By Alex Lennane
Iran gained access to up to $50billion in cash on January 15 after sanctions were lifted, paving the way for a new era of trade. The International Atomic Energy Agency announced that Iran has fulfilled its commitments and the lifting of sanctions, in place for 10 years, will allow Iran to access cash frozen in overseas accounts.
The change will see numerous companies look to extend their reach into Iran.
“Since the Joint Comprehensive Plan of Action [JCPOA] was agreed in July last year, we have seen dozens of multinational companies extending their efforts in Iran, all of which have been jockeying for pole position in an effort to become an exclusive trade partner with Iran,” said Sarosh Zaiwalla, senior partner at London law firm Zaiwalla & Co. “This untapped market, with a large young population, offers investors exciting prospects and Iran has been making a concerted effort to capitalise on this new interest.”
At the end of December, MSC unloaded 300 containers of food and agricultural commodities at Bandar Abbas, while CMA CGM has begun services to the country and Maersk is eyeing its options. IRISL has said it plans to significantly expand its fleet.
Foreign investors are expected to be invited to improve the country’s port infrastructure.
“With sanctions gone, everyone expects there to be quite a surge for containerized goods,” Lars Jensen, Chief Executive of SeaIntel, told The Wall Street Journal. “They see this as a national strategic area for them. There’s an overall sense of great optimism about container shipping in the region.”
Companies need to be careful, however, warned Mr Zaiwalla. “Iran is subject to a ‘snapback’ re-imposition of sanctions in the event of significant non-performance of its JCPOA commitments. Additionally, the majority of U.S. sanctions preventing U.S. persons from conducting transactions in Iran remain in place, and businesses must ensure they comply with all applicable sanctions to prevent problems.” Among Iran’s first moves will be to rebuild its energy industry, which it says will cost $100 billion. Iran’s air services have been dominated by Middle Eastern carriers, although Saudi Arabia announced last week that it was cutting all flights between Riyadh and Tehran following tensions after it executed a Shia cleric.
The UAE and Bahrain have also “downgraded” diplomatic ties. However, that does not appear to have affected air services. In September, Emirates launched its second Iranian service, to Mashhad. Meanwhile, Skyliner Aviation has reported that Iran’s regional cargo carrier, Saffat Airlines, has wet-leased an AN26B.
Reprinted courtesy of The Loadstar (www.loadstar.co.uk)