the US is bullying companies through the banks,” Norman Lamont, president of British-Iranian Chamber of Commerce, told The Wall Street Journal.

Iran’s potentials

In Iran, officials are sanguine. “Iran will soon achieve the best economic standing in the Middle East and North Africa,” Economy Minister Ali Tayyeb-Nia said.

The West “must put an end to tyrannical sanctions on the Iranian nation as soon as possible”, he added.

Iran is the world’s 18th largest economy worth $1.2 trillion at purchasing-power parity.

The country of 80 million prides itself on a well-educated pool of population, sitting on the world’s third largest oil and second largest gas reserves.

Tehran’s stock exchange is the Middle East’s second largest, worth $150 billion.

“With the prudence and the guidelines of the Leader (Ayatollah Seyyed Ali Khamenei), the evil of sanctions will be removed,” Minister of Petroleum Bijan Namdar Zanganeh said.

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