kayhan.ir

News ID: 45405
Publish Date : 17 October 2017 - 20:59

U.S. Threats Bedevil Trade Deals With Iran



PARIS (Dispatches) – European politicians treated Donald Trump’s new Iran policy as America going rogue. Europe’s businesses can’t afford to be so dismissive.
America does have the power to take unilateral action that affects companies everywhere -- and has used it in the past. Trump gave Congress 60 days to consider re-imposing curbs on Iran. Some of them could apply to businesses outside the U.S., potentially forcing them to choose between the American and Iranian markets.
"The bottom line for a company is, will it be able to make a profit without getting sued?” Rouzbeh Parsi, director of the Sweden-based European Iran Research Group which promotes cooperation between Europe and Iran, told Bloomberg.
European giants like Siemens and Total have already signed multi-billion-dollar deals on the back of the 2015 nuclear accord.
Trump can’t roll the clock all the way back and reimpose pre-agreement levels of economic pain on Iran, said Jarrett Blanc, a senior fellow at the Carnegie Endowment for International Peace, and a former State Department official dealing with Iran. But, "there’s no question that the U.S. can, if it wants to, impose pretty substantial costs on Iran’s economy without anybody else’s permission or cooperation,” he said.
Uncertainty over Trump’s Iran intentions is having a dual effect, executives and analysts said. Those already in don’t yet see a reason to pull out. Those on the fence have a new reason to hesitate.
Italy’s Azimut Group last week announced the purchase of a 20% stake in Iranian asset management company Mofid Entekhab. Sergio Albarelli, Azimut’s CEO, acknowledges there are risks – but he says they come with the territory.
"Any great opportunity in the last 40 years in emerging markets has been taken assuming some risk,’’ Albarelli said in an interview. He said his acquisition is fully compliant with existing rules and sanctions. Will those rules change? "Maybe. I’m not a politician and I can’t forecast.’’
European officials say they’ll try to shield business from risks associated with America’s shifting policy. "We want clarity, legal security for our companies,’’ French Finance Minister Bruno Le Maire told his U.S. counterpart in Washington on Thursday. David O’Sullivan, the EU ambassador to the U.S., said that if Congress reinstates sanctions, Europe "will act to protect the legitimate interests of our companies with all the means at our disposal.”
The EU does have tools available. It could use so-called "blocking regulation,’’ applied in the 1990s as a counter to U.S. sanctions, according to Ali Vaez, an Iran analyst at the International Crisis Group. That would bar European firms from complying with unilateral, extra-territorial American measures, and allow the "claw-back’’ of fines imposed by U.S. regulators, Vaez said.
The EU could go further, taking its case to the World Trade Organization or retaliating against American business in Europe, Parsi said. But Europeans may not be ready for a confrontation, he said, and may prefer to defend the nuclear deal "nominally, at the political level,” while avoiding proactive steps. That would amount to telling European companies to "lawyer up, or don’t do business.”
Even before Trump’s U-turn, European companies interested in Iran faced plenty of legal hurdles.
French sports retailer Decathlon has been laying the foundations for its first Tehran store, due to open next year. It sees no reason to give up on a "beautiful opportunity,” said Philippe Bernadat, country manager for Iran.
But, as Bernadat tells it, seizing that opportunity has been fraught with problems. For one, the world’s giant data-processing companies – mostly American – don’t want their systems used in Iran. New ones have to be built with Iranian partners. It means "reinventing everything,’’ he said. "It’s taking us a lot of time and energy.”
Then there’s financing. Several big international banks have been fined by the U.S. over their dealings with Iran. It took Decathlon, which is also in the American market, more than six months to find smaller banks to work with, said Bernadat, and it remains a point of vulnerability. "If tomorrow no bank agrees to finance our projects or transfer funds for us, then of course it would be an extraordinarily difficult situation,” he said.
In Tehran, Amir Alizadeh, deputy managing director of the German-Iranian Chamber of Commerce and Industries, has seen fewer trade delegations in town this year, and he says larger companies, especially those active in the U.S., are delaying their decisions.
But Alizadeh said he doesn’t see any sign that small and medium-sized businesses he’s engaged with are having second thoughts. On the contrary, many are taking their plans to "the next phases” -- conducting market research, finding partners, and registering companies.
European governments have encouraged such moves. In recent weeks, the UK signed a $720 million solar-energy deal with Iran, and France’s state investment bank Bpifrance pledged almost $600 million of credit to French companies with projects there. Austria is offering export finance.
Will such support expand, shrink or stay the same after Trump’s change of course? Albarelli, the Italian financier, said it would be "very close to a waste of time’’ trying to forecast what politicians will do. And he’s not looking for their help.
In Iran, "we see the economic opportunity,’’ he said. "Obviously there are some political risks. Fine. It’s part of the game.’’
Trump's hawkish new approach towards Tehran, coupled with banking worries, are also causing growing uncertainty over Iran's $36 billion deal to buy airliners from Boeing, Airbus and ATR.
IranAir's decision to buy a total of 200 aircraft from the two giants and Franco-Italian turboprop maker ATR marked the zenith of a 2015 pact between Tehran and world powers to renew trade in exchange for placing curbs on Iran's nuclear program.
Several people involved in the airliner deals fear they have become too big to cancel but too sensitive to implement fully beyond a limited number of jets for which Iran has the funds to pay for in cash without foreign loans, Reuters said.
"For Iran it is important that the deal remains intact... the failure of the (plane) deals will be a major blow for us," Reuters quoted what it called a senior Iranian official as saying.
"Their collapse will have a domino effect on other deals and potential foreign investors."