Page 20 - IRANRptJul18

Foreign investors “assessing impact” of possible US sanctions on Iran
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.
20 IRAN Country Report July 2018 www.intellinews.com