At the end of last week, the largest businesses and energy companies in the UK were able to begin talks regarding international trade with Iran as diplomats agreed to reopen the British embassy in Tehran.
This marks a new era for the country and the trading industry as City AM explains how the embassy was closed in 2011 after the ambassador’s residence was attacked, “Death to England” was written on walls and the Union Jack was burnt. On the subject, foreign secretary Philip Hammond said that the relationship between Iran and Britain has improved recently, but “an important milestone” was when the nuclear deal was made with the Islamic republic and six powerful countries.
City AM also reported that this deal would mean that sanctions on Iran would be lifted and Hammond ideally would like to simplify trade financing and investment for British banks. In a meeting with Valiollah Seif, Iran’s central bank governor, Hammond highlights the importance of communication with financial institutions. “I think it would be helpful and very positive if we could begin a dialogue about how we can create conditions which would allow British banks and British financial institutions to engage in the financing of trade and investment in Iran,” Hammond said.
Hammond also continued to explain how communication would prevent illicit behaviour, while alluding to the $2.6 billion in fines that had to be paid to American authorities by HSBC and Standard Chartered after financial transfers took place for Iran. “There is a huge appetite both on the part of our commercial and industrial businesses to engage with the opportunity of Iran opening up and there if huge appetite on the part of our financial institutions to support that activity but of course it has to be done in the proper way,” Hammond as quoted in City AM.
In addition to this, the energy industry has also shown interest in Iran’s oil and this new trade deal will also see those from Weir Group, Amec Foster Wheeler and Royal Dutch Shell participate. Treasury minister Damian Hinds has said that Iran is one of the next 11 emerging markets and has the potential to become one of the world’s largest economies.
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