28 Feb 2024
Tuesday 1 December 2015 - 15:45
Story Code : 191039

Iran moves to revive foreign trade lifeline

Iran istaking the most vital step toward reviving foreign trade, activating banking and insurance ties in time for removal of sanctions to process transactions.

Foreign companies seeking to enter the Iranian market have to get banks on board to open letters of credit and insurers to underwrite critical export-related risks an arrangement which is currently non-existent due to sanctions.

With the lifting of sanctions on the horizon, European governments are up in arms to smooth out hurdles on the way of the worlds biggest economy rejoining the global trading and financial system since the break-up of the Soviet Union.

On Monday, Italys major export credit agency SACE signed three MoUs with Iranian banks as a delegation of about 360 Italian traders continued their meetings with officials in Tehran, including Irans top banker Valiollah Seif.

SACE has already agreed to provide insurance coverage toIranian industrial, construction and infrastructure projects worth at least 3 billion euros which will be provided by Italys investment bank, Mediobanca.

[caption id="" align="alignnone" width="555"] Executives of Italian companies attend an Iran-Italy trade forum in Tehran. IRNA[/caption]

Deputy Minister of Economic Development Carlo Calenda said Italy will open the credit line a day after a nuclear accord signed with Iran in July goes into effect.

Representatives of 11 banks tagging along with him in the visit to Tehran process more than 50% of banking operations in Italy, the IRNA news agency quoted him as saying.

We have decided to remove all banking barriers between the two countries, he said.

Calenda said the main MoU with the Central Bank of Iran will be signed during President Hassan Rouhanis imminent visit to Italy, which will re-open banking transactions between the two countries.

Projects for cooperation

Italy remains one of Irans main commercial partners. Annual trade stood at $7 billion before sanctions slashed it to $1.5 billion. According to SACE, oil and gas, automotive, defense, transport and real estate offer the best opportunities for cooperation.

For Iran, the key to rekindlingforeign trade is that the countrys banks become able to reconnect to the SWIFT financial-transactions system.

Chairman of the Iran-Italy Chamber of Commerce Ahmad Pourfallah said Italy had decided to resume banking ties with Iran by using its smaller banks which are not connected to SWIFT because bigger banks are awaiting removal of sanctions.

Meanwhile, head of the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) Mehdi Karbasian said SACE had offered to provide insurance for up to 5 billion euros of mining projects in Iran.

He made the announcement after meeting SACEs Giovanni Castellaneta. Karbasian saidthe Italian agency had underwritten major steel and aluminum projects in Iran before sanctions were imposed on Tehran in 2012.

[caption id="" align="alignnone" width="555"] Italian delegates attend a joint forum in Tehran. IRNA[/caption]

In recent months, some MoUs have been signed with Italian companies in the steel and aluminum sectors, for which SACE can provide insurance coverage, he said.

Representatives of steel group Danieli, energy company Enel, agricultural machinery maker CNH Industrial, Telecom Italia and several banks were among the Italian delegates in their visit which ended on Monday.

By Press TV
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