Resumption Of Iran Sanctions May Affect Czech Business

Prague, Aug 6 (CTK) – The resumption of US sanctions against Iran as of Tuesday morning may have impact on the activities of some Czech companies in Iran, particularly those involved in the sectors of mining and energy, according to the Chamber of Commerce and the Confederation of Industry.


On the other hand, companies engaged in water management and health care should not be affected.


The sanctions concern mainly Iranian trade in currencies, precious and other metals, coal, industrial software, cars, planes, and imports of Iranian carpets and food to the USA.


According to the Chamber and the Confederation, non-European companies, particularly Chinese and Russian ones, will benefit from the situation.


“It is possible that the sanctions will have negative impacts on Czech firms engaged in mining and energy. We are, however, unable to estimate the extent of the damage that the sanctions will cause to Czech firms,” Chamber spokesman Miroslav Diro said.


According to the Confederation, it will be very difficult for Czech companies to stay in Iran. “Many companies have made notable investments in order to return to Iran at the beginning of 2016, after the original US sanctions ended,” the Confederation’s Eva Velickova said.


The first wave of the sanctions will not affect Czech companies very much, representatives of the Chamber of Commerce and Czech firms running business in Iran have agreed at their meeting recently.


“It was said at the meeting that this wave of US sanctions will have just moderate or no impacts on the activities of Czech companies in Iran. The current and future contracts of Czech firms in Iran are not endangered,” Diro said.


However, the second wave of sanctions, which is to come into effect on November 4 and focus on the oil and banking sectors, will be harder for the Iranian industry.


Even though Czech exports to Iran have been growing in recent years, they are still lagging behind their potential.


Czech exports to Iran rose annualy by 22 percent to Kc1.7bn in 2017. Their actual value may, however, be higher since exporters re-export their goods to Iran via third countries. Owing to problems with interbank transactions, contracts cannot be performed directly.