Economy, Business And Markets

British Guidelines for Resuming Business Ties

British Guidelines for Resuming Business TiesBritish Guidelines for Resuming Business Ties

The UK government has recently published a set of guidelines on trade and doing business with Iran “to help British businesses take advantage of the opportunities that economic reengagement with Iran will bring”.

The government’s website also notes that there is a positive outlook for UK-Iran trade relations and that the UK government fully supports expanding trade relationship with Iran.

The British Embassy was reopened by UK Foreign Secretary Philip Hammond on a visit to Tehran in August last year.

Only three days after the so-called “Implementation Day”, the day the UN nuclear agency IAEA confirmed that Iran had rolled back the scope of its nuclear program as per last year’s landmark deal with world powers, the UK government appointed former chancellor Lord Lamont as UK’s trade envoy to Iran.

“Britain suffered a bit because the government not only enforced sanctions but actively discouraged even legal trade while sanctions were in place. The result was that British trade collapsed by much more than that of Germany, France and Italy,” he said a few days into his new post. “Even America has exported more to Iran recently than we have.”

After advising the ubiquitous “due diligence” thanks to the remaining US sanctions, the guidelines count a few of Iran’s advantages such as its large population of highly educated young people.

“EU trade with Iran currently stands at around $8 billion and is expected to quadruple in the next two years,” it states.

The UK government sees oil and gas sector, airports, infrastructure and railroad as opportunities for British businesses in Iran.

“The lifting of economic sanctions is expected to unlock significant spending on the oil and gas industry as well as other sectors of the economy, which would benefit from investment and access to new technology.”

A noteworthy point mentioned in the guidelines, which incidentally receives special attention, is the official announcement that the British government has tasked UK Trade and Investment–based both in the UK and in the British Embassy in Tehran–to engage with local businesses to provide support and assistance “to help ensure UK business benefits from opportunities as they arise”.

In practical terms, the main task of UKTI here is to provide export finance and insurance for British firms that intend to export to Iran.

As for the size of the cover, however, applications are said to have to be studies case-by-case in cooperation with Iran’s Ministry of Economic Affairs and Finance.

According to the British government, UK Export Finance has already been in contact with a number of exporters about business with Iran.

That a government department has been given the onus of providing official reassurance for UK businesses to engage with Iran is further proof that Britain is firm on taking advantage of Iran’s new opening.