Iran doubts

After Deal, Uncertainty Over Sanctions

Pic from iran oil congress 2015 Picture alliance
Not quite a done deal.
  • Why it matters

    Why it matters

    If sanctions on Iran are lifted quickly, business will flourish but without legal certainty, companies may hesitate to move into the country.

  • Facts

    Facts

    • Iran has agreed to scale back its nuclear activities in return for the phasing out of Western trade sanctions.
    • The country will get rid of 98 percent of its enriched uranium, which can be used to make nuclear weapons.
    • The deal depends on Iran complying with monitoring which will continue through the next decade.
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    Audio

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German firms are seeking legal clarity in the wake of this week’s nuclear deal with Iran to make sure they do not incur steep U.S. penalties for trading with its regime.

The big question for many remains: Does the historic pact to limit Iran’s nuclear ambitions  effectively give western businesses the all-clear to invest again with the Iranians? Or will German businesses still face prosecution for trading with a terrorist regime?

The German business community broadly welcomed the deal announced Tuesday – which will see Iran ditch almost all of its weapons-grade nuclear material in exchange for the easing of economic sanctions. “German companies are eager to play their part in modernizing the country and integrate it into the global community,” said Ulrich Grillo, head of the BDI Federation of German Industries.

He forecast German exports to Iran could leap to more than €10 billion ($11 billion) in the medium term from €2.4 billion last year, and said sectors particularly likely to benefit would include cars, chemicals, healthcare and renewable energy.

“The modernization of the oil industry in particular opens big opportunities for German machinery and equipment makers,” Mr. Grillo said.

Much depends on when and how sanctions are dropped – trade is not expected to really develop until 2016. If sanctions are phased out quickly, conservative estimates say bilateral trade could grow to €6 billion or €7 billion in 2016.

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