Fiscal transparency to lure European firms to Iran?
Tehran, Iran, November 9
By Mehdi Sepahvand - Trend:
If Iran wants to attract foreign companies for investment, the most important thing is to assure them of its market’s accountability by improving fiscal transparency, says Norbert Knittlmayer, partner at the German-based consultation company Marccus Partners.
Marccus Partners has had many clients in the automotive, electro, metal refining, and infrastructure construction industries with long-standing relationships with business partners in Iran.
“After the sanctions relief, the fine print of the international sanctions regime against Iran has become even more complicated, indeed. Therefore, for example, European banks are extremely hesitant to offer banking services for business transactions with Iran,” Knittlmayer told Trend November 9.
He made the remarks on the sidelines of a business trip to Iran to investigate the country’s post-sanctions situation. His company advises businesses of the famous German Mittelstand (i.e., German mid-cap companies).
“Certain legislation in Iran on, for example, anti-money laundering, could make it easier for some banks to commence engaging in such services,” he noted.
“I believe that the government of Iran needs to continue its domestic reforms to provide more accountability and transparency of the economic players of Iran, such as allowing (potential) investors to protect their legitimate interests in Iran,” Knittlmayer said.
He went on to add that his clients are very eager to re-establish business relationships in the post-JCPOA Iran.
“Usually, they prefer to test a market by first engaging in trade. If they can see sufficient demand for their products and services in such market, as a next step, they establish trading subsidiaries and, furthermore, production facilities. I expect that they will follow such pattern in Iran, too,” he said.
The Financial Action Task Force (FATF) this year eased some of its restrictions on Iran and promised to do so more if the Iranian government took measures to increase the country’s monetary transparency.
The government welcomed the initiative and vowed to follow up. However, many conservatives and anti-Rouhani activists have made strong objections to the decision, saying cooperation with the FATF will make the country vulnerable to espionage.