Domestic Economy

Germany Suspends Business Promotion Plans With Iran

Germany Suspends Business Promotion Plans With Iran
Germany Suspends Business Promotion Plans With Iran

Germany says it’s suspending business promotion programs for Iran, citing the “very serious situation” in the country, referring to recent protests in the Islamic Republic.
As Bloomberg reported, the suspension — days after the EU’s top diplomatic representative said relations with Iran were deteriorating — affects loan and investment guarantees that opened up in 2016 after Iran’s nuclear agreement (formally known as the Joint Comprehensive Plan of Action), but have been dormant since at least 2019, the Economy Ministry in Berlin said in a statement on Friday.
Investment guarantees have been suspended and loan guarantees will halt in January, with humanitarian exemptions. Germany’s trade promotion agency, known as Germany Trade and Invest, and Germany’s Business Promotion Office in Iran have “reduced their activities to a minimum,” according to the statement.
Germany is Iran’s top trade partner in the EU region. Bilateral trade totaled €1.76 billion (nearly $1.9 billion) in 2021 and €1.49 billion in the first nine months of this year, the ministry said.
Latest data released by Eurostat, a directorate of the European Commission located in Luxembourg, show the two countries exchanged over €1.6 billion worth of goods during the first 10 months of 2022, 15.44% more than in the similar period of the year before. Iran’s exports stood at €234.48 million and Germany’s at €1.36 billion.
According to AP, export credit guarantees protect German companies from losses when exports aren’t paid for. Investment guarantees are granted to protect direct investments by German companies from political risk in the countries where they are made.
According to Forbes, the suspension of trade guarantees has been accompanied by a series of other measures, including the suspension of a bilateral energy dialogue, a manager training program and a trade fair program. 
However, the impact on trade flows between the countries may not be too great, given no new guarantees have been granted since 2019.
Ever since JCPOA came into effect in 2016, German investment guarantees were given, or extended for a small number of projects, with a total value of around €123 million. 
The deal unraveled under former US president, Donald Trump, after he walked out unilaterally.
It has been a similar situation for export credit guarantees. There were €176 million in 2017 and €37 million the following year, but none since then.
The suspension of trade guarantees also marks a further souring of relations between Berlin and Tehran, which have been on a downward trajectory over recent weeks.
In early December, Germany’s ambassador to Iran, Hans-Udo Muzel, was called in to the Ministry of Foreign Affairs in Tehran to receive a protest about what official Iranian media described as “Germany's continuous and unacceptable interference” in Iran’s domestic affairs.
That followed a vote at the United Nations Human Rights Council (UNHRC) in late November to launch an investigation into the Iranian government’s response to the protests; the motion had been sponsored by Germany and Iceland.
Iranian Foreign Minister Hossein Amir-Abdollahian has also been critical of Germany, saying on Twitter on Nov. 24 that Berlin was guilty of “massive human rights violations” and had been the main provider of chemical weapons to the Iraqi regime of Saddam Hussein. He said the vote at the UNHRC was an abuse of human rights mechanisms “all in the name of a farce ‘solidarity’ with Iranians.”
Iran has also previously accused Germany of hosting “anti-revolution elements” which trained would-be saboteurs before sending them back to Iran.
On Dec. 12, Tehran included seven Germans among a group of European individuals and institutions that it was sanctioning, including former defense minister, Annegret Kramp-Karrenbauer, and Rita Süssmuth, a former speaker of the German Parliament.

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