Energy Law Underscored in Post-Sanctions Era

Energy Law Underscored in Post-Sanctions EraEnergy Law Underscored in Post-Sanctions Era

Oil and trade deals worth tens of billions of dollars will be signed with foreign companies over the next two years after western sanctions are lifted, but there are few professional Iranian law groups to handle the legal proceedings of these deals, Oil Minister Bijan Namdar Zanganeh said during the Second National Convention on Energy Law on Monday.

"Presently, there is a scarcity of credible law groups and legal affairs are often conducted individually," he said on the sidelines of the two-day convention, Shana reported.

"We are approaching the post-sanctions era and many countries are coming to Iran to land lucrative deals."

Zanganeh underlined the inadequate expertise and familiarity of law firms concerning legal works related to the entry of global companies into the Iranian energy market.

He called on domestic law groups to expand cooperation with "tens of prominent European law firms," adding that Iran is trailing in the practice of law in trade and business, despite making great headway on the academic front in legal affairs.

The convention, chaired by Vice President for Legal Affairs Elham Aminzadeh, has assembled a group of experts and senior academic figures in the field of energy to address the loopholes and drawbacks in contracts or legal proceedings related to the energy sector.

Major European and Asian trade delegations, including from France, the UK, Germany, Spain and Austria as well as Japan and South Korea, have visited Tehran to strike multibillion-dollar agreements in economic and energy sectors after the landmark July 14 nuclear accord between Iran and six world powers.

The minister also described the lack of an impartial legal institution to settle disputes between the public and private sectors as a shortcoming, adding that the government is now responsible for making the final verdict in such cases.

Zanganeh pointed to the need for a transparent regulatory framework in the oil, refinery and petrochemical sectors, and elaborated on legal hurdles in funding energy projects.

"The oil industry requires small investments, but legal complexities obstruct attracting funds for energy projects in lesser amounts," he said.

  Domestic Competence

Despite the uncertainties of government officials, a legal expert expressed confidence in the capacity of Iranian private law groups.

"There are many topnotch law firms and independent legal advisers in Iran with solid relations with foreign clients now and before the sanctions," Sepidar Karimi, an energy law expert based in Tehran, told Financial Tribune.

"However, it could become a difficult, lengthy and frustrating procedure for foreign companies to open office and maintain business (in Iran) without an Iranian legal expert by their side."

She blamed a lack of transparency in legal procedures as well as ambiguous interpretations of law, particularly with regard to terms and conditions of foreign investment in Iran. Karimi also referred to the impact of sanctions on many industries and said the transfer of technology has become a top priority in negotiations with foreign companies.

  Multibillion Dollar Deals

The call for promoting expert legal services comes as Iran is slated to unveil the revised version of its oil contracts, known as the Iran Petroleum Contract, or IPC, in a conference in Tehran next month before a full-fledged unveiling in London on February 22-24.

Officials say Tehran has sweetened the terms of the new contracts to attract billions of dollars in foreign direct investment for up to 50 oil exploration and production projects.

Seyyed Mehdi Hosseini, head of the Oil Contracts Revision Committee, referred to the enthusiasm of Europeans to secure a place in Iran's energy projects and said the EU member-states "no longer follow in the footsteps of the United States".

"The ratification of Tehran's nuclear accord by the EU was counterproductive to possible extremist measures from Americans," he said.

He made the remark as speculations suggest the pressure of US-led sanctions against Tehran may force EU members to abandon the London seminar.

Last week, the US State Department warned in a statement that sanctions on Iran would not be lifted until the International Atomic Energy Agency verifies that Tehran has complied with the terms of the deal.

"The United States wants to tell governments not to get ahead of themselves when dealing with Iran," said a London-based diplomatic source.

The source claimed Tehran's decision to postpone the London confab to February 2016 came after US officials conveyed concerns to British diplomats that the event cannot take place before the easing of sanctions.

But Hosseini stressed that there will be no change in plans this time around, adding that any decision from Washington to buttress the sanctions would rob American firms of rewarding investment opportunities in the Middle East country.

Iranian oil officials have said international companies, including from the US, can attend the IPC conference without restrictions.