Saturday 24 August 2019
News ID: 56080
Publish Date: 08 August 2018 - 21:48
TEHRAN (Press TV) - Daimler AG, the maker of Mercedes-Benz trucks and luxury cars, says it has suspended expansion plans in Iran in response to U.S. reimposition of sanctions on the Islamic Republic.
"We have ceased our already restricted activities in Iran in accordance with the applicable sanctions," the company was quoted as saying in a statement.
The German auto group, which decided to return to Iran in 2016 after the lifting of sanctions under an international nuclear deal, had not resumed operations in the country yet.
The carmaker’s re-entry plans for Iran included establishing a joint venture with Iran Khodro Diesel for local production of Mercedes-Benz trucks and power train components, plus the establishment of a sales company for Mercedes-Benz trucks in Tehran.
Daimler also planned to return as a shareholder in the former joint venture Iranian Diesel Engine Manufacturing Co (IDEM) in Tabriz.
The company has not sold any cars in Iran since 2010 despite having a long presence in the country where it sold up to 10,000 vehicles a year before the sanctions.
While the pullout has little economic significance, it flies in the face of the EU implementing a "blocking statute” which is purported to protect firms against possible fallout from breaching U.S. sanctions on Iran.
Germany joined France, Britain, and the EU on Monday to underline that they could protect European companies from new US sanctions which were reinstated on Tuesday.
"We are determined to protect European economic operators engaged in legitimate business with Iran,” EU foreign policy chief Federica Mogherini said.
The German Economy Ministry said Berlin would continue to offer export and investment guarantees to firms doing business with Iran.
Under the blocking statute, European firms must seek a legal exemption for withdrawing from Iran due to U.S. sanctions and those failing to do so could be penalized by their governments.
Firms, however, can twist the law if they claim that their withdrawal is a business decision, making it a tricky issue.
It is not clear yet whether Daimler’s decision would involve penal liability and whether it decided to leave Iran after the blocking statute went into effect.
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