Businesses fear trade losses from Iran sanctions

By Andrew Beatty

Date: 02/02/06

Concern is growing this week among European firms trading with Iran, as the country edges further towards referral to the United Nations Security Council and possible sanctions.

Business representatives said that while trade continued with Iran, investor confidence had been shaken by the three-year long diplomatic stand-off.

"Psychologically these kind of things have an impact," said Jamshid Haghgoo of the Iran-Italy Chamber of Commerce.

Negotiations this week appeared to run into the sand and the prospect of the EU imposing US-style trade sanctions against Iran is jangling nerves in the business community.

"We have experienced long-term sanctions for 20 years because of the Arab war and American sanctions," said Haghgoo.

"We hope that it does not happen. Talk and discussion is better than sanctions."

Helene Rang, CEO of the German Near and Middle East Association, a non-profit organisation helping German business in Iran and the region, echoed this sentiment.

"Of course we are concerned, Germany is a very important business partner for Iran, billions of euros are in the pipeline."

In 2004, EU-Iran trade was worth more than EUR 57,000 million, making Europe by far Iran's largest trading partner.

According to European Commission statistics, the EU accounts for 35% of Iran's total trade.

Italy, Germany and Belgium are Iran's top EU partners, with much of the investment and trade focused on Iran's lucrative oil and gas sectors.

Commission officials said that while it was difficult to blame any increase in European gas or oil prices on the continued diplomatic stand-off, it had had an impact.

Ferran Tarradellas i Espuny, the Commission's spokesperson on energy, said that refining capacity shortfalls in the US, unrest in Nigeria, disputes with Russia and seasonal factors had masked the impact of the Iran crisis.

"It has certainly had some influence, but it is very difficult to measure," he said.

Article gathers comments from the business community regarding fears over the potential damage that could be caused by economic sanctions against Iran. The European Union was backing the country's referral to the UN Security Council over its nuclear programme.

• Primary Source

EEAS: Countries: Iran http://www.eeas.europa.eu/iran/index_en.htm

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