Zarif: 5,000 European SMEs on the Way

EghtesadOnline: Foreign Minister Mohammad Javad Zarif assured the business community that the future of the Joint Comprehensive Plan of Action–the formal name of the nuclear deal Iran signed with world powers in 2015- is safe after the US pullout.

News ID: ۷۴۵۵۳۲

25 June 2018

Addressing representatives of Iran Chamber of Commerce, Industries, Mines and Agriculture on Sunday, Zarif said the key to benefit from the multilateral agreement lies in a new partnership between Iranian and European small- and medium-sized enterprises.

The foreign minister revealed that as part of Iran's negotiations with European partners, they will introduce 5,000 SMEs for participating in joint ventures with domestic companies.

Zarif saw this as a good omen for Iran's "real" private sector to seize the opportunity to leave their bigger semi-state rivals behind, Financial Tribune reported.

"Despite the best efforts made by the US to sabotage Iran's commitment to JCPOA, the country will strive to honor the deal. The key to solving our problems lies in SMEs and special-purpose [banks and entities] and these can replace big companies," he said.

Zarif was speaking in his first appearance at an Iranian business gathering since US President Donald Trump's move last month to quit the Iran deal despite appeals from its European allies not to do so.

As for the banking hurdles that have acted as speed bumps, Zarif saw the solution in the formation of special-purpose banks  and insurance entities. He called on the private sector to come up with innovative ways to reconcile with the emerging circumstances.

Trump has said he would reimpose sanctions within 180 days, prompting several European companies to announce they would end business with Tehran before the Nov. 4 deadline.

Iran's economy has already been affected by the news with rial continuing to sink to all-time lows against the dollar and safe haven assets like gold coin, cars and the property market heating up.

Zarif felt the business community's apparent angst on Sunday–evident in their dark-toned speeches–and cautioned them against helping realize a "self-fulfilling prophecy" by predicting doom and gloom.

"If we predict that JCPOA will fail and we are in a position to turn this into a reality, not only JCPOA but everything else will also fail," the top diplomat said, stressing that there is no reason to make such a forecast.

Iran's foreign minister linked the US move to exit the nuclear deal to its other decisions of abandoning international accords such as the Trans-Pacific Partnership and Paris Climate Agreement and its violation of other global pacts.

Zarif said the US strategic goal is to make Iran abandon JCOPA and isolate the country, but the reality is that the "US is now isolated in its goal".

"The fact that most countries, including Canada that has cut formal political ties with Iran, want to preserve JCPOA shows that things are radically different from 2011 when Europe imposed six-month deadlines on Iran for an oil embargo," he said.

The foreign minister noted that he has had to take flak from domestic hardliners both when entering into the nuclear deal and when it was imperiled by the US move.

Sticking Points

Zarif welcomed business leaders' proposals for the Iranian private sector to take a leading role to navigate Iran through the approaching uncharted waters.

He said the private sector can act not only as a guide and councilor to the Foreign Ministry and the government, but also take the lead in hunting new business opportunities in Europe and elsewhere.

According to the foreign minister, Europe's attempts to save the nuclear deal are part of its efforts to preserve the current world order in the face of threats by rebels like Trump.

"Of course, the length to which Europe wants to go in order to preserve this order depends on them," he said.

"We can make JCPOA succeed or fail, but the situation would be very dangerous for us without it."

Zarif also alluded to the reigning controversy regarding Iran's status with the Financial Action Task Force, saying that Iran can solve its problems regarding anti-money laundering efforts and combating the financing of terrorism.

Lawmakers this month suspended the vote on a government bill that allowed Iran to join the United Nation's International Convention for Combating the Financing of Terrorism.

The decision was followed by comments from Iran's Leader Ayatollah Seyyed Ali Khamenei that accession to such international conventions may not be in Iran's favor.

Although many interpreted those comments as a coup de grace for Iran's action plan with FATF, Zarif said the country can solve its problems vis-a-vis AML/CFT "within the framework of the Leader's statements".