Economy, Domestic Economy

Czech Republic Counts Down for Post-Sanctions Trade

Czech Republic Counts Down for Post-Sanctions TradeCzech Republic Counts Down for Post-Sanctions Trade

With the end of western sanctions expected to come as soon as the start of next year, Iran is now the target of trade delegations and missions from across the world.

The Czech Republic is no exception and, after a visit by its Foreign Minister Lubomír Zaorálek in September, is now looking at the practical steps needed to exploit the opportunities when full two-way trade resumes, the official international broadcasting station of the Czech Republic, Radio Prague reported.

Around 180 participants signed up for a conference on Monday at the Czech Foreign Ministry over the export opportunities beckoning in Iran.

The visit to the 80-million strong resource-rich country by Zaorálek was seen as a breakthrough in putting relations between Prague and Tehran on a better footing. Since then, the Czech Republic has been working on the basics of what is needed for full-blown bilateral trade and the sectors most likely to benefit.

A new economic agreement between the two countries and one offering investment protection for both sides are some of the priorities that could be pushed through fairly quickly. Czech business sectors that look like they could most profit from an end to sanctions are engineering, energy and transport infrastructure, those offering hospital and other healthcare facilities and the food processing sector.

Deputy foreign minister for relations with non-European countries and economic diplomacy, Martin Tlapa, was one of the key speakers at the conference. He believes that Czech firms can build on solid foundations in Iran.

“The Czech Republic, former Czechoslovakia, has [had] diplomatic relations [with Iran since] 1925. So we are one of the countries with the longest relations with the country. Despite circumstances, the links and the name of the Czechoslovakia and the Czech Republic, like Škoda and Bat’a, are well known in the country,” he said.

Recalling Czech exports of industrial machinery in the past, Tlapa hoped that the commercial ties will be restored in the near future.

However, considering the lack of optimal oil and gas export earnings for many years, leading to reduced government revenues, according to Radio Prague, Tlapa says Czech companies should be cautious about how potential Iranian partners can finance deals.

“I think that the timing of resourcing on the Iranian side is an issue ... Of course, it is a limitation that has to be a part of the whole evaluation of the projects and that is something that we suggest be taken into account when the businesses are talking about future contracts,” he said, calling on Czech firms to use “all the financial instruments they can to be on the safe side.”

With that in mind, Czech state advice, aid and safety nets for exporters are being readied. It was announced on Monday that the Czech state export insurer, EGAP, is ready to boost its budget eightfold next year, to 5.24 billion crowns, for underwriting Czech exports to Iran.