Big companies remain in Iran through small mediators

Business Materials 10 November 2018 15:17 (UTC +04:00)

Tehran, Iran, Nov. 10


Countries decide according to their own interests, and companies will do the same, Jalal Mirzaie, an Iranian MP and spokesman of the parliament's energy committee, told Trend, referring to the foreign companies' withdrawal from Iran's market for fear of American penalties.

"US sanctions exert pressure on economic relations with Iran. But trade with Iran has advantages for some companies that do not have much economic relationship with the United States, besides the profit of economic ties with Iran in current situation has increased for some companies," he added.

"The profit of trade with Iran compels the companies to seek new ways to preserve their economic ties," he said.

Referring to ways to bypass the sanctions, Mirzaie says, "I don't want to mention the ways. The claimed ways may be different from the ones that are being implemented, because no country will reveal its solutions to evade restrictions. Therefore, in this issue some of the truth remains confidential."

"But in the last few days, along with some of the leading companies quitting Iran's market, we witness the arrival of new companies to Iran. These companies are mostly small and medium enterprises,” he said.

"Some large companies have tried not to cut their ties with Iran by using mediators, since they know that there is a possibility of positive developments in the world of politics and this is possible in case of the US changing its approach towards the nuclear deal," the MP said.

“Therefore, these companies do not want to leave Iran in a way that blocks their path to return. Some of the companies that have left Iran before the Joint Comprehensive Plan of Action (JCPOA) faced serious difficulties to return after the sanctions were lifted,” he said. “They are aware of these issues and therefore try to keep their relations with Iran through intermediary companies. Although they may publicly say they have left Iran.”

On November 5, the US re-imposed sanctions against Iran. Its restrictions to trade do not apply directly to European companies, but they fear being banned from the American market if they keep doing business in Iran. Yet obeying America’s sanctions is itself illegal under rules devised by Europe, whose leaders want to keep Iran in the global trade.

In order to mitigate the effects of re-imposed US sanctions on European businesses wishing to continue trade with Iran, the EU has set out a plan to keep Iran in the 2015 nuclear deal.

It has proposed to establish a so-called Special Purpose Vehicle (SPV) – a non-US dollar payment system – that will facilitate transactions between Iran and EU companies. The EU has also updated its “blocking statute” to allow EU entities to recover damages arising from the re-imposed US sanctions on Iran and nullifying the effect in the EU of any foreign court rulings based on these sanctions. These measures are specifically designed to decrease the dependency of EU companies on the US financial system, and to reduce the exposure of EU companies to fines and litigation.