Domestic Economy

Crunch Time in Zurich

Auto and Tech Desk
Crunch Time in Zurich
Crunch Time in Zurich

The third edition of the Europe-Iran Forum is taking place in the Swiss city of Zurich through May 3-4.

Like previous iterations of the event, the top-flight of Iran's economy and economic heavy hitters from Europe and beyond are in attendance.

"Announced on January 16, 2016, Implementation Day marks the beginning of the 'post-sanctions' era for Iran, opening the door to one of the world's largest and most promising economies … The 3rd Europe-Iran Forum is designed to help you implement your ideal strategy and achieve robust returns in Iran," reads a welcome note published at the event's website.

This year's event will also have the added significance of US government officials, specifically those of the Office of Foreign Assets Control, arriving in force.

The organizers have several topics on the agenda, including an introduction to issues currently afflicting business entry to Iran, like European banks' continuing hesitancy to deal with Iranian clients.

Financial hurdles facing trade and the post-sanctions environment and dissuading those wanting to enter the Iranian market were the main topics of discussion addressed by a set of speakers on the first day of the forum.

Jeroen van der Veer, a senior executive at Philips Electronics said “You must have clear standards to operate when dealing with Iranians,” adding that Iranian technicians are very well trained.

The Dutch executive added with regard to financing projects inside Iran that people need to double check with American regulations and do their due diligence.

Pratibha Thaker, of the Economist Intelligence Unit, said, “Although Iran is opening to the western economies, it worked with Russia and China during sanctions,” noting that the country will not forget these partners and they will be prioritized.

During the question-answer session, Thaker was asked about the long-term view of pharmaceutical investment in the Islamic Republic.

She responded by saying there is huge potential for this sector, stressing that it was one of the safer bets in the market currently.

She added that “the banking sector is a mess and the role of the state [there] is very large.”

Thaker noted that the right regulations are starting to come on stream, with e-commerce being one of the leading areas driving the finance to support the consumer market. She specifically said startups were one of the key areas that showed promising growth.

> Legal Issues and Sanctions

George Kleinfeld of Clifford Chance said OFAC regulations are often understood by local American agencies in an aggressive manner.

“In 2010, we had an increasing raft of secondary sanctions by American entities, which then gave authority to OFAC to blacklist whoever they wished.”

Kleinfeld pointed out that Iran is extremely frustrated by the actions of some American agencies and their non-compliance with the Joint Comprehensive Plan of Action, the official name of the nuclear deal, noting that this will breed bad blood on the Islamic Republic’s side and that European agencies would ultimately have to stand up to the Americans.

“In my view, I don’t see Iran capitulating with regard to secondary sanctions continuing post-implementation day. Ultimately, America cannot continue this policy, as European leaders like [German Chancellor] Angela Merkel will not abide by US Congress transgressions," he said.

The last of the lawyers' panel was addressed by Patrick Murphy who elaborated on checking prior to entering the Iranian market.

In his view, consumer products like packaged goods were one of the best areas to focus on initially, especially by focusing on the role of distributors in the wider scheme of delivering the products.

“There are inevitably risks and you have got to manage those risks going forward,” he concluded.

Among the Iranian officials expected to address the Zurich forum are Mehdi Karbasian, head of Iranian Mines and Mining Industries Development and Renovation Organization; Majid Qasemi, CEO of Bank Pasargad; Mohammad Asoudeh, vice chairman and managing director of Iranian Reinsurance Company; Ali Ashraf Afkhami, chairman of Bank of Industry and Mine; Sharif Nezam-Mafi, chairman of Iran-Swiss Chamber of Commerce; and Bahram Sobhani, CEO and chairman of Mobarakeh Steel Company.

The first and second editions of Europe-Iran Forum were held in London and Geneva in 2014 and 2015 respectively. The second edition has been referred to as "the largest Iran-focused business conference ever held in Europe".