Europeans rush to profit from Iran deal – Part II

Italian Foreign Minister Paolo Gentiloni and Economic Development Minister Federica Guidi led a high-level trade mission to Iran on August 4-6, aimed at opening export opportunities for Italian companies. According to forecasts by SACE, the Italian export credit company, Italian exports to Iran are expected to grow to €3.8 billion ($4.1 billion) in 2018, up from €1.2 billion currently.

Companies in the oil and gas industry and the machine tool industry, the two sectors most adversely affected by sanctions, are hoping to recapture market share lost due to the trade embargo. Companies active in the machine tools sector (which accounts for nearly 60% of current Italian exports to Iran) have seen their exports drop to €700 million from €1.3 billion during the past five years, according to SACE.

Gentiloni and Guidi met with Iranian Oil Minister Bijan Namdar Zanganeh on August 6. After the meeting, Zanganeh said that Iran had invited the Italian oil and gas giant Eni, as well as other Italian companies, to participate in projects in the Iranian oil industry.

On August 4, SACE, together with the Italian Ministry of Economic Development and Mediobanca, the leading investment bank in Italy, announced the finalization of a Memorandum of Understanding with the Iranian Ministry of Economy and Finance and the Central Bank of Iran, aimed at facilitating the development of future economic and trade relations between the two countries.

Under the agreement, “the parties will collaborate to evaluate short and medium-long term projects of mutual interest implying Italian export and investments and to identify local financial institutions that could benefit from credit lines provided by Mediobanca, and guaranteed by SACE and the Ministry of Economy and Finance of Iran, to support the financing and payment of such transactions.”

Also on August 4, Finmeccanica, Italy’s main industrial group, announced that it had signed a €500 million ($543 million) contract with Iran’s Ghadir Investment Company to build a power plant in the country. Ghadir is 80% owned by the Islamic Revolutionary Guards’ Corps (IGRC). The IRGC, through its elite Quds Force, is responsible for the deaths of at least 1,000 American troops in Iraq.

Austria. Austrian President Heinz Fischer is set to become the first European head of state to visit Iran since 2004 when he travels to Tehran on September 7-9. Fischer will be accompanied by Vice Chancellor and Economy Minister Reinhold Mitterlehner, Foreign Minister Sebastian Kurz, as well as a delegation of high-ranking Austrian business leaders. Mitterlehner said he hopes that Austrian exports to Iran will reach one billion euros per year by 2020, up from 232 million euros today.

On July 23-24, the Austrian Economic Chamber (Wirtschaftskammer Österreich, WKÖ)organized a major EU-Iran trade conference that was attended by nearly 400 Austrian and Iranian business leaders, including Iranian Industry Minister Mohammad Reza Nematzadeh.

According to Nematzadeh: “We are no longer interested in unidirectional importation of goods and machinery from Europe. We are looking for two-way trade, as well as cooperation in development, design, engineering and joint investment for production and export.”

Not all Austrians are happy about the government’s rush to embrace Iran. The Austrian branch of the activist group “Stop the Bomb” organized a protest outside the WKÖ’s headquarters on July 23. In a statement, the group said:

“While the implementation of the nuclear deal with the Iranian has not even started and the sanctions on Iran are still in place, Iran trade lobbyists are set to host the ‘EU-Iran-Conference’ at the Austrian Economic Chamber WKO in Vienna. Among the participants are WKO-President Christoph Leitl and the Iranian Industry & Trade Minister Mohammad Reza Nematzadeh. 70 years after the Shoah, Austrian and German companies are in the first row to boost business ties with the anti-Semitic Iranian regime.

“This conference shows that billions of Euros are going to flow to the Iranian mullahs as a result of the Vienna agreement. This will enable the regime to sponsor its terror proxies like Hamas and Hezbollah and to enforce its aggressive expansion in the region in unprecedented ways. The terror against the Iranian population will not decrease, but increase. Already now more people have been executed under supposedly ‘moderate’ President Rouhani than under his predecessor Ahmadinejad.

“Conducting business with the Iranian regime means to finance the nuclear program, the annihilation threats against Israel, Holocaust denial, the export of Islamist terror and the oppression of the Iranian population.”

Spain. Foreign Minister José Manuel García-Margallo, Industry, Energy and Tourism Minister José Manuel Soria and Development Minister Ana Pastor will lead a high-level trade delegation to Iran in early September. The objective is to open doors for Spanish companies in the energy, telecommunications and infrastructure sectors.

After the sanctions are lifted, Spain hopes to double its exports to Iran to 600 million euros, up from 300 million euros today, according to the Chamber of Commerce. The key sectors of interest for Spanish companies are petroleum, petro-chemical, mining, automobile, infrastructure and rail transport.

Despite the embargo, more than 350 mostly small- and medium-sized Spanish companies are currently active in Iran. On July 19, the newspaper El Mundo reported that more than a dozen Spanish companies sold so-called dual-use materials that could have been used to help Iran build weapons of mass destruction.

Since 2011, Spanish authorities have carried out nearly a dozen police operations aimed at disrupting illegal weapons sales to Iran. One such operation blew the lid off a scheme to sell nine helicopters to Iran. Another operation discovered that a company ostensibly dedicated to importing Persian rugs was trying to sell missile casings to the Iranian military.

A report published by Gatestone Institute in April 2014 found that in addition to Spain, companies or individuals in more than a dozen European countries — including Belgium, Britain, Finland, France, Germany, Hungary, Ireland, Italy, the Netherlands, Norway, Slovenia, Sweden and Switzerland — have been involved in illegal dual-use exports to Iran.

A senior French official interviewed by the Reuters news agency summed it up this way: “Everyone is looking at Iran with greed.”

This article was written by Soeren Kern for Jewish Voiceny on Aug. 26, 2015.