Iran: Joint Comprehensive Plan of Action (JCPOA) – Financial Institutions need to act fast to help Economy

The results of the most recent round of discussion regarding the iranian nuclear programme are positive. Provided, Iran and the five UN veto powers aswell as Germany (5+1-group) agree on the missing “techincal details”, the Joint Comprehensive Plan of Action (JCPOA) provides a reliable base for the future international relations to Iran, also in economic terms.

The embargo situation remains unchanged for exporters until the final agreement of the JCPOA and with that also the very restrictive business policy of many banks. On the other hand the demand from Iran for machines should now rise quickly, as such projects often have a long lead time. In addition the demand for urgently needed spare parts will rise quickly.

Many Iran-exports are already possible today legally. Also payment transactions for Iran-business is legally allowed – but despite these facts many financial institutions block such transactions until now.

China has been the big winner with regard to the Wests’ financial and political institutions policy and much effort will now be needed to win back business in Iran. The finance industry is now required to act quickly to level the playing field and open up possibilities for doing business.

The lost busines can be gaged by the following facts: In 2006 Germany exported machines worth EUR 1.57bn, in 2013 just EUR 455m. During the same time period Chinas’ market share rose from 7.6% to 36.1%. In 2014 exports were EUR 631m.

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