Economy, Business And Markets

ECAs to Help Improve Iran-Sweden Trade

ECAs to Help Improve Iran-Sweden TradeECAs to Help Improve Iran-Sweden Trade

Export Guarantee Fund of Iran and the Swedish National Export Credit Guarantee (EKN) agreed on Saturday to expand cooperation and support trade between the two countries’ private sectors.

In a meeting in Tehran Chamber of Commerce Industries, Mines and Agriculture on, Mehdi Jahangiri, vice chairman of TCCIMA, pointed to the Iranian and Swedish traders interest in bilateral trade and called for export credit agencies of the two countries to prepare the grounds for boosting relations, according to TCCIMA’s public relations office.

“The government is promoting non-oil exports with a focus on quality exports,” he said, adding that Sweden can be a key business partner for Iran in Europe.

The value of Iran’s exports to Sweden was $14 million in last Iranian fiscal year (ended March 19) – the lowest ever, according to Jahangiri. “This is while during the same period, Iran imported $200 million worth of goods from that country.”

The two countries should pave the way for striking a balance in bilateral trade, he noted.

TCCIMA, with more than 15,000 members, will seek to support commercial relations between the two sides, the official added.

Jan Rexandel, EKN chairman, said Iran offers many opportunities to Swedish companies and hoped that the two countries would soon jumpstart closer commercial relations.

According to the agency’s website, EKN board and directors are appointed by the Swedish government, with the minister of enterprise and trade being responsible for EKN affairs. The agency operates in accordance with the regulations in force and special instructions from the government which are specified in an annual letter of appropriation.

EKN has been off cover on Iran since 2012 when EU sanctions against Iran were tightened and export credit guarantees were forbidden.  Before that, Iran was one of the biggest Swedish export markets in the Middle East, and one of the countries on which EKN had its highest guarantee commitment in the region.

After the lifting of sanctions in January, EKN reintroduced export credit guarantees to Iran.

 “EKN has offered guarantees for trade with Iran from 1972 to 2012 when trade was disrupted by sanctions,” said Anna-Karin Jatko, EKN’s managing director. “In the past decade which even includes the sanctions period, EKN issued 500 guarantees for Iran.”

 Not High Risk

Kamal Seyyed Ali, head of Export Guarantee Fund of Iran, also said that during sanctions Iran was regarded as a country with a high risk of investment. “But Iran in general, is not that risky and these reports seem to be unrealistic.”

“Strong foreign exchange reserves and low foreign debt are Iran’s advantages, which indeed reduce the risk factors.”

He added that both the government and private sector have always upheld their financial obligations, even during extraordinary difficult times. “Only during the sanctions, and due to lack of proper payment channels, Iran defaulted on some of its debts.”

Seyyed Ali added that EGFI is keen on expanding ties with Sweden. From 2008 to the start of 2012, EKN has issued guarantees for 232 export transactions to Iran, at a value of $1.4 million. Swedish exports to Iran amounted to about $2 million during this period. Exports guaranteed by EKN included sectors such as telecom, power and transport.