Page 21 - IRANRptJul19

The agreement between Iran and the EEU provides for a reduction in customs fees for all participants. In certain instances, customs fees will be entirely removed.
The countries of the EEU will export meat products, sweets, cosmetics, machinery and technical equipment to Iran, while Iran will export vegetables and fruits, building materials and carpets to the countries of the trade bloc.
The agreement, according to JAM, will involve a particular reduction on duties for industrial goods. Iran is to cut these duties from 22.4% to 15.4%, while the EEU countries will reduce them from 8% to 4.7%.
The reduction of duties will also reportedly make a big impact for those trading agricultural products. In Iran, border payments for agricultural products are quite high, at more than 32%. The agreement will reduce them by more than half to 13.2%.
In the EAEU zone, agricultural product duties will fall from 9.6% to 4.6%.
5.3 FDI
Iran FDI 2010 2011 2012 2013 2014 2015 2016 2017
FDI net inflows (BoP) (USD bn)
3.649 4.277 4.662 3.05 2.105 2.05 3.372 5.019
FDI net inflows (% of GDP)
0.749 0.733 0.778 0.653 0.485 0.531 0.805 1.105
FDI net outflows (% of GDP)
0.049 0.044 0.226 0.04 0.001 0.031 0.025
source: World Bank
FDI in Iran fell 30% in 2018 UN report suggests
Iranian president orders the removal of barriers to foreign investment
The volume of foreign direct investment (FDI) placed in Iran declined more than 30% in 2018, dropping to $3.48bn from more than $5bn in 2017, according to the United Nations’ World Investment Report.
The harsh sanctions regime directed at Iran by the Trump administration since May last year has prompted a great many foreign companies to shutter their operations in Iran.
During the latter half of the Obama administration, FDI in Iran jumped from around $2bn in 2015 to $3.37bn in 2016, at the end of which the nuclear deal was signed by Iran and six major powers including the US. Donald Trump unilaterally pulled the US out of the multilateral accord but the other signatories remain signed up.
The upward FDI trend continued in 2017 with a figure of $5.01bn, up 48% y/y. Overall, the world’s FDI volume stood at $1,297bn in 2018, meaning Iran had a share of 0.26%
Iranian President Hassan Rouhani has tasked ministries and state bodies to pursue measures that will create a production boom and has ordered the removal of barriers to foreign investment that could be delivered by expatriate Iranians, Mehr News reported on May 20.
The renewed US sanctions has seen many foreign investors in Iran make for the exit in recent months, with even EU efforts made so far in fighting back against Washington’s policy failing to dissuade a slew of big European companies from leaving the country. Foreign investment has plummeted with large players like Total and PSA Group exiting the country.
Meanwhile, foreign investors who invest a minimum of $250,000 in Iran are to be offered a five-year residence permit, Mehr News Agency has reported.
21 IRAN Country Report July 2019 www.intellinews.com