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Sanctions Help Bolster  Commerce With Russia
Domestic Economy

Sanctions Help Bolster Commerce With Russia

The unilateral sanctions imposed by the United States and the European Union in the past few years against Iran, over its nuclear energy program, and Russia, over its policy towards the crisis in Ukraine, have strengthened relations between Tehran and Moscow, said Minister of Economic Affairs and Finance Ali Tayebnia on Sunday.
Despite efforts by the Iranian and Russian governments, trade between the two countries has not yet increased as expected “but it is set to grow exponentially very soon,” the minister said in a meeting with visiting Russian Minister of Economic Development Alexei Ulyukayev, IRNA reported.
Tayebnia said he agreed with his Russian counterpart to “form a joint committee to help facilitate bilateral trade.”
During his two-day visit, Ulyukayev also met with Minister of Industry, Mine, and Trade Mohammad Reza Nematzadeh.
Industrial and commercial ties between Tehran and Moscow have recently expanded. Nonetheless, the two are trying to further boost their economic alliance in the face of economic sanctions imposed by the West on both countries. Trade between Iran and Russia currently stands at $1.7 billion in value, with officials expecting it to double in the near future.
Some experts believe Russia and Iran need to undertake measures to reduce the existing obstacles that hamper trade between the two countries.
One such measure is to reduce duty on imports. Mojtaba Khosro-Taj, the Iranian deputy minister of industry, mine, and trade, said on Sunday that the two countries need to adopt a “preferential tariffs system,” which compels both sides to levy lower rates of duty on imports from each other than they do on imports from other countries.  
“To facilitate its import of essential commodities and agricultural products from Iran, Russia has agreed to make necessary reform on its trade tariffs,” Tayebnia announced.
The Russian minister also highlighted the importance of expanding ties between the two countries, saying, “Existing obstacles in the way of bilateral trade will be lifted.”
“We are trying to make use of the sea, air and railway systems in Azerbaijan Republic to facilitate our bilateral trade,” he added. Azerbaijan, located between Iran and Russia, is the shortest way of transportation and transaction of goods between Tehran and Moscow.
He added that “good planning for deeper relations would help both sides meet their industrial and commercial needs.”

  Oil-for-Goods
In a press conference on Sunday, Ulyukayev said Iranian businesses are looking at organizing assembly production of Russian motor vehicles.
Citing the Russian official, Itar Tass said the Iranian side was ready to establish assembly production of Russian cars in Iran.
Apart from that, both sides, discussed plans to set up an alumina plant, assembly production of busses, trucks, railway cars, agricultural machinery, etc., he said.
The visiting Russian minister added that supplies from Iran under the “oil-for-goods” program will begin in the nearest future.
“This issue has been raised. In August, the Russian and Iranian governments signed a relevant memorandum on closer cooperation in trade and economic relations. We are working in this direction,” he told journalists after talks with Iranian government officials. “This may be finalized soon and practical realization, supplies will begin.”
Russia plans to sign contract with Iran on supplies of equipment for the oil and gas sector, Ulyukayev said.
“We can promote a big volume of our non-raw materials exports, such as equipment for the oil and gas industry, agricultural machinery, motor vehicles, aircrafts, railway cars, power machines and electricity generators,” he said.
“Russia can receive a serious portfolio of orders for machine-building for industries with high added value,” he added.
Russia and Iran plan to make settlements in national currencies and the sides are working on legal framework for that, Ulyukayev also said.
However, he said, the exact time when Russia and Iran are to switch to national currencies in mutual settlements has not yet been discussed. “This is up to the central banks of the two countries. They are already working on this. We support this step. But corresponding legal framework is to be prepared first.”  
  Cooperation on WTO
Under a memorandum signed in Tehran between Ulyukayev and Nematzadeh, Russia agreed to help Iran join the World Trade Organization (WTO).
“The Iranian side has sought Russia’s advice and assistance in Iran’s joining the WTO. The Russian side has agreed to offer its assistance,” Tass reported on Sunday night citing the document.
Iran suggested a meeting with representatives from all member countries of the Eurasian Economic Union to negotiate lower customs tariffs in trade between the Union and Iran. Russia agreed to help Iran establish contacts with the governments of the member states of the EEU, the document said.
Apart from that, the two sides agreed to share information about investment projects and tenders, as well as about problems in bilateral trade.

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