Domestic Economy

French Firms Trail in Economic Rush to Iran

French Firms Trail  in Economic Rush to Iran French Firms Trail  in Economic Rush to Iran

French firms have fallen behind their main European, American and Asian rivals in reviving economic ties with Iran since a nuclear deal was reached between Tehran and P5+1 in Vienna in July, a senior French executive said on Thursday.

France's main business lobby group, the Medef, is sending a delegation comprising about 130 firms to Iran, including top companies such as Total and Peugeot, from September 21-23. They will be accompanied by the trade and agriculture ministers, Reuters reported.

"This visit is very important for us," said Thibault de Silguy, vice president of construction company Vinci and of the Medef, who will lead the delegation to Iran.

"We have fallen behind, so now we have to make up lost ground," he told reporters. Among countries that already have a lead on French firms, he cited Germany, Austria, China and the United States.

France took one of the hardest lines of the six powers negotiating the nuclear agreement with Iran. But Foreign Minster Laurent Fabius, who traveled to Tehran over the summer to smooth over relations, has repeatedly said he did not believe that would hurt its companies once sanctions against Iran were lifted.

Unlike other visiting western ministers, he did not take any business leaders with him despite meeting key Iranian ministers dealing with the hydrocarbons, transport and automobile sectors–all areas where French firms hope to seal contracts.

The lifting of sanctions could begin in the first quarter of 2016. The accord was endorsed on Monday by the United Nations Security Council.

French firms were once heavily involved in the Iranian market, but European Union and US sanctions adopted in 2011 scared them away.

"There will need to be offers that have a strong local dimension and are competitive in pricing, but also the financial problems need to be resolved," de Silguy said.

French imports from Iran fell to just €62 million in 2013 from €1.77 billion in 2011. Exports fell to €494 million in 2013 from €1.66 billion in 2011, according to French Foreign Ministry estimates.

French bank BNP Paribas was fined almost $9 billion in 2014 for transactions violating US embargoes.

French diplomats say their banks are especially hesitant and will wait to see how American lenders react to the lifting of sanctions before supporting French firms in Iran.

"It's a major concern that could be a deal breaker if all western firms are hamstrung by the banks," said a senior diplomat. "However, if we overcome this hurdle, I think French firms will get their fair share of the pie."