Sarosh Zaiwalla, Senior Partner of Zaiwalla & Co., has announced that Iran’s Bank Mellat will receive what is fairly owed to it to compensate for the many years of reputational damage and loss of earnings it has suffered.

Bank Mellat, Iran’s largest privately-owned bank, has been fighting a legal battle since 2009 against sanctions that it said were wrongfully placed on it by the European Union and the UK Treasury over alleged links to Tehran’s nuclear program.

Led by Sarosh Zaiwalla, a lawyer for the Iranian bank at Zaiwalla & Co. Solicitors, the bank challenged the European Council’s assertion that it engaged in conduct that supported Iran’s nuclear program and ballistic missile programs. It initially won a case before the EU’s General Court, which ruled in January 2013 that there wasn’t enough evidence to support the European asset freeze on the bank.

Bank Mellat was unlawfully sanctioned by HM Treasury and after the UK Supreme Court dismissed HM Treasury’s appeal, the Bank is pursuing a damages claim against the HM Treasury to the tune of US $4bn in the UK Courts.

On 10th May, the HM Treasury had applied to the Commercial Court to determine three preliminary issues relating to heads of losses under which Bank Mellat can claim its losses falling under those heads as damages.

It was the first ruling in favor of an Iranian company since international sanctions were lifted on the Islamic Republic last month as part of a nuclear deal with world powers.

Mr. Zaiwalla has described the judgment as the first big legal success for an Iranian corporation challenging the sanctions regime and predicted it could open the door to others.

In an interview to Mehr News, sanctions expert Sarosh Zaiwalla, answered the following questions on the issue:

Why did the Bank Mellat sanction pop up? Why was it an abrogation of the international law?

The case of Bank Mellat is a long running case, which began seven years ago in 2009 when the UK government issued notification prohibiting dealing with Bank Mellat. This decision of the government was challenged by Bank Mellat in the London Court. In June 2013, my firm had a breakthrough in the case when a Judgment by the Supreme Court of the United Kingdom held that the sanctions imposed by the UK government on Bank Mellat, in 2009, were both irrational and unlawful. The UK Supreme Court then asked the London High Court to assess Bank Mellat’s losses, which the bank can claim as damages for its unlawful listing by the UK government. The bank has now commenced a claim in the London High Court claiming USD 4 billion damages against the UK government. The trial of this claim will take place shortly.

The subsequent positive court judgment of the Supreme Court, follows a victory in the European Court in January 2013, where the European Court of Justice said there was no evidence connecting Iran’s largest private bank to the government’s nuclear programme.

 

What is the stature of our Bank Mellat foreign trade and what impact did the sanction have on its revenues?

Bank Mellat has claimed in the English Court that it has suffered substantial damages because of the UK government’s actions. It is the bank’s position that it has suffered substantial losses as a result of the government’s listing of Bank Mellat.

 

When and how do you expect the US$4 billion damages to be cleared by HM Treasury?

The next scheduled hearing to decide on the compensation for Bank Mellat from HM Treasury is scheduled for October 2016. We are quietly optimistic that the bank will receive what is fairly owed to it to compensate for the many years of reputational damage and loss of earnings it has suffered.

 

You have deemed the law case as ‘a crucial victory for Bank Mellat’. What are the significances of this major legal victory?

The Bank Mellat case clearly shows the world that even in the world of sanctions, the rule of law still applies in the Western world, particularly in the English Court. The UK Supreme Court judges showed great independence and courage to hold the UK government’s conduct as both unlawful and irrational.

Regardless of international politics, Europe says there must be a reason to curtail the rights of an entity or individual. The EU court held that the EU Council was wrong in its designation of the bank as the bank did not fit the EU’s criteria for sanctions. The message that this shows to the world outside of Europe is that there is a true independence of the EU Court, which is willing to fight against its sister institutions. Unlike cases we are seeing from the US, we can see that true justice can be sought and delivered from the European courts.

 

The case was an interesting example of the difficult terrain of court ‘interference’ with essentially political decisions. How would you evaluate the stance and decision taken by the Supreme Court?

The United Nations Treaty on International Human Rights, which every member of the United Nations has signed, no country is allowed to interfere with the property rights of any individual without due process. This makes it essential that actions taken by the government, like imposing sanctions for political reasons, are based on good reliable evidence and not on the whims and fancy of any government.

 

Sarosh Zaiwalla founded Zaiwalla & Co. Solicitors in April 1982 with offices in Chancery Lane, London. He has been involved in over 1200 International Energy, Maritime and Construction Arbitrations in London and worldwide either as a solicitor, Counsel, party-appointed Arbitrator or Sole Arbitrator. Recently, he succeeded for Bank Mellat of Iran against the UK Government in the UK Supreme Court challenging legality of Iran nuclear sanctions.

The international branches of Bank Saderat Iran (BSI), as one of the largest Middle Eastern banks operating in the fields of International banking and finance, have been removed from the blacklist of financial sanctions.

The announcement was made by Bank Saderat Iran (BSI) in a statement, adding “the removal of banking sanctions by the Executive Council of the European Union has presented a new opportunity for all stakeholders, shareholders and all who have an interested in Bank Saderat Iran.”

The statement referred to several rounds of negotiations held with various EU officials and the BSI’s constant legal measures that finally led to the removal of the bank’s 28 international branches, including Bank Saderat PLC in London, from the blacklist of financial sanctions against Iran.

On Mon. the UK Treasury announced in a press release that the “Council Regulation (EU) 267/2012 imposing financial sanctions against Iran (nuclear proliferation) has been amended”, adding that the BSI and Bank Saderat PLC are no longer under asset freeze.

“The unfreezing of the assets of the largest stock exchange bank in Iran that holds over 50 per cent of the country’s banking system capacities overseas, is promising and beneficial not only for the stakeholders, but the economy of the whole country,” the BSI statement read.

It went on to add that the sanctions relief will bring about many economic benefits including facilitation and expedition of international trade, reduction of foreign exchange costs, and an increase in investment.

BSI, founded in 1952 in Tehran and with 28 international branches and services in 12 countries such as London, Paris, Hamburg, Frankfurt and Athens, had been subject to sanctions since 2010.

Big Oil faces big transition
After the most tumultuous year that Big Oil has endured in decades, the industry is rapidly trying to reshape itself for a new era in energy as the world accelerates the transition away from fossil fuels

In a period that has seen record lows and highs for gas, negative oil prices, more wells being abandoned than ever before, and drilling programmes slashed, the general consensus is that Big Oil is in trouble. Also, the industry faces pressure on all sides as the momentum turns against fossil fuels because of the looming threat of global warming. “If the world acts decisively, the scale of change will revolutionise the energy industry,” predicts international consultancy Wood Mackenzie in a landmark study released in April 2021 that foresees an “upending of oil and gas markets” as demand for oil shrinks and prices progressively collapse. As fossil fuels lose dominance in the energy mix, the oil giants are expected to lose their long-held power. “The steep fall in demand will prevent these key oil producers from managing the market and supporting prices in the way they do today,” Wood Mackenzie forecasts. “Only the lowest-cost producers such as the Middle East members of OPEC will remain core providers of oil.”

Preparing for a revolution
In this scenario Big Oil has 30 years – at the most – to prepare for this new era. That is the broad consensus of the latest reports into an industry that has kept the lights on for the best part of a century and powered nearly all of the world’s transportation. Demand for oil is expected to begin a long decline as soon as 2023, according to some forecasts. By 2030, the price per barrel could fall from today’s $60–70 on the Brent index to an average of $40 by 2030 and as low as $10 by 2050.

The vast refining industry is certain to suffer. “The scenario is grim for the downstream sector,” predicts Wood Mackenzie’s vice-president of refining and chemicals, Alan Gelder, who expects that all but the most efficient refineries will be shuttered. “The refining sector will have withered to a third of its current capacity,” he says. The challenge is how to slash fossil fuel-triggered emissions without running out of energy before renewables can take up the slack.

According to the Environmental Protection Agency in the US, the level of greenhouse gas emissions (GHG) in America, one of the world’s biggest users of energy per capita, fell by 1.7 percent between 2018 and 2019. And since 2005 they have plummeted by nearly 11.6 percent, largely because of increased use of ‘greener’ natural gas. “This is noteworthy progress and supports the larger point that natural gas is critically important in addressing the risks of climate change,” approved the EPA in early 2021.

Turning a blind eye
But is Big Oil ready for the revolution? Not according to Wood Mackenzie, which says “no oil company is prepared for the scale of change envisioned.” In the consultant’s scenario, “all companies face a decline with asset impairments and bankruptcy or restructuring on a scale far greater than that of 2020.”

Also, many countries have their heads in the sand, especially in Latin America, Africa, the Middle East and Asia, where entire nations rely on revenues from fossil fuels. According to a joint analysis by the OECD and International Energy Agency (IEA), in 2019 governments pumped over half a trillion dollars into subsidising the fossil-fuel industry. “The data show a 38 percent rise in direct and indirect support for the production of fossil fuels across 44 advanced and emerging economies,” the study noted. The findings provoked a scolding from OECD secretary-general Ángel Gurría, who criticised “an inefficient use of public money that serves to worsen greenhouse emissions and air pollution.”

However, some oil giants have seen the light. “After 112 years, we are pivoting from being an international oil company to an integrated energy company,” explained BP chief executive Bernard Looney in April. “We plan to be very different by 2030, reducing our oil and gas production by 40 percent and raising our low carbon investment 10-fold.”

Demand for oil is expected to begin a long decline as soon as 2023, according to some forecasts

Royal Dutch Shell has also recognised the dangers. In mid-April, chief executive Ben van Beurden took the unprecedented step of asking shareholders to approve a strategy that has set a target of net-zero emissions by 2050, in line with the Paris Accord. “We are asking our shareholders to vote for an energy transition strategy that is designed to bring our energy products, our services, and our investments in line with the goals of the Paris Agreement and the global drive to combat climate change.”

In concrete terms, Shell will embrace biofuels, electric charging stations, hydrogen and other renewable forms of power as well as the coming technology of carbon capture and storage (CCS). In the interim period though, Shell has no intention of axing its vast oil and gas operations which are fundamental to the current energy mix. “Ending our activities in oil and gas too early when they are vital to meeting today’s energy demands would not help our customers or our shareholders,” the chief executive warned in a 32-page explanation of the energy transition.

The switch to green
During the transition period to a mainly renewably powered future, low cost ‘green’ gas will become king as it steadily replaces coal and oil. According to the IEA, liquefied natural gas (LNG) will play an essential role in lowering global CO2 emissions. “In the generation of electricity, gas emits 50 percent less CO2 than coal,” points out US source RealClear Energy.

Meanwhile, the Biden administration has set America on an unstoppable course of clean energy, completely reversing the previous president’s policy of supporting Big Oil. Until Democrats took control of the White House, the trade body, American Petroleum Institute (API), was an unabashed supporter of Trump and fossil fuels in general, to the point of deriding renewables. The French giant Total, which has also set itself on a renewables course, resigned in disgust from the institute in January, while BP and Shell among others say the only reason they haven’t quit is because they believe they can reform it from within.

Lately though, the API may be acquiring religion. In March 2021, the institute issued a blueprint for the future that cited the importance of “tackling the climate challenge.” And president Mike Sommers, who spent much of 2020 praising president Trump’s anti-renewables policy, now sees Big Oil taking a lead in developing the technology necessary to achieve the great transition. “There’s nobody better equipped to drive further progress than the people who solve some of the world’s toughest energy problems every day,” he said.

Part of the solution
The API’s new tune could be put down to mounting evidence of climate change in the US. According to the US Drought Monitor, cited by Energy Bulletin, 2020 was the worst year for droughts in more than 20 years, with vast areas seeing little or no rain.

Big Oil could also play an important role in the transition. Blessed with much deeper pockets than most of the renewables companies, the industry has the financial firepower to change direction. Some of the oil giants are already leaders in the important but extremely costly technology of carbon capture that essentially traps the carbon dioxide that is produced by burning fossil fuels and isolates it from the atmosphere before, in some instances, reusing it. The US alone boasts 12 commercial-scale facilities that collectively handle about 25 million metric tonnes of CO2 a year.

In a highly volatile industry where abrupt fluctuations in fortunes mask long-term trends (see Fig 1), the tea leaves can be hard to read. In early April for instance, the price of a barrel of oil hit $66.09, up a promising 30 percent since the start of 2021. Yet most experts predict a steady retreat over the long-term. And herein lies an opportunity, according to the IEA’s executive director Dr. Fatih Birol. “Today’s low fossil fuel prices offer countries a golden opportunity to phase out consumption subsidies,” he said.

But will they take the opportunity? In its latest meeting, energy cartel OPEC shocked markets by tightening the taps to keep oil scarce and push up prices. As a result, in what may be one of the last flurries for oil, the Brent price approached $70 and some analysts forecast it could hit $100 or higher in 2022.

On one issue though, nobody is divided. Namely, demand for oil and especially gas will increase for a few years yet. “Fossil fuels are still seen as growing at least through the 2030s, even as renewables usage rises in popularity and affordability,” predicts Energy Bulletin published by America’s Post-Carbon Institute.

But the next 10–30 years will see the end of Big Oil as we know it, according to most forecasters. Citing an unlimited supply of sun, wind and water, they say that over the long term renewable energy will usher in an era of cheap electricity with the use of infinite and low-cost resources.

Backing up that claim, numerous research institutions such as America’s National Renewable Energy Laboratory, Bloomberg New Energy Finance and International Energy Agency are in no doubt that the capital costs of solar and wind will continue to decline well into the future. The writing really is on the wall.

A British firm has lifted ban on delivery of two turbines sent by Iran’s oil industry for repair and maintenance, official says.

Mr. Darioush Amirsardari Goudarzi told Mehr News on Saturday that two turbines had been sent to Britain to be repaired before sanctions went effective, however, sanctions put a ban on both turbine delivery to Iran; “negotiations with the British firm after removal of sanctions removed the ban and now we expect to receive turbines within upcoming weeks,” he added.

Still in a relevant story, Ali Karder, deputy-oil minister and NIOC head had told Mehr New earlier in November that Iran would receive oil money frozen in British banks within months after unfreezing the accounts; “British Petroleum will soon be paying NIOC fully the oil money once out of the access of the industry,” he had said.
In line with lifting ban on oil industry key facilities strategic to South Pars phases, Asian and European companies will contribute to progress of projects in South Pars; Alireza Ebadi, a contractor of 20th and 21st phases told Mehr News that French and Spanish firms would also join the trend; German giant Siemens will also be a contributor, Pars Oil and Gas Co. officials told the press.

With sanctions lifted on oil industry facilities, contractors have placed orders with the European companies for ethane recovery turboexpanders, a key machinery in South Pars 19th, 20th, and 21st phases.

 British Secretary of State for Business, Innovation, and Skills Sajid Javid expressed UK support for Iran’s bid to join the World Trade Organization, announcing his plans to lead a delegation of businesspeople to Tehran in April.

During a meeting with Iran’s Chargé d'Affaires Mohammad Hassan Habibollahzadeh in London on Friday, Javid hailed the opportunities in the Iranian market and described the Islamic Republic as one of world's emerging markets.

The business secretary said UK backs Iran to join the WTO, noting that an economic delegation will pay a visit to Tehran soon.

Executives from across all spheres of trade, including oil, gas, financial services, infrastructure, and engineering sectors, will be accompanying Javid on the trip.

The Iranian official, for his part, said Tehran would take the necessary measures to provide appropriate services to British companies to help facilitate their participation in the economic projects in Iran.

Habibollahzadeh underlined that the removal of banking restrictions following the implementation of the Joint Comprehensive Plan of Action (JCPOA) would encourage bilateral trade and investment.

Early in March, UK Export Finance, the country’s export credit agency, and the Export Guarantee Fund of Iran, affiliated to the Ministry of Commerce, signed a memorandum of understanding on insurance coverage and financing of traders to facilitate exports and trade exchanges between the two countries.

According to Financial Times, Javid said that London should make the best use of Iran’s opportunities as the future of the country as a trading nation cannot solely depend on “familiar trading partners.”

“We can’t afford to stick with what we know. We have to secure new markets for British goods, new sources of foreign investment. Trade opens doors. It provides a platform on which to build diplomatic relations. It creates influence and leverage when it comes to negotiation and builds a bulwark against political instability.”

Keywords: Iran,Investment,British,Trade delegation

Petroleum Minister Bijan Zangeneh said here on Monday that the cabinet members are scheduled to approve of new models of oil contracts in the next two days.


Zangeneh made the remarks on the sidelines of a ceremony on the occasion of the 50th anniversary of foundation of National Iranian Gas Company (NIGC).

Once the contracts are ratified, he said, the executive phases of the contracts would be finalized.

Petroleum minister reiterated that in the first round of the international oil project tenders, several plans would not be announced and they would be introduced gradually.

President Hassan Rouhani took part Monday in a ceremony on the occasion of the 50th anniversary of foundation of NIGC.

National Iranian Gas Company was established in 1965.

Today's session was aimed at presenting the capabilities of gas industry in the international and national arenas and the important role it has played in national economy. The role of gas in improving the environment and lifestyle in Iran during the past 50 years was also examined.

Central Bank of Iran Governor Ali Salehabadi said on Saturday that the economy of the Islamic Republic of Iran has seen growth in Q2 2021 despite the coronavirus pandemic and this indicated that the country has emerged from recession.

• Iran is a party to New York Convention^[2] ("Convention"). Therefore for dispute resolutions, in addition to the Convention, it is recommended to use Iranian arbitration such as Tehran Regional Arbitration Centre (TRAC) and Arbitration Center of Iran Chamber (ACIC), which are applying UNCITRAL Rules. There has not been any history of encountered special difficulties in enforcing the enforcement of Convention awards under the Iranian Code of Civil Practice.
• With the JCPOA, transfer of funds among EU persons, entities or bodies, including EU financial and credit institutions, and non-listed Iranian persons, entities or bodies, including Iranian financial and credit institutions, are permitted. The authorization or notification requirements for fund transfers are no longer applicable. On the other hand, there are still certain authorization procedures to be accomplished in case of transfer of the profits of a foreign investment company in Iran under the Foreign Investment Promotion and Protection Act ("Foreign Investment Act")^[3].
• Investing via Foreign Investment Act is recommended to the foreign investors. Foreign investors in Iran are subject to the same amount of taxes with the Iranians and tax exemption of 80% by the Direct Taxation Law is ensured for 4 years in respect to all the industrial investments. Foreign legal entities residing abroad are subject to taxes at the flat rate of 25% in respect of the aggregate taxable income derived from the operation of their investment in Iran or from the commercial activities performed by them, directly or through their agencies in Iran.

At the Davos in early 2014, President Rouhani declared that Iran is open for business and said that over the next three decades, Iran could become a top-10 global economy. Many dismissed this claim as a pipe-dream, but today, with the recent developments, it is likely to become a reality.

Keywords:Iran,Investment

Modern investment consulting firms encounter several challenges in their pursuit of providing sound financial advice during the investment process.

These challenges include the following:

• Market volatility: Fluctuations in financial markets can make it challenging to provide stable, consistent advice. Consultants must navigate market ups and downs while keeping clients on track toward their goals.

• Regulatory changes: Evolving financial regulations impact consulting practices. Staying compliant with regulatory requirements and adapting to new standards can be complex.

• Client expectations: Meeting diverse client expectations is always demanding. Clients may have different risk tolerances, goals, and preferences, making personalized advice necessary.

• Investment complexity: As investment products become more intricate, consultants must continually update their knowledge to understand and recommend these options effectively.

• Technological disruption: The integration of advanced technologies, like robo-advisors and AI-driven services, presents serious challenges. Consultants need to adapt to remain competitive and provide value beyond what automation offers.

In international investment consulting, ethics play a critical role in shaping the relationships between consultants and their clients.

The ethical framework that underpins this profession is multifaceted and goes beyond mere guidelines. Consultants must maintain the highest ethical standards to build trust with clients and protect their interests.

Key ethical considerations include:

• Fiduciary duty: Consultants have a fiduciary duty to act in their clients' best interests. This means putting the client's financial well-being ahead of any personal or company interests.

• Conflict of interest: Investment consultants must identify, disclose, and manage conflicts of interest. For example, they must disclose if they receive any compensation or incentives from recommending specific investment products.

• Full disclosure: Transparency is vital in this business. Consultants should provide clients with comprehensive information about fees, investment strategies, and any potential risks associated with their recommendations.

• Client confidentiality: Maintaining client confidentiality is another ethical obligation. Consultants must protect clients' sensitive financial information and not disclose it.

• Competence and education: Investment consultants are ethically bound to maintain their professional competence through ongoing education and training.

Practice shows, that investment consulting firms face numerous challenges related to financial and market volatility, adaptation to regulatory changes, and evolving client expectations. They must navigate these challenges while upholding ethical standards.

Capital Intelligence Ratings (CI Ratings), the international credit rating agency, announced that it has affirmed Iran’s long-term foreign and local currency sovereign ratings of ‘BB-’, and its short-term foreign and local currency sovereign ratings of ‘B’. The outlook for Iran’s ratings remains ‘stable’.
CPI Financial reported on Sunday the ratings reflect the improved short- to medium-term outlook for the economy following the recent lifting of international economic and financial sanctions related to the country’s nuclear program. As a result, Iran has begun to repatriate previously frozen external financial assets, export more hydrocarbons, and re-access international financial and banking markets. The removal of sanctions has also facilitated trade diversification, thereby improving the country’s medium-term economic growth prospects.
CI Ratings expects the combination of higher oil production, lower costs for trade and financial transactions, as well as restored access to foreign assets to support real GDP growth of about 3.8 % in FYE 2017-18. Improved terms of trade and renewed access to foreign assets and capital are also expected to increase the stability of the exchange rate and possibly help contain inflation, bringing it down to around 6% in FYE 2018, compared to a record high of 40% in 2013 when President Hassan Rouhani was elected.  
Public finances are expected to improve as well, albeit at a slower pace in view of the steep decline in oil prices since mid-2014, and amid fierce competition for market share, especially with (P)GCC member states. The budget is expected to post a small deficit in 2016, and to register a small surplus of 0.5 % of GDP in FYE 2017-18, based on the assumption of average oil prices of $50 a barrel.
Iran’s public debt remains low and official foreign assets remain sizeable, estimated by CI Ratings to be equivalent to around 14.5 months of imports of goods and services and around 12 times as high as external debt payments falling due in 2016, although there is still some ambiguity regarding the liquidity and usability of these assets.

Sovereign Ratings Constrained

CI reckons the internal political situation is reasonably stable, and a victory for supporters of the current government in recent legislative elections has raised the prospect of greater economic reform going forward. Geopolitical risk remains a material rating factor, however, given the escalating conflict in neighboring Iraq, as well as in Syria and Yemen, and in addition to the ongoing tension with the (P)GCC member states, namely Saudi Arabia.
Notwithstanding the above positive developments, Iran’s sovereign ratings remain constrained by the heavy reliance on oil (the price of which is currently below the break-even fiscal level), by the limited disclosure of data, and fundamental weaknesses in the economy which have been aggravated by the long period of economic sanctions. The ratings are also constrained by continued expenditure rigidity, as well as the weak financial system, institutional shortcomings and complex internal politics.
The outlook for the ratings is ‘stable’. This indicates that Iran’s sovereign ratings are likely to remain unchanged within the next 12 months provided that key metrics evolve as envisioned in CI Ratings’ baseline scenario and no other credit quality concerns arise.
The ‘stable’ outlook balances the projected positive outcome of lifting the sanctions against the prolonged period of low oil prices and the concerns of spillover from the conflict in neighboring countries.

A quiet but collective bubble of excitement could be felt in the top executive floors of some of the largest multinational companies in the world when sanctions against Iran were lifted last month.
Admittedly, the range of excitement differed depending on which country or region the enterprise originated from. The excitement was strongest amongst global and regional CEOs of some of the largest companies in Europe and Asia; countering that excitement was many chief executives of US and Chinese companies–for many different reasons, wrote Damien Duhamel for the Dubai-based weekly business magazine Arabian Business.
Duhamel is the CEO and managing partner at Solidiance–a management consulting services company, headquartered in Singapore and focused on the Asian market. Below you can read part of the article.
First, one must understand the immense opportunity that Iran presents–to understand just how high the stakes are and why so many C-level executives across the globe are salivating.
With a GDP of approximately $1.4 trillion, Iran currently is home to 1.5% of the world’s GDP and is the 18th largest economy in the world–placing it between Turkey and Australia.
Iran’s economy is also much more sustainable than the “hottest” emerging Asian and Middle East economies. Many of Asia’s emerging countries are still focused on pulling themselves out of an agriculture-based economy, and the Arab Persian Gulf states’ wealthiest nations are working hard to move away from an oil-based economy.  
Iran already has a very solid infrastructure and industrial base enabling it to kick-start its economic catchup. It already boasts the second largest proven natural gas reserves and the fourth largest proven oil reserves in the world and is also home to a well-balanced and diversified economy, closer to that of the world’s most industrialized nations.
Oil and gas contribute 25% of the country’s wealth, while the automotive, agriculture, manufacturing and mining industries contribute to 10% each.
While some of the world’s biggest companies withdrew from “the race for Iran” five years ago, Chinese companies continued without looking back.
Over the past decade, China capitalized on Iran’s estrangement with the global economy by securing primary positions in both oil and non-oil sectors of Iran’s economy. However, Iranians now crave for Europe’s high quality consumer brands and industrial goods.
The end of sanctions means the Chinese must now compete with international players and are sure to lose some of their inflated market share.
European and Asian multinationals have not enjoyed the unrestricted access Chinese firms have had; they are still well-positioned to outpace their North American counterparts.
Quality European and Asian brands will thrive in Iran, so long as strong relationships are built with the country’s most competent partners.
Due to stringent compliance regulations in the US, American Fortune 500 CEOs watched impatiently as their European and Asian competitors travelled freely in and out of Iran over the past months to gauge the market and reestablish long-lost relationships. As such, the Americans have sidelined their best corporate entities, and inevitably, the Americans will be last to the Iranian dinner table.
When it comes to Iran opening up to the world, the first-mover advantage will carry with it significant advantages. Speed is paramount; this is true for many markets, but rings especially true in Iran.
The starting pistol may have officially gone off on January 16th, but there is a big difference between companies preparing to go in and those that have not yet started the process.
Careful entry development and growth road map execution with strong partners will define a company’s success in this exciting and newly reopened market.

Keywords: Iran,Investment

Public interest in cryptocurrencies like Bitcoin is booming in Iran as a report estimates that unregulated exchanges are engaged in nearly $200 million worth of trade for digital currencies everyday.

The Iranian government has yet to recognize cryptocurrencies for local trade and platforms use normal authentication procedures to be able to process transactions.
The report said that the number of investors with activity in the local crypto market had exceeded one million, adding that daily trading volume in a total of 20 platforms amounts to 50 trillion rials ($200 million). many of the people engaged in trade for cryptocurrencies were retail investors who have been discouraged by a recent drop in the value of trade in theTehranStockExchange(TSE). people were taking the risk of buying a bitcoin to compensate for the losses they have suffered in the TSE, where main index TEDPIX has dropped to 1.22 million points, down from over 2 million recorded in mid-summer.
That comes as the global daily trading volume for cryptocurencies has reached nearly $200 billion in a market valued at around $1.4 trillion where the dominant currency bitcoin has surged to over $57,000.

A 30-strong business delegation from the Czech Republic, made up mainly of representatives of the country’s mining sector, visited Tehran on Sunday and met with members of Tehran Chamber of Commerce, Industries, Mines and Agriculture to explore potential avenues of cooperation and trade.
The delegation was headed by Deputy Foreign Minister Martin Tlapa, our sister publication Donya-e-Eqtesad reported.
“The purpose of this visit is to cooperate with Iranian firms in the mining industry,” said the Czech official, emphasizing that the European country’s industry players are ready to strike deals with their Iranian counterparts with the full support of Czech central bank and Export Guarantee and Insurance Corporation.
Tlapa pointed to some of the signed economic agreements between Iran and the Czech Republic, including a 50-megawatt power plant construction project worth €50 million, as examples of successful cooperation between Tehran and Prague. He explained that the required turbines for the project are being manufactured by the Czech Republic and that Iran will also be provided with the construction technology.
“The Czech Republic can meet the Iranian market’s requirements in the fields of petrochemicals, agriculture and food, auto manufacturing, railroad production and mineral extraction and processing,” he said.
Establishment of direct flights between Tehran and Prague, cooperation in developing Iran’s infrastructure and undertaking joint ventures in the country’s gas sector were some of the other potential economic sectors discussed by the foreign official.
Tlapa also met with his Iranian counterpart, Majid Takht-Ravanchi, on Sunday. The trade delegation travelled to South Khorasan Province on Monday to attend a business forum alongside the province’s economic players.
Mohammad Reza Bahraman, the head of Iran Mining House, described the untapped potential in Iran’s mining sector as “significant”, and said the Mining Act of the Islamic Republic of Iran allows foreign firms to hold up to 100% stake in the country’s mines and mining industrial firms, offering a good opportunity for Czech investors.
Emphasizing that the government intends to boost the output of Iran’s mining sector, the Iranian official noted that the industry has a “pressing need for foreign investments”.
“Czech companies’ investments in the sector can be highly beneficial for both sides,” he added.
Bahman Eshqi, secretary-general of TCCIMA, said the current annual trade value between Iran and the Czech Republic is too low considering the two countries’ industrial capabilities and longstanding ties. The figure stood at about $52 million in 2015.
The official pointed to sectors such as oil and gas, transportation, auto manufacturing, pharmaceutical production and tourism as potential areas for boosting mutual cooperation.

 Iran’s Economy Minister and Finance  Ali Tayyebnia stressed that  entrusting of the country’s development projects to the private sector as one of the main policies of the government.
According to the report, Tayyebnia made the remarks in the 59th government and private sector joint meeting.
“This year, the country’s Management and Planning Organization is committed to hand over 1000 development projects to the private sector” he said.
The minister believed that most of the country’s economic problems stem from low private sector activity rate and that merging Export Guarantee Fund with Bank Saderat would be a principled and effective solution to help and provide better services to the private sector.
He urged the private sector to help the government in identifying target countries in terms of economic cooperation and investment potential.
The minister also said, “We must focus on countries that are inclined to finance our projects through direct investment in Iran.”

Iranian banks must commit to increasing their capital and reaching a capital adequacy ratio of at least 8%, says a deputy economy minister.

"A minimum capital adequacy of 8% and reaching a capital adequacy of 12% must be pursued by the banks," Hossein Qazavi was quoted as saying by banker.ir.

"Privately-owned banks must improve their capital adequacy by selling their stocks and increasing the capital of state-owned banks should be the function of the government."

The deputy economy minister for banking and insurance affairs says budgetary constraints have indeed imperiled government moves to help increase the capital of banks. "But I hope that amendments to the budget law of 2016-17 which were approved by parliament will be implemented and capital adequacy of the banks will increase."

The amendments to the budget law of 2016-17, the implementation of which was officially proposed by President Hassan Rouhani in early November, contain measures to increase banks' capital and settle their debts.

According to another deputy minister of economy Shapour Mohammadi, the government has several plans to increase the capital adequacy of banks including cash injections with the help of foreign exchange resources of the Central Bank of Iran.

"It was proposed that proceeds from selling the shares of state companies could be utilized based on Article 44 of the Islamic Republic of Iran Constitution [which calls for the privatization of state firms]. These proceeds may be used to increase the capital of state banks which has won Majlis approval,” Mohammadi had said in June.

According to Qazavi, there is also the issue of several privately-owned banks in which the government holds a stake. If these banks choose to offer their stocks, he says, it should be "natural for the government to help in increasing their capital."

The official says in light of budgetary limitations, it seems that the government is willing to reduce its role in banks and let the capital market play its role in increasing their capital.

The main purpose of the amendments to the 2016-17 budget law is to allow the government to settle its debts to the banking sector by using the CBI foreign exchange resources. The government will have the authority to repay up to 450 trillion rials ($14 billion) of its debts to lenders through these resources.

Qazavi notes that when international banks want to collaborate with their Iranian peers, they look into their financial ratios, namely capital adequacy, non-performing loans, return on assets and stocks.

He, however, stresses that when a bank or country wishes to work with Iran on a large scale it should gauge the country within the framework of its extraordinary circumstances. He quickly adds that this does not mean the capital adequacy ratios of Iranian banks must not improve.

"This is a necessity. But in general, hurdles must be removed by way of improving or reforming the structure of bank's financial statements and giving the other side (foreign banks) the necessary assurances."  

Qazavi adds that in the case of government-owned banks, foreign banks can be swayed even if the bank's capital adequacy is below 8% because the government would be its stockholder "and if problems arise, they know that the government is there to help the bank(s)."

Production Loans Lagging

A deputy minister of industries, mining and trade has criticized the banks' performance in allocating loans to promote production in the country.

"Unfortunately, even though 90 cases were sent to private banks to receive loans to improve production, the banks have paid no attention," Reza Rahmani said in the 62nd meeting of the government and the private sector.

Pointing to the CBI governor Valiollah Seif's promise of delivering 16 trillion rials ($499.4 million) worth of loans to the ailing small and medium-sized enterprises (SMEs), the official said "so far, only 11 trillion rials ($343.3 million) has been paid to 16,194 industrial units."

Rahmani recalled that the CBI head had promised that "if any SME does not get the funding by the time the 16 trillion rials has been paid out, the volume of loans will increase."

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