Page 19 - IRANRptJun18

Iranian central bank chief urges more action to facilitate FDI
Foreign investors “assessing impact” of possible US sanctions on Iran
Central Bank of Iran (CBI) governor Valiollah Seif has urged government officials to provide clear access to foreign investors looking to enter the Iranian capital markets, Mehr News Agency reported on April 3.
Seif, a proponent of foreign direct investment (FDI), has repeatedly taken the Rouhani administration to task over the vagueness of current regulations supposed to allow foreign investors some access to the country’s capital markets.
The facilitation of the business environment amounts to a leading strategy in attracting FDI to Iran, the central bank chief said, adding: “Iran should act properly in this respect and must provide suitable ground for foreign investors that is more attractive than that of rival countries.”
He also said: “It is obvious that various legal capacities should be used for the development of the country’s economy and in this way, which, moreover, backs domestic investors, FDI should be taken into serious consideration.”
Seif observed that the more the local business environment was geared towards FDI, the more money would flow into the country, but he also noted that “competition in the region is rife”. Regional actors like arch-rival to Iran Saudi Arabia, currently on a campaign to gain support and investment for its NEOM transnational city and economic zone project, which has an estimated cost of $500bn, is wasting no time in going after foreign capital.
Seif lamented that the business environment has not lived up to even standard expectations since the introduction of the nuclear deal at the start of 2016, with all parties in and outside Iran making foreign investment difficult.
. Several sizeable European companies have announced they are either already winding down their operations in Iran or will after the late August cut-off date for sanctions exposure which the US set in place following Donald Trump’s announcement of Washington's exit from the deal. Others are taking a wait-and-see approach to the situation following an announcement by the EU that they are to reactivate a so-called blocking statute for trade with Iran , protecting companies who choose stay commercially involved with the country.
Swiss Reinsurance Co. said it was “assessing the impact” of the US decision on its business with Iran, but has not formally said it will pull out from its current deals with Iranian insurers. Several other global insurers are taking stock of how the US withdrawal will affect their plans in Iran. US-based insurance broker Arthur J, Gallagher & Co. said on May 18 that it would monitor developments following Trump’s decision. It has dealt with Iranian clients since starting to operate in the country through subsidiaries based in Europe.
Energy majors such as BP, Russia’s LukeOil, Poland’s PGNiG and French Total, among many others, look set to avoid irking Washington. They seem unlikely at this point to keep their current business ties with Iran.
19 IRAN Country Report June 2018 www.intellinews.com