Sputnik - On Monday, French automaker Renault SA finalized an agreement with Iran to increase its car manufacturing in the country by 75 percent, defying US efforts to target Tehran with new sanctions. Sputnik France discussed the deal with expert Thierry Coville, who explained what the company might be risking and what advantages it might get.
On Monday, the French automaker announced that it is setting upa joint venture withIran's Industrial Development & Renovation Organization and local dealer Parto Negin Naseh Co. tobuild 150,000 vehicles a year.
"The proposed joint venture company, ofwhich Renault will be the majority shareholder, though witha first period ofjoint control withIDRO and Parto Negin Naseh Co, will include an engineering and purchasing centre tosupport the development oflocal suppliers aswell asa plant withan initial production capacity of150,000 vehicles a year, supplementing Groupe Renault's existing capacity of200,000 vehicles a year inthe country. The first vehicles tobe produced atthe plant will be new Symbol and new Duster,"said the statementonthe official website ofthe company.
The manufacturing facilities will be inSaveh, located 120 km fromTehran. They will be owned and operated bythe joint venture company.
The agreements also provide forthe development ofan exclusive Renault distribution network, inaddition tothe existing network ofNEGIN Khodro.
The deal defies the US efforts totarget Tehran withnew sanctions.Sputnik France discussed itwiththe deal withThierry Coville, an expert inIranian affairs atthe French Institute forInternational and Strategic Affairs (Institut de Relations Internationales et Stratgiques, IRIS), who explained what the company might be risking and what advantages it might get.
The decision tostrengthen its positions onthe Iranian market might be very risky due tothe American sanctions againstIran, he told Sputnik.
He further recalled the case ofthe French BNP Paribas SA, which was fined bythe US Department ofthe Treasury's Office ofForeign Assets Control (OFAC) forthe record $8.83 billion forviolation ofUS sanctions againstSudan, Cuba and Iran.
The move, the expert said, sent a clear message toother banks, both French (Socit Gnrale, Crdit Agricole), and European (ING, Crdit Suisse, Deutsche Bank).
It was a traumatic experience, he said, even though the risk was more ofa psychological nature. However it forces the banks totry toavoid any possible risks intheir relationship withIran, even inthe operations not sanctioned bythe US, infear oflosing the license inthe US.
"It is a large problem. However let's hope that the European authorities will take it intoconsideration and will interfere asthe aboveconstraints hamper trade relations betweenEurope and Iran," he told Sputnik.
The expert further elaborated that fromthe political point ofview, it is very hard forthe Europeans tounite and defend their interests asthe US imposes sanctions onthe principle ofextraterritoriality, or "sanctions withoutborders." It means that sanctions might be applied worldwide againstany company or an individual who is doing its business inthe US or is using American chips, servers or satellites or is making transactions inUS dollars.
"This is a matter ofpolitical will and Europeans should fight fortheir own interests," he told Sputnik.
