Expert explains Iran's current limits with its oil, oil product exports, revenues

Oil&Gas Materials 23 November 2020 17:02 (UTC +04:00)
Expert explains Iran's current limits with its oil, oil product exports, revenues

BAKU, Azerbaijan, Nov. 23

By Elnur Baghishov – Trend:

Iran is currently able to obtain only a little portion of its earnings from crude oil and oil products exports due to certain reasons, Iranian expert on economic issues Ali Akbar Nikoo Eghbal told Trend.

According to Nikoo Eghbal, the main part of Iran's oil and oil products are exported to South Korea, China, India, Iraq and other countries.

He added that Iran has several problems with its banking system, including its inability to join the FATF.

The economist noted that as Iran is currently unable to join the FATF, it is almost impossible to take any serious steps.

Nikoo Eghbal also said that the value of Iran's annual oil exports amounts $7-$8 billion as of now.

The expert stressed that if oil exports are not increased, the needs of industrial enterprises in raw materials and equipment will be met by low-quality means.

"This will have a negative impact on the development of the industrial sector in Iran," he said.

“However, if Iran's oil exports are increased, the raw materials and equipment needs of industrial enterprises in Iran can be met at the expense ofthese revenues,” he added.

Nikoo Eghbal emphasized that due to the lack of raw materials and equipment in Iran, currently only 30 percent of the potential of the Iran’s industrial sector can be used.

"Equipment must be renewed in the industrial sector every 3 years. If the enterprises are equipped with modern and high-quality equipment, Iran's industrial sector can also develop," he noted.

The objectives of FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

During the recent FATF meeting, Iran has been warned that it may be added to the list of non-cooperative countries within three months if it does not completely fulfill the FATF requirements. Iran fulfilled 37 of 41 FATF requirements. The remaining four requirements refer to the legislative field.

The amendments to Counter-Terrorist Financing Act, Anti-Money Laundering Act, Convention against Transnational Organized Crime (Palermo) and International Convention for the Suppression of the Financing of Terrorism (CFT) were prepared by the Iranian government and sent to the parliament.

Although the four conventions have been approved and sent to the Expediency Council of Iran, the CFT and Palermo conventions have not yet been ratified by the Council.

FATF was established in 1989 on the initiative of the G7 Group to combat money laundering. FATF has 37 members and its secretariat is in Paris.

Iran was included in the FATF blacklist in 2007. The anti-Tehran steps have been taken since 2009. Thus, the countries were cautious in their financial and banking transactions with Iran.

Taking of reciprocal steps against Iran through diplomatic steps has been postponed since 2016. FATF included Iran into the black list again on Feb. 21, 2020.

The US imposed new sanctions on Iran in November 2018. Over the past period, the sanctions affected Iranian oil exports, more than 700 banks, companies and individuals.