Iran News Brief

1 Top News Stories

U.S., EU urge European Banks, businesses to invest in Iran

...but Iran says words and

statements should be translated into action

...deputy Foreign Minister urges European states to encourage business in Iran

Following a meeting last Thursday in Brussels between U.S. Secretary of State John Kerry, EU foreign policy chief Federica Mogherini and their counterparts from France, Germany and the U.K, they released a statement in which they urged European banks and businesses to do legitimate business in Iran, the Wall Street Journal wrote on May 19th. “We will not stand in the way of permitted business activity with Iran and we will not stand in the way of international firms or financial institutions’ engaging with Iran, as long as they follow all applicable laws,” they said. The statement is the latest in a series of efforts made by the US secretary of state, following his separate meetings in the past couple of weeks with Iran’s Foreign Minister Javad Zarif, U.K Foreign Secretary Philip Hammond, and the head of some of major European banks in London. “We understand that firms may continue to have specific sanctions-related questions or concerns about doing business in Iran, and we stand ready to provide expeditious clarifications,” they said. “We encourage firms to approach our governments to address remaining questions, rather than forgo opportunities due to misperceptions or lack of information” reads the statement.

The statement however still has not satisfied the Iranian authorities as in a joint press conference he had on Saturday with visiting New Zealand Foreign Minister Murray McCully, Secretary of Iran’s National Security Council Ali Shamkhani said

“the US dubious moves” have been source of major concerns for Iranians.

Similarly, Minister of Foreign Affairs Javad Zarif said “more measures need to be adopted along with statements.” “We haven’t yet achieved what should have achieved, and more steps should be taken on the part of the US,” he said. “The statement released following the meeting with John Kerry [in April] and the recent statement issued by the ministers of foreign affairs of the US and three European countries indicate the emergence of a political atmosphere in which these countries feel they should comply with their obligations,” added Zarif.

Meanwhile, Iranian ministry of Foreign Affairs officials take advantages of using social network and international conferences to have their voice being heard by more audiences. Deputy Minister of Foreign Affairs Abbas Araghchi ,who was speaking at the Center for International Public Policy Studies of Japan this week, urged Japan and European countries to encourage their private sector to utilize the opportunity of doing business with Iran. In a related development, Hamid Baeedinejad, the ministry of Foreign Affairs’ director general for security and political affairs wrote in his telegram channel that “we will not rest until all banking, financial, and business restrictions against all Iranian legal and real individuals and institutions are lifted.”

Daily coverage of negotiations with foreign companies post-sanctions, latest macroeconomic data, banking and financial developments, economic events to watch...

Iran News Brief

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2 Central Bank of

Iran holds Euromoney Iran Conference in London

...CBI governor says today’s situation in Iran is not comparable to three years ago

Iran says US and EU are still failing to comply with their nuclear obligations

Meanwhile, after his visit to Washington to attend the spring meeting of the IMF/WB, and in the second leg of his foreign trip to promote diplomacy for removing banking barriers, CBI Governor Valiollah Seif delivered a speech at the Euromoney Iran Conference on May 19 in London. According to the daily Donyay-e Eghtesad, in his speech Seif confirmed that the reason for foreign banks’ reluctance to resume business with Iran is the fears of US penalties because sanctions are still in place for non-nuclear issues. Seif said the Islamic Republic is ready to take all reasonable strides that lead to the reduction of risks for the businesses that are willing to work in Iran. He ensured that Iran has good track record in fulfilling its international obligations, even during the years of war and sanctions. Seif said Iran enjoys an “exceptional geopolitical position” and several potentials that can be realized with a population of 80 million and educated and young workforce. The CBI governor boasted that Iran ranks 18^th worldwide in purchasing power parity and its nearly $1.4 trillion economy is very diversified.

Seif told the audiences that under Rouhani’s government, substantial positive changes have been made to Iran’s economy so much so that even the falling oil prices didn’t end up the emergence of an economic shock as opposed to what happened to other oil exporting countries. “You can’t compare today’s situation to three years ago,” he said. “Three years ago Iran was experiencing a volatile economic situation, rising inflation, unstable market and fluctuations in foreign currencies on daily basis, but now the government has successfully curbed the inflation and brought stability to the currency market.” “Falling oil prices shocked oil-dependent countries – even those which were not affected by sanctions, like Iran – but we felt no shock in our economy thanks to good management and good planning of our financial policies.”

The Guardian on May 20 quoted Seif as saying on the sidelines of the Euromoney Iran Conference that the US and EU are still failing to fully comply with their nuclear commitments, and said they need to translate their words into action. “Some movement and western officials have made some positive pronouncements, but banks need tangible reassurances that they would be immune from baseless allegations [of sanctions breaches].”

“

Indian PM in Tehran to promote economic, cultural and political agenda

Afghan president to join Rouhani and Modi

Indian Prime Minister Narendra Modi arrived in Iran on Sunday evening, with developing economic ties being on his top agenda. According to the local media outlets, this is the first Indian PM to visit Iran in 15 years, and Modi, being accompanied by a high-profile economic, political, and cultural delegation is supposed to sign 14 agreements including development of the Port of Chabahar, investment in oil and gas projects, increasing bilateral trade volume, and cooperation in cultural sphere.

Indian newspapers wrote that Afghanistan’s President Ashraf Ghani will join President Modi and President Rouhani in Tehran to sign a tripartite agreement on Chabahar, which will be India’s gateway to Afghanistan and Central Asian

3 Rouhani:

Chabahar port is the origin of the transit corridor between south and north

Modi: agreement on Chabahar is a milestone in developing bilateral ties

...details of agreement on Chabahar

countries bypassing Pakistan. This port is of high strategic importance for India as it is considered as a rival to China’s plan to develop Pakistan’s Port of Gwadar.

Source of the map: BBC

In a joint statement with the Indian Prime Minister this morning, President Rouhani said “Today we have the chance to develop the relationship between our people are India. Chabahar is a very strategic port and it can become a symbol of cooperation between India and Iran. And let us not forget Chabahar port is the origin of the transit corridor between south and north…and it can serve as a link between several countries. Since banks play a very important role between countries, we have discussed several banking and monetary policies.”

In his statement, Modi said that Iran and India have been old friends “as old as history” connected through art, architecture and commerce. “As friends and neighbors, we have shared interest in each other’s growth and prosperity, and joys and sorrows. The agenda and scope of our partnership is truly substantial.

We exchanged views on the emerging regional situation and global issues of common concern. Agreement to develop the Chabahar port & related infrastructure & availability of about $500 million from India is a key milestone.

The Trilateral Transport & Transit Agreement to be signed later today will open new routes for India, Iran & Afghanistan to connect.”

An Indian newspaper wrote today that in the first phase, India will invest about

$200 million –of which a credit line of $150 million will be provided by India’s Exim Bank-- would provide to develop cargo berths and terminals, while a 500- kilometre railway line will be constructed between Chabahar and Zahedan in the second phase.

Another Indian news website declared that Modi is scheduled to meet with Supreme Leader Ali Khamenei, and that his bilateral talks with President Rouhani will focus on regional connectivity, infrastructure and energy as well as

4 ...ahead of Modi’s

trip, two Indian refiners clears

$750 million of debt to Iran

terrorism and extremism in the region. Clearing the $6.4 billion debt owed by Indian refiners and signing a trilateral agreement on developing Chabahar Port are also among the agenda of Indian Prime Minister during his two-day visit of Tehran.

Local media declared on May 21^st that ahead of Modi’s Iran visit, two Indian refineries, namely Mangalore Refinery & Petrochemicals company and Indian Oil Corporation, have paid $750 million to NIOC as part of their country’s effort to clear its pending $6.4 billion oil debt to the Islamic Republic. The transactions were made in euro that according to Reuters, were settled through the Union Bank of India via Turkish Halkbank. The economic daily Donyay-e Eghtesad wrote today that clearing the debt at this juncture of time is meaningful and most probably aimed at helping the negotiations in Tehran go well. The daily wrote that the remainder will be paid in installments but it is not yet known when the second installment will be cleared. An informed source has told Donyay-e Eghtesad that the Iranian ministry of Petroleum had conditioned awarding new oil and gas projects to India to the country’s clearing its oil debts.

Economy minister says registering a 5%

economic growth this year is achievable

...president Rouhani meets grand Ayatollahs in Qom to assure an economic recovery is achievable

While estimation of the Statistical Center of Iran indicates that the country registered an economic growth of less than 1 percent in 1394 (ended 20 March 2016), senior economic authorities ensure that an economic growth rate of about 5 percent is achievable this year. On the sidelines of the 41^st Annual Meeting of Islamic Development Bank Group in Jakarta, Indonesia (15-19 May), Minister of Economic Affairs & Finance told a local TV channel that the government is determined to achieve an economic growth rate of five percent with an oil price of

$40 a barrel. “This estimation can easily be accomplished and we even can go further,” Ali Tayyebnia said.

Meanwhile, President Rouhani whose administration is coming under increasing pressures from hardliners who oppose negotiations with the West is trying to garner the support of grand Ayatollahs in Qom, assuring them that his government will bring about economic recovery after years of mismanagement and corruption. In his separate meetings with a number of influential clerics in Qom, the president tried to build a logic that the nuclear deal achieved last summer and implemented four months ago has been a catalyst to improving living conditions and mitigate problems of Iranian people. “Today with the government’s efforts, there is a good opportunity and atmosphere for economic activities and interaction with foreign countries,” he said after meeting with Grand Ayatollah Vahid Khorasani on Friday.