Economy, Domestic Economy

Few Swedish Firms Affected by US Anti-Iran Sanctions

Few Swedish Firms Affected  by US Anti-Iran SanctionsFew Swedish Firms Affected  by US Anti-Iran Sanctions

Some Swedish companies face difficulties following the renewed US sanctions against Iran and firms that do business with Iran.

Radio Sweden spoke to a Swedish export specialist to assess the impact.

In a tweet on Tuesday, US President Donald Trump wrote that: “Anyone doing business with Iran will NOT be doing business with the United States”.

With this, the first round of renewed economic sanctions against Iran announced in the spring came into effect.

“Trade with Iran will be quite difficult going forward, especially if you are a company with ties to the US and you have to follow the US sanctions that is now being reimposed,” said Victor Carstenius, a senior country analyst at the government agency, Swedish Export Credit Agency.

“The US has selected certain sectors that will not be allowed to do business with in Iran, but in fact, all companies will be affected as the payment channels will now disappear, when banks leave Iran. All international banks must follow the US sanctions, which means they cannot do business in Iran anymore, and if you don’t have a bank you cannot get paid for you exports. It’s obviously very hard to do business,” he added.

One of the companies affected is the truck company Scania. Last year, they sold 5,000 lorries to Iran to the tune of 4 billion kroner. Their press spokesperson told Swedish television on Tuesday that they are trying to adjust to the situation.

“We are making plans based on the information that is available … In the second quarter this year, we announced we will drop some orders connected to Iran. So, yes, it will affect us.”

Asked whether they will be leaving Iran, the spokesperson said, “No, we want to remain and are having a dialogue with the Swedish government and well as Brussels, Washington and Tehran to hopefully find a long-term solution.”

Overall, not many Swedish companies are trading with Iran.

Carstenius thinks the Swedish economy will only be marginally affected.

“In general, the consequences will be rather small, but for certain companies that have been active in Iran now for the past few years and have invested a lot in that market, they will obviously suffer.”

On Tuesday, the EU’s foreign policy chief, Federica Mogherini, delivered a defiant message to Trump that the EU is determined to not let the nuclear energy agreement die, while encouraging European companies to increase trade with Iran.

“We are doing our best to keep Iran in the deal, to keep Iran benefiting from the economic benefits that the agreement brings to the people of Iran, because we believe that this is the security interests of not only our region but also of the world,” she said.  

So, who should the Swedish companies be listening to? To the EU or the US on this?

“The EU is behind the nuclear deal with Iran and tries to protect European companies and banks from the US sanctions and they have introduced some countermeasures that will try to protect European companies from the US sanctions, but in reality I think that’s very difficult in practice. It’s up to each company to decide where to be active and you cannot force anyone to stay in Iran and we’ve already seen many companies leave Iran after Trump’s announcement in May that the US will leave the nuclear deal. So, in essence, if you are a company with strong ties with the US market, it is obviously very difficult to be both present in the US and Iran,” Carstenius said.

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