World  Business and Economic Analysis 

Iran,

  • Interview with Farzaneh Daneshmand,CEO Cheegel Company

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    WBY talks to, Farzaneh  Daneshmand CEO of Cheegel Co., on first ecommerce company in Iran .

     

     

     

     

     



    What diversified services the Cheegel and the group provides?


    Cheegel is first and the only Iranian E-marketplace that has developed by IsDynamic Company base on strong R&D and so advance software product line of IsDynamic. So, at first let me introducing and presenting IsDynamic History then I will back to Cheegel history as one of outcome of IsDynamic.

    IsDynamic is a knowledge base company in field of Super Large Scale software Solutions. This company has established on 24 June 2009, and I found it based on more than 12 years of executive and management experience in information technology and management of private firms.

    IsDynamic after 8 years hard working, at 2016 grew up significantly and now it is one of the famous software companies in Iran. IsDynamic has succeeded to achieve ASPA  Excellence Award and is known as one of fourth superior's software Tech Company in Asia. IsDynamic has done many offshore software projects at different countries for example USA, Netherland and UK. Through doing international projects, IsDynamic achieved newest technologies of developing super large scale software applications. Last year this company success to achieve most high rank certificate of knowledge based companies in Iran from Vice Presidency of Science and Technology for its Software Product Line (SPL) and the internet base services has developed base on this SPL include Cheegel and Yaapost.

    At end of 2016, IsDynamic changed its structure to group companies and registered two other companies under IsDynamic brand and positions in aim to commercialization and business development of Cheegel and Yaapost. Meanwhile the R&D department of IsDynamic has started to develop third internet base service name as A2aTourims.

    Cheegel is a mesh model E-Marketplace that has developed for countries are member of Silk Road in aim to two way business between them.
    Cheegel business model supports Online local b2c ,Online cross border b2c, Online/ offline cross border b2b

    What is Cheegel Product Strategy?

    Cheegel model in supplying products and goods is based on supply chains model. According to this model that is popular in E-Marketplaces, every producer and manufactures catalog itself and its products catalogue on Cheegel. All detail information about product at many views and aspects like attributes, locations, market info and many other detailed has considered in e-catalogue. But in some cases depend to Cheegel business strategy, may be even Cheegel do as a supplier. In many cases it is smarter that Cheegel supply product and catalogue them on the site. So, Cheegel E-Market place is a hybrid model.
    How Iranian government support start-up companies?
    Iranian government from more than 14 years ago by establishing and developing science and technology parks and innovation centers, has made an echo system for accelerating and growing knowledge base companies.
    The Vice presidency of science and technology's mission is realizing knowledge base economy of Iran by developing the physical infrastructure of since and technology parks and too developing supportive business and trading laws like free tax, Fund raising by governmental funds, Long term loans, venture capital and etc.
    So start-up companies that mostly established by high talent student has graduated from university or entrepreneurs that has ideas but need supports, has found STP's as best environment for them to starting developing their ideas.
    At other side, parliament of Iran has approved an advance law of knowledge base companies for supporting this national strategy. Achieving to knowledge base certificate is not easy because the evaluating processes are so advance process and it has 3 degrees (new born, Industrial, producer). There are about 3000 (three thousands) knowledge base companies that about 75 percent are in new born level and only 25 percent put in two other mentioned level.
    The exchange market of Iran has opened a special line for Iranian knowledge base companies and has supportive law for make it possible for these types of companies raise funds from this market by selling some shares of their companies.
     The current laws in field of trade and finance in Iran has now updated as well as for support the laws of knowledge base companies and it is a challenge but it seems in near future this challenge will  be overcome by government.


    What are the factors which led to the success of Cheegel   as the fastest growing company in Iran?


    There are different factors from different views and aspects. But there are some critical success factors (CSF's). The first CSF is fund. Cheegel is in very good stage for a big change and big grow up.
    Moreover Marketing and banding. Cheegel is in best stage for do it strong branding strategy
    human resource strategy and development. Cheegel has potential for employing very motivated knowledge workers and too top managers for its so critical departments like as CRM, SRM, Legal, Contract management, Marketing).

    What are you future growth plans of Cheegel?


        Cheegel Action Plan 2017  encompassed such as  different phases Online Retailing Iranian goods and products in local market (Iran). Online  and offline Wholesaling , exporting Iranian goods and products to china, Middle East  and CIS countries

        
    What opportunities are for the growth of your company in Iran?


    Cheegel is a supply chain model. Iranian suppliers profile themselves and after Cheegel SRM team evaluating and approving them Iran has more than 4,000,000 businesses in size of small, medium ad large close.

  • Investing in Iran? Frontier Market Opens Up

     

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    Although investing in Iranian funds is broadly prohibited for US investors, for Europeans, it can be done—within limits—following the lifting on Jan. 16 of nuclear-related sanctions imposed on Iran by an international coalition.
    And the strong showing of Iranian moderates in national elections last month may encourage further interest in the country.
    Iran has a large, diversified economy and a stock market, and there are new funds that allow some global investors to put their money there, reads an article in The Wall Street Journal.
    However, American individuals and entities are still prohibited from nearly all dealings with Iran, with limited exceptions such as the export of food and medicine to the country. That’s because of US sanctions still in place.
    European investors have a much freer hand, but they need to be wary of some remaining European Union sanctions. In addition, even people who are not American citizens or living in the US are subject to certain remaining US sanctions—for example, prohibitions against dealings with designated Iranian individuals and entities.

      A New Fund
    In anticipation of greater international interest in Iranian stocks, the Turquoise Variable Capital Investment Fund was launched in December. Jointly managed by Turquoise Partners, an Iranian financial group, and London-based Charlemagne Capital, the open-ended fund invests predominantly in Iranian stocks, and is aimed at all non-US investors.
    It has about $55 million in assets and its holdings include some locally listed corporate bonds, but its long-term goal is to hold only equities.
    “Most of the money in the fund was transferred from a similar fund that Turquoise Partners ran on its own for 10 years. There has not been enough time since the lifting of the nuclear-related sanctions for the fund to see significant inflows in reaction,” says Dominic Bokor-Ingram, Charlemagne Capital’s portfolio adviser for frontier markets.
    Bokor-Ingram noted that Iran’s established stock exchange gives it an advantage over other frontier markets for investors.
    “If you look at the biggest frontier, emerging-market opportunities right now that people quote—Cuba, Ethiopia, Myanmar—the difference in Iran is that you have a big, functioning stock market and a very big economy of approximately $400 billion,” he said.
      Iran’s Increasing Wealth
    The portfolio adviser noted that the fund is seeking to tap into Iran’s consumer market, with sectors like banking, telecommunications, healthcare, housing and e-commerce prominent among its holdings—“anything that’s geared to that domestic economy and the increasing wealth of the population.”
    Bokor-Ingram said there is “almost zero foreign investment” in Iranian stocks. But he says there has been an increase in expressions of interest in the new fund from potential investors and he expects investment in the fund to pick up in the coming months.
    Turquoise Partners’ CEO Ramin Rabii said that over the past 18 months, he has hosted more than 150 delegations of foreign investors, ranging in size from two or three people and up to 30 or 40.
    Most of these were from European countries, he said, though there were others from countries in the region such as Turkey and the UAE.
    Turquoise also runs an exchange-traded fund, the Turquoise TSE 30 Iran Index ETF, which tracks the 30 largest companies on Tehran Stock Exchange. It is targeted at small, individual investors, Rabii says, and has seen interest from investors in the region, as well as some in East Asia and Russia. It has assets of about $3 million.
    Rabii says Iran is similar to Turkey in a number of ways, such as population size, but that while foreign investors are major players in Turkish stocks, “in Iran it’s less than half a percent. That just shows you the potential of foreign investment that can come to Iran.”
    But much has to change before Iran can reach that potential. For instance, Rabii notes, many Iranian companies publish their financial statements only in Persian.
    Still, other funds are testing the waters, too.
    London-based Sturgeon Capital, in a partnership with Iranian brokerage firm Mofid Securities, launched a hedge fund in December that invests in companies listed in Iran, though it could broaden its portfolio to include the shares of companies outside the country that do business there. It currently has less than $10 million in assets.
    Sturgeon Capital’s CEO, Clemente Cappello, said he aims to target Iranian companies that have the potential to export to the company’s middle-income neighbors—such as Turkmenistan and Iraq—and highlights the glassmaking sector as having strong potential in this regard.
    Cappello says he does not expect a rush of investment in the fund soon. And on a broader scale he expects many banks to remain cautious for the foreseeable future about handling the transfer of investors’ money into and out of Iran.
    That point is echoed by Daniel Martin, a partner at Holman Fenwick Willan, a London law firm with a focus on international commerce.
    “I think anyone who is looking to persuade a bank or financial institution to make a payment into Iran or receive payment out of Iran is finding it difficult at the moment to identify financial institutions that will support those transactions,” he said.
    In a recent note, Renaissance Capital’s head of equity strategy, Daniel Salter, pointed to a number of challenges in the Iranian market, including a lack of updated economic statistics, and a trading week that runs from Saturday to Wednesday.

  • Investment in Iran Includes Renewable Energy

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    Countries already vying for business in Iran's wind sector.

     




    Talk of investment in Iran more often than not is centered around its oil and gas sector—after all, the country has some of the highest reserves in the world, and is preparing to rejoin the market this year.

    But did you know Iran is also planning some major steps into the renewable energy market too?

    The Iranian government already has a project in the works: the 6th Development Plan lays the groundwork for installations of about 4,500 megawatts of wind energy and 500 megawatts of solar energy capacity.

    Just last week, a 250 kilowatt solar panel project was brought online, and as much as 15 gigawatts of energy capacity installations are being considered by the Renewable Energy Organization of Iran.

    The organization's Mostafa Rabie suggests, “Iran can supply over two-thirds of its energy through wind power. The long-term policy within the next decade... is to supply over 50% of required energy through... green technologies.”Iran Wind Power

    He does note, however, that investment in the sector is absolutely necessary before any of these goals can be achieved.

    To reach the required renewable capacity of 5000 megawatts, Rabie claims, will take $10 billion worth of investments. There are already more than 19 proposed projects that will cost $1.5 billion to move forward.

    Luckily, Iran already has a few parties interested in its renewable sector...

    Denmark is interested in exporting renewable technologies to Iran, especially wind power equipment. The country's Foreign Affairs Minister Kristian Jensen has said that such exports could grow by as much as $72 billion once sanctions on Iran are lifted.

    This may include wind-turbine manufacturing plants from which Danish companies can build and market their products in and out of Iran.

    India is another country ready to move into Iran's energy sector. The country's Suzlon Energy is a major global wind turbine supplier, and has expressed interest in building wind farms in Iran post-sanctions.

    Such projects may in fact find competition from German companies also looking to build in Iran. German Siemens has already signed a deal to invest in Iran's railways, and intends to also supply the country with wind turbine equipment.

    Iran has plenty of options when it comes to outside investments in its energy infrastructures, both fossil-fuel based and renewable.

    Only time will tell how many of these projects are actually brought to fruition.




  • Investment opportunities for foreign investor in petrochemical sector


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    Director of Production Control in Iran's National Petrochemical Company (NPC) Alimohammad Bossaqzadeh said that there are Investment opportunities for foreign investor in petrochemical sector .


    “Foreign investors have voiced readiness to back completion of petrochemical projects in Iran and related negotiations are taking place,” he added.
    According to the NPC director, the Iranian government prefers to attract the foreign finance in form of investments and via making joint venture with Iranian partners.
    The Islamic Republic drew up 30 new petrochemical projects to be implemented in the post-sanctions time, Marzieh Shahdaie, the managing director of NPC, said in an exclusive interview with the Tehran Times in January.
    Questioned about the status of Iran’s petrochemical sector for the attraction of foreign investment in the post-sanctions time, Shahdaie answered that foreign companies mainly from Europe and East Asia are seeking to make investment in the implementation of Iranian petrochemical projects now that the sanctions are being removed against the country.
    She mentioned Iran’s huge reserves of energy, its strategic location as well as domestic capabilities and expert manpower as the country’s advantages for the attraction of foreign investment.

  • Investment Opportunities in Small Scale Power Generation

     

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    Technical and economic benefits of distributed generation for the Ministry of Energy of Iran are obvious. Therefore, in order to decentralization of power generating units, improve network reliability and increase efficiency, "Development of distributed generation project" is planned. The policy of the project to increase power generation in distribution network is incentives facilities offering to private sector.  In this paper, the Ministry of Energy incentive policies are followed.
    Among the various technologies of distributed generation, due to higher generation and reduce gas consumption, combined heat and power (CHP) have more appropriate economic indicators and the willingness of the private sector to invest in this project is more.
    Therefore, we  present an overview of the investment opportunities, government incentives and expressing examples of combined heat and power(CHP) projects, to inform investors and to achieve purposes mentioned in this plan.


     

    Description of investment and government incentive policies
    Investment overview:
    Installation Combined heat and power generation (internal combustion engines, generators and heat recovery facilities).





             Components of investment cost    
        installation initial cost
        maintenance costs
        Personnel / oil filter / lost revenue due to generation interruption
       









     Government incentive policies



     

     The advantage of investment and economic indicators
    Most important advantages of investing in energy generation are Government support in providing free gas and guaranteed power purchase. The following components of income and investment cost of CHP generators have been described.
    Incomes:
     Sale of electricity to the grid (or sale to domestic consumption)
    Depending on the efficiency between 2.57 to 3.14 cent/kWh, Electric power generators purchased and the guaranteed purchase contract will be signed to 5 years. The invoice paid by Ministry of energy in less than 15 days.
    Gross income for 1 MW generator: 20,000 US$/month.


    Use of generator heat in production or in reduction fuel consumption:
    The use of generator heat utilizes based on potential region. Usually the heat generators used in the following processes:
        Production of carbon dioxide from the generator smoke (200 kg/hour  for 1 MW generator-price 114.28 US$/ton)
        Production of distilled water
        Cold production in absorption chiller and injection into the fridge (300 ton of refrigeration per 1 MW generator)
        Heat and carbon dioxide production and injected into greenhouses to accelerate growth.
        Hot water production for swimming pools and domestic consumption (70 cubic meters/hour per 1 MW generator)

     Sale Emission Right:
    According to the efficiency cogeneration generator, yearly 3000 tons of greenhouse gas emissions can be avoided per 1 MW installed capacity. According to Kyoto Protocol, the project as a friendly environment project registered, and based on Emission Right price in the global market (average price was  2 US$ in 2014, and Predicted be 5 to 10 US$ in 2015),is profitable up to 10 years.

    Costs:
    Initial costs:
        Generator and grid connection equipment: 600,000 US$/MW (Stock generator: 314,000 US$/MW and Used generator with guarantee: 200,000 $/MW)
    +The costs of heat recovery equipment+ Recovery of costs of land acquisition/ lease +the project registration fee as environmentally-friendly.
    Monthly costs:
        Fuel cost: 5,000 US$/MW (This cost is monthly statement and paid by TAVANIR, See the attached documentation)
        Oil and filter cost: 1,400 US$/MW
        Personnel costs (for the whole site): 3,000 US$ (This is not a separate cost for industrial sites)
    Estimation of costs and revenues of the CHP system for each project according to characteristics and potential of the site is a free service of Distribution Generation Development Center.










    Silencer units (reduction of noise up to 60 dB – equivalent to a car)




    Summary table of costs and benefits of 1 MW generator installation:

    Initial costs    Revenues
    New generator    Stock generator    Used generator with 6-month guarantee    Power generation    Using of heat
    600,000 US$    314,000 US$    200,000 US$    20,000 US$/month    Depending on the application of unit is variable
        Electric power generation revenue can be increased 50% by selling energy to commercial customers.
        With the increase in electricity tariffs in 1394, revenue will increase.

        period of return on investment (Month)
        With using heat of Generator    Without using heat of Generator
    Using the new equipment    20    32
    Using the Stock equipment    10    15
    Using the Used equipment    6    10

    For a Used 1 MW generator:

     






    Investment Process
     


    Conclusion and call for consultation
    Niroo Research Institute to facilitate investment in the development of CHP generators provides all services to small-scale plants investors with the aim of increasing penetration of combined heat and power generators, increasing efficiency and peak shaving of the Network.
        Issuance Agreement, construction and operation permit, obtaining permits and certificates, contract of guaranteed electric power purchasing.
        Coordinate the activity of attract participation units in regional electric companies and electrical distribution companies.
        Condition assessment tests, performance testing and Maintenance Planning.
    Free consultation services to investors in great Tehran:
        Feasibility consultation, technical-economic evaluation of projects, investment consulting.
        Finding the optimal place for generator installation and heat recovery.
        Introduction of qualified consultants and contractors to design and implementation of CHP units.









  • Iran is suitable country for foreign investments

     

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    Managing Director of Germany's Klifovet Pharmaceuticals Company Klaus Hellmann underlined that Iran is a suitable country with abundant capacities for foreign investment.
    'Given Iran's advances and scientific capacities, Iran has good capacities for investment,' Hellmann said Friday on the sidelines of the Third International Pharmaceuticals Congress hosted by Shahr-e Kord.

    He said that Iran has many capabilities and capacities for advancement and the papers that have been presented by Iranian researchers to this congress shows that the Iranian researchers are at a good scientific level.

    'There are many people in Germany who are willing to be present in Iran and they have scientific exchanges with Iranian researchers; we expect that these exchanges to be prepared more than any time before,' Hellmann added.

    He said that several joint ventures between Iran and German companies have taken place.

  • Iran 2025 Steel Vision Reviewed

     

     

     

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    The Iranian steel industry is pushing ahead with its ambitious plan to become the world’s sixth largest steelmaker as per its 2025 Vision Plan. New crude steel and raw material output capacity are being added every year and production is following a growing trend.
    Maintaining a steady growth to realize the target is a complicated task. The raw material supply is unbalanced across the spectrum, production is growing at a slower pace compared to capacity-making, steel usage is falling and exports need to increase further.
    For the last two years, Foolad Tehnic International Engineering Company has been studying the Iranian steel market and industry, and reporting on the expansion progress at the request of various companies and organizations. FIECO’s project is titled “Monitoring the Comprehensive Steel Plan.”
    The Comprehensive Steel Plan was first floated in 2004 and integrated into the Fourth Five-Year Development Plan (2004-9) the following year. The plan was revised in 2007 under the title “Iran’s Industrial Development Strategy,” in which the 55-million-ton output target was first introduced.
    The macro-planning did not exactly go as expected, as more than a few issues such as the imbalance in steel production chain surfaced.  Accordingly, FIECO stepped in to monitor the industry and provide a detailed report of its shortcomings. Its second report on the steel plan was published in early June.
     Unbalanced Steel Production Chain
    The first part of the report indicates nominal steel and raw material capacity and real output during the previous four years, from 2013-14 to 2016-17.
    Nominal crude steel capacity remained unchanged at 22.5 million tons for the first two years of the period. It increased to 23.7 million in the third year and jumped to 29.8 million tons in 2016-17.
    Also, 4.82 million tons are expected to be added to the capacity by the end of the first half of the current fiscal year (March 21-Sept. 22). Crude production experienced a seesaw trend, as it stood at 16.10, 17.54, 16.7 and 18.51 million tons during the four years respectively.
    As for direct-reduced iron, capacity grew steadily, standing at 19.65, 22.15, 22.3 and 24.45 million tons respectively. It is bound to grow by another 6.4 million tons by the end of the first half. And with the exception of 2015-16, DRI output grew an average of 1 million tons every year to 18.51 million last year.
    Struggling with pellet shortage and the necessity of imports was a common theme for mills in the past. Statistics indicate that pellet production capacity remained nearly unchanged from 2013-14 to 2015-16 at 22 million tons. However, it rose to 32 million tons last year and will have 8.22 million tons added to it as a host of new plants are set to come on stream by late September.  
    The output of such a highly sought-after material was mostly close to its capacity, standing at 20.76, 21.57, 21.50 and 25.62 million tons respectively.
    The imbalance in production chain can be witnessed in the case of iron ore concentrate, where expansion happened too rapidly and left behind pellet development.
    Concentrate capacity rose by about a million ton to reach 30.27 million tons in 2014-15 and suddenly jacked up to 43.4 million tons the next year where it stabilized.
    The sector also has 2.2 million tons of capacity coming its way soon.
    As for production, stats indicate it barely had time to react to sudden capacity boosts and was about 13 million tons less than last year’s capacity.
     Raw Material Needs
    According to FIECO, Iran will require production capacities of 168 million tons of iron ore, 86 million tons of concentrate, 87 million tons of pellet and 57 million tons of DRI to be able to materialize a 55-million ton steelmaking capacity.
    By analyzing Iran’s development projects, FEICO has calculated the current capacity, the best-case scenario added capacity and the deficiency in each sector.
    There’s currently an 80-million-ton iron ore output capacity in place and if all the expansion projects the government has announced were to come on stream, the number would rise to 130 million tons. A 38-million-ton shortage to reach 2025 target still looms large.
    As for concentrates, deficiency stands at 16 million tons, as in the best case, a 26-million-ton capacity will be added to the 44 million tons already in place.
    Pellet is doing better since the potential upcoming capacity of 45 million tons is larger than the current 38-million-ton capacity. That would leave pellet-makers with 5 million tons to add.
    And DRI deficiency is projected to stand at 9 million tons. Potential upcoming capacity is 20 million tons and current capacity is 28 million tons.
    FIECO projects that €8.98 billion of investments are required to cover the deficiencies and reach the 2025 steel target. The total numbers break down to €3.78 billion of investment needed for crude steel capacity-making €1.653 billion for DRI, €1.304 billion for pellets and €1.969 billion for concentrate.
    Moreover, €14.07 billion will be needed to develop the industry infrastructure. Railroad developments account for €4.8 billion of the aggregate figure, €4.26 billion for electricity, €1.91 billion for water, €1.3 billion for ports, €980 million for mining equipment, €560 million for roads and €268 million for gas.
     The Necessity of Exports
    Another part of the 2025 target projects exporting 20 million tons of steel, as the whole 55 million tons are simply beyond Iran’s local demand.
    A combination of galloping inflation, economic sanctions and the ill-famed Mehr Housing Scheme caused mortal harm to Iran’s construction sector, and consequently to steel demand.
    Many steelmakers, especially long producers, are struggling to find buyers for their goods and look at exports as the only way forward. The scenario at home is unlikely to change until 2025, which further underscores the necessity of exports.
    According to FIECO, Iranian semi-finished steel exports have followed an upward trend ever since the 2013-14 fiscal year, reaching from about 300,000 tons to nearly 4 million tons last year. Finished steel shipments nearly set the same record, with exports only dropping about 300,000 tons to 1.99 million tons last year.
    The report envisions three scenarios for Iran’s steel export expansion. The first considers maximum export potential, calculated using Iran’s trade track record and destination markets’ potential demand, which stands at 9.5 million ton/year.
    The second is based on Iran’s share of the global steel market, putting the number at 11.2 million tons/year.
    And the third most optimistic one is based on the industry’s average growth in exports for the last five years, which brings the number up to 16.6 million tons/year.
    All three scenarios would yield results far from 20 million tons/year, but boosting exports by any means necessary should still be on top of the industry’s agenda.
     Call for More Large-Scale Production
    Out of the current 29.7-million-ton crude capacity, 3.3 million tons of it pertain to plants with capacities of 200,000 tons and less, which predominantly utilize induction furnaces. The small-scale plants offer lower prices and of course lower quality, too, as the steel made using induction furnaces does not possess the quality to be able to meet all downstream demands.
    About 76% of Iranian steel are made using EAF with DRI feedstock and the percentage is bound to reach 80% by 2025.
    FIECO’s report suggests “industry policymaking to keep up with the field’s technological development,” indicating that steelmakers should move toward higher quality and more competitive pricing by using a method that utilizes all of Iran’s competitive advantages, such as low energy costs.
     2015-17 Rollercoaster Ride
    In 2015, the installed global steelmaking capacity grew compared to the year before but production marked a significant decline. This was the first time global steel output shrank ever since the 2008 crisis.
    China’s huge investments and incentive policies prevented the country’s production from dropping in 2008 and were actually successful in boosting output and keeping the market up. But in 2015, China had become a behemoth. Its ever-growing output, coupled with the global overreliance on Chinese production and exports, was one of the main causes of global industry depression.
    Usage shrank worldwide and demand dropped. China’s dumping strategies made things no better and eventually eviscerated prices. Many steelmakers were simply unable to keep up and continue, and especially in Iran, dropping iron ore prices also drove many miners out of business.
    Things improved the next year. Iron ore prices ended 2016 higher, as Chinese ore demand and steel usage grew. And interestingly, China’s exports during the year were down compared to 2015, giving exporters worldwide a chance to breathe.
    FIECO’s report indicates that no significant turn in the market trend is expected to occur in 2017. China’s growing debt to GDP ratio will mean fewer incentives in the market for the year and lower growth.
    Markets are also skeptical whether US President Donald Trump’s election promise to inject $1 trillion into infrastructure development will materialize.
    Iron ore supply will remain unchanged and prices will correct the bubble. The Iranian steel industry then will only have its own policymaking to watch.


  • Iran academics urge administration to give visa on arrival to US citizens

     
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    A group of Iran’s top academicians have called on the administration in Tehran to respond to the new US entry ban on Iranian citizens with an innovative approach different from Washington’s discriminatory policies.

    In a letter to President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif, 72 professors from Iran’s prestigious Sharif University of Technology warned against the ramifications of the “discriminatory” travel ban on Iranian citizens by the administration of US President Donald Trump.

    “Apart from the problems that the order has caused for the routine lives of our fellow countrymen in Iran and America, the propaganda aimed at justifying the measure will harm our cultural, religious and historical image as well as our national interests and it can bring about extremely detrimental impacts,” the letter read.

    The top scholars called on the Iranian administration to “exercise restraint” and adopt a “proper and innovative” policy in an attempt to “nullify the harmful impacts” of Trump’s order.

    The academics suggested that the Iranian administration issue two-week tourist visas for US citizens upon arrival at airports over the next 90 days, allowing them to “travel to Iran and closely experience the hospitality of the peace-seeking Iranians and Muslims.”

    Such an initiative will highlight Iran’s “ethics-oriented policy” in the global arena and revive international support for the country, the letter pointed out.
    People stage a protest rally against US President Donald Trump's new travel ban on the citizens of seven Muslim-majority countries at Regan National Airport in Arlington, Virginia, on February 1, 2017 (Photo by AFP)

    In a move which sparked widespread censure, the new US president signed a sweeping executive order on January 27 to suspend refugee arrivals and ban citizens of Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen from traveling to the US.

    On Sunday, the Iranian Foreign Ministry summoned the Swiss ambassador to Tehran, Giulio Haas, who represents the US interests in Tehran, to protest against the US president's discriminatory decision.

  • Iran as main regional center for sustainable development



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    Ban's special advisor on SDGs hailed Iran’s active role in the process of negotiations on Sustainable Development Goals and the 2030 Agenda for Sustainable Development.

    United Nations Secretary-General’s Special Advisor on Sustainable Development Goals (SDGs) Professor Jeffrey Sachs met with Seyyed Abbas Araghchi, Iranian Deputy Foreign Minister for International and Legal Affairs, in Tehran on Monday, where he commended Iran for its tremendous efforts during the process of negotiations on Sustainable Development Goals, expressing hope for further progress on the realization of SGDs with active participation of all UN member States.

    “Adverse environmental consequences and climate change have been very severe in West Asia and can leave a wide-spread impact on the lives and welfare of the people in this area,” Sachs said.

    He went on to add, “as a result, we at the United Nations, are ready to cooperate with regional countries particularly the Islamic Republic of Iran about these issues.”

    Iran has the potential to become the major regional center for environmental issues and sustainable development, he noted.

    Abbas Araghchi, for his part, said environmental issues and sustainable development are of high significance to Iran, and the country’s general policies and national programs lay a great emphasis on environmental protection and sustainable development in different parts of the country.

    He went on to add, “developed countries must provide the necessary means for achieving SDGs in the areas of finance, technology transfer and capacity building so that following up on the measures and activities related to the realization of SDGs would be facilitated and no limitations would be placed on its funding.”

    United Nations Secretary-General’s Special Advisor on Sustainable Development Goals (SDGs) Professor Jeffrey Sachs arrived in Tehran on June 5 for a three-day stay in the Iranian capital. Dr. Sachs, who visited Tehran at the invitation of the Iranian Mission at UN Headquarters in New York, is known as one of the world's leading experts on economic development and the fight against poverty.

    During his stay, he delivered lectures at Amirkabir University as well as the Ministry of Foreign Affairs’ Institute for Political and International Studies (IPIS) and paid a visit to some United Nations Development Programme’s project sites.

  • Iran back in vogue

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    Australia’s exports to the Islamic Republic of Iran were, at one time, valued at over AUD 1 billion and covered a range of industrial and consumer goods and services. After years of nuclear based sanctions, Australia’s total trade and investment with Iran is valued at less than AUD 300 million and is limited to wheat and related products. In the last two months the United Nations and Australia have eased many of the sanctions against Iran, which will open new trade and investment opportunities for Australian businesses looking to Iran as a potential market.

    In January the UN announced that it would remove the nuclear sanctions against Iran and the Australian Government immediately followed by suspending or removing most of its autonomous sanctions against Iran and Iranian businesses. The lifting of these sanctions is welcome news to Australian businesses interested in gaining access to Iran’s 80 million consumers and anticipated infrastructure and energy projects. However, businesses from across Europe, North America and Asia are equally eager to access the Iranian marketplace. Australian businesses need to understand the commercial and legal frameworks in Iran, and the Australian Government needs to facilitate and protect Australian trade and investment with Iran.

    In this Investment Update, Moulis Legal Partner Christopher Hewitt and Associate Alistair Bridges look at the impact on Australian businesses of lifting Iran’s nuclear sanctions and how the Australian Government can provide critical protection to Australians doing business in Iran through investor state dispute settlement.

    Turning a page on nuclear sanctions

    Since 2008 Australia has enforced a combination of UN and independent sanctions restricting trade and investment with Iran, including prohibitions on trading most goods, establishing companies and many financial transactions. In January 2016 the Australian Government announced that it will amend the Charter of the United Nations (Sanctions-Iran) Regulations1 to remove nuclear based financial and business sanctions previously imposed by the UN. The Government also suspended sections of the Autonomous Sanctions Regulations2 to remove the vast majority of the existing restrictions on trade and investment between Australia and Iran. These changes were necessary steps to reopening commercial relations between Iran and Australia.

    Then on 27 February the Australian Government amended the Money Laundering and Counter-Terrorism Financing (Iran Countermeasures) Regulations3 to remove the obligation that financial institutions obtain a permit for transactions with Iran exceeding AUD 20,000. This legislative change is critical because it will facilitate necessary small and medium business transactions between the two countries. This change means that Australian banks can begin providing and accepting transactions, electronic transfers and negotiable instruments between Australian and Iranian businesses. Importantly, in order for Australian banks to undertake these transactions and transfers they must first establish enhanced customer due diligence processes between Australia and Iran, which may result in some delays before Australian banks are ready to undertake all types of financial transactions with Iran.

    Under the changes the following prohibitions on trade and investment have been removed:

        imports into Australia of crude oil, petroleum, petrochemical, natural gas and precious metals from Iran;
        exports to Iran of a range of goods, including transport and storage containers for oil and gas, equipment and technology for oil, gas and petrochemicals, precious metals, Iranian bank notes and some naval and shipping technologies;
        two-way trade in technical services, certain financial services and export services;
        investment by Australians into Iranian companies in the oil, gas and petrochemical sectors;
        investment by Iranians into Australian companies in the oil, gas and financial services sectors.

    Importantly, the law changes will remove most restrictions on the establishment of representative offices, subsidiaries and correspondent banking relationships with financial institutions. This is a critical commercial change that will allow Australian businesses to establish corporate entities and offices in Iran in order to gain access to the Iranian market and new commercial opportunities.

    That said, it is important to understand that the regulatory burden facing entities wishing to do business with, or in, Iran is merely mitigated, not lifted completely. Although some of the sanctions have been suspended (albeit, perhaps only temporarily), Australia will continue to impose restrictions on a number of activities, including the sale and export of arms and related goods to Iran, and will maintain its list of designated parties subject to asset freezing orders, albeit in a reduced form. Violating a sanction law is a strict liability offence. Accordingly, any Australian entity intending to do business with, or in, Iran will need to ensure that its activities do not breach Australia’s remaining operative Iranian-targeted sanctions.

    New opportunities for Australian businesses

    The Australian Minister for Foreign Affairs has stated that the:

        Easing of these sanctions will ensure that Australian business is not disadvantaged in pursuing opportunities in Iran.4

    While this statement is accurate, the commercial reality is that a large number of businesses from countries across the globe are now targeting Iran as a marketplace that is eager for major infrastructure investment, world-class services and an influx of goods. The Australian Government needs to do more for Australian businesses than simply get out of the way of investment.

    After many years of sanctions, it is unsurprising that Australia does not currently have a formal trade and investment treaty with Iran. In 2015, the Australian Minister for Foreign Affairs visited Iran to discuss future opportunities for bilateral trade and investment between Australia and Iran, specifically in the services, mining and technology sectors. During that visit, the Minister intimated an openness to future bilateral trade and investment relations.  Australia now has an opportunity to act on those good intentions and provide Australian businesses investing in Iran with substantive protections.

    Despite its commercial isolation for many years Iran has relatively sophisticated foreign investment regulations that provide foreign businesses and investors with some investment protection. In 2002 Iran introduced The Foreign Investment Promotion and Protection Act (known as the “FIPPA”), which is a progressive, modern foreign investment law that provides legal protection for investment in Iran.

    The FIPPA states that:

        Foreign investments … will have the same rights, protections and facilities available to local investments.5

    Critically, under the FIPPA, foreign investment in Iran is protected from illegal and unfair treatment by the state:

        Foreign investments shall not be subject to expropriation or nationalisation, unless for public interests, by means of legal process, in a non-discriminatory manner, and against payment of appropriate compensation on the basis of the real value of the investment immediately before the expropriation.6

    These protections are significant and demonstrate Iran’s eagerness to encourage and facilitate foreign investment. However, these protections are only valuable if they can be enforced and if foreign businesses are confident that they have a fair and impartial mechanism for enforcing these rights. Under the FIPPA if a foreign business has its investment expropriated or does not receive equivalent protection as a local business then it can enforce its rights in the Iranian courts. Only businesses from countries that have agreed to investor state dispute settlement with Iran have access to independent arbitration. This does not include Australia.

    International dispute resolution professionals have long recognised the inherent conflict in a country’s national courts hearing claims against the national government by a foreign investor. Investment disputes against a national government require assessment of government policy and actions. For example, under the FIPPA an investment dispute may require an assessment of what constitutes the ‘public interest’ or ‘appropriate compensation’. These assessments are best undertaken by an independent arbiter whose decision is final, binding and enforceable.

    For this reason, the Australian Government has agreed to investor state arbitration provisions in various free trade agreements and bilateral investment treaties with other countries. Australians currently have access to investor state arbitration in 27 countries and that number will increase shortly.7  Investor state arbitration provides foreign investors with recourse to an independent arbiter to hear claims against a national government. As it currently stands, Australian businesses investing into Iran have no such protection and would be forced to take an investment dispute through Iran’s own courts.

    Starting a new chapter: an Australia/Iran bilateral investment treaty

    Australia has 27 bilateral investment treaties, free trade agreements and investment promotion and protection agreements with various countries. Australia is also currently negotiating a number of new agreements, including the proposed free trade agreement with the Gulf Cooperation Council that includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

    Iran currently has 52 bilateral investment treaties, which provide individuals and businesses from those countries with greater access, protection and enforcement rights than is provided under the FIPPA. Countries with a formal bilateral investment treaty with Iran include the financial powers of Germany, China, and France, and other smaller countries like Zimbabwe, North Korea and Bangladesh.

    Clearly, Australia would not be breaking new ground by establishing formal commercial relations with Iran and entering into a bilateral investment treaty. In fact, Australia needs to promptly take steps to engage with Iran to ensure that Australian businesses are not left behind as American, British and European businesses move swiftly to take advantage of new opportunities in Iran.

    A review of the Iran Germany Bilateral Investment Treaty from 2004 (“the German Treaty”) shows that Iran is open and willing to enter into a treaty that grants real protection to foreign businesses and investors. Under the German Treaty, German businesses and investors are granted national treatment and most favoured nation status in Iran. The German Treaty also provides for the facilitation of money transfers relating to investment and protects the international transfer of business profits. Critically, the German Treaty also provides that any dispute between Iran and a German investor will be settled by international arbitration and that any award will be enforceable at law. This provides Germans doing business in Iran with real and enforceable protection against unfair treatment, expropriation and discrimination. It is therefore unsurprising that following the lift of the UN sanctions a German law firm was one of the first foreign businesses to establish offices in Tehran.8

    By negotiating and agreeing a bilateral investment treaty with Iran, the Australian Government could provide Australian businesses with the significant added protection of independent arbitration of investment disputes. Australian businesses could have level footing with businesses from Germany, and other countries, by obtaining similar protections as are provided in the German Treaty.9  We were reminded this last week of the importance of sovereign risk protection for foreign investors as Zimbabwe announced that it would expropriate and nationalise foreign investment in its diamond mines. In the context of the past volatility of Iran, and the potential sovereign risk to investment, the added protection of independent investor state arbitration would be of substantive value to Australians doing business in Iran.

    Iran is open for business, and Australians should be looking to take advantage of the opportunities for investment and trade in goods and services. Despite the recent changes Australian businesses still need to take great care when undertaking trade and investment with Iran and ensure they have all possible legal and contractual protection and the Australian Government should look to add to that protection in the near future so Australians are not left behind.

  • Iran begins talks with European insurers

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    President of Bimeh Markazi Iran (Central Insurance of Iran) has travelled to Europe to launch negotiations with European insurers in Munich and London.

    Abdolnaser Hemmati, President & Head of High Council of Insurance of Bimeh Markazi Iran (Central Insurance of IR Iran), is staying in Europe seeking to boost level of cooperation with international counterparts.

    The Iranian official met and talked with CEO of Lloyd's of London insurance market Inga Beale on Friday.

    Hemmati pointed to activities of Lloyd's of London in the Iranian insurance market before imposition of international sanctions adding “given Iran’s economic development plan and expansion of the country’s insurance industry, presence of Lloyd's of London in reinsurance coverage and Iran’s key risks holds great significance.”

    Inga Beale, for her part, pointed to previous activities of Lloyd's of London in Iran’s market and stressed willingness of Lloyd's insurance syndicates to make presence in Iran; “presently, a total of 110 insurance syndicates are performing in Lloyds.”

    Beale, while referring to existing obstacles in the banking system, emphasized the need to follow up issues related to money transfers in the insurance industry.

    In response to the Iranian official’s proposal to form a committee to provide grounds for activity of Lloyd's insurance syndicates in Iran’s free zones, Beale urged two international directors of Lloyds to visit Tehran and conduct negotiations with senior officials of Central Insurance of IR Iran.

    The meeting between president of Bimeh Markazi Iran (Central Insurance of IR Iran) and CEO of Lloyd’s of London came after a 12-year gap in official meetings between the two organizations.

  • Iran Exports over 2 mbd Oil, Condensates: Zangeneh

     

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    Minister of Petroleum Bijan Zangeneh said Iran is exporting above 2 million barrels of oil and gas condensates a day.

    Speaking to Shana on the sidelines of the annual meeting with the ministry’s staff on the occasion of the Iranian New Year (started March 20) on Sunday, he said that completion of the South Pars Gas Field’s development phases is of prime importance to the oil industry’s upstream sector in the current year.

    Launching of the Persian Gulf Star Refinery and signing of new petroleum contracts also top the ministry’s upstream projects in the new year, he added.

  • Iran Eyes $10b in Petchem Finances

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    Iran's petrochemical industry will most likely have attracted  10 billion dollars in foreign investments by the end of the current Iranian calendar to March 20, 2018, a senior oil official said.
    Amir Hossein Zamani Nia, Deputy petroleum minister in international affairs and trading, said to World Business Year  the fact that talks with several foreign investors are nearly complete, 10 billion dollars will be invested in petrochemical development projects by foreign financiers in Iran before the end of this calendar year.

    He predicted that the current calendar year  will be a booming year for the petrochemical sector of Iran, adding negotiations with foreign developers are on the go in all sectors of the oil industry including the petrochemical sector.
    A senior diplomat, Zamani Nia said the talks will, hopefully, lead to 50 to 80 billion dollars of investment in oil, gas and petrochemical projects in Iran.

    "Petrochemical industry is a popular sector in which return on investment is guaranteed and security of investment is one of its major features," he said.

  • Iran FDI booming,Investor flop into Iran

     

     Based on International reports Iran's FDI Increased in 2016.
    The Norwegian investors said in a meeting with Governor General of Gilan Province Mohammad Ali Najafi that Gilan has high potential in fisheries and they are hopeful of partnership in the fisheries and aquaculture industry.
    They said they are ready to invest 10,000 billion Rials investment in production of trawlers, small fishing boats and cages for fish culture through sophisticated technology.
    Najafi for his part said Gilan province is willing to benefit from experience of Norway in fish culture and seafood products.

     

  • Iran has one of the largest Islamic finance markets in the world.

     

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    By Sarah Townsend

    Despite the lifting of sanctions in January, many foreign companies remain so nervous about entering Iran that the country's leaders have asked the IMF to step in to reassure investors, proving that Iran has its work cut out if it is to be a significant player in the international economy


    Last month, Iranian financial institutions gathered in Muscat to set out their case for the Gulf and beyond to invest in post-sanctions Iran.

    The newly-opened country, they claimed, is among the most diversified economies in the Middle East and one of the most liquid. It also has the region’s largest Islamic finance sector, with an asset base worth $500bn, low corporation tax at 10 percent and relatively straightforward investment laws.

    The only thing holding it back, they argued, was a dearth of foreign investment due to restrictive sanctions imposed by the US and the European Union (EU) for the past decade and more.

    Now, following the lifting of sanctions in January, Iran is “open for business”, allegedly capable of attracting billions of dollars of trade and investment and rewarding pioneering global partners with substantial returns.

    In an interview with Arabian Business during the Muscat event, Tehran Stock Exchange CEO and president Hassan Ghalibaf Asl says: “Iran has good potential for growth but sanctions deprived it of this growth. They overheated the market and dampened foreign investment.

    “Still, under sanctions, the capital market performed reasonably well. We had monthly initial public offerings (IPOs) and were trading around $25bn every year, generating significant volumes. However, most of our investors are local. We do not yet benefit from considerable and material investment from foreign investors.

    “The ratio of market cap to GDP in Iran is 25-30 percent and the average in the world is 100 percent, which shows the opportunity for growth.

    “I believe with the lifting of sanctions the atmosphere will change and foreign investors will come in. I think what will be possible then.”

    According to Central Bank of Iran governor Valiollah Seif, the removal of sanctions could trigger at least $50bn a year in foreign investment. He told Bloomberg in January that GDP growth could accelerate to between 5 and 6 percent, from 3 percent, in the year to March 2017. Seif was also adamant that Iranian banks would reconnect to the world within days of sanctions being lifted following years of isolation.

    There have been indications that foreign companies are starting to enter Iran. For example, it was reported last week that Meliá Hotels International had signed to open its first hotel there, the five-star Gran Meliá Ghoo Hotel. UAE payments firm Network International has said it is in talks with Iranian banks to process transactions in Iran, while Oman’s Port of Salalah has reportedly signed a memorandum of understanding (MoU) with Iranian ports to facilitate trade growth, and Bank Muscat aims to open an office in Tehran.

    Ghalibal Asl claims he saw interest among foreign investors rise tenfold in the 10 days after sanctions were lifted, while the ‘Big Four’ accountancy and professional services firms have said they are taking steps to set up operations in Iran to support clients eager to work there.

    However, experts say foreign business activity has remained largely subdued. Many argue that bureaucracy and residual political stigmas will make companies nervous about doing business in Iran.

    One real estate professional who wishes to remain anonymous says that even expat Iranians living elsewhere in the Middle East are reluctant to do business with Iran at present, citing lack of transparency.

    Within the country, confidence is waning. Last week, state news agency IRNA reported that Iran’s leaders had complained that European banks were wary of resuming business in the country and had asked the International Monetary Fund (IMF) to step in and allay prospective investors’ fears. IRNA quoted Hamid Tehranfar, vice-governor of the central bank, as saying: “There is still ‘Iranophobia’ in the banking sector that we’re trying to overcome.

    “We have asked the IMF to review our [banking sector] regulations so other countries’ banks feel reassured. The IMF will announce its assessment in 2018.”

    On the surface, the case for investing in post-sanctions Iran is compelling. It is the second largest economy in the Middle East and North Africa (MENA) region after Saudi Arabia, with an estimated GDP of $406.3bn, according to the World Bank. It also has the second largest population of the region after Egypt, with an estimated 78.5 million people in 2014. Iran is home to some of the world’s largest fossil fuel reserves, with oil production constituting 23 percent of the country’s wealth.

    While government expenditure still depends to a large extent on oil revenues and therefore remains vulnerable, Iran is a more diversified economy than some of its neighbours. For example, services (professional, specialised, real estate and hospitality in particular) account for 51 percent of GDP, while manufacturing and mining makes up 13 percent, according to Trade Economics.

    Meanwhile, the World Bank’s outlook for Iran is positive. The bank’s country update from September 2015 stated: “If all sanctions are lifted by March-June 2016, and reforms to the business environment are made to promote competition and reduce the influence of state-owned enterprises in the economy, real GDP should rise to 5.8 percent and 6.7 percent in 2016 and 2017 respectively, as oil production reaches 3.6 and 4.2 million barrels per day.”

    However, despite this forecast, businesses and commentators remain wary, with some claiming it will be at least a year before global banks and multinational corporations dip their toes in the water.

    “The media gave the impression that as a result of the agreement with Iran, the doors were wide open and it was back to business as usual,” says Nicholas Coward, attorney at law firm Baker & McKenzie.

    “There was an assumption that a sort of nirvana had arrived, but it has not. While numerous sanctions have been lifted and there are opportunities as a result, other sanctions remain in place.

    “The two words that best characterise the current situation are ‘balance’ and ‘caution’. Balance in terms of the government approach to maintaining remaining sanctions and balance from companies in terms of their cognisance of the things they can and cannot do, and how to police that internally.

    “We don’t know any major international bank that has said they want to enter Iran and we anticipate it will be at least a year before this happens. Some may wait to see if their competitors do it first, while others may stay out of the market altogether deeming the risks to be too great.”

    As Coward notes, not all of the restrictions have been lifted and companies are worried about breaching those that remain in place. In January, the US and EU lifted most sanctions on Iran in return for curbs on its nuclear programme. Under the Joint Comprehensive Plan of Action (JCPOA), the EU de-listed over 400 blackmarked Iranian people and entities, allowing them to do business with the EU. Certain entities and individuals, including several Iranian banks, remain blacklisted.

    However, most of the remaining restrictions relate to a larger number of continuing US sanctions. Although the US has lifted the sanctions that in effect prevented international banks from facilitating Iran-related transactions, those sanctions were generally only directed towards non-US citizens conducting business that occurs entirely outside of US jurisdiction and does not involve US citizens.

    The remaining sanctions still prohibit involvement of US citizens, US-originating products and supplies exported or re-exported to Iran, and most transactions conducted in US dollars, largely ruling out US banks from doing business with Iran. The sanctions also penalise those who do business with companies connected to Iran’s Revolutionary Guard (IRGC), whcih is accused of having opaque business interests, according to the Financial Times, because the US still considers Iran to be supporting “terrorism”.

    It is a much reduced list of sanctions, says Baker & McKenzie partner Jasper Helder, but one that could still cause headaches for prospective investors.

    “It is incredibly complex and businesses must do extensive due diligence,” he says. “That is why there was an initial high enthusiasm for opportunities in Iran (and there are real opportunities, in particular for Gulf countries that have historic trading ties and physical proximity).

    “But there are cautionary notes too. While Gulf investors themselves are not subject to any of the remaining US or EU sanctions, they must be mindful about whether or not they have US or European stakeholders, use products or services that they have acquired in those markets, or have US citizens anywhere in the supply chain.

    “They must also check thoroughly with their banks whether they are willing to support commercial activity in Iran.”

    Meanwhile, there are inherent issues with the regulatory landscape that can make doing business in Iran challenging, Helder claims. “It is a more bureaucratic country [than others in the Gulf], with lots of government agencies involved in policing the market. It is certainly not a market you could breeze into.”

    Helder says many of his clients also report difficulties in establishing exactly with who they would be doing business. “There are no systematic company records that allow you to check things like ownership structures, so relationships between companies and individuals are not always clear.”

    News last week that billionaire Iranian businessman Babak Zanjani has been sentenced to death for corruption for withholding billions in oil revenues channelled through his companies is unlikely to help improve public perceptions.

    Another concern is the “snap-back” provisions contained in the JCPOA. The EU and US have reserved the right to re-impose sanctions in the event that Iran is found to have violated its obligations under the agreement. “Investors would want to make sure that they protect themselves and their contract terms – crucially, payments – by having a well-considered exit strategy that does not rely upon conventional force majeure clauses, as those are typically triggered by unforeseen events and you could argue that a snap-back would not be covered,” Coward says.

    Ahmad Azizi, senior advisor to the central bank governor, told the Muscat conference: “While there are negative foreign perceptions of [doing business in] Iran, prospective investors must remember that Iran is a large, local market and one of the most diversified economies in the Middle East. Last year it exported every single category of goods as defined by the IMF – a rare attribute in the region.

    “Those concerned over the implications of the snap-back provisions contained in the deal should be reassured that the country worked hard to negotiate with the US and would not throw away its investment overnight.”

    Dr Moshkan Mashkour, a lawyer and director of the Tehran Regional Arbitration Centre, adds: “Snap-back is unlikely to happen because on both sides the ramifications are great and there is political will [for the agreement to work].

    “If any concerns are raised that there has been a serious breach of terms, there would be serious and lengthy discussions, which, if not resolved, would be passed to authorities, which would then seek to resolve the issue. So snap-back would not happen overnight.”

    He claims that, for example, if a European contractor had been appointed to build 250 kilometres of roads in Iran and snap-back was imposed while there were still 50km left to build, the investment would likely be legally protected under contract and the roads would continue to be built.

    Meanwhile, Iranian leaders and financial institutions claim to be working hard to increase trust among foreigners. IRNA quoted Iran’s deputy foreign minister, Majid Takhteravanchi, as saying this month: “There is no legal obstacle in the way of expansion of Iran-Europe relations”. He said the Iranian central bank was implementing new rules against money laundering and terrorism funding to facilitate ties with European banks.

    Central bank governor Seif added: “Transparency is the prerequisite of international transactions. Iran has taken primary steps to make the financial information of Iranian banks as transparent as possible.”

    Ghalibaf Asl from the Tehran Stock Exchange says the bourse is in the “late stages” of compiling a new index ranking companies according to their transparency and governance structures – a rare move for a stock exchange and one intended to boost confidence in Iranian capital markets.

    Other financial experts working in Iran note the attractive 0.5 percent tax rate on transfer of shares in Iranian stock exchanges, and tax exemption on interest received from fixed-income instruments and dividends received.

    Still, this does not cancel out some risks, including the potential impact of volatile regional politics. There are issues related to Iran’s involvement in Syria, which many argue is a major source of the refugee problem in Europe, so from a European perspective this connection is politically very significant and could deter some European companies from working with Iran.

    “The sanctions agreement alone is not some panacea,” Coward says. “It was a calculated effort to accomplish something in the nuclear arena, which was achieved, but it does not erase the other political challenges that exist in the region.”

    Iran’s 2025 strategic economic plan aimed at doubling the economy from the current $415bn in the next decade requires investments totalling $1.5tr, according to a report by Frost & Sullivan this month.

    This is a colossal amount of money, so Iran must freshen up its business environment and public image to attract those companies whose hands are not still tied by prohibitive sanctions – or risk losing out.
    2013 Arabian Business Publishing Ltd. All rights reserved.

  • Iran has taken significant steps to counter money laundering: fin. min.

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    Iranian Finance and Economic Affairs Minister Farhad Dejpasand said on Monday that Iran has taken very effective and practical measures for countering money laundering and cooperation with Financial Action Task Force (FATF).

    Dejpasand made the remarks in a meeting with ambassadors and representatives of some Asian and European countries in Tehran, IRNA reported.

    Iran’s high council for the prevention of money laundering and terrorism financing convenes regularly under the chairmanship of the economy minister and many government agencies are members of this council, according to Dejpasand.

    The official stated that the country’s anti-money laundering code has been passed by the government and is currently being implemented.

    “The code is in complete compliance with international standards and it also fully covers the country's needs,” he stressed.

    Back in October, spokesman for the Iranian government Ali Rabiei had announced that the government was planning to form specialized anti-money laundering working groups to intensify the country’s campaign against financing terrorism.

    “The entire executive bodies, including Interior Ministry, Trade Ministry, Foreign Ministry, Justice Ministry, Police, Iran Custom Administration, Central Bank of Iran (CBI) and intelligence and security bodies are duty bounded to prepare required information and data for the specialized working groups,” Rabiei stated.  

    Later that month, Central Bank of Iran also obliged all the country’s banks and credit institutions to establish anti-money laundering units.

    At the beginning of the current year, the Expediency Council gave approval to an anti-money laundering bill seen as crucial to maintaining international trade and banking ties.

    The bill on amending the law to counter money laundering was approved with certain changes and sent to the Majlis speaker to be communicated to the government.
    The Expediency Council settles disputes between parliament, which approved the bill last year, and the Guardian Council, which vets all legislation and had rejected it.

     

  • Iran inks first IPC in post-JCPOA

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    An HOA (heads of agreement) was signed between NIOC and POGIDC within the framework of Iran’s new model for oil contracts called Iran Petroleum Contracts (IPC).

    The newly-signed agreement marks the first IPC sealed following the implementation of the Joint Comprehensive Plan of Action (JCPOA)

    Under the terms of the deal, the National Iranian Oil Company (NIOC) has put Persia Oil & Gas Industry Development Company (POGIDC) in charge of development of and implementation of Enhanced Oil Recovery (EOR) methods in Yaran, Marun and Kupal oilfields.

    The first IPC, revolving around development of Yaran joint oilfield, was inked on Tuesday morning at the presence of Iran’s Oil Minister Bijan Zanganeh, chairman of board of directors of POGIDC Gholamhossein Nozari and President of the Headquarters for Execution of Imam Khomeini's Order (EIKO) Mohammad Mokhber.

    The developmental contract, meanwhile, was signed by Deputy Head of NIOC for Development and Engineering Affairs Gholamreza Manuchehri and POGIDC Managing Director Naji Sadouni.

    Persia Oil & Gas Industry Development Company (POGIDC) marks one of the eight Iranian firms who have been qualified by the Iranian Oil Ministry for conducting activities in the upstream oil sector is also commonly known as the exploration and production (E&P) sector.

    Today, in addition to development of Yaran joint field, POGIDC was also entrusted with the task of increasing oil recovery in Marun and Kupal oilfields in the form of two separate contracts.

    NIOC had earlier announced that Iranian companies active in E&P areas were allowed to take charge of small and medium-sized fields as well as to seek assistance from foreign firms if need be.

    Yaran oilfield, which is being developed in two sections of North and South Yaran, remains as one of West Karun joint fields.

    Under a buyback scheme, POGIDC is now developing the northern region of the field and the plan to produce 30 thousand barrels of crude oil per day is on the verge of operation.

  • Iran inks first IPC in post-JCPOA

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    An HOA (heads of agreement) was signed between NIOC and POGIDC within the framework of Iran’s new model for oil contracts called Iran Petroleum Contracts (IPC).

    The newly-signed agreement marks the first IPC sealed following the implementation of the Joint Comprehensive Plan of Action (JCPOA)

    Under the terms of the deal, the National Iranian Oil Company (NIOC) has put Persia Oil & Gas Industry Development Company (POGIDC) in charge of development of and implementation of Enhanced Oil Recovery (EOR) methods in Yaran, Marun and Kupal oilfields.

    The first IPC, revolving around development of Yaran joint oilfield, was inked on Tuesday morning at the presence of Iran’s Oil Minister Bijan Zanganeh, chairman of board of directors of POGIDC Gholamhossein Nozari and President of the Headquarters for Execution of Imam Khomeini's Order (EIKO) Mohammad Mokhber.

    The developmental contract, meanwhile, was signed by Deputy Head of NIOC for Development and Engineering Affairs Gholamreza Manuchehri and POGIDC Managing Director Naji Sadouni.

    Persia Oil & Gas Industry Development Company (POGIDC) marks one of the eight Iranian firms who have been qualified by the Iranian Oil Ministry for conducting activities in the upstream oil sector is also commonly known as the exploration and production (E&P) sector.

    Today, in addition to development of Yaran joint field, POGIDC was also entrusted with the task of increasing oil recovery in Marun and Kupal oilfields in the form of two separate contracts.

    NIOC had earlier announced that Iranian companies active in E&P areas were allowed to take charge of small and medium-sized fields as well as to seek assistance from foreign firms if need be.

    Yaran oilfield, which is being developed in two sections of North and South Yaran, remains as one of West Karun joint fields.

    Under a buyback scheme, POGIDC is now developing the northern region of the field and the plan to produce 30 thousand barrels of crude oil per day is on the verge of operation.

  • Iran makes leap to seize fresh export markets

     

     

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    Iran is after bolstering trade ties with European countries as evidenced by the steep rise in share of EU states in the country’s foreign trade.

    In recent months, trade relations between Iran and European countries have expanded and majority of EU members seek to gain a share in the Iranian market as well as to deepen commercial ties with Iranian businessmen.

    Czech Republic, for instance, had conducted negotiations with Iran’s economic activists over the past three years and intends to reinvigorate trade relations with Iranian traders. Efforts by officials of the two countries brought about 52 million dollars of trade turnover between the two sides in 2015 indicating a 50% rise as compared to the earlier year. What’s more, volume of trade turnover between Iran and Czech experienced a 25% growth in the first 11 months of 2016 and climbed to 59.139 million dollars while the figure for the corresponding period in the previous year stood at 47.433 million dollars.

    A brief look at conditions of Czech Republic reveals that the European state holds a population of about 10.6 million people with a Gross Domestic Product (GDP) of around 182 billion dollars. Moreover, the GDP growth rate of the European state reached 3.9 percent in 2015.

    Presently, the national per capital income of Czech stands at 18,200 dollars on the basis of a purchasing power of 27,600 dollars while the country’s inflation rate was 0.5 percent in 2015. A total budget of 48.8 billion euros has been allocated for Czech in 2017 while its government is facing a 2.2-billion-euro deficit.

    GDP growth rate of Czech Republic was about 2.4 percent in 2014, climbed to about 3.9% in 2015 and reached 4 per cent in the first six months of 2016. Inflation rate for 2015 stood at about 0.5% though it was reduced to around 0.3 percent in the first half of 2016.

    Industrial production of Czech has risen by 8.1 percent as compared with the previous year. In addition, manufacturing of motor vehicles, trailers and semi-trailers increased by 16% and automakers enjoyed a 2.9% share in the 8 percent of growth in industrial production. Manufacturing of machinery and equipment also increased by 15 per cent.

    As announced by the association of Czech exporters, the European country’s exports volume will soar by 4% by the end of the current year with the most important export destinations being Germany, Slovakia, Britain, America, France and Poland.

    The association has pointed to Iran and Cuba as new and interesting markets for Czech exporters and noted that further development of exports in the current and following years will be subject to political issues in North Africa, the Middle East and Greece.

    Top trade partners of Czech Republic in order of trade volume include Germany, Slovakia, China, Poland, France, Italy, England, Austria, the Netherlands, Hungary, Russia, America, Spain, Belgium, Switzerland, South Korea, Romania and Sweden. Also, major trade partners in the Middle East are Azerbaijan, UAE, Saudi Arabia, Iraq, Qatar, Georgia, Oman, Kuwait, Lebanon and Iran. Zionist regime also marks a trade partner of Czech Republic.

    The volume of economic exchanged between Czech Republic and Iran's neighbors in 2015 were three billion and 180 million dollars with Turkey, about one billion and 176 million dollars with Azerbaijan, Kazakhstan about 685 million dollars, about 897 million dollars with Emirates and Saudi Arabia about 620 million dollars.

    Eagerness of Iranian and Czech businessmen formed the impetus for an Iranian economic delegation to travel to Prague at the invitation of Czech’s National Confederation of Industries. The delegation is headed by Chairman of Tehran chamber of commerce industries Mines and agriculture (TCCIMA) Masoud Khansari who is accompanied by more than 30 Iranian companies in the fields of machinery, equipment and mining industry, heavy industry, pharmaceuticals, medical devices, renewable energy, and environmental technologies.

    The delegation, during a three-day stay in the capital of Czech Republic, will make visits to car, renewable energy, food and pharmaceutical factories. The joint meeting of the Iranian and Czech delegations will be also held within the three days with participation TCCIMA members as well as officials of the Confederation of Czech Industry.

    Previously, a 20-strong delegation of Czech’s Chamber of Commerce along with Deputy Minister of Foreign Affairs Martin Tlapa visited Tehran in September in 2014 when four agreements were signed between the two sides in Tehran, Tabriz and Isfahan. Later that year, another delegation travelled to Tehran and two major contracts were inked between Tehran and Prague.

    Also in April 2015, an economic delegation comprising directors of 21 Czech firms visited Iran and held separate meetings with senior Iranian officials.

    Minister of Foreign Affairs of the Czech Republic Lubomír Zaorálek also led a huge delegation to Tehran later in 2014 and momentous agreements were made between entrepreneurs of the two countries. Nevertheless, the visit of Iran’s Economy Minister Ali Tayebnia to Czech marked a turning point in economic relations of the two sides since the deal for elimination of extra tax was inked between the two sides and the draft of document to support mutual foreign investment was prepared.

    Also in January 2016, minister of industry and trade of the Czech, along with representatives of about 65 companies, visited Tehran and Tabriz, where in addition to signing industrial cooperation contracts, athe two sides reached fruitful agreements in areas of heavy industry and machinery. During the visit, agreements were signed between Iranian and Czech companies in the field of mining and mineral collaborations.

    Over the past three years, several measures have been taken to promote joint economic cooperation between Iran and Czech Republic one being formation of a trilateral chamber of commerce among Czech, Iran and Slovakia. Yet another noteworthy measure was holding of the first Joint Economic Commission between the two countries in December, 2016 in Prague, a summit which covered various sectors of industry and mining, energy, finance and banking in addition to health and agriculture.

  • Iran Mideast’s 2nd Largest Cosmetics Market

     

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    Iran accounts for $2.1 billion of the Middle East’s $7.2 billion beauty products market–second in the region after Saudi Arabia, according to the Iranian Association of Cosmetics, Toiletries and Perfumery Importers.

    Around 70% of cosmetics imports to Iran are smuggled and nearly 15 million people are consumers of beauty products in the country,

    The Central Bank of Iran put Iranian households’ annual average income at 270 million rials ($7,460 at market exchange rates) for the last fiscal year (March 2015-16). The CBI report also shows only 2% of the households’ annual expenditure went to recreation and culture, that is, 1.35 million rials ($37.3) for each person, compared to 4.2 million rials ($116) they spend on cosmetics.

    In other words, Iranians spend three times more on cosmetics than they do for recreational and cultural activities.

    According to the Islamic Republic of Iran Customs Administration, about 2,000 tons of cosmetic products worth more than $21.6 million were imported to Iran in the first three months of the current Iranian year (started March 20). The figures show the amount of legally imported products only.

    The imports were mostly from the UAE, France, India, Turkey, Germany, Switzerland, Italy, Spain, South Korea, China, the UK and Indonesia.

کتاب عملیات بانکی در عرصه بین الملل -سرفصل ها،ضمائم ،توصیه صاحب‏نظران ارزی و مدیران ارشد بانکی

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