Iran gears up to open for business

Western companies are getting in line to hear about post-sanctions opportunities in the Islamic Republic.

Next month marks the anniversary of the Geneva interim agreement on the Iranian nuclear-weapons program. In exchange for a freeze on some of the Islamic Republic’s nuclear activities, the Geneva deal eased sanctions on Tehran. The sanctions relief, the Obama administration assured Congress, would be limited and reversible in case talks fail. In the words of Secretary of State John Kerry : “Iran is not open for business.”

Many businesses seem to think otherwise. Consider the Europe-Iran Forum, scheduled to be held in London on Oct. 15 and 16. The forum brings together global law firms (Dentons Europe), business consultancies (FTI), marketing firms ( WPP ), auctioneers (Sotheby’s ) and telecom providers (MTN), among many others, to “prepare and evaluate the post-sanctions trade framework and investment opportunities” in Iran, according to its brochure.

Former U.K. Foreign Secretary Jack Straw and former French Foreign Minister Hubert Védrine are attending, and the brochure carries a blessing from Iranian President Hasan Rouhani ’s chief of staff, Mohammad Nahavandian. “I hope that this forum presents information and opportunities for active international investors and facilitates competitive investments in various sectors of the Iranian economy,” Mr. Nahavandian writes. “I would like to wish you further success with your honorable endeavors for Iran.”

The brochure also carries multiple disclaimers that the event complies with U.S. Treasury Department Office of Foreign Asset Control (OFAC) regulations. There is a brief legal memo appended, stating that the forum “has been specifically designed to comply with all relevant OFAC regulations pertaining to Iran sanctions law” and that “there is to be no negotiation, dealmaking, or commercial transactions conducted or completed at the conference.”

Yet at least one of the businesses represented on the Iranian side—the Middle East Bank—is on OFAC’s list of Specially Designated Nationals, which according to the U.S. Treasury “includes individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries.” Others, meanwhile, are closely associated with designated entities, even though they aren’t designated themselves.

Take Kardan Investment Bank. Although Kardan itself isn’t designated, all three of its major shareholders—Tejarat Bank, Saman Bank and Middle East Bank—are included on OFAC’s Specially Designated Nationals list, according to Treasury Department documents. Tejarat Bank is additionally designated under OFAC’s Nonproliferation of Weapons of Mass Destruction program. A call and an email to Kardan’s Tehran headquarters weren’t returned.

Another notable attendee is Mohammad Reza Ansari, chairman of Kayson Co., an engineering and construction firm with projects in Central Asia, Belarus and Venezuela. Kayson drew global headlines last year when Tahmasb Mazaheri, a former Iran Central Bank governor, was briefly detained at Düsseldorf Airport for failing to declare a check worth $70 million that he was carrying for the company. Kayson’s Venezuelan subsidiary later confirmed to the New York Times that Mr. Mazaheri was transporting the check as a “favor” to Kayson.

Although Kayson and Messrs. Ansari and Mazaheri aren’t designated by OFAC, the U.K. Export Control Organization (ECO) includes Kayson on its Iran List. The ECO’s Iran List is intended to alert businesses as to which of their exports might raise end-use concerns, though the inclusion of an entity on the list “does not necessarily mean that an export license would be refused,” according to the organization. A call and an email to Kayson’s Tehran headquarters weren’t returned.

The forum’s “Premier Sponsor” is Avarya Capital Ltd., aka ACL. The asset-management firm, incorporated in the Cayman Islands, is devoted to injecting foreign direct investment into the Islamic Republic’s moribund economy.

Amir Ali Amiri is ACL’s Iranian-Swiss founding partner. The Harvard Business School alumnus says in a telephone interview that he got interested in the forum to transform Western businesses’ perceptions about the value and risks associated with investing in Iran. “My dear colleagues in government don’t speak English that well,” he says. “They have a huge orientation deficit when it comes to professional dialogue. And this is where the private sector naturally comes up. Exhibit A is this exhibit.”

Mr. Amiri adds that he senses optimism “on the ground” in the business community. He recalls how a “boat load” of French delegates arrived in Iran earlier this year, soon after the Geneva agreement was signed. “It was very funny,” Mr. Amiri says. “You’ve got folks like Renault and Peugeot delegates running around in Tehran with the OFAC list in hand trying to figure out what they can do.”

Opinion Journal Video

Editorial Page Writer Sohrab Ahmari on the upcoming Europe-Iran Forum in London and why he won’t be allowed to attend. Photo: Getty Images

European Voice, a small English-language business newspaper with offices in Brussels and Paris that serves as the forum’s main organizer, barred the Journal editorial page from covering the event, citing space limitations. The U.K. Foreign and Commonwealth Office and the Department for Business, Innovation and Skills, which oversees the Export Control Organization, didn’t respond to requests for comment.

“This is an effort to further undermine Western leverage vis-à-vis Iran at a critical time in the nuclear negotiations by encouraging Western investors to establish valuable business contacts and create the basis for their return to the Iranian market,” said Matt Baker, an associate at the Washington-based Foundation for Defense of Democracies.

“We are aware it is happening but will not be attending,” a U.S. Treasury spokesperson said in a written statement on the forum. “Have no doubt, we are well aware that business people have been talking to the Iranians. We have been very clear that the moment those talks turn into improper deals, we will respond with speed and force. Anyone who violates our sanctions will face severe penalties. Our vigilance has not, cannot, and will not falter.”

Yet sanctions are nothing new for Mr. Amiri. “I started my career in Iran in 1992,” he says. “So as such I’ve only ever worked under sanctions.” Case in point: Although ACL and Mr. Amiri aren’t designated, the firm says on its website that it invests in Karafarin Bank and Middle East Bank, both of which according to U.S. Treasury documents are designated by OFAC.

This article was written by Sohrab Ahmari for the opinion page of The Wall Street Journal on Oct. 12, 2014. Mr. Ahmari is a Journal editorial-page writer based in London.                   

 

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