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Europe-Iran Forum: Cautious Optimism

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Europe-Iran Forum: Cautious Optimism
Europe-Iran Forum: Cautious Optimism

The second Europe-Iran Forum was held late last week in    Geneva. It was attended by the leaders from Iran’s financial and commercial companies as well as a handful of government officials, Central Bank of Iran delegates, and CEOs of private Iranian banks.

The event, for the first time, focused on the need for financing and the difficulties that Multinational Corporations and financial institutions encounter in coming to Iran – a task more difficult as a result of US-led sanctions over Iran’s nuclear program. It also touched on the need for Iranian companies to meet their international obligations in attracting foreign investment.

However, the tone coming out from delegates at the Swiss- based event started off somewhat downbeat as the majority of the speakers struggled to explain how to enter Iran, let alone invest large sums of money.

One group of speakers was rather cautious about the opportunities involved, much to the disappointment of the investors in the audience.

It was not the organization of the event itself, which was watertight, but it seemed that many executives struggled with the very idea of investment and ways to move ahead  without hitting against some hidden legal compliance issue originating from Washington.

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The first joint panel consisted of current Swiss Ambassador to Tehran Guilio Haas and the former envoy Livia Leu. In his speech Haas mentioned that westerners should act cautiously when considering Iran. “One thing is clear, there are a lot of opportunities in Iran,” he told an excited audience. “But you have to go after them carefully.”

The diplomat then took an even more perplexing turn and said that some companies would not be investing due to the complex financial regulations.

Leu who seated beside the current envoy echoed his statements by saying that “playing it safe” was the better option. She added “It has to be kept in mind: the US government doesn’t think about EU companies when applying sanctions.”

Implementation day -- the crucial point -- when Iran must meet all its obligations vis-à-vis what it had previously agreed, seemed to repeatedly crop up during the first day of the discussion.

Implementation day is when EU sanctions will be lifted and US-backed sanctions suspended. This is the day when Iran has officially announced that sanctions related to the nuclear dispute would become history making way for business as usual.

Pirouzan Parvine, of Dentons law firm in Paris, continued in favor of cautiousness with his statement that when negotiating with local groups, “companies should ensure mutual understanding.”

This theme continued throughout the first day with only a handful of anomalies. Charles Hollis of FTI Consulting said to the audience that his first piece of advice would be to “understand sanctions and abide by them.”

Hollis continued on his “easy does it” approach but did reach out and commend the Rouhani government on their approach to economic matters.  He said that the current administration has recognized corruption in the long-term as a national security threat and is striving to crack it down.”

This is backed up by the news in the press this week that for the first time in 50 years, Iran’s internal tax revenues exceeded its oil receipts.

Barthélemy Helg from ACL Investment said that in his discussions with investors he kept saying that international banks were growing tired of being the “enforcers of sanctions.”

He added that “With all the current problems in Iran’s banking industry, local banks will be required to meet the high standards of the international peers.”

Tim Fox of Emirates NBD, a UAE based Investment Bank mentioned that Iran currently has around $114 billion in foreign-held assts, with at least $30 billion to be repatriated after the deal goes through.  

Nicholas Gilani, an Iranian-American émigré followed suit by suggesting the business atmosphere with Iran is more difficult than westerners perceive. “Beware of the middlemen and exercise cautiousness, “he cautioned.

Nonetheless, the cautious voices outweighed the positive sentiment over the course of the one and a half day event, with the majority of panelists and guests alike taking stock of the complexities and the long road ahead.

As the audience grew tired of the negative comments coming from the stage, one bright spark from the event came from ACL’s Ali Amiri who interjected :”I’d rather be a little late [to Iran], but do it sustainably. Be brave, be selective and you’ll win.”